Crypto mining has a bad rap among environmentalists. Proof-of-work crypto mining is often quite costly in terms of energy consumption. In fact, worldwide crypto mining efforts cumulatively consume the same amount of power as an entire nation. And while some crypto mining companies reduce their carbon footprint through alternative sources of fuel or cleaner-burning natural gas, these companies nonetheless find themselves in the crosshairs of the eco-conscious. That’s where Greenidge Generation (NASDAQ:GREE) finds itself today after a letter from Sen. Elizabeth Warren. GREE stock is in turmoil as a result.
Greenidge Generation is a crypto mining facility based in the Finger Lakes region of New York. The facility was initially a coal-burning power plant; since purchasing the property, Greenidge has converted the facility to one which burns natural gas. Since the company revamped the facility, it has caused uproar from the local community.
A major point of contention between local activists and the company is over the warming of water in Seneca Lake. The plant is situated on the edge of the lake, and it has a permit to dump warm water back into the lake after use. Environmentalists claim the activity is warming the lake and killing local fish populations. Of course, the facility is also producing greenhouse gas emissions as well, for which it has a permit. The company is currently permitted to produce over 600,000 tons of carbon dioxide per year. But, it is capable of producing well over 1 million tons at full capacity.
GREE Stock Dips After Elizabeth Warren Puts Pressure on Greenidge
Greenidge is a recently public crypto mining firm and one of just a handful based in the United States. It saw listing on the Nasdaq Exchange in September after a merger with Support.com. After initially sinking, GREE stock has been trading steadily between $20 and $30. But with new scrutiny on its carbon output, the stock is suffering this week.
Massachusetts Sen. Elizabeth Warren is a progressive lawmaker with an emphasis on environmental policy. As such, she is one of the most vocally skeptical of crypto mining efforts. Now, she’s putting Greenidge in the hot seat. A letter from her office, addressed to Greenidge CEO Jeff Kirt, is requesting insight into the company’s energy usage.
Warren sent Kirt a string of seven questions, and a deadline of Dec. 17 to respond with some information. These questions request accurate data into both the energy consumption of the plant as well as the carbon output of the facility. They also challenge the company’s claim that it is the first carbon-neutral crypto miner in the U.S., requesting evidence of the carbon offsets it says it purchases. Further requested documentation into the effects the plant has on local wildlife, as well as the financial effect of the plant on local citizens closes out the letter.
Greenidge has a lot to answer for, and the six-page letter highlights the level of scrutiny at play. In the meantime, GREE stock is seeing a fair bit of volatility. The stock is down 9% this morning as investors process the news. As we advance through the morning, about 500,000 shares of GREE are trading hands against an average of 3 million.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
