THE ENERGY BOMB

How Proof-of-Work Cryptocurrency Mining Worsens

the Climate Crisis and Harms Communities Now
September 2022
Mandy DeRoche, Deputy Managing Attorney,
Clean Energy Program, Earthjustice
Jeremy Fisher, Senior Advisor for Strategic Research and
Development, Environmental Law Program, Sierra Club
Nick Thorpe, Climate & Energy Senior
Program Associate, Earthjustice
Megan Wachspress, Staff Attorney,
Environmental Law Program, Sierra Club
Suggested citation: DeRoche, M., Fisher, J., Thorpe, N., and
Wachspress, M., The Energy Bomb: How Proof-of-Work
Cryptocurrency Mining Worsens the Climate Crisis and Harms
Communities Now (Sept. 2022).

Cover photo: iStock/NiseriN

Table of Contents
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
I. Cryptocurrency Mining’s Explosive Growth in the United States . . . . . . . . . . . . . . . . . . .5
II. Proof-of-Work Cryptocurrency: A Brief Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
III. No Longer a Hobbyist’s Experiment: How Cryptocurrency Mining Transformed Into Massive,
Centralized Operations to Maximize Profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
A. Proof-of-Work Cryptocurrency Mining Incentivizes Mining As Quickly As Possible to Maximize Profits . . . . . . .7
B. Cryptocurrency Miners Often Value Speed of Access to Energy Over Price,
Even to the Point of Reviving Dying Fossil-Fueled Power Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
IV. The Scale and Source of Bitcoin Energy Usage is Largely Invisible to Regulators . . . . . . .8
V. Where Do The Electrons Come From? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
A. Types of Electricity Procurement by Cryptocurrency Miners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1. Behind-the-Meter Generation at Fossil-Fueled Power Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2. Power Purchase Agreements with Fossil-Fueled Power Plants or Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. Retail Purchases of Electricity from the Grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Combusting Fossil Gas at Oil and Gas Wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
VI. The Climate and Energy Impacts of Cryptocurrency Mining
in the United States are Substantial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
VII. Cryptocurrency Mining Harms Communities and Electricity Ratepayers . . . . . . . . . . . .15
A. Most Environmental Impacts from Cryptocurrency Mining Are Borne by Local Communities . . . . . . . . . . . . 15
1. Local Air Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2. Water Usage and Thermal Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3. Fire and Safety Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4. Noise Pollution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5. Enormous Amounts of Electronic and Other Solid Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
B. Impacts on Electricity Prices for Local Residents and Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1. Utilities, and Their Customers, Face Unique Risks from Cryptocurrency Mining Operations . . . . . . . . . . . . . . . . 16
2. Rural Electrical Cooperatives and Cryptocurrency: A Costly Partnership for Ratepayers . . . . . . . . . . . . . . . . . . 18
3. Grid Impacts and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4. Tax Incentives for Cryptocurrency Miners are Breaking the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5. Reports of Cryptocurrency Mining Jobs Have Been Greatly Overstated . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
VIII. Breaking Through the Bitcoin Myths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Myth 1: Cryptocurrency Mining is Already Sustainable Because it is Located Near Clean Energy,
or Because it Purchases Renewable Energy Certificates or Carbon Offsets . . . . . . . . . . . . . . . . . . . . . . 21
1. Claims of Co-Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2. Claims of “Carbon Neutrality” by Purchasing Renewable Energy Certificates or Carbon Offsets . . . . . . . . . . . . . . 22
Myth 2: Cryptocurrency Mining Uses Energy That’s Being Wasted From Variable Wind and Solar Output . . . . . . 23
Myth 3: Cryptocurrency Mining Incentivizes Clean Energy Development, or Helps to Decarbonize the Grid . . . . . 23
Myth 4: Cryptocurrency Mining “Acts Like a Battery” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Myth 5: Cryptocurrency Miners are No Worse than Any Other Electricity Users . . . . . . . . . . . . . . . . . . . . . 25
IX. Recommendations to Mitigate the Risks of Proof-of-Work Cryptocurrency Mining . . . 25
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Endnotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 1
Executive Summary
Cryptocurrency mining is an extremely energy-intensive What is Cryptocurrency Mining, and How
process that threatens the ability of governments across Does It Work?
the globe to reduce our dependence on climate-warming Proof-of-work cryptocurrency mining is designed to
fossil fuels. If we do not take action to limit this growing consume enormous quantities of energy. The process
industry now, we will not meet the goals set forth by the effectively entails millions of computing machines racing
Paris Agreement and the Intergovernmental Panel on to solve a complex, but meaningless, problem. In Bitcoin’s
Climate Change to limit warning to 2 degrees Celsius. And algorithm, for example, the computer or mining machine
cryptocurrency mining operations harm local communities that successfully solves the problem is rewarded with
now, including by increasing local pollution and impacting Bitcoin (and functionally verifies the blockchain). As long
electricity rates and delivery. In our paper, we discuss as the reward is high enough (i.e., the price of Bitcoin
several such examples where fossil-fueled cryptocurrency is high enough), miners will attempt to use more — and
mining has increased local air, water, and noise pollution, faster — mining machines to increase their chances of
increased costs on others, and increased climate pollution winning that reward. As more mining machines enter
at a time when we should be doing everything in our power the race, the difficulty of the computational problem
to move in the opposite direction to mitigate the worst gets harder, and the electricity required to win increases.
impacts of the climate crisis. Over time, the electricity used by miners in these races
The cryptocurrency mining industry is opaque: there increases exponentially.
are few, if any, reporting standards, and there is little The design of proof-of-work cryptocurrency mining
or no formal tracking of mining operations. This paper incentivizes miners to ramp up operations as quickly
is the first attempt to comprehensively document the as possible, often irrespective of the source of energy.
explosive growth of cryptocurrency mining in the United Indeed, big mining operations have shown a willingness
States and examine how this industry is impacting to invest in otherwise uneconomic power sources, like
utilities, energy systems, emissions, communities, and defunct coal plants or low-capacity gas plants, as long as
ratepayers — based on public filings before utility and that electricity can be made available quickly. Unlike other
financial regulators, investor presentations and reports, large electricity users, cryptocurrency mining operations
and local media reports. have a short time horizon, and most have shown little
interest in investing in new clean energy.
Cryptocurrency Mining’s Explosive Growth
In addition, the mining industry is becoming highly
in the United States
concentrated. The energy and technology requirements
After cryptocurrency mining was banned in China in
of cryptocurrency mining means that mining operations
2021, the amount of mining operations exploded in
require the backing of large capital. For example, the
the United States. As of this writing, it is estimated
National Bureau of Economic Research estimates that
that 38% of Bitcoin — the predominant proof-of-work
0.5% of mining companies control 70% of mining. This
cryptocurrency — is mined in the United States. We
increasing concentration in turn lends itself to the arms
estimate that in the year prior to July 2022, Bitcoin
race where large corporations are able to leverage enor-
consumed around 36 billion kilowatt-hours (kWh) of
mous capital to build massive mining facilities, like the
electricity, as much as all of the electricity consumed in
750 megawatt Whinstone mining facility an hour east of
Maine, New Hampshire, Vermont, and Rhode Island put
Austin, Texas.
together in that same time period. And while proof-of-work
mining proponents claim that cryptocurrency always Proof-of-Work Cryptocurrency Mining
looks for the cheapest energy, the last two years have Increases Emissions in the United States
demonstrated that the industry preferentially seeks
Top-down estimates of the electricity consumption of
readily-available energy and minimal regulation, re-starting
cryptocurrency mining in the United States imply that the
defunct coal and gas plants, flooding the restructured
industry was responsible for an excess 27.4 million tons
electricity market in Texas, and tapping into power grids
of carbon dioxide (CO2) between mid-2021 and 2022 — or
where regulators have little oversight. This explosive
three times as much as emitted by the largest coal plant in
growth strains energy grids, raises retail electricity rates,
the U.S. in 2021. But these estimates are simply based on
and increases total carbon emissions and local air pollution.
the likely energy consumption to solve cryptocurrency’s

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 2
puzzles. A ground-up approach, looking at how the indus- available—electricity, wherever they can find it. An
try has actually been deployed, suggests that proof-of- influx of new, large customers (sometimes doubling
work cryptocurrency might be yet more impactful. the utility’s existing load) has forced utilities to seek
Tracking down the energy sources — or even just the additional generation resources or reduce off-system
consumption — of proof-of-work cryptocurrency mining in sales, strained their ability to manage the system, and
the United States is difficult. The industry is notoriously raised prices for other customers. We found numerous
opaque, and little-to-no reporting requirements exist at examples of utilities making significant investments to
either the state or federal level. The most reliable sources serve cryptocurrency miners that were — or are likely
of information are a patchwork of filings before the to be — paid for by existing ratepayers. In some of these
Securities and Exchange Commission (SEC) by publicly- cases, the mining operation left abruptly months later,
traded cryptocurrency companies, environmental permit leaving behind stranded costs that are picked up by the
applications, utility and other energy filings, and local utility and its customers:
reporting. ¢¢ The Nebraska Public Power District spent $17.6
million, or 18% of its 2020 budget, on transmis-
Cryptocurrency miners procure their electricity in four
sion and a substation for a cryptocurrency mining
different ways: (1) outright purchase of power plants
operation.
that supply mining rigs “behind-the-meter;” (2) power
purchase agreements with power generators or utilities; ¢¢ Big Rivers Electric utility plans to spend $12.7 mil-
(3) electricity purchases from a local utility; and (4) by lion in upgrades to service a new cryptocurrency
burning fossil gas at oil and gas wells. Each type of mining mining operation in Paducah, Kentucky.
produces excess emissions, and impacts electricity and ¢¢ Entergy Arkansas reported that a cryptocurrency
energy consumers. mining operation left “virtually overnight” in
search of lower rates in 2019 after the utility
• Behind-the-Meter at Power Plants. Most egregiously,
expended significant funds on facility upgrades on
we identified four fossil-fueled power plants (the
the customer’s behalf.
Scrubgrass and Panther Creek waste coal plants in
Pennsylvania and the Greenidge and North Tonawanda ¢¢ In 2018, a mining operation in Washington State
gas plants in New York) that have been purchased left more than $700,000 in utility bills unpaid
and converted to mine proof-of-work cryptocurrency after it declared bankruptcy.
mining. • Combusting Fossil Gas at Oil and Gas Wells. Some
• Power Purchase Agreements (PPAs). Power plants or companies mine cryptocurrency at the site of previ-
utilities may agree to sell a specific amount of electric- ously closed or low-operating fossil gas wells and use
ity to a cryptocurrency miner. In some cases, a PPA is on-site generators to power their mining equipment.
just a financial transaction, and in some cases, it can There is also an increasing amount of companies that
even change the amount that a power plant operates. sell cryptocurrency mining rigs specifically designed to
In either case, when a cryptocurrency mining facility tap into gas at oil-producing wellheads. The cryptocur-
holds a contract with a fossil plant or a fossil-heavy rency mining operations provide additional revenue to
utility, it provides a direct incentive to keep running oil drilling companies, by finding entities that would
polluting power plants. For example, an arrangement have otherwise been unwilling to gather oil-drilling’s
between Marathon Digital and the Hardin coal plant in “associated gas” as required.
Montana, which had been on the verge of retirement,
led to ramped up operation and an 800% increase in
The Industry Keeps Greenwashing Its Poor
CO2 emissions (and 500% increase in sulfur dioxide
Practices
emissions) from the plant in one year. Another example The proof-of-work cryptocurrency mining community is
is the recent AboutBit agreement to purchase electric- well aware that its extraordinary energy consumption — and
ity from the Merom coal plant in Indiana. There, the fossil fuel habit — is unattractive when much of the rest
plant’s owner had previously announced a May 2023 of the economy strives to rapidly decarbonize. In the last
retirement date, which has now been postponed, and a year, the industry and its trade organizations have rolled
nearby coal mine has reopened to serve the plant. out a series of sustainability claims that are anywhere from
outright fiction and greenwashing to no more than hopeful
• Electricity Purchases. Cryptocurrency miners that
theories, undermined by actual practices.
rely on retail electricity seek low cost—and rapidly

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 3
One of the most widespread mischaracterizations is that produced at peak solar or wind hours for later use, and
mining is “sustainable” when the facility is physically provide no other grid services.
located near existing wind power or solar power. But most
Today, the cryptocurrency mining industry already
mining facilities draw power from the grid — meaning their
uses half the electricity of the entire global banking
electricity is generated by whatever existing energy is in
place in the region, or is contracted by their utility. Worse, sector (while holding a miniscule fraction of the value),
adding a new large-scale load, like a cryptocurrency and continues to increase. In the United States, the
mining facility, to the grid generally requires existing industry has shown little indication of slowing its growth
fossil generators to increase their output. Mining facilities when prices are high. Miners have demonstrated,
located near wind or solar sites do not have a special consistently, from their initial rush to China where coal
claim to energy produced by that energy, but instead drive is a predominant source of electricity to the recent deal
increased emissions from gas and coal plants. between AboutBit and a soon-to-be-retired coal plant
Another myth put forward by proponents is that proof- in Indiana, that proof-of-work cryptocurrency mining
of-work cryptocurrency mining only uses “wasted” (or prioritizes the short-term need for large amounts of
curtailed) energy from solar or wind overproduction. The electricity over longer-term investments in renewable
fact is that mining operations operate and draw on the energy. And unlike other industries where self-imposed,
grid at all hours, not just when there is excess solar or or regulation-based, community standards could result
wind. Mining operations would likely fail to be profitable in more sustainable practices, proof-of-work mining
using only the sparse hours in which solar or wind curtails. is an inherent arms race towards increased energy
Few cryptocurrency mining operations are even located consumption, until prices no longer support growth.
where wind or solar might provide curtailed energy, and
operate far in excess of the amount of curtailed energy Regulators and Policymakers Can
even available. Take Steps to Reduce the Harm of
Cryptocurrency Mining
Proponents of proof-of-work cryptocurrency like to
State, local, and federal policymakers and regulators can
claim that the intensive demand of mining will spur new
help ensure cryptocurrency mining does not undermine
renewable development, and stabilize the grid. The reality
climate or health goals, or adversely impact ratepayers.
is that clean energy allocated to cryptocurrency mining is
then unavailable for grid decarbonization. As such, there The massive energy consumption of cryptocurrency
are few mining facilities that are actually building new mining threatens to undermine decades of progress
renewable energy to power their operations. The only claim towards achieving climate goals, and threatens grids,
to grid stability is that cryptocurrency mining operations utilities, communities, and ratepayers. Some jurisdictions
may be willing to curtail operations if they paid enough have, or are considering, simply banning the practice of
to do so. A miner’s participation in demand response mining proof-of-work cryptocurrencies. Shy of a complete
programs during emergency periods (which many other moratorium, there are actions that can be taken by state,
electricity users do as well) can amount to tens of millions local, and federal officials to protect energy systems,
of dollars a year and is often paid by other ratepayers. communities, and ratepayers.
Unlike batteries, mining operations cannot store electricity

POLICY AND REGULATORY OPTIONS

• Local and state officials can enforce not leave a trail of stranded assets, • Grid operators can develop
pollution and noise ordinances, ensure critically assess utility plans for energy comprehensive guidance and rules
that they are not extending economic procurement for cryptocurrency mining around the interconnection of high-
development dollars on false promises facilities, and ensure that mining facilities density loads, study the impact of
of long-term jobs or revenue, develop do not increase electricity or capacity cryptocurrency mining on congestion,
careful zoning codes, and — in the cases costs for existing customers. resource adequacy, and wholesale market
where municipalities run the electric • Utilities can develop electricity rates that prices, and create rules that minimize the
utility — develop tariffs that protect protect against stranded assets, ensure impact of cryptocurrency mining on other
existing ratepayers. that they do not need to expand power customers.
• Utility regulators can influence or bar capacity to meet cryptocurrency mining • Environmental regulators at all levels
problematic power purchase agreements, load, and charge rates sufficient to fully should consider affirmative regulation
create protective electricity rates or protect existing ratepayers from the to minimize the local health and
system benefits charges that ensure increased marginal cost of production. environment impacts cryptocurrency
speculative mining operations do mining places on local communities.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 4
I. Cryptocurrency Mining’s Explosive Growth in the United States
So-called “proof-of-work” cryptocurrencies are Until last year, the majority of Bitcoin mining was
secured by the use of intensive computing — and physically located in China. In May 2021, Chinese
electricity — resources. Cryptocurrencies, starting with officials initiated a crackdown on cryptocurrency mining
Bitcoin, innovated an approach to tracking, and verifying, operations; within a month, more than 90% of operations
transactions that requires no central entity, like a bank. were shut down or planned to.8 Bitcoin mining, however,
But the currently predominant cryptocurrency, Bitcoin, continued its upward trajectory, with much of the
bases its security on an approach that requires machines computing shifting to the United States.9 Although there
to compete to solve complex puzzles. The growth in the had been some indications of growth in U.S.-based mining
value of Bitcoin led to an arms race — and explosive energy in 2020,10 in a matter of months, the amount of U.S.-
consumption globally, and over the last year, in the United based mining exploded, with little regulatory oversight.11 In
States. The Cambridge Centre for Alternative Finance 2019, the U.S. accounted for just 4% of global mining; as
estimates that Bitcoin alone increased its electricity of August 2022, nearly 38% of Bitcoin mining activity is
consumption from less than a gigawatt (GW) per day in estimated to be based out of the U.S.12 By January 2022,
early 2017 to more than 11 GW in July 2022.1 By early U.S. Bitcoin operations were consuming an estimated 3.7
2022, prior to the collapse of Bitcoin prices,2 Bitcoin was billion kWh per month — more than the January electricity
consuming over 10.5 billion kilowatt hours (kWh) every sales of the entire state of Kansas or Nevada.13 Assuming
three months — or the equivalent output of ten large that the efficiency of mining machines in the United
coal-fired power plants.3 States is roughly consistent with those used in other
In its April 2022 report, the Intergovernmental Panel on countries, we estimate that Bitcoin mining consumed
Climate Change (IPCC) warned that soaring electricity 35.8 billion kWh from June 2021 to July 2022, or as
use by proof-of-work digital currencies is likely to “be a much electricity as all of Maine, New Hampshire, Vermont,
major global source of CO2 if the electricity production is and Rhode Island put together — or every industrial
not decarbonized.”4 The White House’s Office of Science electricity customer in Georgia.14
and Technology Policy (OSTP) recently estimated that Migration of Cryptocurrency Miners, Sept. 2019 — Aug. 202115
proof-of-work cryptocurrency mining likely comprises AS OF AS OF
SEPT. 2019 AUG. 2021
somewhere between 0.9% to 1.7% of total annual U.S.
USA 4.1%
electricity usage, or 36 to 66 billion kWh per year in
KAZ 1.4%
mid-2022.5
Other 6.1% 35.4% USA
Bitcoin has been at the center of cryptocurrency energy
RUS 5.9%
debates, and rightfully so: Bitcoin mining uses far
CAN 1.1%
more electricity than any other cryptocurrency, for two MYS 3.3%
reasons. First, Bitcoin makes up more than 40% of the DEU 0.9%
18.1% KAZ
cryptocurrency market share, by far the largest of any IRN 1.7%
currency.6 Second, Bitcoin is the most energy-intensive
cryptocurrency in wide circulation, because it uses a 13.5% Other
“proof-of-work” mining method that is designed to require
increased energy inputs for the same economic output 11.2% RUS
over time. Because of its outsized energy footprint, this
CHN 75.5%
paper focuses on Bitcoin as a proxy for other proof-of- 9.6% CAN
work cryptocurrencies. As of this writing, the second
largest energy consuming cryptocurrency, Ethereum, 4.6% MYS

