NEW YORK : U.S. officials this week indefinitely withdrew a survey aimed at gathering information on the crypto-mining industry’s power use, hindering attempts to understand the sector’s impact on grids and energy prices at a time of record activity.
Riot Platforms, among the biggest U.S. bitcoin miners, and industry group Texas Blockchain Council, sued to stop mandatory data requests after a new survey went out this month by the U.S. Energy Information Administration (EIA) to assess crypto-mining’s electricity use.
As a result, U.S. officials canceled the emergency survey and are negotiating an agreement with the bitcoin mining plaintiffs to end the lawsuit, said two sources familiar with the situation. Crypto critics said halting the survey could create new vulnerabilities to the U.S. electrical grid, and one environmental group called industry opposition to the survey “reprehensible.”
Mining of digital coins hit a peak on Feb. 7 and is expected to consume more than 60 terawatt hours in the U.S. this year, or nearly the annual electricity consumption of Israel, according to Reuters calculations and estimates from firms producing data about Bitcoin and electricity use.
Bitcoin mining power demand is projected to grow by more than a third globally through 2024, with the U.S. accounting for the largest share, according to energy analytics firm Enverus.
It was unclear if the EIA would still pursue its survey or what sort of timeline such an effort would now entail.
The U.S. made up 38 per cent of global bitcoin mining as of January 2022, according to the latest data from Cambridge University. Anecdotally, that share is now likely closer to 50 per cent, estimated Alexander Neumüller, a researcher at Cambridge Centre for Alternative Finance.
Recent approval of spot bitcoin exchange-traded funds (ETFs) has boosted prices, which this week soared to $60,000, encouraging more mining activity.
Last month the EIA, the Department of Energy’s statistical arm, filed an emergency request to begin monitoring crypto-mining’s power use, citing concerns its swelling footprint could raise power bills and overburden the vulnerable U.S. electrical network.
Booming electricity consumption, and crypto-mining’s unusual interplay with power markets, has affected grids in places like Texas and driven up energy costs for some consumers.
“It’s particularly reprehensible for Texan cryptocurrency miners to obstruct basic efforts to gather essential data energy regulators need to deliver reliable, affordable power,” said Holly Bender of environmental group Sierra Club. Bender pointed to a 2021 winter freeze that knocked out power across large swaths of Texas and killed over 200 people.
‘SENSE OF URGENCY’
The EIA began its survey of 82 miners the week of Feb. 5, requesting details about operations and energy use. Members of Congress, including Senator Elizabeth Warren, had requested a survey for more than a year.
“The department is asking crypto-miners to report basic information about their energy usage — like other industries have done for decades — so the public and lawmakers better understand how crypto-mining’s electricity use and carbon emissions affect the power grid and environment,” Warren said in an email to Reuters.
The memo from EIA Head Joseph DeCarolis requesting approval of the survey from the Office of Management and Budget said, “We feel a sense of urgency to generate credible data that would provide insight into this unfolding issue.”
The mining industry’s lawsuit, filed on Feb. 22, claimed the survey’s fast-track approval process was unlawful and its scope, including questions about precise geographic locations of miners and commercial partners, posed threats to their businesses and hard assets if made public.
On Friday, the EIA agreed to halt the survey for over a month until March 25 and sequester the data it received so far. Later that day, a U.S. federal judge in Waco, Texas, ordered a temporary restraining order against federal agencies and the survey.
This week, the survey was withdrawn, according to sources who asked to remain anonymous because of the ongoing legal dispute. The sides reached an “agreement-in-principle,” to be finalized by March 1, court records show.
Both sides declined to comment on details of any agreement.
