The Crypto Mining report is the first public response to the U.S. In the crypto order that President Joe Biden signed, he also asked for standards to be set to reduce the amount of energy used.
In a new report released Thursday, the White House Office of Science and Technology Policy said that the U.S. should do more research on how crypto mining uses energy in order to set standards for the industry.
In the report, one of the first responses made public to U.S. In response to President Joe Biden’s executive order on cryptocurrencies, the office explained how it would deal with the question of how crypto mining affects the environment, including how big an effect it has and how the energy needs of different cryptocurrencies vary.
The report asks federal agencies like the Environmental Protection Agency and the Department of Energy to work with state and local governments to set standards for how the industry affects the environment, including how much energy it uses and where it comes from, how much noise it makes, how much water it uses, and how to make carbon-free energy to make up for how much energy it uses.
“If these measures don’t work to reduce impacts, the Administration should look into executive actions, and Congress might think about passing a law, to limit or stop the use of high energy intensity consensus mechanisms for crypto-asset mining,” the report said.
The report said that crypto mining, especially mining for bitcoin (BTC), uses a lot of electricity, which goes against U.S. goals to be more environmentally friendly.
“The crypto assets with the largest market capitalizations used 140–30 million metric tons of carbon dioxide per year (Mt CO2/y) of electricity, which is about 0.3% of the world’s annual GHG emissions,” the report said.
Taking care of the Crypto Mining grid
The Biden administration also wants energy regulators and grid operators to make sure that crypto mining doesn’t put the stability of electricity grids at risk or cause prices to go up for consumers. On the other hand, Bitcoin miners say that they can help make electricity grids more reliable because they can act as a base load consumer that can turn off during times of peak demand, like this summer when heatwaves hit the U.S. and Texas in particular.
In response to this argument, the White House said, “Reducing this peak during a grid emergency is important, but the increased peak is often why demand response is needed. This means that the incentives of crypto-asset miners and grid operators are not aligned.” Crypto-asset miners and other demand response participants must be able to show full transparency about their participation and payments in demand response.
At the same time, the White House is asking for more information about how the industry uses clean energy, pointing out that miners who don’t use energy that releases carbon do not add to carbon emissions. The report said that “uncertainty” about how much clean energy the industry uses needs to be cleared up with better data.
The good news is
The White House report was interesting because it cautiously supported crypto miners who use flared and vented methane to power their machines. In the last few years, this method has become more popular, with mining companies setting up data centers at sites where natural gas is extracted.
“While the EPA and the Department of the Interior have proposed new rules to reduce methane from oil and natural gas operations, crypto-asset mining operations that capture vented methane to make electricity can be good for the climate by turning the powerful methane into [carbon dioxide] during combustion,” the report said. “However, methane could be turned into CO2 in a more reliable and efficient way by mining operations.”
The report said that using vapor capture technologies may be a better way to cut methane emissions.
The report’s conclusion was that zero methane venting or flaring would be needed for net-zero emissions, but “crypto-asset mining that installs equipment to use vented methane to generate electricity for operations is more likely to help U.S. climate goals than hurt them.”
The White House did say which miners lead to zero direct emissions: those who buy or build new renewable energy capacity and those who use renewable energy that would be wasted otherwise in the U.S.
“To help the U.S. meet its climate goals, industries could build zero-carbon energy capacity that generates more electricity than the crypto-asset miner needs and sells the extra clean energy back to the grid,” the report said.
Even though the report on the environment is one of the most controversial topics, two other reports had already come out of the executive order. One was a July fact sheet from the Treasury Department that explained how the U.S. could work with foreign regulators to deal with the cryptocurrency market. The other came from the Justice Department and said that the U.S. should share more information about crimes related to cryptocurrency and help build partnerships overseas to help fight them.