While Texans Swelter In the Heat, Crypto Miners Make Millions

ERCOT asks Texans to voluntarily conserve energy while crypto miners are paid to do the same

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HOUSTON, TX (08/18/2023) (readMedia)-- This week, ERCOT, Texas's power grid operator, is asking Texans to voluntarily conserve energy as temperatures climb above 110 degrees. Meanwhile, crypto-miners such as Riot Blockchain who use exorbitant amounts of energy are being paid by ERCOT to conserve energy. Jen Powis, Managing Attorney at Earthjustice's Gulf Office, issued the following statement:

"While ERCOT asks Texans to turn off their air conditioners during this deadly heatwave, it's a money-making opportunity for crypto miners. Last year, five Bitcoin mining operations earned a whopping $60 million out of hardworking Texans' pockets just from promising to shut off when asked. Instead of buying into conservative pundits' arguments against wind energy, Governor Abbott and ERCOT should stop paying crypto miners and start investing in common sense items like energy efficiency and more renewables to protect Texans' lives."

Extreme heat waves are the world's deadliest weather events. As temperatures climbed in Texas earlier this summer, emergency room visits surged and at least 13 people died in June alone. New research proves heat waves are made hotter and more deadly by climate change, fueled by excessive greenhouse gas emissions. And Texas's renewable energy sector has met the challenge, producing nearly a quarter of Texas's needs this summer despite Governor Abbot and ERCOT's failure to invest in these low cost alternatives.

Contributing to climate change and worsening heat waves, crypto-mining operations use massive amounts of energy - in Texas alone, at the rate crypto mines are expanding, by 2026 they will use as much electricity as the entire state of Florida. Since 2021, researchers tracked 2,234 MW of crypto mining facilities almost all built since mid-2021. Read more about crypto-mining in Texas, and the Responsive Reserve Service that pays crypto miners for agreeing to shut down to avoid blackouts.

Background

In its most recent report, the Intergovernmental Panel on Climate Change (IPCC) warned that Earth is likely to cross a critical and dire threshold for global warming within the next decade if we don't quickly and drastically reduce our dependence on fossil fuels. But after China banned proof-of-work crypto-mining (the process Bitcoin uses), citing, among other things, the environmental threats that mining poses to meeting emissions reduction goals, the U.S. is now hosting many energy-intensive proof-of-work crypto-mining operations. While these facilities of automated machines create few new jobs, they threaten the climate, in addition to small businesses, local economies, and natural resources.

Proof-of-work cryptocurrency mining is an energy-intensive process that requires thousands of machines whirring 24/7 to solve complex equations. The more machines that are running, the faster a coin is mined. Each one of these machines requires energy to run, plus more energy for cooling. Globally, Bitcoin mining consumes more energy each year than entire countries. Fossil-fueled mining facilities can also be major emitters of local air pollutants.

Earlier this year, the New York Times published an in-depth expose about the negative impacts of proof-of-work Bitcoin mining. In September 2022, the White House sounded the alarm about cryptocurrency mining - the Office of Science and Technology Policy released a report about the industry's climate threats and the need for regulation. But cryptocurrency mining continues to grow rapidly across the country. Earthjustice and the Sierra Club released a Guidebook, finding that in one year from mid-2021 to mid-2022, Bitcoin mining in the U.S. alone consumed as much electricity as four states combined, emitting 27.4 million tons of CO2 - equivalent to the emissions of as much as 6 million cars annually. More highlights from the Guidebook:

  • Proof-of-work cryptocurrency mining has grown explosively in the United States since 2020. Today, an estimated 38% of Bitcoin is mined in the U.S, resulting in nearly 30 million tons of excess CO2 emissions in the last year alone.
  • From mid-2021 to mid-2022, Bitcoin consumed 36 billion kilowatt-hours of electricity - as much as all of the electricity consumed in Maine, New Hampshire, Vermont, and Rhode Island put together in that same time period.
  • The massive energy consumption of cryptocurrency mining threatens to undermine decades of progress toward achieving climate goals and reducing local pollution. In addition, cryptocurrency mining practices raise costs and risks for utilities and their ratepayers, can stress electric grids, and flood communities with noise.
  • The cryptocurrency mining industry already uses half the electricity of the entire global banking sector, and it will overtake the sector in two years if current trends continue. Meanwhile, the ratio of Bitcoin's energy consumption to humans who actually have Bitcoin is extremely high.
  • Rather than investing in long-term energy infrastructure that benefits the grid, the cryptocurrency mining industry seeks the fastest energy that can serve its needs, and looks for minimal regulation and oversight. In practice, that translates to mining cryptocurrency at coal and gas plants, straining the electric grid in Texas, and tapping into power grids that are often fossil-fuel heavy.
  • Most mining facilities draw their power from the grid. That means electricity is generated by whatever existing energy is in place in the region. No grid anywhere in the U.S. is 100% renewable yet.
  • Proponents also claim that mining is spurring new renewable development and stabilizing the grid. But clean energy allocated to cryptocurrency mining doesn't actually do anything to decarbonize the grid, and there are few mining facilities that are building renewables to even power their own operations, let alone send to the grid.
  • Cryptocurrency mining proponents claim that mining uses "wasted" energy from solar or wind overproduction. But mining operations consume energy 24 hours a day, not just when there is excess solar or wind - meaning mining operations would fail to be profitable using only the hours when wasted energy is available.

Read the Sierra Club and Earthjustice guidebook here.

About Earthjustice

Earthjustice is the premier nonprofit environmental law organization. We wield the power of law and the strength of partnership to protect people's health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change. We are here because the earth needs a good lawyer.