In what’s shaping up to be a literal power struggle, the world of cryptocurrency mining is clashing with federal regulators over the growing energy demands of crypto mining operations. Crypto mining requires extensive electricity for its computing needs, exacerbating the global challenge of reducing emissions at a time when urgent cuts are necessary.
Crypto mining’s energy surge and regulatory response
In February 2024, the U.S. Department of Energy (DOE) highlighted that global cryptocurrency miners consumed as much electricity as Australia in 2023. The DOE’s Energy Information Administration (EIA) responded with an “emergency” survey aimed at gauging the energy usage of these mining operations.
However, the initiative hit a roadblock. A federal judge has temporarily halted the survey, citing potential “immediate and irreparable” harm to the crypto mining industry. The miners have accused the DOE of skirting the required public notice and comment period by declaring an “unlawful” emergency.
Lee Bratcher, president of the Texas Blockchain Council, expressed relief at the court’s decision, criticizing the government’s approach to data collection.
“We’re not averse to sharing data,” Bratcher said. “We just want the government to go about data collection in a lawful way and not in a way that is politicized.”
Following the judge’s injunction, the EIA announced it would refrain from penalizing companies that fail to respond to the survey by the March 22 deadline. Additionally, the administration noted it would not use the data already collected, acknowledging the survey’s premature distribution.
The broader impact of crypto mining
The surge in crypto mining has led to an increase in electricity consumption across the U.S., with some coal plants being resurrected to fulfill the growing energy demands. Data centers — the backbone of cryptocurrency mining operations — number over 8,000 in the U.S. alone.
The impact extends beyond cryptocurrency, with advancements in AI technology also contributing to the energy surge. The International Energy Agency forecasts that by 2026, data centers could consume over 1,000 terawatt-hours of energy, mirroring Japan’s annual energy consumption.
A report from Wood Mackenzie underscores the financial implications for Texans who are not involved in mining, pointing out a $1.8 billion annual increase in electricity costs attributed to Bitcoin mining. As Bitcoin’s price reaches $57,000, making mining more lucrative, these costs are expected to escalate further.