Crypto Energy Study Shrugged By Agencies, Irking Lawmaker
Federal agencies are balking at — or refusing to publicly explain their response to — recommendations on cryptocurrency mining from a White House report that raised serious concerns about the fast-growing industry’s energy use and climate footprint.
The situation has irked a House Democrat who has been pushing for a closer federal look at cryptocurrency — and who demanded that the agencies respond to his concerns soon.
U.S. energy and environmental officials have announced no plans to pursue possible efficiency standards, electric grid reliability ratings or energy use studies outlined by the study, which was released four weeks ago. The report found that cryptocurrency mining accounts for 0.9% to 1.7% of US electricity use and causes about 0.4% to 0.8% of US greenhouse gas emissions.
Costa Samaras, the Office of Science and Technology Policy’s principal assistant director for energy, told Bloomberg Law that his office continues to engage with agencies to chart a path forward.
“Each agency is reviewing the recommendations and will announce commitments as part of its own process and timeline,” he said.
But officials from the Federal Energy Regulatory Commission and the North American Electric Reliability Commission said in interviews that they do not plan to take up a reliability rating solely for cryptocurrency, arguing that they have safeguards in place to address grid shortfalls.
The Energy Department declined to be interviewed about the White House report — it referred questions to the Justice Department, which has no jurisdiction over energy efficiency standards. Justice spokespeople did not return requests for comment.
The Environmental Protection Agency also did not respond to multiple requests for comment, nor did it respond to inquiries from congressional Democrats.
“Find Out What Happens”
The silence from central agencies dampens the enthusiasm of Rep.
“This problem is not going away — if anything, it’s potentially getting a lot worse,” Huffman told Bloomberg Law.
The agencies “should look at where this evidence of cryptomining work is located,” he said. “Are they in affected communities that have already been disproportionately affected by various industries? Are there negative effects on electricity prices, water pollution or noise for those communities?”
Huffman said he wants to hear from agencies soon.
“If I don’t hear from them in the next few weeks, I’m certainly going to get on the phone and find out what’s going on,” he said.
In May, Energy Secretary Jennifer Granholm told Congress that she “absolutely” supports further study of cryptomining.
“The projection of the expansion of the capacity of the grid that most modelers use has not fully taken into account the huge energy demand that cryptocurrency represents,” said Granholm.
Searching for data
Huffman’s questions made up the core concerns laid out by the White House Office of Science and Technology Policy.
The push for better energy and emissions data is the biggest recommendation in the report, Samaras said during a Twitter Spaces event hosted by Bloomberg last week.
“The public needs information and transparency so we can enable some evidence-based policy,” Samaras said. Data can be collected from voluntary disclosures by industry, Department of Energy surveys of electric utilities or state energy and environmental agencies, he said.
Mines can consist of thousands of servers stacked in warehouses, deploying raw computing power to solve a variety of complex math problems.
“This is an industry that can grow very quickly,” Samaras said. “We want to make sure the public is protected.”
Part of the plan
Officials monitoring electrical reliability said cryptocurrency mining does not pose an imminent risk to the grid because it already balances supply with large power-guzzling plants.
Looking several years ahead, the growth of crypto — along with electric vehicles — may require keeping some power plants running and building new facilities in the right places, said John Moura, director of reliability assessment and performance analysis for the North American Electric Reliability Commission. The Commission is a not-for-profit international regulator whose task is to reduce the risk to the reliability and security of the grid.
“We’re not too concerned about this risk of demand just appearing very quickly – we have a process for that,” Moura said. “What we’re concerned about is, will we have enough generating capacity to service that load?”
Cryptomining may not need to be separated from online studies, Allison Clements, a Democratic FERC commissioner, said during a recent editorial meeting with Bloomberg.
“It’s unclear to me that an individual reliability assessment related to cryptocurrency mining, which happens at locations, should be separated from general reliability planning for any particular node, any service territory, any region, any interconnection,” Clements said. “It’s certainly on our radar. I don’t have anything to report, in terms of anything coming up soon.”
The Energy Information Administration, which publishes reams of data on energy trends, stands “ready to help,” if the government begins to move forward on the issue, Chris Higginbotham, an EIA spokesman, said in an email.
“It will be a long process for us to identify the right organizations to investigate, the right questions to ask and the best way to present the data,” Higginbotham said.
Short-term concerns
Advocates hope that the report will stimulate action.
“Typically, OSTP reports are the kind of reports that gather dust,” said Scott Faber, senior vice president of government affairs for the Environmental Working Group.
But this time may be different, he said, because “this issue is so much more critical to this White House than virtually any other issue that OSTP can report on.”
Others see a window for the industry to act on its own. The report was a “call for transparency” issued to bitcoin, which uses a far more energy-intensive form of mining called proof-of-work, said Jesse Morris, CEO of Energy Web, a technology company that works with utilities and consumers to accelerate decarbonization .
“It seemed like the administration was suggesting that if the industry can provide some level of transparency around these things around bitcoin mining, that would be a way to hedge against heavy-handed regulation of proof-of-work mining,” Morris said.