was in the process of transitioning from a proof-of-work 4.5% DEU

construct to a “proof-of-stake” verification, an alternative 3.1% IRN
mechanism of securing cryptocurrency transactions that 0.0% CHN

does not require machines to solve the same volume of

puzzles — and hence uses only a small fraction of proof-of-
work algorithms.7

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 5
When primarily located in China before it was cryptocurrency mining have on our electric system,
banned, cryptocurrency mining was often powered by utility bills, air and water quality, communities, and
hydroelectric facilities and coal plants. When miners fled decarbonization goals. The rapid rise of massive,
China, they began to power operations with gas and fossil- centralized, proof-of-work cryptocurrency mining
heavy grids (especially in the United States) and hard coal operations affects utilities, ratepayers, and the
(in Kazakhstan). The share of renewable energy used to environment. It also threatens to reverse ongoing
power Bitcoin mining is estimated to have dropped from trends toward the decarbonization of the U.S. power
41.6% in 2020 to about 25.1% in August 2021.16 At least sector, further entrenching fossil fuel production and
one estimate suggests that U.S.-based Bitcoin miners are consumption. This paper seeks to educate advocates,
already responsible for at least one-quarter of the global policymakers, regulators, and the public about the
greenhouse gas emissions caused by Bitcoin mining.17 immediate threat that proof-of-work cryptocurrency
OSTP estimates that Bitcoin mining in the United States mining poses to communities, ratepayers, and climate
alone is responsible for between 21 to 35 million tons (Mt) action and to provide a much-needed corrective to myths
CO2 per year; and global Ethereum operating on a proof- that cryptocurrency mining companies have promoted
of-work algorithm accounts for 25 to 50 MtCO2 per year.18 about the relationship between their business model and
This paper identifies the impacts from proof-of-work clean energy.

II. Proof-of-Work Cryptocurrency: A Brief Introduction

What are “proof-of-work” cryptocurrencies, and why if they successfully validate a set of transactions — that
do they use so much energy? In short, proof-of-work is, be the first to solve the puzzle, thereby adding another
cryptocurrencies’ mechanism for protecting the integrity “block” (or solution) in the chain (that in turn becomes
of ownership is to require computers or mining machines an input to the next puzzle). Operations that try to earn
to compete to solve complex mathematical puzzles, this new Bitcoin are called “miners” (because they are
and reward the winner (the miner) with currency. The “mining” new Bitcoin), as are the mining machines that
mechanism is designed to promote an arms race: more are specially designed to only solve these puzzles.19
machines competing to solve the puzzle theoretically The puzzle that Bitcoin miners try to solve is calibrated
means that no single entity can control, or monopolize, approximately every two weeks such that across the
the system. The person or company with the most global network, rewards are earned, on average, about
computational power will be rewarded with the most every ten minutes.20 As more miners enter the system,
currency. Consequently, cryptocurrency mining operations the reward becomes harder to earn. To have a better
are running immense computational operations, often chance of earning the reward, miners add new machines
tens of thousands of mining machines, around the clock to to the system, consequently consuming more energy, and
secure the best chances of winning. in doing so, make the reward harder to earn. The entire
Cryptocurrencies generally use a “distributed ledger,” system can be compared to an unbounded lottery, played
meaning that ownership and transaction records are not every ten minutes. To have the best chance of winning
centrally located but can only be established through the lottery, you need to buy more tickets, but as more
computations conducted across participants’ mining people buy tickets, your chances of winning the lottery
machines. To minimize the chances of participants decrease. The winning strategy, to date, has been to buy
trying to cheat each other by writing false transactions as many chances at the lottery as possible, as quickly
into the ledger, cryptocurrencies need a mechanism to as possible — i.e., build mining centers as quickly as
decide how a transaction can be considered valid. For possible.21 Importantly, the vast majority of computational
proof-of-work cryptocurrencies, the first mining machine energy in the Bitcoin system at any one time is wasted:
to solve a cryptological problem (i.e., a puzzle) gets to the system works if there are twenty thousand mining
validate the next set of transactions, and in doing so, machines competing — or two million.22
earns a reward. The form of the puzzle requires mining Will the explosive growth in energy consumption ever
machines to perform millions of computations, in effect come to an end for proof-of-work cryptocurrencies? There
guessing at the answer. To induce individuals to commit are two countervailing forces that drive the trajectory
computing power towards these validation puzzles, the of energy use for Bitcoin: difficulty drives the value of
Bitcoin network rewards participants with new Bitcoins

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 6
mining down, and the price of Bitcoin drives the value of costly to obtain new Bitcoin.23 But higher Bitcoin prices
mining (and energy consumption) up. Difficulty is driven can overwhelm these barriers. Even at the relatively
by miners entering the system, increasing the complexity depressed price of Bitcoin as of this writing (~$20,000),
of the problems and thereby raising the energy cost of Bitcoin miners can afford to pay well above what ordinary
winning a block of Bitcoin. By design, the Bitcoin reward users of electricity pay — and can afford to keep adding
offered to miners is cut in half approximately every four new processing power.
years. These two factors together make it increasingly

III. No Longer a Hobbyist’s Experiment: How Cryptocurrency

Mining Transformed Into Massive, Centralized Operations
to Maximize Profits
In October 2010, just one year after Bitcoin was publicly with minimal human supervision.
introduced, its network processed around ten billion Cryptocurrency is touted as a democratizing form of
calculations (gigahashes) per second (Gh/s),24 meaning finance33 — but it is increasingly a highly concentrated
the entire network could be run by between 6,000 and industry that relies on large financial institutions to fuel
7,000 mining machines.25 With Bitcoin trading at a its growth. Because of the immense amount of capital
modest 20 cents, Bitcoin miners were mostly restricted needed to purchase enough ASIC miners, with high-
by the cost of acquiring hardware and allocating it to performance machines many thousands of dollars each,
Bitcoin mining.26 Cryptocurrency mining was largely cryptocurrency mining is beyond the reach of only a few
a hobbyist’s exercise, with miners found in garages, mining companies.34 Even small-scale miners’ operations
basements, or home offices.27 But today, these small are part of high-density loads, as many pool their
operations are in the minority; in 2020, 4.5% of Bitcoin computing power to increase their chances of validating
holders held 85% of the currency.28 a coin. Almost 80% of all computing power on the Bitcoin
Beginning in early 2012, miners began switching to network is owned by seven mining pools.35 A 2021 paper
specialized equipment, first using modified graphics from the National Bureau of Economic Research tracing
processing units and quickly advancing to application- rewards within a subset of those pools found that 90%
specific integrated circuit (ASIC) machines. As mining got of rewards (Bitcoin blocks) were received by just 10% of
more popular (and thus more competitive), the estimated miners — nearly 70% were received by just half a percent
power dedicated to Bitcoin mining rose from less than of miners.36
1 GW at the start of 2017 to nearly 4.4 GW by the end of
2018.29
A. Proof-of-Work Cryptocurrency Mining
Incentivizes Mining As Quickly As Possible
Today, the scale of cryptocurrency mining is expanding to Maximize Profits
rapidly in the United States. Cryptocurrency mining is now The structure of proof-of-work cryptocurrency
the largest source of electricity demand for some utilities. mining — where the first mining machine to solve the
In Texas alone, we tracked 2,234 MW of cryptocurrency puzzle gains a reward, where the reward falls over time,
mining facilities, almost entirely built since mid-2021. where there is no limit on the number of entrants in the
Eight of the facilities are between 150 to 300 MW each.30 competition to earn the reward, and where there is a
A single 300 MW facility might host nearly 100,000 perception that the value of cryptocurrency is effectively
machines,31 consuming enough electricity to power, on limitless — creates an incentive to mine cryptocurrency
average, nearly 49,000 nearby homes.32 Unlike many as quickly as possible. Mining equipment, too, quickly
industrial operations or even data centers that reduce becomes obsolete.37
energy usage at off-peak times, these facilities typically
The ability to get existing mining equipment running as
run 24 hours a day, seven days a week, 365 days a year, at
soon (and often) as possible is incentivized over nearly
full capacity. Any downtime is a lost opportunity to “win”
all other considerations. Bitcoin is designed so that the
blocks of Bitcoin, and mining machines can run for hours
reward that miners receive for validating a transaction

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 7
shrinks over time. These are known as “halving” events. At Miners have invested at power plants that have otherwise
the inception of Bitcoin, miners that successfully validated struggled to demonstrate economic value, a trend that
transactions were provided 50 Bitcoin. That reward has would seem to be counter to prudent planning. But
fallen approximately every four years. Today, in 2022, unlike other customers, miners have been willing to pay
it is just 6.25 Bitcoin. At the height of Bitcoin’s value in above-market prices for electricity from otherwise retiring
March 2022, that 6.25 Bitcoin was worth $294,146. The coal plants (such as at the Hardin coal plant in Montana),
next halving event is projected for 2024, at which point or inefficient plants (such as the Panther Creek and
the value per computational effort of mining Bitcoin will Scrubgrass waste coal plants in Pennsylvania) because
immediately fall by 50%. Miners looking towards that energy from these plants could be procured quickly, and
halving event will seek to mine as much Bitcoin today as with few regulatory hurdles.
feasible, knowing that the value of mining will sharply Similarly, Texas’s deregulated electricity market
decline at that event.38 means end-users are not limited to a particular retail
B. Cryptocurrency Miners Often Value electricity provider based on location, and the absence
Speed of Access to Energy Over Price, Even of a wholesale capacity market (basically, a requirement
to the Point of Reviving Dying Fossil-Fueled that utilities pay for a guarantee of available electricity)
Power Plants can lead to price extremes (both low and high). Both
Proponents of proof-of-work claim that it seeks low-cost of these characteristics have made Texas attractive to
energy, or even excess energy. This is true — but only to an geographically flexible miners who can shop around for
extent. Utilities with particularly inexpensive energy due favorable terms, and can shut down operations when
to subsidized hydropower, for example, have seen a higher prices spike. Texas’s restructured market makes it easy
number of interconnection requests from miners. But for miners to build facilities with few obligations to the
because proof-of-work cryptocurrency mining rewards grid.
speed above all other considerations, miners are turning Given the uncertainty as to future Bitcoin prices, the
to any and all readily available energy options, such as fact that Bitcoin cannot be widely used as a currency
defunct or otherwise uneconomic power plants, so they for ordinary transactions, and the exceptional volatility
can set up mining operations as quickly as possible. in prices, mining operations cannot — and generally do
Accordingly, some of the fastest growth of cryptocurrency not — bet on the long-term stability of their enterprise.
mining in the United States recently has occurred where There is little reason for cryptocurrency miners to make
miners have made direct deals with defunct generating investments lasting even a year or two to build solar or
stations, and in Texas’s unique electricity market. wind generation, as long as existing fossil fuel plants can
provide the same electricity, faster.

IV. The Scale and Source of Bitcoin Energy Usage is Largely

Invisible to Regulators
Although cryptocurrency mining operations have become noting that it could complete the transition by the third
increasingly specialized, concentrated, and capital- quarter of 2022, or in less than half a year.40 Similarly,
intensive — and thus identifiable as a distinct class of Compass Mining recently announced that it would close
business and energy user — it is difficult or impossible to its Georgia facilities and move its mining machines to
find information about the scale, location, or fuel source of Texas, reportedly just two months after proposing to
cryptocurrency mining operations in the United States. ship Texas mining machines to Georgia to chase a faster
Proof-of-work cryptocurrency mining operations are interconnection.41
not tethered to any particular geography: miners seek Currently, the primary sources for publicly available
speed to market, cheap energy, flexibility, and distance information about cryptocurrency’s energy usage and
from regulators. For example, multiple companies offer environmental impacts are local journalists, company
mining equipment in shipping containers to chase press releases, and Securities and Exchange Commission
the best prices,39 and when prices fluctuate, mining (SEC) filings for publicly-traded cryptocurrency
facilities can migrate quickly. For example, in April 2022, mining companies. Occasionally, information about
Marathon Digital announced that it would abandon its mining operations may be found incidentally through
new position adjacent to the Hardin coal plant in Montana, regulatory oversight of utilities or generation facilities

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 8
(such as through utility tariff filings that identify new Purchase Agreement (PPA) with a utility, and that utility is
interconnection requests or Federal Power Act Section required to file an integrated resource plan or other public
203 filings before the Federal Energy Regulatory information about its generation under state law (or does
Commission (FERC) relating to the sale of generation so voluntarily),43 that information can be used to help
facilities). determine fuel mix when operations use energy from the
Many mining operations, however, are not owned by grid.
publicly-traded companies. Among those that do file In the cases where the mining company directly purchases
reports with the SEC, many do not disclose the fuel generation resources, there may be additional information
sources associated with the miners listed in their 10-K through the U.S. Environmental Protection Agency (EPA)
or 8-K reports, or provide only partial or selective or state air or water permitting processes,44 or within
information, such as describing the energy supply as filings under Section 203 of the Federal Power Act if
“reliable, renewable” or as having “high emissions free FERC approval is required for the purchase.45
content.”42 If the mining company reports a Power

V. Where Do The Electrons Come From?

Despite the lack of centralized information about the processes, local newspaper coverage, and local activist
location or energy source for large-scale cryptocurrency efforts. Using this information, we then attempted to
computing centers, we were able to identify more determine how these operations were obtaining electricity
than 140 cryptocurrency mining operations through and the greenhouse gas emissions associated with that
a patchwork of SEC filings, investor presentations, electricity usage.
public utility commission dockets, grid operators’ public

FracTracker Alliance, Status of known proof-of-work cryptocurency mining operations in the U.S. (Sept. 2022).46

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 9
A. Types of Electricity Procurement by The Scrubgrass plant relies on a mixture of rejected waste
Cryptocurrency Miners coal and dirt that emits hundreds of tons of dangerous
There are four primary means by which proof-of-work air pollution, including sulfur dioxide, nitrogen oxide, and
cryptocurrency mining companies power their operations: hazardous air pollutants.53 The waste coal is also carried
(1) operating behind-the-meter at a power plant;47 (2) on hour-long trips by large trucks over two-lane country
purchasing power directly from a power plant or utility; roads, endangering communities along the route with
(3) purchasing electricity from the grid either through a additional air pollution. Adding insult to injury, the plant
power purchase agreement with a utility or by paying a receives subsidies from Pennsylvania taxpayers and
retail rate (which may be a general industrial rate or an ratepayers because it burns “waste,” including $4/MWh
even lower “economic development” rate); or (4) hooking for the Pennsylvania Coal Refuse Reclamation tax credit
up a generator to oil and gas wells to burn gas that would and $16/MWh from the Pennsylvania Tier II Alternative
not be combusted, or otherwise not be injected into the Energy Portfolio Standard Program.54 Stronghold, which
pipeline system, either through flaring or venting. In nearly owns and operates the two waste coal plants, has claimed
all of these scenarios, these unregulated, energy-intensive that 60% of their generation costs will be covered by
proof-of-work cryptocurrency mining operations are subsidies from taxpayers and ratepayers.55
financing the continuation of fossil fuel extraction and ii. Burning Fossil Gas to Generate Electricity for
generation — in direct opposition to what is needed to Cryptocurrency Mining in New York State
prevent the worst of the impacts from the climate crisis. 48 In upstate New York, the Fortistar North Tonawanda
And in some places, investments in fossil generation will gas-fired power plant plans to power proof-of-work
be made in response to this boom in demand that will cryptocurrency mining full-time behind-the-meter. Prior
have ongoing effects for decades. to the change in operations, the facility operated rarely, at
only a 2 to 13% capacity factor, meaning its emissions of
1. Behind-the-Meter Generation at Fossil-Fueled
Power Plants greenhouse gases and other harmful air pollutants were
relatively small compared to what the plant was capable
Cryptocurrency mining operations most directly drive
of.56 Running the plant full-time to mine cryptocurrency
increased greenhouse gas emissions when they outright
could cause a nearly 3,000% increase in its annual CO2
purchase fossil fuel plants. We have identified several
emissions along with dramatic increases in other harmful
fossil fuel power plants where greenhouse gas emissions
local air pollutants such as haze-producing nitrogen
and local pollution increased dramatically after those
oxides, particulate matter, and carbon monoxide.57 This
plants were acquired by cryptocurrency mining companies
significant increase in air pollution will spew into several
and began operating around-the-clock.
nearby environmental justice areas.58
i. Burning Waste Coal to Generate Electricity for
Cryptocurrency Mining in Pennsylvania About a hundred miles away, on the western shores of
In July 2021, Stronghold Digital Mining Inc. filed an S-1 Seneca Lake, among the productive vineyards and farms
report with the SEC disclosing plans to purchase three of the Finger Lakes, the former coal-fired and now fossil
waste-coal-fired power plants in Pennsylvania with a gas-fired Greenidge Generation Station began operating
combined capacity of 300 MW and install 57,000 ASICs as a cryptocurrency mining facility full-time in 2020. In its
dedicated to mining cryptocurrency.49 To date, Stronghold first year of mining operations, CO2 emissions at the plant
has purchased the 94 MW Scrubgrass power plant in increased 479%.59 Other local air pollutants rose sharply
Venango County and the 94 MW Panther Creek facility in as well when it began operating 24 hours a day.60
Carbon County.50 Fortunately, it is not clear how much longer Greenidge
Burning waste coal to generate electricity for will continue to pollute; the New York State Department
cryptocurrency mining is one of the worst possible of Environmental Conservation denied an air permit
choices for the climate and for local air pollution.51 renewal application for the Greenidge gas plant in June
According to U.S. Energy Information Administration data, 2022, concluding the plant’s expanded operations and
Pennsylvania’s waste-coal-fired power plants had average significant increase in air emissions over the past two
CO2 emissions of over 2,760 pounds per megawatt-hour years were inconsistent with the state’s climate law,
(MWh), making them the second most carbon intensive because its behind-the-meter cryptocurrency mining
fuel behind residual fuel oil. 52 “was creating a significant demand for energy for a wholly
new purpose unrelated to its original permit.”61 There are

