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Wednesday, February 21, 2024
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Environmental impacts of crypto mining under microscope in Senate

A newly unveiled Senate bill aims to increase transparency around carbon emissions generated by cryptocurrency farms.

WASHINGTON (CN) — Companies operating facilities that mine cryptocurrency, particularly bitcoin, should not be allowed to “grade their own homework” where greenhouse gas emissions are concerned, U.S. Senator Edward Markey said during a committee hearing Tuesday.

Markey, who is sponsoring a bill that would require cryptocurrency miners to disclose their emissions levels, said the United States needs “independent, trustworthy and accurate statistics” on the environmental impacts of such activity.

“While the bitcoin mining industry claims that they can actually be a boon to the environment … we don’t have the transparency we need to vet those arguments,” the Massachusetts Democrat said.

Markey’s proposed Crypto Asset Environmental Transparency Act, unveiled March 3, would require crypto miners that use more than five megawatts of power to report their greenhouse gas emissions to the Environmental Protection Agency. The measure would also direct the national environment authority to conduct a “comprehensive investigation” into the effects of mining cryptocurrency in the U.S.

Bitcoin mining operations — which use computer banks to generate the digital currency —  create electronic waste and demand large amounts of electricity to run, Markey said.

“With an environmental impact like this, bitcoin is more like digital coal than digital gold,” he added.

Rob Altenburg, senior director for energy and climate at Pennsylvania-based advocacy group PennFuture, told the senator during Tuesday's hearing in the Senate Environment and Public Works Committee that although some crypto mining operations run on carbon-free energy sources such as nuclear power, that can create problems for the power grid writ large.

“When carbon-free energy is diverted from powering our grid to wasteful cryptocurrency, something has to make up the difference,” Altenburg said, “and that is often fossil fuels.”

Crypto miners in New York have worked to bring retired fossil fuel power plants back online to power crypto farms, New York State Assemblywoman Anna Kelles said during the hearing.

“We must carefully study the environmental and grid impacts of cryptocurrency mining methods,” she said, “and implement appropriate statutes and regulations to prevent the damage it is doing to our public health and the environment.”

Meanwhile, Courtney Dentlinger, vice president of customer services at state-run electric utility Nebraska Public Power District, took a different approach, highlighting the “significant” economic benefits of crypto mining for some states.

In the Cornhusker State, the cryptocurrency industry has generated over $5 million in tax revenue and provided jobs with higher wages than the state’s median household income, Dentlinger said. Flexible site requirements and smaller workforces also make crypto mining operations ideal for rural areas.

“Our customers, both rural public power districts and municipalities, are eager to host these opportunities because of the tax benefits and good-paying jobs they bring,” Dentlinger said.

Nebraska Senator Pete Ricketts, a Republican, concurred with Dentlinger’s assessment that crypto mining could be a positive force for economic development in some states and expressed concern that regulating the industry in the U.S. could push it overseas.

“When the federal government targets an industry, that has caustic consequences, especially for an industry that is just beginning its development,” Ricketts said. “Overreaching laws and regulations can drive emerging technologies overseas, often to countries that have fewer environmental regulations than the United States.”

Markey said Tuesday that cryptocurrency companies should embrace greater transparency in mining operations: “If the industry is confident in its positive contributions to the environment, they should welcome the transparency of the Crypto Asset Environmental Transparency Act.”

“Only vampires are afraid of the sunshine,” the senator added.

Follow @BenjaminSWeiss
Categories / Economy, Environment, Financial, Government, Technology

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