Warren, Colleagues, Call on Environmental Protection Agency and Department of Energy to Require Cryptomining Companies to Disclose Energy Use and Emissions
Lawmakers Release Responses From Seven Large Cryptomining Companies Showing Extraordinarily High Energy Use and Climate Impact from Cryptomining
Seven Cryptominers Have Developed Enough Capacity to Power all Residences in Houston, Texas
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass), Sheldon Whitehouse (D-R.I.), Edward J. Markey (D-Mass.) and Jeff Merkley (D-Ore.) and Representatives Jared Huffman (D-Calif.) and Rashida Tlaib (D-Mich.) sent a letter to the Environmental Protection Agency (EPA) and the Department of Energy (DOE), highlighting findings from their investigation into the environmental impacts of cryptomining and requesting that the EPA and DOE work together to require cryptominers to report their emissions and energy use.
“The results of our investigation… are disturbing… revealing that cryptominers are large energy users that account for a significant – and rapidly growing – amount of carbon emissions. Our investigation suggests that the overall U.S. cryptomining industry is likely to be problematic for energy and emissions. But little is known about the full scope of cryptomining activity. Given these concerns, it is imperative that your agencies work together to address the lack of information about cryptomining’s energy use and environmental impacts, and use all available authorities at your disposal… to require reporting of energy use and emissions from cryptominers,” wrote the lawmakers.
Cryptomining’s energy usage rivals that of entire countries. The total annual global electricity consumption associated with just the two largest cryptocurrencies by market capitalization, Bitcoin and Ethereum, has been comparable to the annual electricity usage of the United Kingdom and resulted in almost 80 million tons of carbon dioxide emission in 2021. This substantial energy use also drives up electricity costs for consumers and small businesses. According to a recent study, “the power demands of cryptocurrency mining operations in upstate New York push up annual electric bills by about $165 million for small businesses and $79 million for individuals.”
The lawmakers note that state and federal regulators know very little about the full scope of electricity use and emissions associated with cryptomining, given the lack of national or state reporting requirements and data about the locations and operations of cryptomining facilities.
In December 2021 and January 2022, the lawmakers sent letters to seven large cryptomining companies, seeking information about the locations of their facilities, their energy sources and consumption, and the climate impacts associated with this production. While the companies did not provide full and complete information, their responses and the lawmakers’ investigation revealed the following:
- Cryptominers are using substantial amounts of electricity: The seven companies alone indicated that they presently have developed over 1,045 MW capacity for cryptomining. This is enough capacity to power all the residences in Houston, Texas.
- Cryptominers are significantly increasing production: Although miners are already using a significant amount of energy, the companies indicated that they expect considerable increases in mining capacity and energy use in the coming years. The limited set of information provided by the seven cryptominers indicates that they will increase their total capacity by nearly 230%, enough new capacity to power a city of 1.9 million residences.
- Cryptomining results in substantial amounts of carbon emissions: Several of the companies insisted that their mining efforts were environmentally friendly and did not have a significant adverse impact on climate and air quality. These same companies reported millions of tons of carbon dioxide emissions resulting from the energy needed to power their operations.
- Just three companies that provided clear emissions data are currently responsible for approximately 1.6 million tons emitted annually, the equivalent of almost 360,000 cars.
- The current energy use of cryptomining results in large amounts of carbon emissions and other adverse impacts on air quality, local environments, and the electric grid, and prevents the use of that energy for other priorities that could contribute toward electrification and climate goals.
The lawmakers are calling on the EPA and DOE to use their authority to require reporting about cryptomining’s energy use and environmental impact and answer a series of questions about their ability and plans to require this reporting by August 15, 2022.
Senator Warren is an advocate for reining in cryptocurrency to protect consumers and the environment:
- In May 2022, Senators Warren and Tina Smith (D-Minn.), sent a letter Fidelity, asking the company to explain its decision to allow Bitcoin investments for 401(k) plans, despite the Department of Labor’s warnings about 401(k) crypto investments.
- In March 2022, Senator Warren, Senate Armed Services Committee Chair Jack Reed (D-R.I.), Senate Intelligence Committee Chair Mark Warner (D-Va.), and Senate Defense Appropriations Subcommittee Chair Jon Tester (D-Mt.) introduced the Digital Asset Sanctions Compliance Enhancement Act to ensure that Vladimir Putin and Russian elites don't use digital assets to undermine the international community’s economic sanctions against Russia following its invasion of Ukraine.
- In March 2022, at a a hearing of the Senate Banking, Housing, and Urban Affairs Commiteee, Senator Warren highlighted the various cryptocurrency tools that could make it easier for sanctioned individuals to hide their wealth and lessen the impact of Russian sanctions.
- In March 2022, at a a hearing of the Senate Banking, Housing, and Urban Affairs Commiteee, Senator Warren warned that cryptocurrency may allow Russia to dodge sanctions and urged stronger regulation of the crypto market to ensure that countries, drug traffickers, cyber criminals, and tax cheats can’t evade economic pain
- In March 2022, Senators Warren, Warner, Reed, and Sherrod Brown (D-Ohio), Chair of the Senate Banking, Housing, and Urban Affairs Commitee, sent a letter to Treasury Secretary Janet Yellen, asking about the Treasury Department’s plans to enforce sanctions-compliance guidance for the cryptocurrency industry to ensure that economic sanctions remain an effective tool for achieving foreign policy goals.
- In January 2022, Senators Warren, Whitehouse, Merkley, Markey, and Maggie Hassan (D-N.H.), and Representatives Tlaib, Huffman, and Katie Porter (D-Calif.) sent letters to six cryptomining companies raising concerns over their extraordinarily high energy usage.
- In December 2021, Senator Warren sent a letter to Greenidge Generation Holdings Inc., which operates a Bitcoin mining facility in upstate New York, expressing concern about the company’s energy usage and its impacts on the environment and consumers.
- In December 2021, during a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren raised concerns over the growing risks presented by stablecoins.
- In September 2021, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren called on regulators to step up to address crypto's regulatory gaps and ensure an inclusive financial system.
- In July 2021, Senator Warren sent a letter to the Securities and Exchange Commission Chair Gary Gensler requesting information about the agency's authority to regulate cryptocurrency exchanges and protect consumers from risks posed by the highly volatile cryptocurrency market.
- In June 2021, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, Senator Warren delivered remarks on the opportunities and risks that digital currencies present.
- In a June 2021 interview, Senator Warren called the market for cryptocurrencies the “wild west,” and said digital currency is “not a good way to buy and sell things and not a good investment and an environmental disaster.”
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