Lawmakers: US Crypto-Mining Companies Need to Disclose Energy Usage

It’s no secret that cryptocurrency mining can consume lots of electricity. But now a group of US lawmakers is calling on the federal government to require domestic crypto-mining companies to regularly report their energy usage and carbon emissions.  

On Friday, six Democratic lawmakers, including US Senator Elizabeth Warren (D-Mass.), sent a letter urging(Opens in a new window) the Environmental Protection Agency and the Department of Energy to enforce more transparency in the crypto-mining industry. 

The lawmakers conducted their own investigation, which involved scrutinizing seven major crypto-mining firms in the country. The investigation found that the companies collectively can use at least 1,045 megawatts of electricity to mine cryptocurrencies, which is almost enough energy to power all the residential homes in Houston, Texas, according to their estimates. 

“Our investigation suggests that the overall US cryptomining industry is likely to be problematic for energy and emissions. But little is known about the full scope of cryptomining activity,” the lawmakers wrote in their letter(Opens in a new window). 

The lawmakers added: “There is no national or state reporting requirement or compilation of the locations of cryptomining facilities in the United States, and no federal regulations specifically governing cryptomining. Consequently, policymakers and the public do not have a comprehensive source of information about where these operations are located, how much energy they consume, and what their sources of energy are.”

The lawmakers are particularly concerned with whether the cryptocurrency mining contributes to carbon emissions and can result in electricity price hikes. According to their investigation, many of the crypto-mining companies also have plans to expand their operations, which is bound to increase electricity usage. 

In their defense, several of the crypto-mining companies told lawmakers they’ve been using environmentally friendly mining procedures. Bit Digital, for example, says a majority of its mining runs on carbon-free sources. Meanwhile, Stronghold Digital Mining relies on the “reclamation of coal refuse,” or leftover material from coal mining, for power generation. In the process, the surrounding land is then restored to its natural conditions. 

Nevertheless, the lawmakers’ investigation found some of the mining is still generating significant amounts of carbon emissions. “Bit Digital indicated that its operations resulted in an estimated 92,000 metric tons of CO2 emissions in 2021, and projected 1.075 million metric tons of CO2 emissions in 2022, increasing to 1.2 million metric tons in 2023 and beyond—annual emissions that are equivalent to those from over 260,000 automobiles,” the letter added. 

As a result, the lawmakers say it’s time for US federal agencies to intervene by requiring crypto-mining firms to report their impact on the electric grid and on the environment. “This collected data would enable valuable public policy activities, including better monitoring of energy use and trends, better evidence basis for policy making, improved data for national mitigation analyses, better abilities for evaluating technology policies for the sector, and better modeling of national and regional grid loads and transitions, among other purposes,” the lawmakers added.

The Environmental Protection Agency confirmed it received the letter from the lawmakers. “And we will respond accordingly,” an agency spokesperson told PCMag.