Crypto miners may be facing tough times, with the Biden administration taking a sweeping look at the industry's energy usage. The US Energy Information Administration (EIA), the statistical and analytical agency of the Department of Energy, has launched a survey concerning the electricity consumption of the crypto mining facilities operating in the US. Starting next week, the agency will approach selected companies with a detailed questionnaire regarding their energy use for crypto mining activities.
EIA anxious about crypto mining's impact on the electrical grid
The survey was authorized on January 26 by the Office of Management and Budget (OMB) as an emergency data request – a procedure for obtaining information from service providers in emergency situations. The urgency is related to the assumption that the mining industry could dramatically scale with the surging price of Bitcoin, boosting electricity demand with a potential negative impact on the national grid.
"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." – said Joseph DeCarolis, the EIA administrator.
Crypto miners are to provide a detailed breakdown of their activities
The agency plans to collect relevant data from 82 mining companies that are "required to respond with details related to their energy use." The questionnaire extends beyond mere energy usage and asks for a detailed breakdown thereof, including the names of electric service providers with their respective electricity supply.
The survey also asks for the mining fleet technicalities, including the number of mining equipment units, the newest and average age of units, the highest and average mining gear electric load, and the maximum and average hash rate of miners. Surveyed mining companies that fail to submit data from the reporting period risk "criminal fines, civil penalties, and other sanctions."
The survey is described as experimental and provisional, but the agency has already announced its intention to continue scrutinizing cryptocurrency mining activities in the US and write about their energy implications. The OMB has recognized the current initiative as a probe that will provide insights and for building a new standard for future data collection.
The environmental concerns of crypto mining
Following the prohibition of Bitcoin mining in China in 2021, the United States emerged as the global epicenter for Bitcoin mining. The surge in mining activities drew legislators' attention due to the process's energy requirements. Bitcoin mining operations contributed to the revival of dormant fossil fuel power plants, spurring concern from environmental activists, and resulted in an increase in electricity expenses for residents in some areas.
In 2022, Democratic legislators requested major cryptocurrency mining firms in the United States to reveal their electricity usage and the corresponding environmental impact. None of the companies complied by providing all the requested data. This prompted Congress to petition the Department of Energy and the Environmental Protection Agency to mandate public disclosure of such information by crypto enterprises.
On the other side of the Atlantic, the crypto mining industry is facing a headwind from the EU regulators. European lawmakers are gearing up to challenge Bitcoin as "environmentally harmful" with all due consequences.