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 10
also serious question as to whether the plant’s owners can As Hardin plant powered Bitcoin mining, emissions spiked
safely and effectively address and remediate the existing
CO2 EMISSIONS
coal ash contamination or water pollution issues on site.62
1M TONS OF ANNUAL CO2 EMISSIONS
2. Power Purchase Agreements with Fossil-Fueled
Power Plants or Utilities
800k Plant transitioned
As the Greenidge plant’s air permit denial demonstrates, to power Bitcoin
outright ownership of fossil fuel resources entails legal mining in 2021
(Q4 data missing)
responsibilities and both invites scrutiny and requires 600k
transparency that many cryptocurrency mining opera-
tions have sought to avoid. Therefore, a large number of
mining operators instead set up mining facilities in close 400k

proximity to, and directly connected with, fossil fuel power

plants, and enter into power purchase agreements for
200k
electricity from those plants. Some of these arrangements
are negotiated with the local utility to purchase electricity
at rock bottom prices, often with no scrutiny from regula- O
tors. For example, Cipher Mining has negotiated PPAs 2010 2015 2020

with an average fixed price of 2.73 cents per kWh.63 For

many others, the electricity rate paid by miners in PPAs is
BOILER OPERATING DAYS
250 OPERATING DAYS
unknown.
These arrangements, often not publicly available, can
prolong the operation of coal- or gas-fired power plants 200

that were otherwise likely to retire or even had an an-

nounced retirement date.
150
i. A Coal Plant in Hardin, Montana That Hardly
Operated Powered Up to Mine Cryptocurrency
One prominent example of this practice is the Big Horn 100

Data Hub operated by Marathon Digital Holdings at the 115

MW Hardin Generating Station, a coal plant just north of
50
the Crow Indian Reservation in Big Horn County, Montana.
Before cryptocurrency mining operations ramped up at Data unavailable
Hardin, the plant had been slated to close permanently O
in 2018 and generated power for just 75 days per year on 2010 2015 2020

average from 2017 through 2020.64 In late 2020, publicly- Sources: Provided by the Montana Environmental Information Center
traded cryptocurrency mining company Marathon an- from reports submitted to the Montana Department of Environmental
Quality. Graphic is adapted from The Guardian.
nounced a partnership with the plant’s operator, Beowulf
Energy, to utilize roughly 37 MW of power from the plant As with all coal plants, delaying a retirement date and
to mine cryptocurrency around the clock. Hardin operated increasing operations to mine cryptocurrency increases
323 days in 2021.65 all pollution from the plant. Additional years of operations
The plant’s operations were enormously profitable for mean millions of tons more of coal ash or coal combustion
Marathon, which won approximately 34 Bitcoin on residuals (CCR) — a toxic solid waste byproduct of burning
December 1, 2021 alone66 — equivalent to $1,945,786 at coal.69
the time.67 Hardin’s neighbors were not so lucky. In 2021, In early April 2022, Marathon Digital announced that it
nitrogen oxide emissions increased 842%, sulfur dioxide would transition its operation at Hardin to other locations
emissions increased 508%, and CO2 emissions increased to use “more sustainable sources of power” and reduce
850%.68 its pollution by the end of 2022.70 However, agreements
between Marathon and Compute North suggest the

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 11
miners were simply moved to a behind-the-meter opera- At the same time, miners often also participate in demand
tion at fossil gas-powered Wolf Hollow Generating Station response programs, which will pay miners to stop drawing
in Texas.71 And even in leaving, Marathon left millions of electricity during periods of high demand. Although such
dollars’ worth of infrastructure intact, “so another miner programs mitigate some of the impacts of mining on the
can come in right behind us with a minimal delay and then grid, other customers must effectively pay miners to shut
com[e] up to speed,” according to its CEO.72 The Hardin down, which may be extremely profitable for such large
plant’s owner is currently in discussions with potential consumers like mining operations during extreme weather
tenants that are interested in moving into the Big Horn events than actually mining.83 As described further below
Data Hub.73 in Section VIII.D, while demand response programs are
ii. A Coal Plant’s Polluting Operations in Merom, Indiana essential tools to mitigate the pressure the power grid
Are Extended to Mine Cryptocurrency faces from extreme weather events like heat waves, the
Cryptocurrency mining may also help prolong the life of vast amount of new and increasing load placed on the grid
the Merom Generating Station, a 1,080 MW coal-fired by cryptocurrency miners who often pay lower electricity
power plant in southwest Indiana. Hoosier Energy, a rates than others, but then are paid very high rates for
generation and transmission rural electric cooperative demand response are not fair to other electricity users.
that has owned the plant for around 40 years,74 previously The impacts on other ratepayers from discounted electric-
announced the plant would retire in May 2023.75 Then, ity rates provided to miners and from the payments to
in February 2022, Hoosier Energy announced plans to miners for demand response can be severe, which is
sell the plant to Hallador (a coal-mining company) and discussed further below in Section VII.B.
purchase a portion of the plant’s energy and capacity
4. Combusting Fossil Gas at Oil and Gas Wells
from the new owner. 76 Shortly thereafter, in May 2022,
Many cryptocurrency mining companies are utilizing
the public learned that AboutBit, a cryptocurrency min-
electricity generated from combusting fossil gas at oil
ing company, would be constructing a new mining site
and gas well pads. This type of mining operation can
adjacent to the Merom plant and purchasing 115 MW of
reopen orphaned wells, often in remote areas such as in
electricity from WIN Energy, a distribution cooperative
rural South Dakota or western Pennsylvania, that should
that purchases all of its power from Hoosier Energy.77 It is
otherwise be plugged or capped to prevent methane and
unclear whether the PPA between WIN and AboutBit was
other pollution.84 Some of these operations are literally
known to Hallador, Hoosier Energy, or both, before the two
off-the-map. One journalist visited a “small installation
parties reached an agreement on the sale of the plant, but
[in Kentucky], miles from the nearest paved road, [that]
it makes the Merom plant considerably more economically
draws methane gas from a long abandoned well that [the
viable as a merchant generator than it would otherwise
miner] has fixed up with a generator and satellite internet
be.78 In fact, AboutBit’s co-founder responded to criticism
. . . .”85 The mobility and remoteness of these operations
about keeping a coal plant open by stating, “It’s 100
make them and their pollution extremely difficult to
percent correct. For anyone to say their crypto operation is
quantify.
green, unless they are 100 percent hydro, they can’t make
that claim. As an operation, it’s not humanly possible.”79 This type of cryptocurrency mining also incentivizes
Hallador also plans to reopen a coal mine in Knox County, further oil and gas drilling, as it converts what would be
Indiana, to supply this plant’s extended operations.80 a loss for drillers (“waste” flared gas that could go to
beneficial end uses or minimized) into a new source of
3. Retail Purchases of Electricity from the Grid
revenue.86 Some miners claim these operations are a kind
Some miners simply purchase energy from their local
of environmental mitigation because they use the “waste”
utility as retail customers. Miners seek out utilities where
flared gas to generate electricity.87 As one professor at
industrial electricity rates (which are often lower than
University of California, Santa Barbara, has observed,
residential rates on a cent per kWh basis) are particularly
“This is basically a way to monetize flaring. It’s not a way
low.
to stop flaring.”88
One of the largest cryptocurrency mining companies, Riot
Just one of the companies engaging in flare-based
Blockchain, only pays 2.5 cents per kWh for its electricity.
generation for cryptocurrency mining, Colorado-based
These rates are roughly 10 to 11 cents less than the going
Crusoe Energy, claimed in April 2022 to operate 86
residential rate,81 and about 5 cents less than the large
“Digital Flare Mitigation” data centers in Montana, North
consumer rate.82
Dakota, Wyoming, and Colorado, with more planned in

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 12
Texas and New Mexico.89 Major oil companies have also 2022, inspectors from the Pennsylvania Department
expressed interest in these operations.90 In March 2022, of Environmental Protection found 30 methane-gas-
Exxon Mobil announced that it would consider expanding fired generators with an estimated capacity of more
a North Dakota-based pilot program with aforementioned than 10 MW that were cryptocurrency mining without
Crusoe Energy to Alaska, the Qua Iboe Terminal in authorization.92 In Adams County, Colorado, inspectors
Nigeria, Argentina’s Vaca Muerta shale field, Guyana, and found four cryptocurrency mining operations at oil and gas
Germany, which would use up to 18 million cubic feet of wells operating without proper authorization.93 Concerned
gas per month.91 about these operations and their pollution, in May 2022,
When regulators do locate and inspect wellhead miners, the county “prohibit[ed] cryptocurrency / digital currency
they can find violations of law. For example, in January / electronic currency mining operations on oil and gas
facilities.”94

VI. The Climate and Energy Impacts of Cryptocurrency Mining

in the United States are Substantial
The scale, and explosive growth, of cryptocurrency mining to be interconnected by mid-2023.95 ERCOT continues to
in the United States is hard to fully document, because adjust its forecasts of crypto-related load — announcing
most mining operations do not readily disclose their 17 GW by 2026 in April 2022,96 to 27 GW by 2026 in July
energy consumption, much less location and source of 2022,97 to 33 GW by 2026 in August 2022.98
electricity. But both ground-up accounting and top-down
estimates reveal the same trend: cryptocurrency mining Based on the current grid generation mix and estimated
operations have a substantial emissions impact. The Bitcoin energy consumption, we estimate Bitcoin mining
most obvious way cryptocurrency mining increases in the United States is responsible for between 11 to 76
global emissions is by driving huge increases in electricity million annual excess tons of CO2 in the last year, with a
demand. For example, Texas’s grid operator, the Electric central estimate of 27.4 million tons CO2.99 For context,
Reliability Council of Texas or ERCOT, recently disclosed that is about three times as much CO2 as was emitted by
that it expected nearly 6 GW of new cryptocurrency load the largest coal plant in the United States in 2021.100 The
White House’s OSTP arrives at a similar estimate, of about
Texas Crypto Boom is Getting Even Bigger 21 to 35 million tons by mid-2022 from Bitcoin mining,
40 GW and 25 to 50 million tons CO2 from all cryptocurrency
As much electricity mining activity in the United States.101 According to the
35 GW use as the entire
state of Florida U.S. House Committee on Energy and Commerce, the CO2
30 GW 33 GW
emissions from global mining of Ethereum and Bitcoin in
25 GW 27 GW 2021 equaled the tailpipe emissions of more than 15.5
Slightly less than
20 GW all industrial million gas-powered cars.102
electricity in

15 GW
Texas
In the absence of a comprehensive strategy to reduce all
17 GW
emissions from the power sector, adding this massive
10 GW About the same as
1/3rd of all Texas amount of new electricity demand will drive up emissions.
households
5 GW
6 GW
Until the grid and all new generation build-out has been
O 2 GW
completely decarbonized, proof-of-work cryptocurrency
Online in Middle of By 2026, By 2026, By 2026, miners will never exclusively rely on renewable energy to
April 2022 2023 April 2022 July 2022 August 2022
estimate estimate estimate power their operations.
Texas Blockchain Council. ERCOT Large Flexible Load Task Force Meeting, at 4 But cryptocurrency mining threatens to derail or reverse
(April 22, 2022)
decarbonization in ways that go beyond simply adding
6 GW of cryptomining equipment operating at 85% load factor results in 44.7 TWh
per year. Texas residential consumption in 2021 was 156.1 TWh. Source: Energy electrical load. At a moment when the cost of fossil
Information Administration, Annual Electric Power Industry Report, Form EIA-861. fuel generation exceeds wind or solar alternatives, the
(Last accessed August 3, 2022).
economic fundamentals of cryptocurrency mining distort
33 GW of cryptomining equipment operating at 85% load factor results in 245.7
TWh per year. Total Florida consumption in 2021 was 244 TWh. Source: Energy the U.S. energy market and drive increased coal and gas
Information Administration, Annual Electric Power Industry Report, Form EIA-861. generation.
(Last accessed August 3, 2022).

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 13
The acceleration of cheap renewable energy in the U.S. Marginal emissions, or the emissions that are associated
pushed higher cost coal, gas, and nuclear plants out of with incremental additions or reductions in demand, vary
service. As the cost and risk of retaining and operating across the country, primarily determined by the resource
coal plants increased, and the cost of new solar, wind, mix on the grid, and to a lesser extent market structures
and storage — along with fossil gas — fell, coal plants and local fuel costs. According to data aggregated by the
retired in waves.103 But to cryptocurrency miners, with EPA, these marginal emissions vary from half a short ton
their short-term focus on mining as much as possible, as of CO2 per MWh consumed in New England and California
quickly as possible, these same power plants look like an to just under one short ton of CO2 per MWh in the
attractive, ready source of electricity, even if they do come Midwest / Central regions and Rocky Mountains, where
with above-market rates. Ready access to transmission coal dominates the margin.107
infrastructure, a low cost of acquisition, and utilities A 300 MW data center in Texas might be estimated to
eager to offload liability make the purchase of otherwise contribute 1.4 million tons of CO2 to the atmosphere, while
uneconomic fossil fuel power plants a profitable choice a similarly sized data center in North Dakota (not affiliated
for miners, at least in the short-term. In the long-term, with a specific generator) might contribute more than 2
acquisition of these power plants risks creating new long- million tons of CO2 to the atmosphere every year. In some
lived environmental impacts and remediation obligations. cases, the net impact might be higher than the utility-
And because cryptocurrency mining operations are wide average, such as when a utility procures from or
focused on near-term margins, they are unlikely to foot constructs specific energy sources to serve its customers,
the bill for these long-run social obligations.104 and changes in the energy mix that serve the utility might
The largest partnerships between specific power plants be attributed to the new demand (at least financially).
and cryptocurrency mining operations we have been It is at least theoretically possible for cryptocurrency
able to identify are at existing coal plants and gas plants miners to develop truly zero-emission sources of
that were on the verge of retirement, have struggled electricity. (See Section VIII.C below.) But simply
to find buyers, or were operating infrequently: Hardin purchasing energy from existing renewable sources is
(MT), Scrubgrass and Panther Creek (PA), Coal Creek insufficient, because but for the cryptocurrency mining
(ND), and Merom (IN) (coal plants); and Greenidge and operation, energy from that renewable facility would
Fortistar North Tonawanda (NY), Odessa and Wolf Hollow be consumed by other customers. Additionality, or
(TX) (gas plants). In most cases, the resulting increased contracting for new clean energy sources, is key. Miners
emissions of these power plants are directly attributable that fund new renewable development can fairly claim
to the cryptocurrency mining operations that support to be non-emitting. For example, Aspen Creek Digital
their operations in part or in whole.105 announced in June 2022 that it is developing a 6 MW
These behind-the-meter operations are particularly solar behind-the-meter cryptocurrency mining center in
pernicious but relatively rare. As discussed above, the Colorado.108 To the extent that Aspen actually builds new
majority of cryptocurrency mining operations appear solar facilities and relies exclusively on the energy they
to be served by electric utilities, taking service under produce, it is as close as feasible to a non-emitting mining
a power purchase agreement or that utility’s existing facility, albeit a tiny fraction of overall cryptocurrency
tariffs (i.e., retail rates). In both cases, energy is served by usage.109 But as of this writing, we were unable to
increasing the output of existing generators, or those on determine what, if any, steps have been taken to construct
the operating margin, or adding new resources. In today’s the facility.110 The overwhelming majority of the 140
energy system, the operating margin is almost entirely mining operations we were able to identify, in contrast,
composed of fossil generators that are able to serve rely in whole or in part on fossil-fuel generation.111
incremental load.106

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 14
VII. Cryptocurrency Mining Harms Communities and
Electricity Ratepayers
A. Most Environmental Impacts from facility, which is in need of $3 million in emergency
Cryptocurrency Mining Are Borne by Local repairs and $30 million for long term repairs, which will
Communities be borne by local residents.115 The Greenidge gas plant,
The climate impacts of cryptocurrency mining will be felt also in upstate New York, is permitted to discharge up to
globally, but the operations also have disproportionate 134 million gallons of water, at temperatures up to 108
and damaging impacts on local communities, as well degree Fahrenheit, into the Keuka outlet at Seneca Lake.
as generating enormous quantities of electronic and 116
This thermal pollution endangers health and wildlife
packaging waste, which in turn cause toxic contamination habitability, including but not limited to potential harmful
where it is ultimately disposed. algal blooms, fish deaths, biodiversity loss and migration,
1. Local Air Pollution oxygen depletion, direct thermal shock, and changes in
dissolved oxygen.117 And thermal pollution from the Merom
Cryptocurrency mining that relies on fossil fuel
coal plant in Indiana (which will supply 115 MW of power
combustion for energy generation indirectly causes all of
to a new AboutBit facility) has been associated with the
the air pollution impacts of the underlying combustion
“virtual collapse” of the largemouth bass population in the
method. For coal combustion, this means fine particles,
nearby Turtle Creek Reservoir.118
sulfur dioxide, nitrogen oxides, and air toxics; for gas, the
biggest air pollution impact is typically nitrogen oxides. 3. Fire and Safety Risk
Where cryptocurrency mining occupies an existing Mining equipment operating 24 hours a day, 7 days a week
generation plant, it is unlikely to add pollution controls in small, enclosed spaces generates tremendous amounts
unless compelled to do so. When cryptocurrency mining of heat, creating a fire risk.119 The risks of fire at the facility
facilities use electricity from fossil-fueled grids, like can originate from “unsafe equipment, wiring failure, . . .
most in the U.S. and especially so with a coal-heavy overloading of electrical network[s], overheating of the
grid like Kentucky’s, it increases the pollution in another equipment due to . . . incorrect cooling system[s].”120
community. Cryptocurrency mining facilities often operate in low-tech
In fact, last year, the World Health Organization released environments, in previously unused warehouses, or old
new Global Air Quality Guidelines, finding that “[a]ir industrial sites.121 Fires and fire risk are common enough
pollution is one of the biggest environmental threats to as to drive a market in cryptocurrency mining insurance
human health, alongside climate change.” Air pollution and industry “guidelines.”122
exposure, especially to particulate matter, is estimated There is also fire and explosion risk associated with
to cause 7 million premature deaths annually and result electric grid equipment serving the mining operations,
in the loss of millions more health years of life across the in addition to the mining facilities. For example, recently
globe.112 in Buffalo, New York, there was a fire and explosion from
2. Water Usage and Thermal Pollution “faulty equipment” serving a mining operation.123 Some
localities have instituted new fire and safety regulations or
The environmental impacts of fossil-fueled
instituted moratoria on the basis of fire risks for neighbors
cryptocurrency mining operations are not limited to
and damaged grid equipment not sized for the load.124
climate and air pollution. Many cryptocurrency mining
operations use water to cool their operations, whether These fire risks are especially of concern in drier areas of
at the site of the mining machines or the water use that the country where wildfires abound and especially in the
comes with fossil-fueled electricity generation, or both.113 dog days of summer, when drought warnings cover much
The Fortistar North Tonawanda gas plant in New York, of the country.125
for example, will consume 500,000 gallons of water per 4. Noise Pollution
day for cooling purposes once ramped up for full-time
While all fossil fuel plants entail air and water pollution,
mining operations, approximately 12% of the City of
cryptocurrency mining introduces yet another local
North Tonawanda’s current total water consumption.114
environmental harm: noise pollution.126 Mining companies
This water will flow to the City’s wastewater treatment
acknowledge this: Compass Mining’s website explicitly

