Cryptocurrency mining operators in the United States question the legality and motives behind a mandatory survey of energy usage, sources and locations.
Key figures representing United States-based cryptocurrency mining have raised red flags over an emergency survey to garner information on energy consumption and sources by operators.
Cointelegraph reached out to key mining firms operating in the country following the U.S. Energy Information Administration’s (EIA) announcement that it would carry out a provisional, mandatory survey to measure the electricity usage of local mining firms.
The Department of Energy’s statistics agency received approval for its “emergency request” to collect data in January 2024. The administration previously told Cointelegraph that it aims to develop a “baseline snapshot,” identifying electricity sources for U.S. cryptocurrency miners and singling out regions with concentrated mining activity.
Several mining firms and organizations representing the broader blockchain industry have raised red flags over the legality of the approach and questioned why government-run institutions are targeting the cryptocurrency mining industry.
Bitcoin miners suspect political motivations
An overarching concern raised by respondents was the lack of clarity about the reason for the emergency survey and suspicions of political motivations.
Texas Blockchain Council (TBC) president Lee Bratcher hit out at the “unprecedented information collection request” and said the situation should be cause for concern for industries relying on data centers as part of their operations:
“The EIA’s mandatory emergency survey of electricity consumption data represents the latest politically motivated campaign against Bitcoin mining, cryptocurrency, and U.S.-led innovation.”
Bratcher claimed that the EIA’s survey is an abuse of authority that looks to further the Biden administration’s public goal “to limit or eliminate” U.S. Bitcoin (BTC) miners while feigning ignorance over the industry’s use of renewable energy and flexible operational ability.
The TBC president added that the general public is becoming increasingly aware of Bitcoin miners’ ability to adjust data center power usage according to grid conditions. Bratcher also cited anecdotal evidence, which the EIA referenced in its technical analysis report justifying the survey, where Bitcoin miners offered critical grid stabilizing benefits during recent periods of cold weather in Texas.
— Brian Morgenstern (@MorgensternNJ) February 5, 2024
A spokesperson from Riot Blockchain reiterated Bratcher’s sentiments, telling Cointelegraph that the EIA’s request is unlawful and that the company is exploring its legal options:
“We question how a survey can be considered an emergency and why this emergency only targets Bitcoin miners. On its face, this appears to be an attempt to avoid administrative procedure, including public notice and a comment period, in service of a political agenda.”
Riot’s head of public policy, Brian Morgenstern, went as far as to label the EIA’s survey as a politically motivated attack on Bitcoin driven by the “self-appointed anti-crypto” U.S. Senator Elizabeth Warren.
Industry double standards
Commentators have also questioned why the EIA has not imposed similar mandatory data collection measures on other industries in the U.S. that demand large amounts of energy.
SunnySide CEO Taras Kulyk, whose company provides hardware and infrastructure to Bitcoin mining firms, including Iris Energy, CleanSpark, Cathedra and Bitfarms, told Cointelegraph that a pressing concern is the lack of context of the collection’s intent and why the digital mining sector is being singled out.
“Many industries utilize vast amounts of electricity in going concern operations. The fact this is targeting our sector screams to be another political attack when Congress and the White House have many bigger issues to tackle,” Kulyk said.
The SunnySide CEO added that it’s fair to argue that it’s in the public’s interest to understand how much energy every industry uses in a country. Kulyk believes government agencies singling out digital mining is disingenuous and reflects the malintent behind the request:
“I wonder, will the oil and gas, traditional data center, banking and petrochemical sectors be asked for the same data?”
Riot’s correspondence with Cointelegraph also notes that the EIA’s move could set a precedent for government agencies to overstep boundaries relating to sensitive industry data. The company believes that the EIA is scrutinizing the sector through “unlawful means, despite the Bitcoin industry upholding transparency as a fundamental principle.”
Riot cautions that other industries should be concerned about government agencies making private information public “so that fringe political activists can cherry-pick from it to launch political attacks against legitimate businesses.”
“Sudden emergency mandates from the government are in the interest of our industry, or for any industry. Despite the transparency that is inherent to Bitcoin, the EIA is trying to unilaterally impose standards on Bitcoin mining that no other industry would tolerate,” Riot’s spokesperson added.
2018 data center survey was a flop
Corresponding with Cointelegraph, Colin Harper, head of research and content at Bitcoin mining software company Luxor, described the EIA’s move as an “inauspicious development.”
Harper said that the survey being touted as an emergency was alarmist but notes that these types of surveys are unprecedented given that the agency routinely conducts surveys on energy use for commercial buildings and manufacturers in the United States.
However, Harper adds that the EIA has only run one pilot program to identify data center power use specifically. The program received just a 26% response rate from the 50 data centers that the EIA solicited in 2018.
Harper also questioned why the EIA had tapped data centers for information in these commercial building surveys but had not singled the industry out beyond the 2018 pilot:
“It seems pretty incongruous to me for the EIA to single out Bitcoin miners with a standalone survey when they haven’t even done a full-scale one for data centers at large.”
Cointelegraph also reached out to U.S. mining firms Hut8, Core Scientific, Marathon Digital, and Foundry to ascertain their thoughts on the EIA’s energy data information survey, whether they intend to comply and the legality of the request. Iris Energy declined to comment.