Environmental impacts of cryptomining under the microscope in the Senate

Ben Weiss

WASHINGTON (CN) – Companies that operate facilities that mine cryptocurrency, particularly bitcoin, should not be allowed to “grade their own homework” when it comes to greenhouse gas emissions, US Senator Edward Markey said during a committee hearing on Tuesday.

Markey, who is sponsoring a bill that would require cryptocurrency miners to disclose their emissions levels, said the US needs “independent, reliable and accurate statistics” on the environmental impacts of such activity.

“While the bitcoin mining industry claims they can actually be a boon to the environment … we don’t have the transparency we need to consider these arguments,” the Massachusetts Democrat said.

Markey’s proposed Crypto Asset Environmental Transparency Act, unveiled March 3, would require crypto miners using more than five megawatts of electricity to report their greenhouse gas emissions to the Environmental Protection Agency. The measure would also order the national environmental authority to conduct a “comprehensive investigation” of the effects of cryptocurrency mining in the United States

Bitcoin mining — which uses data banks to generate the digital currency — creates electronic waste and requires large amounts of electricity to run, Markey said.

“With an environmental impact like this, bitcoin is more like digital coal than digital gold,” he added.

Rob Altenburg, senior director of energy and climate at the Pennsylvania-based advocacy group PennFuture, told the senator during Tuesday’s hearing of the Senate Environment and Public Works Committee that even if some cryptomining is run on carbon-free energy sources like nuclear power, that could create problems for the power grid writ large.

“When carbon-free energy is diverted from powering our grid to wasted cryptocurrency, something has to make up the difference,” Altenburg said, “and it’s often fossil fuels.”

Crypto miners in New York have been working to bring retired fossil fuel power plants back online to run crypto farms, New York State Assemblywoman Anna Kelles said at the hearing.

“We need to carefully study the environmental and cyber impacts of cryptocurrency mining methods,” she said, “and implement appropriate laws and regulations to prevent the damage it does to our public health and the environment.”

Meanwhile, Courtney Dentlinger, vice president of customer service at the state electric utility Nebraska Public Power District, took a different approach, highlighting the “significant” economic benefits of crypto mining for some states.

In the Cornhusker State, the cryptocurrency industry has generated over $5 million in tax revenue and provided jobs with wages higher than the state’s median household income, Dentlinger said. Flexible site requirements and smaller workforces also make crypto mining ideal for rural areas.

“Our customers, both public power districts and rural municipalities, are eager to host these opportunities because of the tax benefits and good-paying jobs they provide,” Dentlinger said.

Nebraska Senator Pete Ricketts, a Republican, agreed with Dentlinger’s assessment that cryptomining could be a positive force for economic development in some states and expressed concern that regulation of the industry in the United States could push it overseas.

“When the federal government targets an industry, it has caustic consequences, especially for an industry that is just beginning its development,” Ricketts said. “Excessive laws and regulations can drive new technologies abroad, often to countries that have fewer environmental regulations than the United States.”

Markey said Tuesday that cryptocurrency companies should embrace greater transparency in mining operations: “If the industry is confident in its positive contributions to the environment, it should welcome the transparency of the Crypto Asset Environmental Transparency Act.”

“Only vampires are afraid of the sunshine,” the senator added.