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 15
states that, “Bitcoin mining isn’t a quiet activity. . . A Cryptocurrency mining results in enormous amounts of
typical ASIC’s noise levels range between 50 DB and electronic waste.137 This externality of cryptocurrency
75 DB, or a noise level similar to a food blender or a loud mining also suffers from a lack of data, but a recent
vacuum.”127 estimate found that in 2021 alone, proof-of-work mining
Neighbors have reported much worse: generated more than 30,000 metric tons of waste,138
which is comparable to the e-waste produced by the
• At a mining facility in Limestone, Tennessee, residents whole country of the Netherlands.139 Much of this waste
have described the noise as “like a jet engine idling
is sent to low-income communities around the world who
on a nearby tarmac.”128 A commissioner who voted
bear the harms of this toxic pollution but do not see any of
to approve the operation told a reporter that he has
the profits from the mining.140
“never regretted a vote like this one. I sure wish I could
take it back.”129 When cryptocurrency mining operations first begin,
there is also a tremendous amount of solid waste from
• In Cherokee County, North Carolina, residents offer
installation and construction. One community in North
that the noise is “like living on top of Niagara Falls” and
Carolina, for example, needed to revise their solid waste
“like sitting on the tarmac with a jet engine in front of
ordinances after large amounts of solid waste could not be
you. But the jet never leaves. The jet never takes off. . . .
handled by the local waste processing center.141
It’s just constant annoyance.”130
• In Elk County, Pennsylvania, a local farmer said, B. Impacts on Electricity Prices for Local
“My family, farm, and businesses have been severely Residents and Businesses
impacted by the constant noise from the site, and it In a similar vein to the problematic climate impacts
has led to death for some of my animals as well as emerging from proof-of-work cryptocurrency mining,
health issues with my horses.”131 these operations harm existing electricity customers
• In North Tonawanda, New York, one neighbor both by increasing the total quantity of electricity needed
described it as “that whistling and that howling and it’s on the grid and by introducing specific risks that are
nonstop.” Another resident stated “she continues to attributable to the intensity, portability, and extreme time-
hear the whine one mile away from the plant.132 sensitivity of cryptocurrency mining operations. In this
• In Adel, Georgia: “An inescapable drone that is driving section, we explore the risks faced by utilities and their
many of them crazy. ‘It’s comparable to torture,’ said ratepayers, grid operators, and localities when energy-
[a] city councilor who has heard the noise and received intensive cryptocurrency mining operations move in.
complaints from constituents.” One local resident 1. Utilities, and Their Customers, Face Unique Risks
offered, “‘I wear earplugs inside my own house’ . . . from Cryptocurrency Mining Operations
The noise sounds like 1,000 hair dryers blowing in High-density electricity users such as miners frequently
unison.”133 demand the construction of transmission and distribution
• In Plattsburgh, New York, one local resident described lines, substation upgrades, and other infrastructure to
the “constant, high-frequency whine . . . ‘like a small- facilitate the delivery of huge quantities of electricity
engine plane getting ready to take off.’ It wasn’t just the to a new energy intensive mining rig.142 Ratepayers may
decibels, but the pitch: ‘It registers at this weird level, be left on the hook for these investments if and when
like a toothache that won’t go away.’”134 a cryptocurrency mining operation abruptly leaves (as
5. Enormous Amounts of Electronic and Other they are generally capable of doing).143 For example, one
Solid Waste cryptocurrency mining operation in Washington that
ASICs, the specialized machines used exclusively in the declared bankruptcy in 2018 left more than $700,000
proof-of-work cryptocurrency mining process, have a in unpaid utility and electricity bills.144 Mining operations
limited lifespan, and recent changes in the hardware (to may leave solely because they can get a better deal
mine faster) potentially increase machine turnover and on electricity somewhere else. For example, after the
thus the annual amount of electronic waste.135 Today, New York Municipal Power Authority increased rates
the average lifespan of a well-kept, maintained machine for supplemental electricity used by high-density load
is projected to be around 3 to 5 years. In harsh or poor customers in Plattsburgh because the rates for local
conditions, they can deteriorate in as little as a few residents there skyrocketed, many cryptocurrency miners
months.136 moved west to Massena, increasing electricity costs in
Massena.145

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 16
There is ample evidence of utilities expending significant Empirical evidence strongly supports the conclusion
sums to serve cryptocurrency mining operations — finan- that cryptocurrency mining operations push electricity
cial outlays that will be passed on as higher rates to the rates higher for the surrounding community. Several
utility’s other customers. Americans are already struggling other localities have seen local electricity prices rise
to keep up with their electricity bills, particularly those when proof-of-work cryptocurrency miners show up. For
living in disadvantaged communities. 25% of U.S. house- example, in Plattsburgh, New York, residents’ electricity
holds (30.6 million) face a high energy burden (i.e., paying bills increased 30% when a mining boom came to town
more than 6% of income on energy bills) and 13% of U.S. a few years ago.153 A recent study found that Plattsburgh
households (15.9 million) have a severe energy burden residents and small businesses paid $189 million and
(i.e., paying more than 10% of income on energy).146 $90 million, respectively, more in electricity bills due to
As an example of customers being stuck holding the bag crypto’s arrival.154
for costly infrastructure upgrades, one need only look to Some states, recognizing the risks of cryptocurrency
Kentucky. There, the Kentucky Public Service Commission mining’s unique position as a new, unregulated industrial
recently approved $12.7 million in transmission upgrades user, have begun requiring miners to pay for upgrades as
for Big Rivers Electric to provide service to Blockware opposed to passing those onto the community at large.
Mining in Paducah, the costs of which will be allocated Likewise, some utilities, recognizing the risks cryptocur-
across all of Big Rivers’ ratepayers.147 These investments rency mining operations pose to their existing customers,
are often made instead of long-overdue transmission have begun to develop tariff provisions to mitigate these
upgrades that would benefit ordinary ratepayers. risks. In November 2021, Idaho Power became the first
In addition to discounted infrastructure, Kentucky also investor-owned utility to submit an application with its
offers discounted electricity rates to cryptocurrency state regulator, the Idaho Public Utilities Commission,
mining operations.148 Recently, Kentucky Power, a utility to create a separate class of “Speculative High-Density
serving 165,000 consumers in 20 counties, recently Load Customers,” since the utility received at least 17
requested additional discounted electric rates to as many separate inquiries totaling 1,950 MW — roughly 52% of its
as eight new cryptocurrency mining operations, which until-then-record peak demand.155 According to the utility,
would add more than 395 MW of new load for a utility these inquiries reflected customers with: (1) high energy
with approximately 80% coal generation.149 use and load factor; (2) the ability to relocate and disag-
gregate equipment to obtain favorable rates; (3) volatile
Yet many Kentucky residents and local businesses strug-
load growth and load reduction; (4) high responsiveness
gle with ever increasing energy burden from their bills.150
to short-term economic signals or volatility; and (5) lack
As the executive director for Appalachians for Appalachia,
of demonstrated long-run financial viability.156 To meet
recently said, “[l]ocal energy infrastructure is being
demand from these mining operations, Idaho Power
pushed to the limit. Meanwhile these miners are receiving
would need to procure additional generation resources or
benefits that local business owners, and everyday people,
wholesale energy purchases, but doing so risked over-
are not being extended as well.”151
procurement (and stranded assets) if and when these
Nebraska customers are also being forced to pick up highly mobile and high-risk customers left or went out of
the tab for cryptocurrency miners. Compute North business.157 On June 15, 2022, the Idaho PUC approved
operates cryptocurrency mining facilities where power Schedule 20 for Speculative High-Density Load158 — find-
is supplied by the Nebraska Public Power District. In ing that the new rate is “fair, just, and reasonable.”159
2020, the Power District spent $17.6 million, or 18% of However, cryptocurrency mining company GeoBitmine
its 2020 capital budget, constructing a transmission line LLC has challenged the new Schedule, leaving its ultimate
and substation to increase the delivery capacity to the fate uncertain.160
Compute North facilities from 30 MW to 100 MW.152 This
Similarly, prompted by approximately 150 MW of “crypto-
new infrastructure was built specifically to serve Compute
mining related interest” in its service territory, Entergy
North, not for general benefit — but retail electricity
Arkansas recently submitted a proposed tariff for “Large
customers will likely subsidize the cost. Customers will do
Power High-Load Density” customers. Entergy’s filing
so as the $17.6 million is rolled into the Power District’s
provides more examples about how explosive growth
revenue requirement and through residential rates that
of crypto’s energy consumption can harm customers.
are higher per-kWh than Compute North itself pays.
According to testimony submitted by Entergy, a 15' x 15'

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 17
x 30' pod of mining machines in the New Orleans area Entergy’s current customers from stranded transmission
used more energy than the nearby airport.161 Entergy also or generation asset costs. But utilities should consider
described an incident in 2019 where a new cryptocurrency incorporating elements of Entergy’s proposed tariff or
mining customer requiring significant facility upgrades the Chelan County Public Utility District’s proposed rate
opted to pay a monthly minimum for those upgrades structure — upfront deposits, guarantees, or cost cover-
under Entergy’s tariff — only to move its shipping contain- age for infrastructure investments; interruptible rates
ers “virtually overnight” “shortly after taking service . . . designed to avoid the need for new capacity buildout; and
effectively disappearing” and leaving Entergy unable to even temporary moratoria168 as appropriate — as requests
even reach the customer to recoup their upfront costs, from new cryptocurrency mining customers accelerate.
forcing existing customers to pick up the bill.162 Fitch Ratings, a ratings agency that advises on the cred-
To prevent such interconnect-and-run incidents from itworthiness of both investor-owned and public power
recurring, Entergy Arkansas’s rate filing proposes safe- utilities, has already advised utilities as much.169
guards: to protect customers from a disappearing miner, 2. Rural Electrical Cooperatives and Cryptocurrency:
new cryptocurrency customers would be required to pay A Costly Partnership for Ratepayers
a security deposit; contribute to any construction upfront; One pattern that emerged in our research is the predilec-
and post a surety bond or letter of credit.163 And to ad- tion of cryptocurrency miners for rural electric coopera-
dress the potential increase in capacity requirement due tives. Rural electric cooperatives — which supply 13% of
to the influx of shipping containers full of mining equip- U.S. electricity to 42 million people over 56% of the U.S.
ment with insatiable energy demand, the cryptocurrency land mass170 — often lack the regulatory oversight that
mining tariff would require miners to select between two investor-owned utilities are subject to. Thus, rural electric
interruptible rates that would allow Entergy or the grid cooperatives generally do not need to obtain approval
operator to require the miner to cease operation on 30 from state or federal regulators to propose new rate
minutes to an hour’s notice ten to twenty times per year, structures or enter into large-scale contracts. Although
ensuring the additional cryptocurrency load is available regulation varies by state, many rural electric cooperatives
as a demand response resource and will not — at least in have only minimal reporting requirements (such as a
theory — add to Entergy’s capacity obligations and require ten-year or integrated resource plan) to the state utility
it to construct new generation resources.164 commission and most (but not all) are exempt from over-
Some utilities have gone further in an effort to protect sight by the Federal Energy Regulatory Commission with
their existing ratepayers: the Chelan County Public Utility respect to their wholesale rates.171 Cooperatives also lag
District in Washington instituted two moratoriums on investor-owned and municipal utilities in decarbonization;
new mining operations as well as a new rate structure as of 2020, “six out of the top ten most carbon-intensive
to discourage miners from setting up shop within its emitters were cooperatives.”172
footprint after the utility was overwhelmed by demand In theory, ratepayers are protected from excessive rates
for cheap hydropower from crypto miners.165 The New by cooperatives’ governance structure and non-profit
York Municipal Power Agency, an association of 36 status. Ratepayers are also “members,” who vote for
municipal power authorities, petitioned the New York a cooperative’s board of directors and thus select its
State Public Service Commission to prevent high-density leadership. However, cooperative elections tend to be low-
load customers, specifically cryptocurrency companies, information and low-turnout, and incumbent leadership
from requesting disproportionately large amounts of is rarely unseated. Further, under the cooperative model,
power, which according to those utilities could be up to if rates are higher than necessary to cover costs, any
33% of a municipal utility’s total load.166 While not a utility, excess income is returned to member-customers in the
Missoula County, Montana adopted emergency “green” form of “patronage capital” or “capital credits.” In practice,
regulations to require cryptocurrency miners to purchase as Representative Jim Cooper (TN) has described,
or build new sources of renewable energy to offset 100% cooperatives rarely provide a full and accurate accounting
of their energy demands.167 as to whether they have distributed patronage capital to
It remains to be seen whether the Arkansas Public member-customers.173
Service Commission will approve Entergy’s proposal, or Without active engagement by customers (and greater
whether the tariff’s safeguards will be sufficient to protect transparency than cooperatives generally provide),

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 18
cooperatives tend to increase sales rather than minimize extent their literature suggests, by the fourth quarter of
rates.174 Courting large-scale cryptocurrency mining 2022, there could be up to 1,626 MW of demand directly
operations is a surefire way to increase sales. The for proof-of-work mining operations in New York State
complex changing of ownership and related transactions alone. Assuming these facilities operate 24/7/365,
surrounding the gigawatt-scale, coal-burning Merom their annual energy use of over 14,000 GWh would be a
Generating Station in Sullivan County, Indiana, previously whopping 9.5% of New York State’s total 2020 electricity
discussed in Section V, is one example of a cooperative consumption.181
increasing electricity sales through partnership with Perhaps the most worrying site of potential grid instability
cryptocurrency mining operations.175 The upshot of the due to cryptocurrency mining load increases is Texas, and
deal (which involves selling a coal plant to a coal mining how that impacts Texans both from a safety perspec-
company) is that a coal plant previously slated to retire in tive and financially. The instability of Texas’s grid was
2023 will now operate indefinitely. exposed, with tragic consequences, by Winter Storm
Merom is not the only example of cooperatives entering Uri in February 2021, in which at least 246 people lost
into large-scale electricity sales to cryptocurrency their lives,182 and 69% of Texans lost electricity for an
mining operations with little or no transparency and at average of 42 hours.183 Evidence is also becoming public
significant risk to their member-customers. Big Rivers that cryptocurrency miners are taking advantage of
Electric Cooperative reached a 100 MW power purchase such extreme weather. One cryptocurrency miner resold
agreement with Blockware Mining to supply its mining electricity valued at more than $125 million to the Texas
operation in Paducah, Kentucky.176 According to local grid during that storm and the state still owes the miner
reporting, Big Rivers intends to spend $12.7 million on $86 million, with that amount likely to be paid by ordinary
infrastructure upgrades at the proposed mining site.177 utility customers.184
And the Rayburn County Electric Cooperative in North A February 2022 report by five former Texas Public Utility
Texas found that serving two cryptocurrency mines Commissioners and a former regulatory advisor found
interested in connecting to the utility’s service territory that ERCOT still has not improved its ability to restart
north and east of Dallas would require up to $40 million power plants during a blackout, improved its load fore-
to fortify power lines to avoid blackouts while consuming casting and resource assessments (including accounting
enough electricity to power as many as 60,000 Texas for extreme weather), or adequately winterized the state’s
homes.178 As of this writing, it is unclear whether the gas system.185 In 2021, an analysis by ERCOT found that
Rayburn County Electric Cooperative followed through on four of the five extreme risk scenarios considered by
these investments, especially considering that “upgrades ERCOT would leave the grid short of a significant amount
to the grid threaten to drive up bills for consumers already of power.186
shouldering price shocks for almost everything.”179
Yet, as of August 2022, 33 GW worth of cryptocurrency
3. Grid Impacts and Reliability mining operations have applied to connect to the Texas
Proof-of-work cryptocurrency mining operations drawing grid over the next several years — a third more than
energy from the grid are placing a mostly-unplanned-for ERCOT’s announcement in April 2022. 187 This 33 GW
load on already-strained grids across the country. In figure represents 41% of ERCOT’s record peak demand of
January 2022, Fitch Ratings issued research finding that 79.8 GW on July 20, 2022.188 By some measures, this is
“[d]igital asset or crypto currency mining in the US could equivalent to New York State’s entire energy demand.189 If
pose power supply risks to public power utilities unless the cryptomining facilities run at an 85% load factor, the
they are sufficiently mitigated.”180 This is largely due to would consume as much electricity as the entire state of
cryptocurrency mining’s energy intensity and ability to Florida.190 Wood Mackenzie predicts that Bitcoin mining
quickly scale operations up or down. could more than double the rate of demand growth in
The sheer speed and magnitude of load growth associ- ERCOT’s territory.191
ated with cryptocurrency mining is unprecedented and Further impacting average Texans, it appears that
threatens the ability of both generation and transmission cryptocurrency miners are buying electricity low and
resources to get electrons where they are needed without selling it high. As the Tech Transparency Project recently
overheating or unbalancing the physical infrastructure. found: “Programs that appear to be unique in the country
For example, if mining operations for which we were allow miners to leverage their contracts to resell electricity
able to find SEC reports and other data expand to the at massive mark-ups and collect millions of dollars in

