Manchin's Vote May Depend On Weird Coal-Crypto Conflict Of Interest
Reprinted with permission from DailyKos
The fate of the Build Back Better legislation, including the future of U.S. participation in attempts to limit the impact of the climate crisis, may depend on one of the weirdest phenomena of the modern world. It's a trend that crosses an outdated technology from a dying market with a still-growing craze which baffles much of the public. And it all comes down to putting money in the pocket of one man.
The outdated industry is coal-powered electrical plants. The growing craze is cryptocurrency. And the man is, of course, West Virginia Sen. Joe Manchin.
Stitch that all together, and you get a Politicoreport on how the Grant Town power plant near Morgantown, West Virginia has put forward a proposal to turn itself into a giant, coal-powered, cryptocurrency "mine." If that proposal moves forward, it could ensure that the lone contract that defines Manchin's "coal brokerage firm" will continue to hand him over $500,000 a year for doing very close to nothing. Then maybe we can all have nice things. Or, if the crypto-plant proposal fails, Manchin could still hold the entire bill hostage to his personal interest in fossil fuels.
Not only does all of this represent a massive conflict of interest, the timing of events serves to showcase what may be the height of placing individual greed above the greater good.
Cryptocurrency is a still a phenomenon that leaves many people scratching their heads. Whether it's a Bitcoin or a Sol, cryptocurrency doesn't exist as a block of gold in a vault, a physical coin in a drawer, or a promissory note backed by a government. It's a series of numbers embedded in a blockchain, which is itself a kind of storage system for these numbers that makes it very difficult to falsify or alter information. The numbers can't be guessed, and don't follow a regular pattern. They can only be calculated using a laborious set of equations that can discover the next sequence in a process popularly called "mining." Through mining, new "blocks" of verified transactions are added to the blockchain. Those blocks are owned by the miners.
In the early days, discovering these sequences was relatively easy and could even be done on generic desktop computers. But finding new crypto "coins" rapidly becomes more difficult, and the equations aren't really optimized to work on the kind of generic microprocessors at the heart of most laptops and desktops. Systems expanded to allow many computers to work together in discovering a block. Then computer gamers and graphic artists found that the dedicated graphics cards they needed were simply unavailable, because cryptocurrency miners had discovered that the type of processors on these cards was much better suited to digging up that next coin.
That's still true today to some extent, but in large part, crypto mining has moved on to even more specialized hardware, designed expressly to deal with the particular equations involved in uncovering a new transaction. This dedicated hardware has taken crypto mining well beyond the limits of what many early adherents of Bitcoin or other currencies thought to be practical.
Over time, the real cost of mining a new block has become defined by one thing: power. Anyone trying to mine a Bitcoin at home these days is almost certain to spend more money on the power it costs to mine that coin than the coin is actually worth. At the other end of the mining spectrum, rooms full of specialized mining machines, all digging away at the blockchain, consume a lot of energy, but the cost of the power is still lower than the profit that can be returned—especially when the crypto market is surging.
Rather than the cost of power, the availability of power has become a constraint on these high-end mining operations. There are systems out there that need more power than a mid-sized town to handle their ongoing search for that next transaction. So where do they get it? They buy a power plant.
There are some rather ingenious alternatives being put forward—including solar-powered EV charging stations that would use all solar power to mine for cryptocurrency using any excess energy—but all too often, the easiest form of power for the crypto-hungry to find can be defined in one word: coal.
Across the nation and in many parts of the world, coal power plants are closing for the simplest reason: They cost too much. The cost of operating a coal-powered plant is now so far above adding new power in the form of solar or wind, that systems are finding it cheaper to overbuild renewables and close down the aging coal plants. Some plants are being converted to burn natural gas instead. Others are just being shuttered.
A plant that's about to be written off and remaindered is a great target for a crypto operation. Using that dedicated hardware, they can afford the higher cost of the coal-based power. That's led to crypto miners buying up multiple plants in Pennsylvania and in New York. That New York plant had been used as a "peaker" plant, filling in when there was high demand on the grid. Its continuous use in powering crypto mining has reportedly made a nearby glacial lake used to cool the plant "feel like a bathtub."
In the case of the Grant Town plant in West Virginia, operating it for power no longer makes any sense. It's a relatively small power plant, only 80 megawatts. It's also the only plant in the state that still burns "waste coal."
Coal mines often generate a spoil pile of mostly non-coal material that is picked off the conveyor belt, often by hand, and pitched aside. Before the coal is sent to the power plant, it is often sent through a "prep plant," where the coal is crushed to a more uniform size and sent through a series of chemical baths in which the lighter coal floats, while heavier minerals—especially those rich in sulfur—sink. This leaves behind a second spoil pile of waste material.
Producing waste coal requires going back through the spoil piles for coal that was missed the first time. That coal is worse in almost every way than what was produced on the first pass. It contains more non-coal material, lowering the energy output and increasing the amount of ash. It also contains more sulfur and heavy metals, creating toxins that either go up the smokestack or into the coal slurry at the plant.
All coal is dirty, but waste coal is the dirtiest form of coal. Waste coal is what Joe Manchin sells.
Using waste coal made a tiny amount of sense in 2008, when the coal market was at its peak and supply was having a hard time keeping up with demand. It makes no sense now, when a majority of mines have been idled and there is still enormous overcapacity. But Manchin has a contract, and that contract has netted him over $5 million in the last decade.
The result of all this is that Grant Town isn't just the dirtiest plant using the dirtiest fuel, it's also the most expensive plant in the state, in terms of dollars per megawatt. That plant has lost $117 million in just the last five years while paying Manchin $500,000 a year—not even for the waste coal itself, but just to manage the contract that delivers the waste coal.
Joe Manchin is almost singularly responsible for removing $1.8 trillion in funding from the Build Back Better legislation. Thanks to Sen. Manchin's refusal to support the bill as it was originally proposed, dozens of major programs have already been reduced in scope or eliminated completely. Some of the things that were removed—including two years of free community college—seemed like complete no-brainers which would have not only decreased the debt students now face upon emerging from college, but given the U.S. a competitive advantage by creating a more educated work force.
The funds for climate change included in the legislation that just passed the House are much smaller than those included in the original proposal that came from the White House. However, they do include over $500 billion in funds dedicated to expanding the use of renewable energy and electric vehicles. Funds for the creation of the Civilian Climate Corps are also still in there, which would create jobs dedicated to restoring and maintaining lost areas of forest and wetland.
Also still included is a program that will give utilities a bonus for the switching production to renewable power. As Popular Science explains, that program could be a massive game-changer when it comes to transitioning not just coal plants, but also natural gas-powered plants, to solar or wind. Manchin has specifically opposed that program, saying, "Why pay the utilities for something they're going to do anyway, because we're transitioning?"
This is why. Because the program supporting those increased payments is expected to speed the transition by four precent a year. And that adds up.
A 4 percent yearly increase would get the energy mix to about 70 to 80 percent in 2030, whereas business as usual would put Americans around 48 percent by the same date.
If the U.S. is even going to come close to meeting the goals that must be met to ward off the worst of the climate crisis, it needs Manchin to vote for inclusion of the Clean Energy Performance Program as part of Build Back Better.
And getting that vote may depend on whether or not the Grant Town plant gets turned into a dedicated crypto mining plant … all so that Joe Manchin can continue to sell the dirtiest coal, to the dirtiest plant, to line his pocket with the dirtiest money.
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