Written by Lila Carney
NEW YORK (Reuters) – U.S. authorities this week indefinitely withdrew a study aimed at gathering information on the cryptocurrency mining industry's power use, and the impact the sector's record activity has on the power grid and energy prices. thwarted attempts to understand.
Riot Platforms, the largest U.S. Bitcoin miner, and the Texas Blockchain Council, an industry group, announced this month after the U.S. Energy Information Administration (EIA) conducted a new study to assess the power usage of crypto mining. , filed a lawsuit seeking to halt the mandatory data requests.
As a result, U.S. authorities have suspended the emergency investigation and are negotiating an agreement with the Bitcoin mining plaintiffs to end the lawsuit, two sources familiar with the situation said. Cryptocurrency critics said canceling the study could create new vulnerabilities in the U.S. power grid, and one environmental group called industry opposition to the study “reprehensible.”
Mining of the digital coin peaked on February 7 and is expected to consume more than 60 terawatt-hours in the U.S. this year, according to Reuters calculations and estimates from companies that produce data on bitcoin and electricity. , which is roughly equivalent to Israel's annual electricity consumption. use.
Energy demand for Bitcoin mining is expected to increase by more than a third globally by 2024, with the United States accounting for the largest share, according to energy analysis firm Enverus.
It is unclear whether the EIA will continue to investigate or what the timeline for such efforts will be.
According to the latest data from the University of Cambridge, the United States accounts for 38% of the world's Bitcoin mining as of January 2022. Anecdotally, that share is now likely approaching 50%, estimates Alexander Neumuller, a researcher at the Cambridge Center for Alternative Finance.
The recent approval of a spot Bitcoin exchange-traded fund (ETF) has boosted prices, soaring to $60,000 this week, prompting increased mining activity.
Last month, the Department of Energy's statistical arm, the EIA, announced that it would not be able to reduce the use of cryptocurrencies due to concerns that the growing footprint of crypto mining could lead to higher electricity prices and put an undue strain on the fragile U.S. power grid. We have submitted an urgent request to begin monitoring electricity usage by mining.
The surge in electricity consumption and the unusual interaction between cryptocurrency mining and power markets is impacting power grids in states such as Texas, driving up energy costs for some consumers.
Holly Bender of the Sierra Club, an environmental group, said, “Energy regulators are making fundamental efforts to collect the essential data needed to provide reliable and affordable power to Texas crypto miners.'' “It is particularly condemnable that they interfered with this.” Killed over 200 people in Texas.
“Sense of urgency”
EIA launched a survey of 82 miners in the week of February 5, seeking details about their operations and energy use. Members of Congress, including Sen. Elizabeth Warren, have been calling for an investigation for more than a year.
“The Department is requiring crypto miners to report basic information on their energy usage, just as other industries have done for decades. “We will be able to better understand how our electricity use and carbon emissions impact the power grid and the environment,” Warren said. he said in an email to Reuters.
A memo from EIA Director Joseph DeCarolis asking the Office of Management and Budget to approve the study said: “We feel a sense of urgency to generate reliable data that provides insight into this evolving problem.'' ” was written.
The mining industry's lawsuit, filed on February 22, alleges that the investigation's expedited approval process is illegal, its scope includes questions about the precise geographic locations of miners and commercial partners, and the investigation is not publicly available. They argued that doing so would pose a threat to their business and hard assets.
The EIA agreed on Friday to suspend the investigation for more than a month, until March 25, and to quarantine the data it has obtained so far. Later that day, a federal judge in Waco, Texas, issued a temporary restraining order against the federal agency and the investigation.
The investigation was withdrawn this week, said the people, who requested anonymity due to the ongoing legal dispute. According to court records, the two sides have reached an “agreement in principle” and the deal is expected to be finalized by March 1.
Both sides declined to comment on the details of the agreement.
(Reporting by Lila Carney in New York; Editing by Liz Hampton and David Gregorio)