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 19
incentive payments from the state grid operator. . . . Some franchise fees, equating to $70,501,509 over ten
miners already view themselves as energy traders. One years, to accommodate Bootstrap Energy’s $1.1 billion
bitcoin miner called his company ‘[a]n energy arbitrage cryptocurrency mining operation.200 Bootstrap has
operation disguised as a bitcoin mining company.’”192 contracted with AEP Texas for 600 MW.201
In response to the overwhelming influx of cryptocurrency 5. Reports of Cryptocurrency Mining Jobs Have Been
mining, ERCOT has instituted new processes aimed at Greatly Overstated
ensuring the system can handle the enormous load.193 As Despite the purported economic development
a temporary measure, ERCOT will now require new, large justification for cryptocurrency mining incentive
cryptocurrency miners to seek permission to connect to programs, these operations actually create few jobs.
the state’s power grid and will require utilities to submit Most of the work that is created at cryptocurrency
studies on the impact of miners and other large users on mining sites is hiring temporary workers to set up the
the grid.194 Any project that will add 20 MW of demand mining machines; less than a dozen people may be
on the site of a generator within the next two years, and required to maintain the operation. As a Berkeley Haas
any project that will add 75 MW of demand without its professor similarly observed: “These are warehouses full
own power generation on site within the next two years, of computers and they only require one or two IT people
will have to undergo a review process.195 Local officials to run the whole operation, so it’s unlikely that it brings
are also sounding the alarm on grid instability that would jobs or stimulates the economy.”202 And Fitch Ratings
be caused by cryptocurrency mining operations. For found “[c]ryptocurrency mining operations typically bring
example, the City of Brenham’s Planning and Zoning in very little additional economic benefits in the form of
Committee said that the city’s current power grid cannot jobs or ancillary business to a local economy.”203
sustain the amount of electricity required for large scale
Here are just a few examples of the meager job benefits of
and commercial-like cryptocurrency mining setups, thus
cryptocurrency mining operations:
necessitating the committee halting the approval of more
mining setups.196 • The Blockware Mining operation in Paducah, Kentucky
will provide just 10 full-time jobs in its initial phase.204
4. Tax Incentives for Cryptocurrency Miners are
Breaking the Bank • Core Scientific, with seven facilities, reported 205 full-
time employees in the United States, as of December
Making matters worse, some states provide additional
31, 2021.205
subsidies or tax breaks in an effort to encourage crypto-
currency mining operations. Kentucky passed a law last
• Marathon Digital Holdings, which mines cryptocurren-
cy in Montana and Texas, has nine full-time employees,
year that waives taxes on energy purchases by cryptocur-
as of December 31, 2021.206
rency mining companies, while Wyoming exempted from
taxes any natural gas used to power mobile mining rigs. • Stronghold Digital Holdings, which mines cryptocur-
In 2021 alone, a total of 33 states had bills supporting rency in Pennsylvania, has 16 full-time employees, as of
cryptocurrency developments and 17 enacted new laws March 24, 2022.207
to create working groups, provide tax breaks, and/or • AboutBit’s $50 million facility adjacent to the Merom
establish subsidies for cryptocurrency mining opera- coal plant in Indiana is expected to create 15 jobs.208
tions, according to the National Conference of State • The Greenidge cryptocurrency mining operation in
Legislatures.197 New York employed 5 union workers on site as of
Kentucky has proven particularly short-sighted in offering October 2021.209
benefits to cryptocurrency miners in addition to dis- • “A $1.9 billion facility by FX Solutions and Atlas
counted electricity, offering cryptocurrency-specific tax Power near Williston, North Dakota, would create
incentives estimated to cost Kentucky taxpayers at least around 100 temporary construction jobs and support
$9 million a year in lost revenue.198 These tax incentives only 30 employees over the long-term. Meanwhile,
include “tax exemptions totaling 9 percent on electricity the first stage of the project would draw 240 MW of
consumed at larger cryptocurrency mining operations, . . . electricity — roughly, the amount of energy needed to
sales-tax refunds on mining equipment, as well as poten- power the city of Fargo — and eventually ramping up to
tial incentives on income taxes and wage assessments.”199 a powerhouse 700-megawatt scale.”210

Kentucky is not alone. In Texas, the City of Corpus • “In Rockdale, Texas, during the BTC boom of 2017, a
Christi is forgoing $7 million annually in sales tax and cryptocurrency mining company promised to build

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 20
 the largest crypto mining facility in the world — one Commerce oversight subcommittee panel, stating that:
that could eventually be used for other data-driven “we heard substantial reservations from our community
applications and create more than 300 jobs. In reality, about supporting cryptocurrency mining due to . . . [the
the facility only generated 14 of 350 promised jobs and r]elatively low number of local jobs per unit of electricity
was quickly scaled back.” 211 consumed.”214
The municipalities who handled an earlier boom in For local communities, the above-described tax incentives
cryptocurrency mining in the mid-2010s can attest and promise of jobs that do not materialize end up
to the lack of economic development benefits from being a bad deal; a recent Forbes study estimated that
cryptocurrency mining. The former mayor of Plattsburgh, cryptocurrency mining tax incentives end up costing
New York has said that due to the automated nature of counties and municipalities across the U.S. roughly
these servers, the new mines provided few local jobs: $1 million per job.215 As one reporter who interviewed
“when you look into it, and I have — [the jobs,] they just community members in Kentucky observed: “Some see
don’t materialize.”212 “I’m pro-economic development, echoes of what they say were the worst elements of the
but the biggest mine operation has fewer jobs than a now largely defunct coal industry: out-of-state money,
new McDonald’s.”213 The former head of the Bonneville absentee owners, and huge fortunes made with little
Power Administration and Chelan County Public Utility wealth trickling down to local communities.”216
District testified before the U.S. House Energy and

VIII. Breaking Through the Bitcoin Myths

Proponents of proof-of-work cryptocurrency often make For example, in Argo Blockchain’s 2021 Sustainability
grandiose statements about how energy-intensive mining Report, released August 18, 2022, the company claims
advances environmental and climate goals, using a variety that it “is taking action against climate change” by
of half-truths and cherry-picked information. In this “select[ing] sustainable energy sources.”221 Argo’s primary
section, we explore the narratives and messaging used mining facility is the Helios facility, a 200 MW facility east
by proof-of-work miners, identify the elements of truth of Lubbock, Texas. Argo does not hold a power purchase
that make some of these statements so confounding, and agreement with a renewable energy provider, instead
explore how climate and environmental advocates can noting that “Argo currently uses grid electricity in a low
probe these often deeply misleading statements. carbon part of the ERCOT market,”222 and has purchased
renewable energy certificates (RECs).223
Myth 1: Cryptocurrency Mining is Already
Sustainable Because it is Located Near But simply locating new demand in a region rich in
Clean Energy, or Because it Purchases renewable resources does not mean that the new demand
Renewable Energy Certificates or Carbon is served by the renewable resources of that region. When
Offsets a load is added to the grid, it is served by the generation
1. Claims of Co-Location available on the grid at the time electricity is consumed
(unless it specifically causes new generation to be built
It is not uncommon for cryptocurrency mining companies
for its exclusive use). Large loads, like cryptocurrency
and advocates to tout that, while their operations
mining operations, can themselves cause changes in
are energy intensive, they are “sustainable” or run on
the generation mix as the grid dispatch patterns shift in
renewable energy.217 One industry-funded organization,
response to the new load’s requirements. The generators
the Bitcoin Mining Council, claims 58% of energy used
that adjust output in response to load changes will
to power Bitcoin in 2020 was from renewable sources,
set the “marginal” emissions rate. 224 In almost every
based on selected companies’ self-reporting.218 The
circumstance, new demand drives an instantaneous
Cambridge Centre for Alternative Finance puts this
increase in the output of fossil generators.225
number much lower — at 39%.219
For example, the aforementioned Argo Helios facility
What explains the discrepancy? In many cases miners
in West Texas pays for market-based grid generation,
are claiming (or implying) “renewable” energy simply by
and therefore drives changes in marginal generation in
being in proximity to wind or solar farms with which they
Texas, which is typically gas and coal. According to recent
have no contractual relationship. In our opinion, they’re
research from the Proceedings of the National Academies
greenwashing.220

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 21
of Science, while the average emissions rate of all
generation in West Texas has fallen to about 0.375 tCO2/ Claims of Carbon Neutrality via
MWh, the marginal emissions rate holds steady at around
0.5 tCO2/MWh, or equivalent to the output of a gas-fired
Voluntary REC Purchases
generation station.226 The current wind in West Texas will To drive clean energy buildout, some states have
generate irrespective of whether Argo’s Helios facility established renewable portfolio standards (RPS), that
exists or not. Argo does not pay for incremental wind require a certain minimum amount of electricity to
generation, and has not built wind to serve its facilities. be generated by “renewable resources.” Most states
Therefore, it drives existing fossil-based generation allow utilities to demonstrate compliance with RPS
to increase its output — and results in an increase in by retiring RECs. Utilities can either generate their
emissions. own RECs through their own renewable resources,
2. Claims of “Carbon Neutrality” by Purchasing or can purchase RECs on the market. RECs can be
Renewable Energy Certificates or Carbon Offsets purchased with or without the associated electricity.
Co-location is not miners’ only form of greenwashing. RECs that are purchased without the accompanying
Miners often claim “carbon neutrality” when in fact electricity are known as “unbundled RECs.” Each
they are simply purchasing offsets or renewable energy
REC represents the non-energy attributes of a
certificates — paying renewable generators elsewhere
megawatt-hour generated by renewable energy
while increasing load on (and pollution from) fossil fuel
resources. In other words, when you purchase a REC,
plants locally.
you’re purchasing the legal right to claim all of the
Examples abound. In late 2021, at the opening of its
“renewableness” of that electricity. Often the REC
massive Denton, Texas facility, Core Scientific claimed
will also include the avoided emissions value of that
that it would “increase the Company’s total power
MWh of electricity. However, the avoided emissions
capacity to more than 800MW while remaining 100%
net carbon-neutral.”227 This claim of carbon neutrality is value of any particular MWh of renewable energy
entirely based on unbundled renewable energy certificates is highly dependent on the grid mix and marginal
(RECs).228 Prior to Denton, Core’s largest facility was resource at the time the MWh is generated. In other
a 125 MW facility in Calvert City, Kentucky, opened in words, the avoided emissions value of a REC can
late 2019. Core Scientific’s Calvert City facility holds a vary from state to state, month to month, and hour
contract with the Tennessee Valley Authority, a provider to hour. Because clean energy deployment today far
whose resource mix is just 3% wind and solar.229 And exceeds RPS standards in most states, there is a glut
yet Core Scientific’s claimed carbon neutrality is entirely of RECs on the market. Some people and businesses
based on RECs it purchases from wind farms in North
purchase these excess RECs in order to claim their
Dakota.230 Argo Blockchain, discussed above, too has
homes or businesses are powered by clean energy.
purchased renewable energy certificates to offset its fossil
In some cases, these REC purchases can effectively
generation.231
spur new clean energy development that offsets
Separate from RECs, several mining companies rely on
fossil energy: specifically, this can occur where the
purchase of carbon “offsets” to advertise to the public and
demand for the REC is incentivizing the construction
their investors that they are a sustainable operation. For
of new, additional renewable electricity that would
example, Greenidge Generation LLC has claimed that it is
“significantly reducing greenhouse gas emissions now,” otherwise not be built. But in most cases, REC
by purchasing voluntary carbon offsets, despite using a purchases provide little or no additionality: usually,
fossil gas plant 24 hours a day to mine cryptocurrency.233 REC sales revenues are not driving the decision about
As a general matter, many carbon offsets programs are whether to build a new wind or solar facility. A clean
unverifiable and hard-to-measure, and in many instances, energy project would have been built irrespective of
not actually reducing carbon pollution.234 That being said, the REC sale. Where the REC sale is not the result of
non-proof-of-work blockchain technology could be a key additional, incremental clean energy development, it
tool in properly verifying whether offsets are achieving has little or no incremental climate benefit.232

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 22
reductions in pollution.235 But, the key is to reduce excess clean energy and redeploy it during hours of need,
pollution in the first place, not create a problem and then presenting a far superior solution to the problem of
seek creative new ways to account for the harms. curtailment.

Myth 2: Cryptocurrency Mining Uses Energy Only in the edge cases where an extraordinary amount
That’s Being Wasted From Variable Wind of clean energy is built without storage or sufficient
and Solar Output transmission, or where cryptocurrency miners are willing
One of the most common storylines from cryptocurrency to locate behind transmission constraints, run at thin
mining proponents is that cryptocurrency mining capacity factors, and cease operations when transmission
thrives on energy that would otherwise be wasted from and/or storage come online does this thesis hold water.
“curtailed” solar and wind projects.236 Curtailment for We are not aware of any cryptocurrency mining facilities
wind and solar projects occurs when an energy system currently operating in the U.S. that were built — or
produces more electricity than can be absorbed by financed — with these constraints in mind.
demand at a particular moment, or more electricity Myth 3: Cryptocurrency Mining Incentivizes
than can safely fit on a transmission system. In these Clean Energy Development, or Helps to
circumstances, grid operators will direct to generators Decarbonize the Grid
to reduce, or cease operations. Wind and solar projects Proof-of-work enthusiasts argue cryptocurrency mining
are particularly susceptible to curtailment because they will drive clean energy development and decarbonize the
have almost no cost to start and stop, unlike large thermal grid.241 The most carefully constructed of these arguments
generators that may take hours to turn off, or even essentially stipulates that the primary barrier to massive
succumb to damage if turned off too quickly. clean energy deployment is transmission congestion
As renewable energy penetration has grown, so has (causing curtailment and reduced economic margins for
curtailment. In California’s electricity market (CAISO), new renewable development) and integration (lengthy
curtailment has risen to 2.1 million MWh in 2022 — or queues to interconnect to regional grids). Proponents
an 81% increase from 2021.237At a first glance, it might argue that the incremental revenue from cryptocurrency
therefore appear that CAISO could handle a 200 MW mining could incentivize the development of wind and
cryptocurrency facility to harness the 1.5 million MWh solar energy that would otherwise not be deployed, either
of “wasted” energy in 2021.238 In reality, curtailments because grid revenues are insufficient or because a
are sporadic. Measured in five-minute increments location is transmission congested.
in California, there were only 15% of hours in which But this theory rests on the same faulty assumptions as
curtailments rose above 200 MW in 2021.239 In other the “waste electricity” thesis: that renewable developers
words, a 200 MW mining facility in California could have will gamble on long-term transmission build-out and
only operated on “free” just energy 15% of the time, a cryptocurrency miners will be willing to forgo mining (and
daunting prospect for an industry that typically requires profits) whenever wind or solar generation dips — and
mining operations to operate around-the-clock to be cease operations or limit itself to curtailed electricity once
profitable. A 2019 paper exploring cryptocurrency use the renewable resource can serve a general load.
of curtailed resources concluded that a cryptocurrency
The leading thought paper on cryptocurrency mining
operation seeking to maximize profit by operating only
as a driving force for more clean energy acknowledges
on curtailed energy would only operate about half the
that mining operations would likely “still mine with grid
time, and that a cryptocurrency mining operation scaled
electricity during other periods when profitable to do
to consume all of the curtailed energy would lose an
so, so it wouldn’t be entirely green from day one.”242 But
extraordinary amount of money.240
more to the point, if a clean energy facility is built entirely
Even if absorbing curtailed wind and solar worked in to serve a cryptocurrency mine without respect to its
theory, in practice it ignores that clean energy developers ability to serve the remainder of the grid effectively — or
actively seek to avoid curtailment by integrating into at all — then it has little to no value in decarbonizing the
regions not susceptible to oversupply. Further, utilities, remainder of the grid.
states, and the federal government are working quickly
Moreover, there are other constraints to clean
to build transmission that would relieve congestion and
energy deployment beyond interconnection delays
constraints that can lead to curtailment. And, finally,
(or curtailment caused by inadequate transmission
energy storage (i.e., batteries) work to both absorb any

