Concerned about a surge in cryptocurrency mining activities driven by the recent increase in Bitcoin's price, the United States Department of Energy (DOE) has launched an 'emergency' review of crypto miner energy consumption. The move comes amid fears that rising cryptocurrency mining could lead to increased electricity consumption.
Starting next week, the US Energy Information Administration (EIA), the statistics agency of the DOE, will initiate a provisional survey to assess the electricity usage of local cryptocurrency mining companies. Miners will be required to respond with details related to their energy use. The survey will run for six months and will focus on understanding how energy demand for cryptocurrency mining is evolving, identifying areas of high growth, and quantifying the sources of electricity used for mining.
The decision to conduct the survey came after an emergency request from the EIA was greenlit by the Office of Management and Budget. The request highlighted the recent surge in Bitcoin's price, which had increased by roughly 50% over the past three months, as a factor that could incentivize more crypto mining activity and subsequently increase electricity consumption.
In addition to data collection from miners, the DOE will also seek public comments regarding cryptocurrency miners' energy use. This initiative is the latest effort by the US government to gain a better understanding of the cryptocurrency mining industry, which saw significant growth in the country after China banned mining activities in 2021.
Concerns over energy consumption and environmental impact have led lawmakers to investigate the industry. In early 2023, Congress called for the Environmental Protection Agency (EPA) to investigate the impact of cryptocurrency mining, and President Joe Biden proposed a 30% incremental tax on crypto miners' electricity costs to reduce mining activity in the US.
In 2022, global Bitcoin miners consumed an estimated 121.13 terawatt-hours of electricity, setting an all-time high since data collection began in 2010, according to Cambridge University's Bitcoin Electricity Consumption Index. For comparison, data from the International Energy Agency (IEA) in 2022 showed that the European country of Belgium consumed 93.8 terawatt-hours. The IEA predicts that cryptocurrency mining will consume 160 terawatt-hours by 2026, indicating a continued increase in energy consumption.
The DOE's survey and data collection efforts aim to provide insights into the cryptocurrency mining industry's energy consumption and its impact on the US energy infrastructure.