The United States Department of Energy (DOE) is set to launch a survey to collect data on the energy consumption of local cryptocurrency mining companies in response to growing concerns about the environmental and energy impact of crypto mining activities.
The move comes as the price of Bitcoin surged by over 50% in the past three months, leading to an uptick in crypto mining, which in turn has raised questions about its electricity consumption.
Survey to assess crypto miners’ electricity usage
Starting next week, the U.S. Energy Information Administration (EIA), the statistical agency of the DOE, will initiate a provisional survey that will require crypto miners to report their energy consumption over the next six months.
The survey, approved by the Office of Management and Budget in response to an emergency request, aims to gather details related to the energy use of local crypto-mining operations.
The key objective of the survey, as outlined by EIA Administrator Joe DeCarolis, is to “specifically focus on how the energy demand for cryptocurrency mining is evolving, identify geographic areas of high growth, and quantify the sources of electricity used to meet cryptocurrency mining demand.” This data will be crucial in understanding and addressing the energy impact of the crypto mining industry in the United States.
Growing concerns about crypto mining energy consumption
The decision to initiate this survey is part of the U.S. government’s broader efforts to gain better insight into the crypto-mining industry. In 2021, following China’s ban on crypto mining, the United States became the world’s largest hub for miners looking to relocate their operations. This shift in mining activity raised concerns about energy use and its environmental implications.
In 2022, U.S. lawmakers held a congressional hearing to investigate the crypto mining industry, focusing on energy consumption and fossil fuel emissions concerns. Subsequently, in early 2023, Congress called upon the Environmental Protection Agency to conduct an investigation into the impact of crypto mining.
In an effort to address the growing energy consumption associated with crypto mining, U.S. President Joe Biden proposed a 30% incremental tax on crypto miners’ electricity costs in 2023. The aim of this proposal was to “reduce mining activity” within the country.
The tax would target Bitcoin miners’ significant electricity consumption, reaching an estimated 121.13 terawatt-hours globally in 2023, marking an all-time high since 2010, according to Cambridge University’s Bitcoin Electricity Consumption Index.
To put this into perspective, data from 2022 provided by the International Energy Agency (IEA) indicates that the European country of Belgium consumed 93.8 terawatt-hours. The IEA also predicts a further increase in crypto mining energy consumption, forecasting that it will reach 160 terawatt-hours by 2026 in a report released on January 25, 2024.
Public input welcome
In addition to collecting data from crypto miners, the U.S. government is seeking public input on the energy use of cryptocurrency mining. Public comments regarding crypto miners’ energy consumption will be collected alongside the survey data.
This approach aims to ensure that all stakeholders have the opportunity to contribute their insights and concerns regarding the industry’s energy usage.