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 23
infrastructure): supply chain (i.e., materials), state or local When miners talk about “grid benefits,” they are actually
policies, land use, and labor availability. To the extent touting an ability that all large-scale customers have:
cryptocurrency miners induce developers to locate wind The ability to shut off in emergencies or periods of peak
and solar farms at non-grid useful locations that remove demand. In the middle of a heat wave causing high
clean energy from the critical supply chain, they remove electricity demand, Texas Bitcoin miners voluntarily shut
opportunities to decarbonize other elements of the grid. down their operations, curtailing 1,000 MW of load in
Even if a mining operation did incentivize new renewable mid-July 2022 for 3.5 hours.248
development in a location where interconnection delays But is cryptocurrency miners’ willingness to pause opera-
were the only barrier to development, to further grid de- tions during times of high demand and grid strain really a
carbonization, the mining operation would have to go away grid service? As external experts put it: it’s complicated.249
in a timeframe that is relevant for decarbonization. For For most grids, the demand for electricity varies hour by
that renewable resource to have decarbonization value, it hour, day to day, and month to month. On particularly
must offset existing fossil fuel use in some way, either by hot or cold days, demand may spike well above normal
reducing utilization of fossil fuel power plants, or enabling use. The cost of maintaining capacity to serve those peak
electrification of other end uses traditionally powered by hours, and the cost of operating the most expensive gen-
fossil fuels, such as transportation or home heating. To erators to serve these peak hours, can be extreme — but
realize that outcome, the cryptocurrency mining facility failing to serve load during the highest moments of strain
must cease to exist, allowing that electricity to flow to can be even more costly for customers. Utilities and
those other purposes. As of yet, no proof-of-work pro- grid operators often hold capacity in reserve simply to
ponents have come forward with a solid plan that would serve those peak conditions.250 Paying a customer with
allow a developer to build clean energy for an offtaker that non-essential energy needs to reduce their demand can
expects to go out of business. be a way of aligning demand with supply and retaining
Instead, miners have done the opposite. For example, reliability, a practice known as “demand response.”251
Compute North has recently announced that it has ener- Most industrial customers do not adjust their energy
gized a new 280 MW mining facility near Odessa, Texas, use based on the real-time price of electricity, which
which sits “behind the meter” at a wind farm.243 The constitutes a relatively small portion of their overall
wind farm in question is King Mountain Wind Ranch,244 costs (and thus any savings would be heavily outweighed
a 278 MW wind farm built in 2001 and owned by FPL by disruptions that might have cascading impacts on
(NextEra).245 For the last two decades, King Mountain meeting production deadlines, etc.). Demand response
has contributed to the larger Texas grid, and will now be payments help make non-price-responsive customers
taken out of circulation for grid use. So, while the Compute responsive: a manufacturing plant might incur substantial
North facility may be able to legitimately claim that it uses operational cost and product risk when it stops operation,
primarily wind energy, this type of project is not additional or other types of data centers may impair customer
and is not contributing to broader decarbonization of services by ceasing operations. But cryptocurrency miners
the energy system. Instead, it represents price seeking are only responsive to electricity prices, and have no other
behavior from the wind farm owner, resulting in less service provided to customers aside from processing
overall renewable energy on the broader grid. cryptographic puzzles: if the cost of energy rises above
Myth 4: Cryptocurrency Mining their breakeven, they can simply cease operations without
“Acts Like a Battery” experiencing additional costs or inconvenience.252
Cryptocurrency mining proponents make the perverse Unless a demand response program is carefully calibrated
claim that “Bitcoin mining is strengthening the grid,”246 to cryptocurrency miners’ extremely low costs of
and “provide[s] critical grid reliability products usually temporality paused operations, miners effectively become
provided by fossil fuel plants.”247 energy traders, able to convert cheap electricity into
cryptocurrency most hours, while also receiving high
Mining operations simply do not provide ancillary services,
prices for foregone electricity during peak periods or
such as load balancing, that maintain the operability of
emergencies. During this summer’s heat wave in Texas,253
the grid. They also do not provide storage capacity. Energy
Riot Blockchain announced that it received $9.5 million
consumed by a mining operation cannot be exported or
(equaling the value of 439 Bitcoin at the time) in demand
redeployed.
response payments in July alone.254 In addition to this

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 24
hefty payout, Riot still was able to mine 318 Bitcoin that such as banking, telecommunications, or to data center
month.255 In fact, demand response company Voltus operations.260 But as described above, the huge premium
estimates that a cryptocurrency mining company can placed on immediate access to large amounts of
generate up to 10% of its annual revenue by providing electricity without the long-term commitments necessary
shutdown services to the grid.256 to finance renewable development attract cryptocurrency
By increasing the demand on the grid, miners increase the miners to fossil fuel sources, such as Hardin, Greenidge,
need for demand response, the cost of such programs, Merom, Scrubgrass, or coal-heavy grids like Kentucky’s.
and thus the cost of providing electricity to all other Electricity demand in comparable sectors has not
customers. 257 ERCOT’s independent market monitor increased and, in some cases, even declined as energy
expects that Texans could be paying an extra $1.5 efficiency increased.261 For example, electricity demand
billion for electricity this year alone258 — partially to pay by data centers has not increased, even though internet
cryptocurrency miners to shut down their operations traffic and data center workloads have increased
during high demand. significantly.262 In sharp contrast to cryptocurrency
As explained by Professor Severin Borenstein, mining, data transmission networks and mobile
communications networks are rapidly becoming more
[T]he crypto mining business model is based on energy efficient.263 However, even as ASICs have become
buying electricity at wholesale prices or on a real- more energy efficient than the hardware previously used
time variable price tariff. They would already for cryptocurrency mining, the efficiency gains have not
resulted in decreased overall energy consumption because
have a strong incentive to cut back during grid
of the substantially increased scale of mining.264
emergencies without the additional payments
Moreover, Bitcoin’s ratio of energy consumption to human
from the demand response program, especially
participation — people actually buying Bitcoin, holding
in Texas with its $5000/MWh wholesale price it, or even working at mining facilities — is wildly larger
cap. That means the mining companies get paid than other electricity users. Bitcoin already uses half
for taking demand off the grid that they never as much electricity as the entire global banking sector,
according to one estimate, and will overtake the banking
would have put on the grid at those high prices
sector within two years if current trends continue.265 One
anyway.259
study estimates that the average electricity footprint of
Myth 5: Cryptocurrency Miners are No non-cash transactions by the global banking system is no
Worse than Any Other Electricity Users more than 0.4 kWh, while the average electricity footprint
per Bitcoin transaction ranges from 491.4 kWh to 765.4
Many miners will respond to critics of its insatiable
kWh.266 By some estimates, a single Bitcoin transaction
need for energy by comparing it to other industries
uses more energy than 100,000 Visa transactions.267

IX. Recommendations to Mitigate the Risks of Proof-of-Work

Cryptocurrency Mining
Proof-of-work cryptocurrency mining poses significant and impacted community members as they face the risks
risks to grid stability, retail electricity rates, our climate, of proof-of-work cryptocurrency mining.268
and local air and water quality. Therefore, policymakers
LOCAL GOVERNMENTS, DECISION-MAKERS, AND
and regulators at all levels of government, as well as
COMMUNITY MEMBERS
utilities and impacted community members, should
Given the significant local impacts and outsized role
review proof-of-work cryptocurrency mining proposals
of local decision-making in the approval process for
carefully with these risks in mind.
cryptocurrency mining operations, local governments,
Because the type of operations and impacts of including zoning and planning boards, as well as
cryptocurrency mining vary from community to community members are on the front lines of the
community, solutions will necessarily be project- cryptocurrency mining boom. As such, local actors should
specific. As such, we offer the following high-level approach proposals for new cryptocurrency mining
recommendations to policymakers, regulators, utilities, facilities with an eye toward noise pollution, whether

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 25
they truly create stable, good-paying jobs, what grid and • Consider noise pollution mitigation. Cryptocurrency
infrastructure upgrades are needed, fire and safety risks, mining operations can be extremely loud operations.
as well as increases in local air, water, and solid waste Local governments can review, update, and enforce
pollution. noise ordinances to mitigate noise levels.
• Mitigate local air, water, and solid waste pollution. In • Update local land use codes. Planners and local
addition to any local air pollution from the electricity leaders are working on model codes for communities.
generated to power mining operations, mining For example, the American Planning Association
operations can use significant amounts of water for recently published a Zoning for Data Centers and
cooling. In water-constrained areas of the country, Cryptocurrency Mining Guide.269 Many zoning codes
local regulators should assess the consumptive needs from communities who have already implemented
of cryptocurrency mining operations, particularly if the such codes are available online as well, including from
mining operation uses municipal (i.e., treated) water municipalities across the country.270
supplies that might impact residential water costs. In ELECTRIC UTILITY REGULATORS
addition, mining equipment, after their useful lives are
Cryptocurrency mining operations in the United States
over, contribute to significant e-waste pollution. The
have, thus far, sought to build new mining facilities in
initial construction of a mining facility also creates a
jurisdictions where energy costs are low and easy to
large amount of solid waste. Preventative measures
access, and where regulators either encourage electricity
can be taken to ensure recycling and proper waste
consumption as economic opportunity (or supportive
handling. States and municipalities with climate laws
of utilities), or where there is relatively thin regulatory
and regulations on the books are well-situated to make
oversight. State and local utility regulators, including
some of these arguments.
officials that oversee municipal utilities and rural electric
• Calibrate or forego economic development cooperative board members, public utilities commissions,
incentives. Cryptocurrency mining operations offer energy regulators, and regional energy system market
relatively few local jobs. Prior to offering economic monitors can provide critical ratepayer protections.
development incentives, local governments should
require cryptocurrency miners to provide a guarantee
• Utility regulators should refuse to approve power
purchase agreements with cryptocurrency mining
for a high number of local jobs over a sustained
operations unless those utilities can demonstrate the
period. Any tax incentives or local municipal utility
agreement will not adversely impact other ratepayers,
incentives should be carefully weighed against a
including by raising rates or otherwise increasing
realistic assessment of job growth potential, as well as
costs. State regulators and lawmakers should work
other costs borne by the community as a result of the
with non-jurisdictional utilities, such as municipal and
operation.
cooperative utilities, to do the same.
• Ensure miners bear their fair share of grid and
infrastructure upgrade costs. Large energy consumers
• Utility regulators should ensure that cryptocurrency
miners are not provided discounted rates, and instead
such as cryptocurrency mining operations may require
allocate costs and adopt rates in a manner that
grid and infrastructure upgrades, which may be paid
protects existing consumers from higher wholesale
by local governments or all electric utility customers.
costs, cost shifting, and stranded assets. In fact,
Utility regulators and local governments should ensure
several utilities have argued that cryptocurrency
that ratepayers and community members do not
mining operations should face substantially higher
foot the bill for these projects unless they benefit the
rates than other industrial consumers given the
community as well.
short-term view of the industry. In the short run,
• Protect against fire and safety risks. Cryptocurrency new utility infrastructure may be required to support
mining rigs can present a unique risk of overheating
mining center interconnection, and over the long-run,
and fire risk. Local governments should ensure that
utilities may need to procure new generation to
facilities have the technical capacity to mitigate fire,
serve substantial new load. Utilizing traditional “cost
and carry appropriate levels of insurance. Additionally,
causation” principles, utility regulators should ensure
local governments in cold weather climates can require
that mining operations pay their fair share over the
the excess heat from cryptocurrency mining operations
short- and long-run.
to be recycled for local benefit.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 26
 • Utility regulators should critically assess utility plans guidance around the interconnection of large-scale,
to increase or maintain obsolete capacity (such as old high-density electricity users, including emergency
fossil generators) in response to cryptocurrency mining response rules, that prioritize the integrity of grid
operations, and ensure that existing ratepayers are operations and treat cryptocurrency mining as the
held harmless. These reviews can occur in resource highly interruptible, “flexible” load it claims to be.
planning, procurement, or rate proceedings, and
FEDERAL AND STATE POLICYMAKERS AND
through other regulator inquiries. REGULATORS
• Utility regulators should consider Systems • States should consider imposing a moratorium on
Benefit Charges (SBCs), or on-bill surcharges to cryptocurrency mining operations until the impacts on
cryptocurrency mining operations, to fund mitigation climate goals and energy costs can be ascertained and
measures and protect ratepayers against stranded mitigated. New York State is already considering such
asset costs. a moratorium, and several municipalities have already
• Utility regulators, market monitors, and federal implemented them. In the absence of a moratorium,
electricity regulators should review the impact of state environmental regulatory agencies should take a
cryptocurrency mining operations on regional resource hard look at fossil power plants purchased or primarily
adequacy and the cost to serve customers. In non- serving cryptocurrency operations, including whether
restructured (i.e., non-market-based) regions, utility those plants are properly operating under previously
regulators should assess if cryptocurrency mining obtained permits. In states with oil and gas drilling,
impacts utility load forecasts and system costs. In stronger and more proactive enforcement may be
restructured states, market monitors should assess required to stop unpermitted flare mining operations.
the impact of mining operations and load increases • Below are additional options that state policymakers
on the wholesale cost of energy and grid congestion. and regulators should consider:
This necessarily requires a comprehensive reporting
¢¢ Reviewing a cryptocurrency mining facility’s local
requirement for mining operations to ensure accurate
and state environmental permits, including local
data needed for planning.
stormwater and solid waste permits, as well as air
• State environmental and energy regulators should and water permits.
establish and require best management practices
¢¢ Establishing revenue assurance or bonding
for high-density load energy users, including but not
requirements as a way to protect customers in the
limited to energy efficiency requirements, power
event that a high-density-load customer does not
density limits that set caps on the number of kW of
pay its utility bills.
energy consumption or load per thousand square feet,
¢¢ Regulating electronic waste and other solid
and take service as fully interruptible load.
waste from proof-of-work cryptocurrency mining
ELECTRIC UTILITIES AND GRID OPERATORS operations.
• Utilities should develop rate structures for high- ¢¢ Creating a registry for proof-of-work mining over
density energy users such as cryptocurrency miners a certain megawatt threshold and requiring those
that ensure those operations pay their fair share of operations to disclose their energy source.
infrastructure upgrades at the time of interconnection
¢¢ Establishing minimum energy efficiency limits, for
(either through a deposit requirement or other
both the mining rigs themselves or one set around
mechanism); incorporate interruptibility provisions to
a kWh per transaction or block.
avoid, where possible, increases to the utility’s capacity
¢¢ Requiring public power authorities to halt all
obligations necessitating new generation build-out; and
discounted energy provided to proof-of work
protect customers from rate shocks due to either the
mining operations.
magnitude of new requests or the sudden departure
and resulting stranded assets.
• Independent system operators should develop

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 27
Acknowledgements
“We would like to thank the following individuals for DeGasperi, and Michael Worrall, Earthjustice; as well as
their review of and/or contributions to this paper: Irene Global Energy Monitor. The Sierra Club also acknowledges
Weiser, Fossil Free Tompkins; Joseph Campbell and the work of the Pennsylvania Environmental Law Project
Yvonne Taylor, Seneca Lake Guardian, a Waterkeeper (Ryan Baldwin; Matt Burner; CeCe Coffey; Nathaniel
Alliance Affiliate; Pamela Wellner, Amplify Eco; Karen Edelheit-Rice; Ellen Heiman; Omar Khodor; Jessie
Edelstein, FracTracker Alliance; Lane Boldman, Kentucky Levin; Yuxuan Liu; Ronni Mok; Xiaoshu Ruan; Runrun
Conservation Committee; Rob Altenburg, PennFuture; Yang; and Michael Zschokke) for their assistance in
Anne Hedges, Montana Environmental Information our initial investigation into this topic area. Finally, we
Center; Michael Brune, Change the Code, Not the Climate would also like to thank the many partners we have been
campaign; Mini Saraswati, Sierra Club; Liz Moran, Thom collaborating with on this issue.”
Cmar, Angelica Navarro, Sean Woody, Trish Bosch, Maya

