This is not the summer that Americans want to deal with an unknown number of cryptocurrency firms unexpectedly flooding the power grid. More Americans are already expecting to experience rolling blackouts as the nation’s power grid strains against record heat and drought conditions currently spiking energy usage from coast to coast. Now, US lawmakers are worried that plans for rapid growth in cryptocurrency mining operations will further destabilize the grid, while quietly spiking carbon emissions and driving up utility costs to more and more consumers.
This story originally appeared on Ars Technica , a trusted source for technology news, tech policy analysis, reviews, and more. Ars is owned by WIRED’s parent company, Condé Nast. That’s why Senator Elizabeth Warren joined five other congressmembers to submit a letter to the Environmental Protection Agency and Department of Energy , recommending the agencies combine forces to draft new regulations requiring emissions and energy use reporting from all crypto-mining operations nationwide.
Only then, Warren and others suggest, will we know exactly how many firms are operating in the US, how much energy is being used, how much damage to the environment is being done, and how many communities are being affected. The letter provided the EPA and DOE with new information from Congress’ investigation into the environmental impacts of “seven of the largest crypto-mining operations in the US. ” It’s just a fraction of the whole, but together, these firms plan to increase their total mining capacity by nearly 230 percent, requiring an added electricity consumption greater than that of all the homes in Los Angeles.
None of the firms said that they track the impacts on consumers connected to power grids, and none of the firms seemed to think they had any reason to fully comply with Congress’ request for information. “None of the companies provided full and complete information in response to our questions,” Warren, et al. wrote.
“But the information they did provide reveals that these companies’ mining operations are significant and growing, have a major impact on climate change, and that federal intervention is necessary. ” Only three firms shared data on greenhouse gas emissions, but the pattern the limited data set revealed was troubling to congressmembers: “These three companies that provided clear emissions data alone are currently responsible for approximately 1. 6 million tons emitted annually, the equivalent of almost 360,000 cars—and these figures are only set to go upwards in the coming years.
” Warren, et al. have given the agencies until August 15 to verify their authority to enforce crypto-mining reporting. They suggested that some reporting, like emissions data, could be required through existing legislation, like the Clean Air Act.
After China banned crypto mining last fall, the US became the prime destination for firms relocating. Within the past few years, the congressmembers say in the letter, the US has supplied “over a third of the global computing power dedicated to mining Bitcoin” ( the most popular cryptocurrency ). As more firms move into the US, Warren et al.
said that people who live and do business near these firms have already ended up paying higher utility costs. The biggest example comes from Plattsburgh, New York. The Congress members described a report detailing “residential electricity bills that were ‘up to $300 higher than usual’ in the winter of 2018.
” In that case, New York responded to growing concerns by passing the first US moratorium on new crypto-mining operations . Warren, et al. are not urging a nationwide ban like China’s, but they quoted a study from the Haas School of Business at UC Berkeley that showed the extent of the issue and implications for other areas impacted by future growth: “The power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.
” All of the companies included in the investigation were asked to explain “the impacts of your facilities on energy costs to local families and businesses,” but none could describe any existing estimates or models that tracked those impacts. Those who engaged with the question said this was because they didn’t expect to have a noticeable effect on costs of consumer energy bills. One firm, Bit Digital, said it would be counterintuitive to study its own impact on local families and businesses, because firms are intentionally located in rural areas with excess power supply and limited demand—taking up empty space not being used on the power grid, not competing with consumers for power.
Bit Digital’s chief strategy officer, Samir V. Tabar, criticized the letter from Warren, et al. for being “silent on” data provided that shows how the crypto-mining firm stokes job creation “in dilapidated economies while utilizing unwanted power infrastructure.
” Tabar says that Bit Digital is “happy to help shape the industry by being leaders in using sustainable sources of power,” and the firm was “hoping the Senator would see our efforts there. ” Because data is so underreported, it remains difficult to forecast how local residents and businesses will be impacted by projected growth of these firms. Some firms said that because of commitments by crypto-mining firms to shift to renewable energy sources, things could change so fast that any existing data cannot be reliably used to forecast how US citizens will be impacted.
At least one firm, Stronghold Digital Mining, claimed that “the multitude of factors that impact residential electricity costs,” such as “natural gas prices, temperature fluctuations, and other factors,” make it “difficult to attribute any change in local electricity costs” to crypto mining. (Stronghold did not immediately respond to a request for comment. ) The congressmembers believe that requiring reporting is the answer.
They’re especially concerned about residents and businesses in states like Texas, where “relatively cheap electricity costs” are attracting “an influx of crypto-mining companies,” which could potentially “add to the stress on the state’s power grid. ” Warren, et al. say that since 2019, global power consumption from bitcoin mining alone “increased nearly four-fold”—which basically erased “the total reductions in greenhouse gas emissions attributed to electric vehicles.
” In their responses, crypto-mining firms pushed back against environmental complaints by pointing out that their goal is to spend as little money as possible on power, and thus, the biggest firms are highly motivated to switch to renewable energy sources. That, firms claimed, could help the US achieve its renewable energy goals if the US supported the expansion of crypto mining, rather than restricting or banning it as China has done and India is trying to do . Firms also say that due to agreements between power companies and crypto-mining firms to shut off miners’ power when there’s a spike in energy demand on the grid, firms help to stabilize energy supply and decrease consumer costs.
Bit Digital even suggested that lawmakers consider rewarding miners participating in these programs and encouraging more cities to adopt crypto-mining partnerships. Crypto miners’ hunger for growth and incentives seems, predictably, boundless. Energy security remains a top US priority for most Democrats , and helping officials understand how digital currency works will remain an important part of the country’s energy use equation.
By the end of the summer, congressmembers expect the EPA and DOE to reveal how they plan to ramp up reporting on crypto mining in the US. If the agency response is timely, that update should arrive ahead of President Joe Biden’s request for a September report that will explain, in part, the energy policy implications if the US adopts a central bank digital currency in the coming years. This story originally appeared on Ars Technica .
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From: wired
URL: https://www.wired.com/story/cryptomining-us-power-grid-regulations/
