Bitcoin Miners Forced to Report Energy Use in Proposed Bill (1)

by James · December 8, 2022

(Bloomberg) — U.S. crypto miners will be forced to disclose greenhouse gas emissions under a new law, adding pressure to a fast-growing industry criticized for its heavy toll on the environment and power grid.

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The legislation, introduced by Democratic Senator Edward Markey, would require crypto miners using more than 5 megawatts of electricity — a threshold that most Bitcoin miners would pass — to report emissions and the source of power, according to a copy of the bill shared with Bloomberg News. The U.S. Environmental Protection Agency will conduct a study on the impact of existing and planned digital mining operations—including stress levels on the energy grid and fossil fuel use—and offer any measures state regulators can take to reduce energy demand.

Mining digital currency is energy-intensive, with companies including Riot Blockchain Inc. and Argo Blockchain often running thousands of specialized computers around the clock, solving equations that allocate cryptoassets. About 60% of global currency mining is powered by coal and natural gas, as opposed to renewable energy sources, according to data from Cambridge University’s Center for Alternative Finance. American mining produces the equivalent greenhouse gas emissions of 7 million cars on the road in a year, according to a statement from Markey.

After China banned crypto mining last year, US operators raced to set up shop, and now account for more than a third of global Bitcoin mining, skyrocketing from just 3.5% in 2020. They were drawn to Texas for its business-friendly policies and cheap prices. power, but the explosion of interest has raised concerns that the wave of new demand for electricity will strain a power grid that was already plagued by widespread blackouts last year.

“Ensuring crypto mining companies report their greenhouse gas emissions is a necessary step toward holding them accountable and protecting communities across the country that depend on the grid,” Markey, chair of the Senate Environment and Public Works Subcommittee on Clean Air, Climate, and Nuclear Power. Security, says a statement.

Earlier this year, Markey signed a letter from Sen. Elizabeth Warren, a fellow Democrat from Massachusetts, asking miners to disclose years of electricity use and emissions, but responses were limited. The new Markey bill, sponsored by fellow Democrats Rep. Jared Huffman and Sen. Jeff Merkley and backed by several sustainability-focused groups, including the Sierra Club, would appropriate $5 million in 2023.

Markey is pushing for key committee hearings on the matter, a spokesperson for the senator said.

“We would like a law of this nature as long as the bill holds other industries to the same standard,” Lee Bratcher, president of the industry group Texas Blockchain Council, said in a statement. The group contested that mining digital currency takes up a large amount of energy.

(Updates with comments in the last two paragraphs.)