The US Department of Energy (DOE) and Energy Information Administration (EIA) have canceled their immediate survey on the power usage of Bitcoin mining due to a legal challenge from industry organizations. This decision comes at a time when there is increasing scrutiny on the energy consumption of cryptocurrency mining and its potential impact on the environment and the stability of the power grid.
Industry Objects, Points Out Legal Issues
Riot Blockchain, a publicly traded Bitcoin mining company, and the Texas Blockchain Council, filed a lawsuit stating that the survey did not adhere to the legal requirements for public input and data collection procedures specified in the Paperwork Reduction Act. The plaintiffs argued that the EIA did not justify how bypassing these procedures was necessary to prevent potential “public harm,” a prerequisite for emergency data collection.
Kara Rollins, representing the plaintiffs, expressed to Fortune:
“We were shocked to see how blatantly the law was ignored here… We don’t want politics infecting data.”
However, the EIA contended that the urgency of the situation warranted bypassing standard procedures, citing concerns that Bitcoin mining could disrupt the electric power industry.
Bitcoin Mining And Energy Discussion
Bitcoin mining, the process of verifying and recording transactions on the blockchain ledger, requires powerful computers to solve complex mathematical problems. This process consumes substantial amounts of electricity, leading to concerns about its environmental impact and strain on the power grid.
Initial estimates from the EIA indicate that Bitcoin mining could contribute between 0.6% and 2.3% of total annual electricity consumption in the US. While the industry argues this is on par with individual states like Utah and Washington, environmental groups such as Earthjustice argue that it adds to greenhouse gas emissions and raises electricity prices for consumers.
In Texas, a significant Bitcoin mining center, Wood Mackenzie notes that the industry has increased electricity costs for non-mining residents by about $1.8 billion per year. Nonetheless, the industry contends that data centers can enhance grid stability by providing flexible demand, enabling them to swiftly halt operations during peak periods or emergencies.
Transparent Data Collection: A Way Forward
The DOE and EIA have opted to discard any data gathered from the original survey and will pursue a non-emergency version with a 60-day public comment period. This revised approach aligns with the Paperwork Reduction Act and allows for broader participation from stakeholders.
Although the lawsuit successfully challenged the initial method, it underscores the importance of transparent data collection and open discussions to address the environmental and economic ramifications of Bitcoin mining. Obtaining accurate data through the revised survey will be crucial for shaping well-informed policies and regulations in the future.
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