E&C Leaders Demand Answers from Cryptomining Companies on their Environmental and Energy Impacts
Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ), Energy Subcommittee Chairman Bobby Rush (D-IL), Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO), and Environment and Climate Change Subcommittee Chairman Paul Tonko (D-NY) wrote to four cryptomining companies today as part of the Committee’s continued oversight of the environmental and energy impacts of blockchain technology. The four Committee leaders are seeking answers on how each company is mitigating those impacts and what steps are being taken to ensure their operations do not strain the energy grid or undermine our nation’s climate goals.
The letters follow a January Oversight and Investigations Subcommittee hearing on the energy impacts of cryptocurrency and question the adverse environmental and energy impacts of blockchains that use a proof of work (PoW) consensus mechanism.
“Blockchain technology holds immense promise that may make our personal information more secure and economy more efficient,” the four Committee leaders wrote. “However, the energy consumption and hardware required to support PoW-based cryptocurrencies may, in some instances, produce severe externalities in the form of harmful emissions and excess electronic waste.”
Despite testimony during the January hearing that cryptomining companies can mitigate their energy consumption by investing in renewable energy projects, the Committee leaders explained that PoW cryptomining facilities still consume an immense amount of energy, pointing out that some of the largest companies continue to rely primarily on the electric grid for power. The Committee leaders said this can drive up peak demand and may even breathe new life into fossil fuel generators.
“Given the existential threat posed by the climate crisis, we are deeply concerned about efforts like this that increase demand for fossil fuels, with the potential to put new strain on our energy grid,” Pallone, Rush, DeGette, and Tonko continued. “While blockchain technology is emerging as a potentially important tool in fighting climate change, increasing demand on the grid and burning more fossil fuels to power PoW cryptomining facilities only serves to undermine the potential climate benefits of blockchain technology and hold us back from achieving our climate pollution reduction goals.”
As part of their inquiry, the Committee leaders requested answers to an array of questions, including:
- How much energy did each of the company’s cryptomining facilities use during 2021?
- What are the energy sources used by utilities serving each of the facilities, including the energy mix of each?
- What is the proportion of energy used that is offset with renewable energy credits?
- In the last 12 months, how many days have the companies curtailed cryptomining to support grid stability?
- In 2021, what was the average cost per megawatt hour and per megawatt hour profit at each of the company’s cryptomining facilities?
Full text of the letters is available here: