Biden administration acknowledges it can force Bitcoin mines to disclose pollution

Federal agencies have the authority to force crypto mining companies to divulge how much energy they use and greenhouse gas emissions they create, according to letters between the agencies and Democratic lawmakers shared exclusively with The Verge.

Bitcoin miners have flocked to the US over the past couple years, triggering concerns about electricity usage and greenhouse gas emissions. Despite the proliferation of crypto mines across the US, there hasn’t been solid data on what impact they each have on the power grid and national climate goals.

That could soon change as Democratic lawmakers pressure federal agencies to speed up plans to require crypto mining companies to report their emissions and energy consumption. That kind of transparency is an early, crucial step toward reining in pollution from crypto mines.

The Department of Energy (DOE) and the Environmental Protection Agency (EPA) have described “clear authority to require emissions and energy-use disclosures by cryptominers” according to a letter several Democratic Congress members sent to the agencies yesterday. It asks each agency to provide timelines for when they plan to start executing those powers and collecting information.

“We urge you to use those authorities to implement a mandatory disclosure regime as rapidly as possible,” says the letter, which was signed by Senators Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Ed Markey (D-MA), Jeff Merkley (D-OR), Dick Durbin (D-IL), and Representatives Jared Huffman (D-CA), Katie Porter (D-CA), and Rashida Tlaib (D-MI).

This is the latest move in a saga that started last year, when Democratic lawmakers asked the biggest crypto mining companies in the US to share numbers on their energy consumption and pollution. Seven companies together have the capacity to use over 1 gigawatt of electricity, almost enough energy as every residence in Houston might use combined, according to the Congress members.

While several companies provided some data, none of them gave full responses to Democrats’ questions. That spurred the Congress members to ask the DOE and EPA in July to require that crypto companies publicly share information to get a more comprehensive picture of the impact they have on the grid and the environment.

Warren’s office shared the DOE and EPA’s responses to that July inquiry with The Verge. In November, the Secretary of Energy Jennifer Granholm wrote a letter to Warren saying that the US Energy Information Administration (EIA) has the authority to require crypto operations to report their energy use as “operating facilities… engaged in… major energy consumption.” Such a mandate would “require development of a new survey to collect this information,” the letter says. The EIA could also require utilities to share information about how much electricity they sell to crypto companies.

The EPA, meanwhile, told lawmakers that the Clean Air Act gives it the ability to collect pollution data from facilities pumping out at least 25,000 tons of planet-heating carbon dioxide a year. Democrats’ probe into the nation’s largest crypto mines has already revealed that at least two companies run crypto mines in the US that fall into that category. Both of those companies already report those emissions under the Clean Air Act requirements.

But the letter Warren and her colleagues sent yesterday asks the EPA to clarify whether it has already listed every crypto operation that meets the 25,000-ton threshold — and, if not, when it plans to do so. The letter asks for answers by no later than March 6th. The Verge reached out to the EPA and DOE, but did not receive comments by time of publication.

While there aren’t concrete numbers yet on just how dirty or energy-hungry crypto mines are in the US, initial estimates are striking. The crypto industry’s operations in the US likely use roughly as much electricity as all of the nation’s home computers combined, according to a September report from the White House. That report recommended that the EPA and DOE work together to develop performance standards that would push crypto companies to transition to clean energy while using less energy overall. If that doesn’t work, the report suggests that the Biden “Administration should explore executive actions, and Congress might consider legislation.”

If that happens, the policies would primarily target Bitcoin — still the most popular and most polluting cryptocurrency. Other cryptocurrencies, including Ethereum, have already ditched the energy-intensive code that the Bitcoin network refuses to give up.

Bitcoin miners set up data farms filled with specialized hardware used to solve computational puzzles. It’s part of a purposely energy-inefficient process of validating new transactions. The miners are rewarded with new tokens in return, although that incentive has fallen along with Bitcoin prices during the enduring crypto winter. Still, the Bitcoin network is estimated to use nearly as much electricity annually as the Netherlands, according to the Cambridge Centre for Alternative Finance.