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The U.S. Department of Energy (DOE) has announced its plans to gather data on the electricity consumption of cryptocurrency mining operations, responding to concerns raised by environmental advocates regarding the significant energy requirements of these ventures.
Focus on Evolving Energy Demand
Joe DeCarolis, Energy Information Administration's (EIA) administrator, emphasized the agency's intent to study the evolving energy demands of cryptocurrency mining.
In a press release today, DeCarolis stated, "We will 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."
The EIA, operating as the statistical agency of the Department of Energy, disclosed the initiation of a preliminary survey to gather electricity consumption data from identified cryptocurrency mining companies, commencing next week. These companies must comply with the survey requirements following an "emergency collection of data request" authorized by the Office of Management and Budget last week.
Background and Regulatory Response
The move comes amid growing concerns over the environmental impact of cryptocurrency mining activities. Following China's ban on Bitcoin mining in 2021, the United States emerged as the world's largest hub for Bitcoin mining.
Earth Justice said this surge in mining activities drew scrutiny from lawmakers and activists due to its significant energy demands. Instances of Bitcoin mines reviving fossil fuel power plants and escalating electricity costs for residents in certain regions, such as New York, heightened regulatory concerns.
In 2022, Democratic lawmakers urged major cryptocurrency mining companies in the U.S. to disclose their electricity consumption and associated environmental impact. However, none of the companies provided all the requested data, prompting Congress to call on the DOE and EPA to mandate public disclosure of this information.
According to CNET, in communications between the agencies and Democratic lawmakers, Secretary of Energy Jennifer Granholm confirmed that the EIA has the authority to require cryptocurrency operations to report their energy usage. This necessitates the development of a new survey to collect pertinent data. The EIA may also compel utilities to disclose information regarding the electricity sold to cryptocurrency companies.
Notably, a spokesperson for the Blockchain Association did not immediately respond to requests for comment on this development.
Photo: Scott Graham/Unsplash
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