Senator Elizabeth Warren of Massachusetts and a group of six other US senators have asked for data on the energy use and potential environmental effects of Texas-based bitcoin mining facilities.
The senators expressed their concerns about the possibility that mining operations could put additional strain on the state’s power grid in a letter to Pablo Vegas, CEO of the Electric Reliability Council of Texas (ERCOT), referring to Texas as a “deregulated safe harbour” for cryptocurrency mining companies.
The senators specifically asked for data on how much electricity Texas’s crypto miners used and how much carbon dioxide they released during the previous five years.
The letter explained that Bitcoin miners profit from mining, which places significant strain on the electric grid. During periods of peak demand, when it becomes less profitable to continue mining, they then collect subsidies in the form of demand response payments when they cease their mining operation and take no action.
“Cryptomining is adding significant demand to an already unreliable grid, posing enormous challenges to the transmission and distribution system… and contributing to the global climate crisis”
It also called out Riot Blockchain, the owner of a 750 MW facility in Rockdale, as one of the businesses engaged in Bitcoin mining in Texas. Riot Blockchain revealed in July of this year that it had made about $9.5 million by shutting down operations and selling electricity back to the grid. The senators pointed out that this was more than the $5.6 million the business really made that month from selling Bitcoin.
The letter further says that Texas is also home to 25% of all Bitcoin mining operations in the United States and 9% of the world’s computer power used for cryptocurrency mining, “a share that is predicted to reach 20% by the end of next year.”
According to a recent article by The Texas Tribune, over 30 cryptocurrency mining companies have relocated to Texas over the past ten years, drawn by the state’s abundant open space, easy access to affordable power, and low state taxes.
The state’s already vulnerable energy grid, which collapsed in February 2021 following a severe winter storm, was feared to become much more weakened as a result of the increasing demand.