The Biden administration has set its sights on reining in energy usage from large cryptocurrency mining operations. This comes as concerns mount that the burgeoning industry could destabilize electricity grids and accelerate climate change.
The Energy Information Administration will now require 137 major crypto-mining companies in the US to report their electricity consumption. Together, these operations account for 2.3% of total national energy usage – around 90 terawatt-hours per year. To put that in perspective, that’s more electricity than many mid-sized countries like Finland, Belgium, and Chile use annually.
The data collection initiative aims to map out crypto hotspots across the country and their energy demands. So far, the EIA has found that nearly 38% of all bitcoin mining takes place in the US today, up from just 3.4% in 2020. This rapid growth is sounding alarm bells.
Crypto mining’s energy appetite has raised worries it could overload grids during peak demand and jack up costs for households and businesses. Most electricity generation still relies on fossil fuels, so the resulting carbon emissions are also massive – an estimated 25 to 50 million tons of CO2 per year just from US crypto miners. That matches the annual diesel emissions of the entire US railroad industry.
Texas has emerged as a nexus of crypto mining, accounting for over a third of activity. With the state’s grid already strained, the added electricity burden hurts consumers through higher bills and decreased grid reliability. Renewable energy sources in Texas are also being diverted to crypto mining rather than powering homes and businesses.
However, the picture isn’t entirely bleak. Some major cryptocurrencies like Ethereum have invested heavily in improving energy efficiency and reducing emissions from mining operations. While crypto’s climate impact remains substantial, targeted policies and technological innovation could curb its energy appetite and environmental footprint. But action must be swift, as this fledgling industry’s electricity usage and carbon emissions continue their meteoric rise.
