The Biden administration recently announced that it would be requiring large cryptocurrency mining operations to report electricity usage, via a press release from The Energy Information Administration. This follows concerns that the industry could pose a threat to the nation’s electricity grids and hasten the impacts of climate change.
To that end, the EIA has targeted 137 “identified commercial cryptocurrency miners” working in the US. These operations account for around 2.3 percent of national energy usage. This breaks down to 90 terawatt-hours per year, which is more than Finland, Belgium and Chile use in that same time period. The world’s crypto miners used as much electricity in 2023 as the entire country of Australia. That’s a whole lot of energy for Shiba Inu-branded internet money with no practical application.
The data collection started this week. The survey aims to get a sense of the industry’s growing demands and which parts of the country are the biggest crypto hotbeds, so as to refine policy later on. The EIA has already discovered that nearly 38 percent of all bitcoin is mined in the US, which is up from 3.4 percent in 2020.
“As cryptocurrency mining has increased in the United States, concerns have grown about the energy-intensive nature of the business and its effects on the US electric power industry,” the EIA said in a report that offered further details behind the survey.
The EIA went on to note that large crypto mining operations could strain the electricity grid during peak periods, force higher energy prices for average consumers and negatively impact energy-related carbon dioxide emissions. Most of the electricity generated throughout the world comes from burning fossil fuels, and that process releases carbon dioxide into the atmosphere.
The clean energy advocacy group RMI estimates that US cryptocurrency mines release 25 to 50 million tons of CO2 into the atmosphere every year. That’s around the same amount as the yearly diesel emissions from the US railroad industry.
The biggest mining operations in the country are scattered throughout 21 states, but largely clustered in Texas, Georgia and New York. This is especially dangerous for Texans, as the state’s energy grid is already notoriously fragile. Ben Hertz-Shargel, who leads energy research consultancy firm Wood Mackenzie, told Ars Technica that crypto mining operations are not only placing a higher burden on the state’s energy grid, but increasing prices for consumers.
Energy costs in Texas are based on real-time demand, so Hertz-Shargel estimates that state residents see an increase of 4.7 percent in their monthly utility bills due to cryptocurrency mining. He also said that mining operations tend to open up shop next to pre-existing renewable energy facilities, which draws clean power away from nearby homes and businesses.
It’s not all doom and gloom in the crypto world. Back in 2022, Ethereum announced a software update to make mining ether more eco-friendly. The Ethereum Foundation claims this reduces the carbon emissions of its mining operations by more than 99 percent. However, ether accounts for just 17 percent of the global cryptocurrency market share.