Bill Text: NY A07389 | 2021-2022 | General Assembly | Amended

New York Assembly Bill 7389 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Establishes a moratorium on cryptocurrency mining operations that use proof-of-work authentication methods to validate blockchain transactions; provides that such operations shall be subject to a full generic environmental impact statement review.

Spectrum: Partisan Bill (Democrat 50-0)

Status: (Passed) 2022-11-22 - approval memo.26 [A07389 Detail]

Download: New_York-2021-A07389-Amended.html


                STATE OF NEW YORK
        ________________________________________________________________________

                                         7389--B

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                       May 6, 2021
                                       ___________

        Introduced  by  M.  of  A.  KELLES, LUPARDO, ENGLEBRIGHT, THIELE, GLICK,
          MAGNARELLI, EPSTEIN, BURDICK, STECK, J. D. RIVERA, CLARK, NIOU,  FAHY,
          WALLACE,  BARRETT, CARROLL, L. ROSENTHAL, SEAWRIGHT, GALLAGHER, GONZA-
          LEZ-ROJAS, DE LA ROSA, BURKE, STIRPE, MAMDANI, SIMON, GRIFFIN,  ANDER-
          SON,  McMAHON,  MITAYNES,  OTIS, McDONALD, GOTTFRIED, GALEF, DINOWITZ,
          PRETLOW -- read once and referred to the Committee on Banks --  refer-
          ence changed to the Committee on Environmental Conservation -- commit-
          tee  discharged, bill amended, ordered reprinted as amended and recom-
          mitted to said committee -- again reported from  said  committee  with
          amendments,  ordered  reprinted  as  amended  and  recommitted to said
          committee

        AN ACT to amend the  environmental  conservation  law,  in  relation  to
          establishing  a  moratorium on consolidated operations that use proof-
          of-work authentication methods to  validate  blockchain  transactions;
          and  to require a comprehensive generic environmental impact statement
          review

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.    Legislative  findings. The legislature hereby finds and
     2  declares that:
     3    (a) Climate change threatens the health, welfare, and economy  of  the
     4  state with increasingly severe and widespread impacts to our communities
     5  due  to  flooding,  sea level rise, heat waves, coastal erosion, erratic
     6  and unpredictable weather patterns, shifting  climatic  zones,  loss  of
     7  wildlife,  increased  harmful  algal  blooms  and  invasive species, and
     8  increased risk of disease, in part, which  leads  directly  to  loss  of
     9  life,  property  damage  and  reduction in value, ecological damage, and
    10  increased infrastructure costs;
    11    (b) It is the policy of the State of New York to conserve, improve and
    12  protect its natural resources and environment and to prevent, abate  and
    13  control  water,  land and air pollution, in order to enhance the health,

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11081-14-1

        A. 7389--B                          2

     1  safety and welfare of the people of the state and their overall economic
     2  and social well-being;
     3    (c)  To mitigate the current and future effects of climate change, the
     4  State of New York  implemented  the  Climate  Leadership  and  Community
     5  Protection  Act,  requiring  that  statewide greenhouse gas emissions be
     6  reduced eighty-five percent by 2050 and that  the  state  has  net  zero
     7  emissions in all sectors of the economy by that time;
     8    (d) Data centers running proof-of-work authentication methods to vali-
     9  date  blockchain  transactions are an expanding industry in the State of
    10  New York, often, but not exclusively, located in  retired  or  converted
    11  fossil fuel power stations, including in dormant peaker plants;
    12    (e)  The magnitude of computer processing output required to authenti-
    13  cate a single block of a blockchain with a proof-of-work method uses  as
    14  much energy as an average American household uses in a month. The annual
    15  global energy use for proof-of-work authentication is equivalent to that
    16  of  the  country of Sweden and exceeds the energy consumption of all the
    17  global activity of major tech companies like Amazon, Google,  and  Face-
    18  book combined;
    19    (f)  The  continued  and  expanded  operation  of data centers running
    20  proof-of-work authentication methods to validate blockchain transactions
    21  will greatly increase the amount of energy usage in  the  State  of  New
    22  York,  and  it  is  reasonable  to believe the associated greenhouse gas
    23  emissions will irreparably harm compliance with the  Climate  Leadership
    24  and Community Protection Act in contravention of state law;
    25    (g)  Consolidated  operations  that  use  proof-of-work authentication
    26  methods to validate blockchain transactions often use large  amounts  of
    27  water,  which,  when  discharged,  can raise the temperature of adjacent
    28  water bodies to levels that harm aquatic life,  including  fish  species
    29  that  are  important  for local tourism, and may increase the amount and
    30  frequency of harmful algal blooms on lakes, ponds and streams; and
    31    (h) Many fossil fuel power plants have been shut down across the state
    32  in recent years due to  reduced  energy  demand,  improved  transmission
    33  capacity  and non-economic carbon-based fuel sources. Consolidated oper-
    34  ations that use proof-of-work authentication methods to validate  block-
    35  chain  transactions  are bringing these plants back online, with behind-
    36  the-meter operations  that  greatly  exceed  the  previous  intermittent
    37  usage,  and  can cause significant negative impacts to air quality espe-
    38  cially in environmental justice communities.
    39    § 2. The environmental conservation law is amended  by  adding  a  new
    40  section 19-0329 to read as follows:
    41  § 19-0329. Moratorium on permit issuance and renewal.
    42    1. For the period commencing on the effective date of this section and
    43  ending  three  years after such date, the department shall not approve a
    44  new application for or issue a new permit pursuant to this  article  for
    45  an  electric  generating  facility that utilizes a carbon-based fuel and
    46  that provides, in whole or in  part,  behind-the-meter  electric  energy
    47  consumed  or  utilized by a facility that uses proof-of-work authentica-
    48  tion methods to validate blockchain transactions.
    49    2. For the period commencing on the effective date of  this    section
    50  and ending three years after such date, the department shall not approve
    51  an  application  to  renew  an existing permit or issue a renewal permit
    52  pursuant to this  article  for  an  electric  generating  facility  that
    53  utilizes  a  carbon-based  fuel  and that provides, in whole or in part,
    54  behind-the-meter electric energy consumed or utilized by a facility that
    55  uses proof-of-work authentication methods to validate blockchain  trans-
    56  actions  if  the  renewal application seeks to increase or will allow or

