News
The U.S. Energy Information Administration will launch a new investigation that will require cryptomining firms to report energy consumption.
Washington DC –
Yesterday, the U.S. Energy Information Administration (EIA) announced plans to launch a new interim investigation into electricity consumption by cryptocurrency mining companies in the United States. This is the federal agency’s second attempt to collect much-needed cryptomining data, after revoke a similar emergency data request earlier this year due to a lawsuit filed by cryptominers in Texas. The EIA will now proceed with a public comment process on cryptominer reporting requirements, the first step toward establishing regular requirements for cryptominers to report data on their energy use. The public comment process is expected to begin in the coming months and, once comments are received and the survey is completed, will mark the first extensive collection of data on cryptomining companies operating in the United States.
Until now, Proof-of-work cryptocurrency mining has been largely invisible to U.S. regulators with virtually no reporting requirements. Cryptocurrency mining has expanded rapidly in the United States following China’s ban on cryptocurrency mining in 2021. Estimates suggest that over 38% of the world’s cryptocurrency mining takes place in the United States, making it the leading cryptocurrency mining country in the world. The growth of cryptocurrency mining threatens to keep polluting coal and gas-fired power plants running, strains the grid, and could increase electricity rates for American households.
Caroline Weinberg, Senior Research and Policy Analyst for the Clean Energy Program at Earthjustice said, “Utilities and anyone who depends on reliable, affordable electricity should support EIA’s effort to bring transparency to this energy-intensive sector. EIA must work quickly and carefully to finalize a comprehensive investigation this year.”
Background
In 2022, Earthjustice, in collaboration with several other organizations, submitted comments to the U.S. Energy Information Administration regarding the negative climate and environmental impacts of cryptocurrency mining, asking the agency to collect data on cryptocurrency energy consumption.
In September 2022, the White House Office of Science and Technology Policy released a Report on the sector’s climate threats and the need for regulationEarthjustice and the Sierra Club have published a guide, “The Energy Bomb” finding that in one year from mid-2021 to mid-2022, Bitcoin mining in the United States alone consumed as much electricity as four states combined, while emitting 27.4 million tons of CO2, equivalent to the emissions of as many as 6 million cars per year.
Cryptocurrency mining’s massive energy consumption threatens to undermine decades of progress toward meeting climate goals and reducing local pollution. Additionally, cryptocurrency mining practices can increase costs and risks for utilities and their ratepayers, stress power grids, increase local air and water pollution, and inundate communities with harmful noise pollution.
Instead of investing in long-term energy infrastructure that benefits the grid, the cryptocurrency mining industry seeks the cheapest available energy that can meet its needs. In practice, this means mining cryptocurrency near coal and gas power plants and tapping into electricity grids that often rely on fossil fuels.