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Environment & Energy

How waste coal is fueling Bitcoin in Pennsylvania

waste coal pile pollution bitcoin fuel.jpg
Reid Frazier
/
The Allegheny Front
Toxic substances can leach into streams from coal waste piles, which litter Pennsylvania's landscape. Burning the waste in specialized power plants is subsidized by the state.

There are a lot of cryptocurrencies out there now, but the biggest is still Bitcoin. By design, it uses a lot of energy. Bitcoin’s energy footprint keeps climbing and is currently greater than Finland’s.

Why does it need so much energy? In the Bitcoin system, transactions occur without a ‘middle man,’ such as a bank, so transactions have to be verified on a type of ledger. A ‘block’ — a set of data — records bitcoin transactions digitally. Blocks are stacked together in a related chain called a blockchain — that’s the ledger.

“Bitcoin has established a procedure that everybody else can agree on when a new block has been added to the blockchain, when a new coin has been created,” said Rob Altenburg, senior director for energy and climate at PennFuture, who has written about it. “That procedure requires a certain ‘proof of work’ that self-regulates the system so we don’t get billions of bitcoins created every second.”

The ‘proof of work’ process requires the block to be turned into a number. “But it can’t just be any number. It has to be a number that meets certain parameters,” said Altenburg.

Generating that number is almost like picking a winning lottery number. The process has to be done with specialized computers and a person or company now needs thousands of these bitcoin miners to find that unique number to add new blocks in the bitcoin blockchain.

Altenburg estimates that the entire Bitcoin network is drawing 422-megawatt hours of energy for each bitcoin “mined,” or created, which is about what the average Pennsylvania household would use in 40 years.

“The whole network itself uses a tremendous, tremendous amount of power,” he said.

The Allegheny Front’s Kara Holsopple spoke to Altenburg about a piece he wrote on powering Bitcoin from coal waste in Pennsylvania.

Kara Holsopple: In Pennsylvania, a company called Stronghold Digital Mining is using energy produced at a waste coal [power] plant in Venango County to mine bitcoin, with plans to expand. What is waste coal and what are the environmental problems associated with it?

Rob Altenburg: Well over 100 years ago now, really, when coal mining started across Pennsylvania, both in the bituminous and the hard coal anthracite region, when coal wasn’t commercially valuable, when rocks were dug out of the ground that had some coal, but a lot of impurities – people would throw them away into giant piles.

We have just tons and tons of these piles all across Pennsylvania. What’s been happening is, when rain falls on them, chemicals can leach out of the piles and drain into our streams. Occasionally, the piles can catch on fire and dump a lot of the toxics into the air.

Holsopple: Stronghold. Digital Mining’s website says using coal waste as a fuel is beneficial because the ash produced from burning it can be used to remediate the existing coal waste sites and can be used as fertilizer. If coal wasn’t used for fuel, how would these piles of waste be eliminated or reclaimed? 

Altenburg: First of all, using coal waste as fuel does not eliminate the pollution, it moves the pollution. You’re taking pollution that was going to be impacting the land and water and turning it into air pollution.

What you could do to these piles is – there’s a couple of different approaches. You could essentially dig up the waste coal and move it to an appropriately permitted landfill, some sort of facility that’s sited so it’s not going to leach into the land and water. Another option would be planting something like beachgrass on top of these coal piles that will create a barrier of vegetation that will limit the amount of water that can leach through it.

Holsopple: The company’s site also says it burns coal wastes in an “emissions-controlled manner” so that it reduces the emissions of things like mercury, particulate matter and sulfur dioxide. What’s your take on that?

Altenburg: Coal is the dirtiest fuel that we use now in Pennsylvania, and waste coal is dirtier still because of its lower energy value. You have to burn more to get the same amount of energy.

Yes, waste coal facilities do have emissions control equipment installed, but there is a difference between having emission control equipment and not emitting. These plants produce ozone precursors, precursors to smog. They emit fine particulates, heavy metals, acid gases – all manner of air toxics. Quite a lot of pollutants still come out of these plants, especially the carbon pollution that contributes to climate change.

Holsopple: Is waste coal an efficient fuel source, and how competitive are waste coal plants with other power sources?

Altenburg: Normally, they wouldn’t be competitive at all. The reason why almost all of the large conventional coal plants have already announced their retirements in Pennsylvania is that they can’t compete on price with fracked gas and other cheaper fuels.

Waste coal is less cost-effective than conventional coal plants, and the reason we have waste coal plants at all is that Pennsylvania ratepayers and taxpayers heavily subsidize them. We give a tax credit to plants for every ton of waste coal that they burn.

Right now, they’re also getting what are known as Tier II alternative energy credits. We have in Pennsylvania what’s known as the Alternative Energy Portfolio Standards Act which requires a certain amount of energy to come from a variety of different sources. A very small part of your energy has to come from solar photovoltaic. Another chunk comes from other renewables, primarily wind and some hydro.

But in Pennsylvania, 10 percent of our energy comes from what’s known as Tier II sources within Pennsylvania. The majority of those Tier II sources are waste coal generators. According to Stronghold Digital Mining’s filings with the Securities and Exchange Commission, it’s claiming that Pennsylvania ratepayers and taxpayers will be paying 60 percent of energy costs.

Kara Holsopple: The government gives subsidies to use waste coal because they see it as an environmental benefit? 

Altenburg: Politically, getting rid of waste coal is very popular. For a politician that has these waste coal piles in their district, constituents see that. If they do something to get rid of them, that’s something very visible. Now, of course, they’re not getting rid of the pollution. They’re moving it.

But those constituents don’t see maybe in the town downwind a child’s asthma attack is exacerbated or somebody with coronary disease is hospitalized because of the air pollution. They don’t see that, and they don’t connect it to the emissions from the waste coal. When you’re talking about air toxics – acid gases and carcinogens and other things like that – it doesn’t have to be a lot of them that cause these adverse health effects.

Kara Holsopple: What’s your overall concern about bitcoin mining and energy generation in Pennsylvania? Because there are other sources of energy getting into this game, like nuclear power and fracked gas.

Altenburg: Of the energy sources that you can have to mine bitcoin, waste coal is particularly bad because it’s probably the highest emitting source of energy that’s used, and it’s also something that we’re heavily subsidizing as ratepayers in Pennsylvania. If we don’t subsidize coal waste as a fuel for powering Bitcoin, then it’s likely bitcoin miners will gravitate to other sources of energy, and those sources of energy will have to be cleaner than waste coal.

But ‘proof of work’ cryptocurrency – all of these like Bitcoin that use this similar technology – their main problem is that they’re wasteful by design. It doesn’t have to be that way. You can design a cryptocurrency or a blockchain technology that works without being nearly as wasteful.

For a state and a country that’s trying to do something to respond to climate change and reach our emissions goals, being intentionally wasteful just isn’t compatible with that. I think a big thing should be to educate investors and regulators, and as much as we can, use cleaner and better technologies.

Read more from our partners, The Allegheny Front.

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