        A. 7389--B                          3

     1  result in an increase in the  amount  of  electric  energy  consumed  or
     2  utilized by a facility that uses proof-of-work authentication methods to
     3  validate blockchain transactions.
     4    §  3.  Generic  environmental  impact statement. (a) The department of
     5  environmental conservation shall prepare, pursuant to article  eight  of
     6  the  environmental  conservation  law,  a  generic  environmental impact
     7  statement on statewide consolidated operations  that  use  proof-of-work
     8  authentication methods to validate blockchain transactions.
     9    (b)  The  generic  environmental  impact statement shall address, at a
    10  minimum:
    11    (i) the number and location of existing consolidated  operations  that
    12  use  proof-of-work  authentication methods to validate blockchain trans-
    13  actions in the state;
    14    (ii) the amount of electric energy consumed by each such operation;
    15    (iii) the sources of electric energy consumed by each  such  operation
    16  and the type of fuel used by each energy source;
    17    (iv) the amount of greenhouse gas emissions and co-pollutants released
    18  by  each  energy  source  attributable  to  providing electric energy to
    19  consolidated operations that use proof-of-work authentication methods to
    20  validate blockchain transactions;
    21    (v) the anticipated increase, if any, of consolidated operations  that
    22  use  proof-of-work  authentication methods to validate blockchain trans-
    23  actions in the state and the anticipated expansion, if any, of  existing
    24  operations;
    25    (vi)  the  potential impacts of electric energy consumption by consol-
    26  idated operations that use proof-of-work authentication methods to vali-
    27  date blockchain transactions on the state's ability to meet  the  green-
    28  house  gas emission reduction goals set forth in article seventy-five of
    29  the environmental conservation law;
    30    (vii) the water quality and other ecological impacts, if any, of cool-
    31  ing water use by consolidated operations that use proof-of-work  authen-
    32  tication methods to validate blockchain transactions;
    33    (viii) the potential public health impacts, if any, due to reduced air
    34  and  water  quality in communities near consolidated operations that use
    35  proof-of-work  authentication  methods  to  validate  blockchain  trans-
    36  actions;
    37    (ix)  the  potential  statewide  public  health  impacts, if any, from
    38  increased greenhouse gas emissions released  by  statewide  consolidated
    39  operations  that  use  proof-of-work  authentication methods to validate
    40  blockchain transactions; and
    41    (x) the social and economic costs and benefits,  if  any,  of  consol-
    42  idated operations that use proof-of-work authentication methods to vali-
    43  date blockchain transactions.
    44    § 4. Any generic environmental impact statement draft shall be subject
    45  to  120 days of public comment from the date of issuance. The department
    46  of environmental conservation shall conduct at least one public  hearing
    47  in  each  of  the  following regions of the state: western New York, the
    48  finger lakes, the southern tier, central New York,  the  Mohawk  valley,
    49  the north country, the capital region/Hudson valley, and the City of New
    50  York/Long  Island,  as  defined  by  the Empire State Development Corpo-
    51  ration.
    52    § 5. The department shall issue a final generic  environmental  impact
    53  statement  after  close  of the public comment and public hearing period
    54  and no later than two years after the effective date of this act.
    55    § 6. For the purposes of this act:

        A. 7389--B                          4

     1    (a) "proof-of-work" shall mean a consensus algorithm in  a  blockchain
     2  network  used  to  confirm  and  produce  new blocks to the chain, where
     3  competitors complete new blocks and  where  the  algorithm  changes  the
     4  complexity  of  the  competition  in a manner that is designed to and/or
     5  results in increased energy usage for each competitor when the complexi-
     6  ty is increased; and
     7    (b) "blockchain" shall mean a digital ledger in which transactions are
     8  recorded chronologically and publicly.
     9    § 7. This act shall take effect immediately.