Endnotes
1 Cambridge Centre for Alt. Finance, Cambridge Bitcoin Electricity 11 The pace of migration of mining from China to the U.S. is spelled 21 As stated by the mining company Bit Digital: “When bitcoin was
Consumption Index (last visited Aug. 25, 2022), https://ccaf.io/ out starkly in the public filings of some mining companies. For first launched in 2009, miners were awarded 50 bitcoin if they
cbeci/index. example, such as. In Bit Digital’s May 2022 prospectus, the first solved a new block; this award was halved to 25 bitcoin per
company notes that “In October 2020, we commenced our new block in 2012, and halved again in 2016 to 12.5 bitcoin
2 Id. (recording energy consumption every quarter); a 700 MW
strategy of migrating assets from China to North America. . . per new block. Most recently, in May 2020, the then prevailing
power plant operating at 70% capacity factor (i.e., average
. From April through June 2021, we migrated 14,500 miners reward of 12.5 bitcoin per new block was halved to 6.25 bitcoin.
output) produces just over 1 TWh over a three-month period.
from China to the United States.” Bit Digital, Form 424B3, This reward rate is expected to next halve during 2024 to 3.125
Bitcoin prices fell from a high above $60,000/BTC in late
Prospectus, at 10-11 (May 5, 2022), https://www.sec.gov/ bitcoin per new block and will continue to halve at approximately
2021 to less than $20,000/BTC in third quarter 2022.
Archives/edgar/data/1710350/000121390022024123/ four-year intervals until all potential 21 million bitcoin have been
CoinMarketCap, Cryptocurrency Historical Data Snapshot (last
ea159396-424b3_bitdigital.htm. To put this number in context, mined. Miners with a greater hash rate have a higher chance
visited Aug. 25, 2022), https://coinmarketcap.com/historical.
based on Bit Digital’s portfolio of miners, each of which consumes of solving a block and receiving a bitcoin award. After a third
3 Cambridge Centre for Alt. Finance, Cambridge Bitcoin Electricity between 2.1 and 3.4 kW, the three-month migration from China halving of bitcoins in May 2020, our mining strategy has been
Consumption Index (last visited Aug. 25, 2022), https://ccaf.io/ was equivalent to an instantaneous load of approximately 45 to mine bitcoins as fast and as many as possible given there are
cbeci/index. MW. less bitcoins and a lower efficiency of mining.” Bit Digital, Form
4 IPCC, Working Group III Contribution to the IPCC Sixth 424B3, Prospectus, at 7 (May 5, 2022), https://www.sec.gov/
12 Cambridge Centre for Alt. Finance, Cambridge Bitcoin Electricity
Assessment Report (AR6), Chapter I, at 1-26:20-21 (2022), Archives/edgar/data/1710350/000121390022024123/
Consumption Index; Evolution of Country Share (last visited Aug.
https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_ ea159396-424b3_bitdigital.htm.
25, 2022), https://ccaf.io/cbeci/mining_map.
FullReport.pdf (IPCC Assessment Report) (citing Camilo Mora 22 As of this writing, Bitcoin miners were processing 222 exahashes
13 Authors’ calculations based on estimated electricity consumption
et al., 2018: Bitcoin emissions alone could push global warming per second, or 222 quintillion guesses at the puzzle solution
and U.S. share of Bitcoin mining operations in January 2022,
above 2°C, 8(11) Nat. Clim. Chang. 931 (Oct. 2018), https:// every second (i.e., 222,000,000,000,000,000,000 hashes/
from Cambridge Centre for Alt. Finance, Cambridge Bitcoin
www.researchgate.net/publication/328581842_Bitcoin_ second). See Blockchain.com, Total Hash Rate (TH/s) (last
Electricity Consumption Index, Bitcoin Mining Map (last visited
emissions_alone_could_push_global_warming_above_2C); IPCC visited Sept. 10, 2022), https://www.blockchain.com/charts/
Aug. 25, 2022), https://ccaf.io/cbeci/mining_map.
Assessment Report, at 5-57 to 5-58, https://report.ipcc.ch/ hash-rate. Specialized machines, developed specifically for this
ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf. 14 U.S. Energy Information Administration (U.S. EIA), Electricity purpose, can now process between 50 and 200 trillion guesses
Data Browser: Retail Sales of Electricity (last visited Sept. 10, (terahashes) each second, implying that there are between 1 and
5 White House Office of Science and Technology Policy (OSTP),
2022), https://www.eia.gov/electricity/data/browser/#/topic/5. 4 million processors continuously churning. Individual mining
Climate and Energy Implications of Crypto-Assets in the United
States, at 15 (Sept. 8, 2022), https://www.whitehouse.gov/ 15 Marcus Lu, After China’s Crypto Ban, Who Leads machines draw between 2.5 and 5 kW (faster machines draw
wp-content/uploads/2022/09/09-2022-Crypto-Assets-and- in Bitcoin Mining?, Visual Capitalist (Dec. 7, more), or about double or triple a standard space heater.
Climate-Report.pdf. 2021), https://www.visualcapitalist.com/sp/ 23 See, e.g., Jon Huang et al., Bitcoin Uses More Electricity Than
after-chinas-crypto-ban-who-leads-in-bitcoin-mining/. Many Countries. How is That Possible? N.Y. Times (Sept. 3,
6 That is, if you added up all the “value” associated with
cryptocurrencies based on their current exchange prices, Bitcoin 16 Alex de Vries et al., Revisiting Bitcoin’s carbon footprint, 6(3) 2021), https://www.nytimes.com/interactive/2021/09/03/
holdings would constitute 40% of that total dollar amount. Based Joule 498 (Feb. 25, 2022), https://www.cell.com/joule/fulltext/ climate/bitcoin-carbon-footprint-electricity.html; David
on top 200 cryptocurrencies by market capitalizations, as of July S2542-4351(22)00086-1; see also BBC, Bitcoin less green Lavie, Bitcoin halving is how the supply of the world’s largest
31, 2022. CoinMarketCap, Historical Snapshot - 31 July 2022, since China ban, research suggests (Feb. 25, 2022), https:// cryptocurrency is controlled, Business Insider (Aug. 16,
https://coinmarketcap.com/historical/20220731/. www.bbc.com/news/technology-60521975; Molly Taft, 2022), https://www.businessinsider.com/personal-finance/
Bitcoin Is Dirtier Than Ever, Gizmodo (Feb. 25, 2022), https:// bitcoin-halving.
7 Hanna Lang, Explainer: Understanding Ethereum’s major
gizmodo.com/bitcoin-worse-for-climate-1848593882; David 24 BitInfoCharts, Bitcoin Hashrate Historical Chart (last visited
‘Merge’ upgrade (Sept. 9, 2022), https://www.reuters.
Yaffe-Bellany, Bitcoin Miners Want to Recast Themselves as Sept. 1, 2022), https://bitinfocharts.com/comparison/bitcoin-
com/technology/understanding-ethereums-major-merge-
Eco-Friendly, N.Y. Times (Mar. 22, 2022), https://www.nytimes. hashrate.html#alltime.
upgrade-2022-09-09/.
com/2022/03/22/technology/bitcoin-miners-environment-
8 Jeff Cox, Bitcoin price falls after China calls for crackdown on 25 If mining machines could process between 1.5 to 16 million
crypto.html; Jael Holzman, Crypto carbon emissions are
crypto mining, CNBC (updated May 22, 2021), https://www. hashes per second (see @hashrateindex, Twitter (Mar.
getting worse, study says, E&E News (Feb. 25, 2022), https://
cnbc.com/2021/05/21/bitcoin-falls-after-china-calls-for- 15, 2022, 7:00 PM), https://twitter.com/hashrateindex/
subscriber.politicopro.com/article/eenews/2022/02/25/
crackdown-on-bitcoin-mining-and-trading-behavior.html; China status/1503883768582483969) then ~6,000 to 7,000
crypto-carbon-emissions-are-getting-worse-study-
to shut down over 90% of its Bitcoin mining capacity after local miners could have generated 10 Gh/s.
says-00011867.
ban, Global Times (June 20, 2021), https://www.globaltimes. 26 BitInfoCharts, Bitcoin Price in USD Historical Chart, https://
17 Alex de Vries et al., Revisiting Bitcoin’s carbon footprint, 6(3)
cn/page/202106/1226598.shtml. bitinfocharts.com/comparison/bitcoin-price.html#alltime.
Joule 498 (Feb. 25, 2022), https://www.cell.com/joule/fulltext/
9 Jerry Shih, Bitcoin miners exit China, beat a path to the U.S. as S2542-4351(22)00086-1. 27 For example, the Public Utility District No. 1 of Pend Oreille
crypto climate shifts, Seattle Times (June 21, 2021), https:// County typically averages 35 MW per month, whereas Allrise
18 White House OSTP, Climate and Energy Implications of Crypto-
www.seattletimes.com/business/bitcoin-miners-exit-china- Capital and Blockchain LLC’s cryptocurrency mining operation
Assets in the United States, at 23 (Sept. 8, 2022), https://www.
beat-a-path-to-the-u-s-as-crypto-climate-shifts/. Miners also requested 220 MW per month, representing 6 times the amount
whitehouse.gov/wp-content/uploads/2022/09/09-2022-
migrated, to a lesser extent, to Kazakhstan. Cambridge Centre for of electricity the small utility typically covers. See Thomas
Crypto-Assets-and-Climate-Report.pdf.
Alt. Finance, Cambridge Bitcoin Electricity Consumption Index; Clouse, Massive cryptocurrency mining operation planned at
Bitcoin Mining Map (last visited Aug. 25, 2022), https://ccaf.io/ 19 White House OSTP, Climate and Energy Implications of Crypto- former Ponderay Newsprint mill, Spokesman-Review (Mar. 11,
cbeci/mining_map. Assets in the United States, at 10-12 (Sept. 8, 2022), https:// 2022), https://www.spokesman.com/stories/2021/sep/16/
www.whitehouse.gov/wp-content/uploads/2022/09/09- massive-cryptocurrency-mining-operation-planned-at/. The
10 MacKenzie Sigalos, How the U.S. became the world’s new
2022-Crypto-Assets-and-Climate-Report.pdf. cryptocurrency mining facility received a conditional use permit
bitcoin mining hub, CNBC (July 17, 2021), https://www.cnbc.
com/2021/07/17/bitcoin-miners-moving-to-us-carbon- 20 In fact, due to the increasing efficiency of mining machines that allows for 100 MW to run 30,000 servers. Thomas Clouse,
footprint.html. continuously entering the system, the average reward is earned Crypto mine in Usk gets conditional use permit from Pend
about every 9.9 minutes. Estimated as the January 2020 Oreille County; opponents appeal, Spokesman-Review (June 1,
to September 2022 average time between blocks based on 2022), https://www.spokesman.com/stories/2022/jun/01/
difficulty adjustments every 2,016 blocks. BTC.com, Difficulty crypto-mine-in-usk-gets-conditional-use-permit-fro/.
(last visited Sept. 10, 2022), https://btc.com/stats/diff.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 28
28 NPR, Cryptocurrency tech is vulnerable to tampering, a 42 For example, Riot Blockchain disclosed the total number of 53 See, e.g., U.S. EPA, Clean Air Markets Program Data, https://
DARPA analysis finds (June 21, 2022), https://www.npr. cryptocurrency mining machines expected to be in use by campd.epa.gov/; ABC News, Bitcoin operation ignites
org/2022/06/21/1105815143/cryptocurrency-bitcoin- the company by the end of 2022 (120,146 miners, utilizing debate around the waste from coal mining in Pennsylvania
blockchain-security-tampering-darpa; Evan Sultanik et al., approximately 370 MW of capacity in New York and Texas, (Jan. 25, 2022); https://abcnews.go.com/US/bitcoin-
Are Blockchains Decentralized? Unintended Centralities in but did not detail the fuel sources associated with that energy operation-ignites-debate-waste-coal-mining-pennsylvania/
Distributed Ledgers, Trail of Bits, 8 (June 2022), https:// consumption. Riot Blockchain, Inc., Form 10-K, Annual Report, story?id=82246178.
assets-global.website-files.com/5fd11235b3950c2c1a3b6df4 at 34 (for year ending Dec. 31, 2021), https://www.sec.gov/
54 See, e.g., Penn. Dep’t of Comm’y and Econ. Dev., Coal Refuse
/62af6c641a672b3329b9a480_Unintended_Centralities_in_ ix?doc=/Archives/edgar/data/0001167419/0001079973220
Energy and Reclamation Tax Credit (last visited Aug. 25, 2022),
Distributed_Ledgers.pdf. 00280/riot10k1221.htm.
https://dced.pa.gov/programs/coal-refuse-energy-reclamation-
Iris Energy claims to have 530 MW of capacity, split across
29 Cambridge Centre for Alt. Finance, Cambridge Bitcoin Electricity tax-credit/; Penn. Pub. Util. Comm’n, Alt. Energy and Economic
three different facilities, but only discloses the capacity of one
Consumption Index; Historical Bitcoin Network Power Demand Dev. in Pennsylvania AEPS Fact Sheet (last visited Aug. 25,
of those facilities, and it is only 30 MW. Iris Energy Ltd., 2021
(last visited Aug. 25, 2022), https://ccaf.io/cbeci/index. 2022), https://www.puc.pa.gov/general/consumer_ed/pdf/
Form F-1, at 3, 7 (Nov. 10, 2021), https://www.sec.gov/
AEPS_Fact_Sheet.pdf
30 Includes Argo’s Helios facility (200 MW), BitDeer Rockdale (170 Archives/edgar/data/0001878848/000114036121037466/
MW), Riot Blockchain Rockdale (400 MW), Compute North ny20000275x9_f1a.htm. 55 Stronghold Digital Mining, Inc., Form S-1, Registration
Granbury (300 MW), Compute North McCamey (280 MW), See also Argo Blockchain plc., 2021 Form F-1, at 3 (Nov. 10, Statement, at 100 (Jul. 27, 2021) https://www.sec.gov/
Core Scientific Denton (300 MW), Genesis Digital Pyote (300 2021), https://www.sec.gov/Archives/edgar/data/000184167 Archives/edgar/data/0001856028/00015645902103808
MW), and Lancium Abilene (200 MW). 5/000110465921136647/tm2130707-7_f1a.htm; 7/sdmi-s1.htm (Net Cost of Power w/incentives as $17 versus
Core Scientific, Inc., Form 10-K, Annual Report, at 148 (for year $37 without).
31 Based on estimate from Riot Blockchain that a single 100
MW facility might host 28,000 Bitcoin mining machines. Riot ending Dec. 31, 2021), https://www.sec.gov/Archives/edgar/ 56 U.S. Envt’l Prot. Agency (U.S. EPA), Power Sector Emissions Data,
Blockchain, Inc., Forward Looking Statements, 28 (June 16, data/1839341/000119312522088850/d268076d10k.htm. https://www.epa.gov/airmarkets/power-sector-emissions-data;
2022), https://d1io3yog0oux5.cloudfront.net/_3e5c4be455c 43 Where the PPA is with an electric cooperative or municipal U.S. EPA, Clean Air Markets Program Data, https://campd.epa.
deba10dde03ac9c750ba5/riotblockchain/db/447/4204/pdf/ utility in states where cooperatives or municipal utilities are not gov/ (filtering for Fortistar North Tonawanda Inc.).
Riot+Corp+Deck+-+June+22+-+vF.pdf. required to file such plans (e.g., Illinois), this information may be 57 Id.; Digihost Tech., Inc., Title V and Title IV Permits Renewal
32 U.S. EIA, How much electricity does an American home use? (Oct. available only piecemeal or after-the-fact. Application, Fortistar North Tonawanda Cogeneration Facility,
7, 2021), https://www.eia.gov/tools/faqs/faq.php?id=97&t=3. 44 See, e.g., Ind. Dep’t Envt’l Mgmt, Letter from Chief - Permits at 5–6, 30 (Apr. 21, 2021); N.Y. State Dep’t of Envt’l
Branch to Plant Manager, Hoosier Energy (Jan. 28, Conserv., Fortistar North Tonawanda current Title V and Title
33 Josh Zerlan, Bitcoin as the Ultimate Democratic Tool, Wired
2021), Doc. No. 83119775, https://ecm.idem.in.gov/cs/ IV Permits (2016), https://www.dec.ny.gov/dardata/boss/
Magazine (2014), https://www.wired.com/insights/2014/04/
idcplg?IdcService=GET_FILE&dID=83119370&dDocName= afs/permits/929120005900013_r2.pdf. The local water
bitcoin-ultimate-democratic-tool/.
83119775&Rendi%20tion=web&allowInterrupt=1&noSave consumption and thermal pollution from the plant is discussed
34 Paul Kim, ASIC mining: Computers built specifically for mining As=1; N.Y. State Dep’t Envt’l Conserv., Permit Documentation for further below.
cryptocurrency, Business Insider (Mar. 16, 2022), https:// Notable Projects, Greenidge Station (last visited Aug. 25, 2022), 58 N.Y. State Dep’t of Envt’l Conserv., Potential Envt’l Justice
www.businessinsider.com/personal-finance/asic-mining; https://www.dec.ny.gov/permits/123728.html. Area (PEJA) Communities, https://www.arcgis.com/
Lucas Wyland, The 10 Best Bitcoin Mining Hardware Machines
45 Fed. Energy Regulatory Comm’n (FERC), Mergers and Sections home/webmap/viewer.html?url=https://services6.arcgis.
2022, Coin Ledger (Aug. 25, 2022), https://coinledger.io/tools/
201 and 203 Transactions (last updated Apr. 12, 2021), https:// com/DZHaqZm9cxOD4CWM/ArcGIS/rest/services/
best-bitcoin-mining-hardware.
www.ferc.gov/electric/general-information/mergers-and- PotentialEnvironmentalJusticeAreaPEJACommunities/
35 Jon Huang et al., Bitcoin Uses More Electricity Than Many sections-201-and-203-transactions; FERC, Forms 65 and 65A FeatureServer&source=sd; U.S. EPA, Envt’l Justice Screening
Countries. How is That Possible? N.Y. Times (Sept. 3, 2021), and Triennial Market Power Analysis Letters (last updated Feb. and Mapping Tool, https://ejscreen.epa.gov/mapper/.
https://www.nytimes.com/interactive/2021/09/03/climate/ 17, 2022), https://www.sec.gov/ix?doc=/Archives/edgar/data 59 U.S. EPA, Power Sector Emissions Data, https://www.epa.gov/
bitcoin-carbon-footprint-electricity.html. In July 2021, just /0001167419/000107997322000280/riot10k1221.htm; airmarkets/power-sector-emissions-data; US EPA, Clean Air
five mining pools controlled more than 80% of the hash power https://www.reginfo.gov/public/do/DownloadDocument?object Markets Program Data, https://campd.epa.gov/ (filtering for
in Bitcoin. Jacob Wolinsky, If You Think The Decentralized ID=10176501. Greenidge Generation LLC). These numbers do not include
Blockchain Platforms Of Today Are Truly Decentralized, Think
46 FracTracker Alliance, Status of known proof-of-work upstream emissions.
Again, Yahoo! Finance (July 26, 2021) https://finance.
yahoo.com/news/think-decentralized-blockchain-platforms- cryptocurrency mining operations in the U.S. (Sept. 2022). 60 Id.
today-142927523.html. 47 When an electrical load is placed “behind-the-meter,” it is 61 N.Y. State Dep’t Envt’l Conserv., Notice of Denial of Title V
36 Igor Makarov & Antoinette Schoar, Blockchain Analysis of the powered directly by a particular power plant, rather than from the Air Permit, DEC ID: 8-5736-00004/00017, Greenidge
Bitcoin Market, Nat’l Bureau of Econ. Rsch., Working Paper grid, where electricity is generated by a suite of different power Generation LLC — Greenidge Generating Station, Title V Air
29396, 22–23, Nat’l Bureau of Econ. Rsch., Working Paper plants across a broader system. Because the plant’s power (or Permit Application, at 15 (June 30, 2022), https://www.
29396 (Oct. 2021) https://www.nber.org/papers/w29396 a portion of it) flows directly to the mining operation without dec.ny.gov/docs/administration_pdf/greenidgefinal630.pdf;
(note: this analysis was for the time period before China banned going onto the grid, the plant may be exempt from or subject to Earthjustice, Press Release: New York State Denies Air Pollution
mining). different monitoring and reporting requirements in a variety of Permit for Fossil Fuel-burning Crypto mining operation, Citing
respects than power plants “on the grid.” Energy-Intensity and Envt’l Concerns (June 30, 2022), https://
37 Riot Blockchain, Form 10 Q, Quarterly Report, at 13 (for
48 The White House’s OSTP recently stated that “The 2020s earthjustice.org/news/press/2022/new-york-state-denies-
period ending June 30, 2022). https://www.sec.gov/ix?doc=/
are a decisive decade for climate action in the United States, air-pollution-permit-for-fossil-fuel-burning-crypto-mining-
Archives/edgar/data/1167419/000155335022000687/
and up to 100 GW of clean electricity capacity needs to be operation-citing-energy.
riot-20220630.htm. Today, the average lifespan of a well-kept,
maintained machine is projected to be around 3 to 5 years. In added to the grid every year to meet the demand of these 62 See, e.g., U.S. EPA, Proposed Date to Cease Receipt of Waste
harsh or poor conditions, they can deteriorate in as little as a few newly electrified end uses.” White House OSTP, Climate and for Greenidge Generation LLC Based on Interim Ineligibility
months. Lumerin Blog: How to prolong your ASIC miner’s lifespan, Energy Implications of Crypto-Assets in the United States, at Determination, Docket ID No. EPA-HQ-OLEM-2021-0591
Medium (Nov. 23, 2021), https://medium.com/lumerin-blog/ 17 (Sept. 8, 2022), https://www.whitehouse.gov/wp-content/ (Jan. 24, 2022), https://www.regulations.gov/document/
how-to-prolong-your-asic-miners-lifespan-360b68140a04; uploads/2022/09/09-2022-Crypto-Assets-and-Climate- EPA-HQ-OLEM-2021-0591-0002; Sruthi Gopalakrishnan,
Minery, How Long Do ASICS Last? (May 16, 2022), https:// Report.pdf. In the Finger Lakes, a cryptocurrency mining plant billed as
minery.io/blog/how-long-do-asics-last/. 49 Stronghold Digital Mining, Inc., Form S-1, Registration ‘green’ has a dirty coal ash problem, Energy News Network
Statement, at 4, 7 (July 27, 2021), https://www.sec.gov/ (Aug. 25, 2022), https://energynews.us/2022/08/25/
38 See, e.g., White House OSTP, Climate and Energy Implications
Archives/edgar/data/0001856028/000156459021038087/ in-the-finger-lakes-a-bitcoin-mining-plant-billed-as-green-
of Crypto-Assets in the United States, at 10-12 & n.30
sdmi-s1.htm has-a-dirty-coal-ash-problem/; WXXI News, Envt’l groups
(Sept. 8, 2022), https://www.whitehouse.gov/wp-content/
turn focus to Greenidge’s water permits (Sept. 2, 2022),
uploads/2022/09/09-2022-Crypto-Assets-and-Climate- 50 Stronghold Digital Mining, Inc., Form 10-K, Annual Report, at 7
https://www.wxxinews.org/local-news/2022-09-02/
Report.pdf; David Lavie, Bitcoin halving is how the supply of (for year ending Dec. 31, 2021), https://www.sec.gov/ix?doc=/
environmental-groups-turn-focus-to-greenidges-water-permits.
the world’s largest cryptocurrency is controlled, Business Archives/edgar/data/0001856028/000162828022007706/
Insider (Aug. 16, 2022), https://www.businessinsider.com/ sdig-20211231.htm; Stronghold Digital Mining, Inc., Form S-1, 63 GlobeNews Wire, Cipher Mining Provides Second Quarter 2022
personal-finance/bitcoin-halving. Registration Statement, at 4, 7 (July 27, 2021), https://www. Business Update (Aug. 9, 2022) https://www.globenewswire.
sec.gov/Archives/edgar/data/0001856028/0001564590210 com/news-release/2022/08/09/2494732/0/en/Cipher-
39 See, e.g., EZ blockchain, EZ Smartbox Mobile Mining Container
38087/sdmi-s1.htm. Mining-Provides-Second-Quarter-2022-Business-Update.html.
(last visited Sept. 10, 2022). https://ezblockchain.net/
smartbox/. 51 Waste coal is a low-energy-value product that, before 64 Alex Alley, Bitcoin miner Marathon signs for coal-fired
environmental restrictions were passed, was often dumped electricity in Montana, Data Center Dynamics (Oct. 16,
40 Marathon Digital Holdings. Marathon Digital Holdings Announces
in piles near mining sites. Pennsylvania has approximately 2020), https://www.datacenterdynamics.com/en/news/
Intent to Transition Hardin, Montana Bitcoin Mining Operations
840 such sites and operators such as Stronghold claim that bitcoin-miner-marathon-signs-coal-fired-electricity-montana/.
to More Sustainable Power Sources. (Apr. 5, 2022) https://
ir.marathondh.com/news-events/press-releases/detail/1282/ burning it for energy is “environmentally beneficial” because 65 Data compiled from quarterly air monitoring reports filed with the
marathon-digital-holdings-announces-intent-to-transition. it encourages the removal of these piles, and the waste ash Montana Dep’t of Envt’l Quality.
can be used for fill and reclamation projects. Pennsylvania
41 Eliza Gkritsi, Bitcoin Mining Middleman Compass’ Georgia has nine other coal waste plants where mining could increase 66 Marathon Digital Holdings, Press Release: Marathon Digital
Facilities to Close as Energy Prices Soar (Sept. 1, 2022) https:// their operations or extend their useful lives. See, e.g., Evan Holdings Announces Bitcoin Production and Mining Operation
www.coindesk.com/business/2022/09/01/bitcoin-mining- D. Endres, Waste Coal: Time to finish what we started, Updates for November 2021 (Dec. 3, 2021), https://
middleman-compass-georgia-facilities-to-close-as-energy- PennFuture (Nov. 18, 2015), https://www.pennfuture.org/ ir.marathondh.com/news-events/press-releases/detail/1269/
prices-soar/. Blog-Item-Waste-Coal-Time-to-finish-what-we-started. marathon-digital-holdings-announces-bitcoin-production-and.

