A group of eight Democratic US lawmakers, led by Senator Elizabeth Warren of Massachusetts, are seeking answers from US-based cryptocurrency mining companies about their power consumption and potential environmental impact.
A A series of lettersSix crypto mining companies received them: Riot Blockchain (Marathon Digital Holdings), Stronghold Digital Minings and Bitdeer.
Although the letters are personalized for each operation, the content of the letters is essentially the same:
How much electricity does your operation consume and how much carbon is produced?
Are there any agreements you have with local power utilities?
What are your future plans to scale up your operations in the future?
Do you have any models or estimates that show the impact of your operations upon energy costs for small businesses and families in your area?
For some time, US regulators and lawmakers have been quietly rumbling about crypto’s domestic energy use. A couple of recent factors may have triggered this new request for information.
The first was a hearing that was held by House Committee on Energy and Commerce, titled “Cleaning up Cryptocurrency: The Energy Implications of Blockchains,”The committee heard testimony on the energy and environmental effects later referenced in the letters.
The University of California, Berkeley issued the second report titled “Power-hungry cryptominers drive up electricity costs for locals.”The letters directly refer to this report, especially focusing on its claims about how crypto mining operations in New York State led to annual power bills rising by $165 million for small business and $79 million residential customers.
It also pulls data from a Congressional Research Service Report titled “Bitcoin and Blockchain: The Energy Sector”According to the report, local crypto mining operations led to a $300 rise in Plattsburgh. According to the report this spike caused “the nation’s first 18-month moratorium for new cryptomining operations.”
The letter points out that crypto mining in the US has grown from 4% in August 2019, to 35% by July 2021. It blames this increase on recent Chinese mining operations. The authors of the letter expect that this share will continue to grow to over 40% over the next year.
The eight lawmakers are asking for more information about the operations of crypto mining companies to help them understand the full consequences for their environment and local communities.
Although no legal or regulatory action is suggested in these letters, Senators as well as Representatives have serious concerns that such actions could be taken in the near future.
The letter’s signers include Senator Elizabeth Warren, Senators Sheldon Whitehouse and Jeffrey A. Merkley (Oregon), Maggie Hassan and Edward J. Markey respectively (Massachusetts), and Congressional Representatives Jared Huffman (California), Rashida Talaib (Michigan) and Katie Porter (California).
The lawmakers have given the letters’ recipients until February 10th to respond to their queries.