52 U.S. EIA, Emissions by Plant and Region, 2020 (Apr. 12, 2022), 67 Yahoo Finance, Bitcoin USD (BTC-USD) Historical Prices (as of
https://www.eia.gov/electricity/data/emissions/. Dec. 31, 2021), https://finance.yahoo.com/quote/BTC-USD/
history/.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 29
68 U.S. EPA, Clean Air Markets Program Data, https://campd.epa. 76 See Hallador Energy Co., Form 8-K/A, Current Report 87 See, e.g., Sergio Chapa, Cryptocurrency mining company
gov/; see also Montana Envt’l Info. Center, et al., Comments Amendment No. 1 (Feb. 18, 2022), https://www.sec.gov/ eyes flared gas in Permian Basin, Houston Chronicle (June
on Montana’s Proposed Regional Haze State Implementation ix?doc=/Archives/edgar/data/0000788965/0001437749220 23, 2020), https://www.houstonchronicle.com/business/
Plan for the 2nd Implementation Period (Mar. 21, 2022), 06045/hnrg20220309_8ka.htm. energy/article/Cryptocurrency-mining-company-eyes-
https://protectnps.org/wp-content/uploads/2022/03/ flared-gas-in-15359750.php; Crusoe Energy, Understanding
77 See Gerry Dick, Startup to Establish Crypto Mining Facility in
Combined-MT-Regional-Haze-R2-Comment-Letter- the Problem Crusoe Solves (Sept. 23, 2021), https://www.
Sullivan County, Inside IN Bus. (May 12, 2022), https://www.
Exhibits-2022-3-21_reduced-file-size.pdf. crusoeenergy.com/blog/3MyNTKiT6wqsEWKhP0BeY/
insideindianabusiness.com/articles/startup-to-establish-
understanding-the-problem-crusoe-solves.
69 Today, coal-fired power plants in the U.S. generate roughly 100 crypto-mining-facility-in-sullivan-county; see also Haley
million tons of CCR every year. Recent industry data demonstrate Cawthon, AboutBit to Open New Crypto Mining Facility in 88 Justine Calma, Why fossil fuel companies see green in Bitcoin
that 92% of CCR ponds are polluting the underlying groundwater Southern Indiana, KYINNO (May 11, 2022), https://www. mining projects, The Verge (May 4, 2022). https://theverge.
to levels that exceed federal drinking water standards. CCR bizjournals.com/louisville/inno/stories/news/2022/05/11/ com/2022/5/4/23055761/exxonmobil-cryptocurrency
contaminates groundwater with carcinogens, neurotoxins, aboutbit-merom-mining.html. mining-bitcoin-methane-gas; Andrew R. Chow, Fact-
developmental toxins and other dangerous chemicals including Checking 8 Claims About Crypto’s Climate Impact, Time
78 See Hallador Power Co. LLC, Petition Ex. A, at 4 (Test. of M.
arsenic, boron, lithium, chromium, cobalt, lead, lithium, Magazine (July 1, 2022), https://time.com/6193004/
Elliott Batson), Ind. Util. Reg. Comm’n, Cause No. 45691 (Mar.
manganese, molybdenum, radium, mercury, and cadmium. This crypto-climate-impact-facts/.
8, 2022), https://iurc.portal.in.gov/_entity/sharepointdocu
groundwater can flow to drinking water wells or pollute nearby
mentlocation/746eff84-fd9e-ec11-b3fe-001dd8017dcd/ 89 Businesswire, Crusoe Energy Systems Closes $505
surface water. See, e.g., U.S. EPA, Coal Ash, https://www.epa.
bb9c6bba-fd52-45ad-8e64-a444aef13c39?file=Verified%20 Million in New Capital Led by Climate Technology Investors
gov/coalash; see also U.S. News, EPA Moves to Crack Down on
Petition%20to%20Indiana%20Commission%20with%20 G2 Venture Partners, Prepares Launch of CrusoeCloud
Dangerous Coal Ash Storage Ponds (Jan. 11, 2022), https://
Exhibit%20A.pdf; see also Hallador Power Co., LLC, (Apr. 21, 2022), https://www.businesswire.com/news/
www.usnews.com/news/business/articles/2022-01-11/epa-
Application (Apr. 11, 2022), FERC Docket No. ER22-1608, home/20220420005676/en/Crusoe-Energy-Systems-Closes-
moves-to-crack-down-on-dangerous-coal-ash-storage-ponds;
Accession No 2022-0411, https://elibrary.ferc.gov/eLibrary/ 505-Million-in-New-Capital-Led-by-Climate-Technology-
Envt’l Integrity Project & Earthjustice, Coal’s Poisonous Legacy:
filelist?accession_Number=20220411-5116&optimized=false; Investors-G2-Venture-Partners-Prepares-Launch-of-
Groundwater Contaminated by Coal Ash Across the U.S. (Mar.
Hallador Energy Co., Hoosier Energy announce agreement to CrusoeCloud%E2%84%A2; Stephen Cunningham, Bitcoin
2, 2019, rev. July 11, 2019), https://environmentalintegrity.
transfer ownership of Merom Generating Station, multiyear PPA, miners help US oil producers cut flaring, Argus Media (Oct. 8,
org/reports/coals-poisonous-legacy/; Kari Lydersen et al.,
https://www.sec.gov/Archives/edgar/data/0000788965/0001 2021), https://www.argusmedia.com/en/news/2261931-
Cracking down on coal ash: Tough talk and tough choices, E&E
43774922006045/ex_345554.htm (Feb. 15, 2022); Benjamin bitcoin-miners-help-us-oil-producers-cut-flaring.
News (Aug. 24, 2022), https://energynews.us/2022/08/24/
Storrow & Jael Holzman, Cryptocurrency’s Climate Conundrum,
cracking-down-on-coal-ash-tough-talk-and-tough-choices/. 90 Laila Kearney, Oil drillers and Bitcoin miners bond over natural
E&E News (May 18, 2022), https://www.eenews.net/articles/
gas, Reuters (May 21, 2021), https://www.reuters.com/
70 Tom Lutey, Crypto miner plans to exit Hardin coal-fired power cryptocurrencys-climate-conundrum (“Some crypto miners,
business/sustainable-business/oil-drillers-bitcoin-miners-
plant, Billings Gazette (Apr. 6, 2022), https://billingsgazette. meanwhile, are unconcerned about criticism of their industry’s
bond-over-natural-gas-2021-05-21/.
com/news/crypto-miner-plans-to-exit-hardin-coal-fired-power- environmental impact. Last week, a Kentucky-based crypto
plant/article_cd2ca444-929a-511d-913d-903fbc570498. miner announced it had signed a deal to build a 115-MW facility 91 E&E News, Exxon weighs taking gas-to-bitcoin pilot to 4
html; Catarina Moura, Marathon to move its Bitcoin miners outside an Indiana coal plant that had been slated to retire next countries (Mar. 25, 2022), https://subscriber.politicopro.com/
from Montana to new locations with ‘more sustainable’ power year. Now, the plant will provide electricity to AboutBit’s data article/eenews/2022/03/25/exxon-weighs-taking-gas-to-
sources, The Block (Apr. 5, 2022), https://www.theblock.co/ mining operation as part of a five-year power contract, said bitcoin-pilot-to-four-countries-00020188; Audrey Carleton,
linked/140753/marathon-to-move-its-bitcoin-miners-from- Jay Chiang, the company’s co-founder. Asked about critics’ Exxon Considering Expanding Bitcoin Mining Pilot to 4 Countries:
montana-to-new-locations-with-more-sustainable-power- assertions that the deal could keep a polluting coal plant open, Report, Vice (Mar. 25, 2022), https://www.vice.com/en/article/
sources. Chiang replied, ‘It’s 100 percent correct.’ ‘For anyone to say their xgdpwa/exxon-considering-expanding-bitcoin-mining-pilot-to-
crypto operation is green, unless they are 100 percent hydro, 4-countries-report.
71 In April 2022, Compute North announced a new 300 MW
they can’t make that claim,’ he said. ‘As an operation, it’s not 92 Penn. Dep’t of Envt’l Prot., Notice of Violation to Big Dog Energy,
cryptocurrency mining facility that would operate “behind-the-
humanly possible.’. . . ‘Is coal 100 percent bad? The answer is no. LLC (Jan. 7, 2022); see also Bill Shannon & Yanni Tragellis,
meter” at the Wolf Hollow gas-fired power plant in Granbury,
Does it cause environmental issues? Yes,’ he said. . . .”). Crypto mining raises concerns in Clearfield County, WTAJ (Feb.
TX. See Compute North, Compute North Launches New 300MW
Data Center In Granbury, Texas (Apr. 8, 2022), https://www. 79 Benjamin Storrow & Jael Holzman, Cryptocurrency’s Climate 10, 2022), https://www.wearecentralpa.com/news/local-news/
computenorth.com/news_release/compute-north-launches- Conundrum, E&E News (May 18, 2022), https://www.eenews. crypto-mining-raises-concerns-in-clearfield-county/.
new-300mw-data-center-in-granbury-texas/; Dan Swinhoe, net/articles/cryptocurrencys-climate-conundrum 93 John Aguilar, The crude marriage of oil drilling and bitcoin
Compute North breaks ground on 300MW data center in mining gets a wary eye from Adams County, Denver Post (July
80 See Gerry Dick, Hallador Energy Co. reopens Knox County
Granbury, Texas, Data Center Dynamics (Apr. 12, 2022), https:// 18, 2022), https://www.denverpost.com/2022/07/18/
coal mine, Inside Ind. Business (July 14, 2022), https://
www.datacenterdynamics.com/en/news/compute-north- cryptocurrency-mining-adams-county-oil-gas/.
www.insideindianabusiness.com/articles/hallador-energy-
breaks-ground-on-300mw-data-center-in-granbury-texas.
co-reopens-knox-county-coal-mine; see also Hallador 94 Adams County, Oil & Gas Info., https://www.adcogov.org/oil-and-
With the need for Marathon to move its miners at the Hardin
Power Co., Response to FERC’s Deficiency Letter of July 7th gas-information; Memo from Jenni Hall, Director of Community
coal plant to meet its deadline of “redeploy[ing] Hardin-installed
(July 15, 2022), FERC Docket No. EC22-52, Accession & Economic Development to CED Staff, Re: Interpretation
miners to renewable power facilities on or before September 30,
No. 20220715-5204, https://elibrary.ferc.gov/eLibrary/ of Use — Oil and Gas Cryptocurrency / Digital Currency /
2022,” it became suspiciously clear that Marathon was actually
filelist?accession_Number=20220715-5204&optimized=false Electronic Currency Mining, Adams County (May 25, 2022),
deploying miners to Compute North’s Wolf Hollow operation.
(Hallador provided data on the concentration of coal mining https://www.adcogov.org/sites/default/files/2022.05.25%20
Marathon Digital Holdings, Inc., Form 10-Q, Quarterly Report,
ownership within the MISO region, purportedly in response to Cryptocurrency%20Mining%20Interpretation_Signed.
at 15 (for the period ended March 31, 2022), https://www.sec.
competitiveness concerns raised by FERC). pdf. Out of the 14 local governments that responded to the
gov/ix?doc=/Archives/edgar/data/0001507605/0001493152
22012398/form10-q.htm; “On July 5, Marathon also expanded 81 Judith Lewis Mernit, Bitcoin’s Intensive Energy Colorado Oil and Gas Conservation Commission’s survey
its hosting arrangements with Compute North to include an Demands are Sparking a Crypto Backlash, Yale Env’t about cryptocurrency mining, five counties — Adams, Boulder,
additional 42 megawatts of hosting capacity at Compute North’s 360 (June 21, 2022), https://e360.yale.edu/features/ Larimer, Thorton, and Arapahoe — all offered that “gas to crypto”
facility near Granbury, Texas.” Marathon Digital Holdings, Inc., bitcoins-intensive-energy-demands-spark-a-crypto-backlash. operations would not be permitted in their jurisdictions. Mark
Marathon Digital Holdings Secures Hosting Capacity to Support Jaffe, Oil and gas and cryptocurrency miners are Colorado’s new
82 Naureen S. Malik, Texas crypto miners could require as much
All 23.3 EH/s of Bitcoin Mining (July 18, 2022), https:// odd couple. And they’re making quite a bit of coin., Colorado
power as all of New York state, Bloomberg (Aug. 26, 2022),
ir.marathondh.com/news-events/press-releases/detail/1289/ Sun (Aug. 29, 2022), https://coloradosun.com/2022/08/29/
https://www.bloomberg.com/news/articles/2022-08-26/
marathon-digital-holdings-secures-hosting-capacit y-to. oil-gas-cryptocurrency-bitcoin-mining/.
texas-crypto-rush-may-need-as-much-power-as-entire-state-
72 Kayla Desroches, As crypto company departs Hardin, what’s next of-n-y (“Texas has some of the cheapest electricity rates for 95 Electric Reliability Council of Texas, Inc. (ERCOT), Large Flexible
for the communities it leaves behind? Yellowstone Public Radio big consumers, averaging about 7.57 cents per kilowatt-hour in Load Task Force. Overview of Large Load Interconnection
(Apr. 28. 2022), https://www.ypradio.org/energy/2022-04-28/ June, a third lower than the national average, according to the Requests (Interim Process), at 2 (Apr. 26, 2022), https://
as-crypto-company-departs-hardin-whats-next-for-the- U.S. Energy Info. Administration.”) www.ercot.com/files/docs/2022/04/25/InterimLargeL
communities-it-leaves-behind. oadInterconnectionProcess_AggregateData_04262022.
83 Id.
pptx; Naureen S. Malik, Crypto Miners’ Electricity Use in Texas
73 Id. 84 Seth Tupper, Orphaned South Dakota gas wells could soon Would Equal Another Houston, Bloomberg (Apr. 27, 2022),
74 Hoosier is a generation and transmission cooperative providing power bitcoin mining, S.D. Public Broadcasting (Feb. 24, https://www.bloomberg.com/news/articles/2022-04-27/
electric power to a 17-member electric distribution cooperative 2021), https://www.sdpb.org/blogs/politics-public-policy/ crypto-miners-in-texas-will-need-more-power-than-houston.
in central and southern Indiana, and one member cooperative in orphaned-south-dakota-gas-wells-could-soon-power-bitcoin-
96 Naureen S. Malik, Crypto Miners’ Electricity Use in Texas Would
Illinois. See U.S. EPA, Letter from Robert Hochstetler, V.P., Hoosier mining/; Anne Danahy, EPA Asks A Bitcoin ‘Mining’ Operation
Equal Another Houston, Bloomberg (Apr. 27, 2022), https://
Energy, to Richard Kinch, US EPA (Mar. 28, 2009), https:// In Clearfield County For Info., Allegheny Front (July 22, 2022),
www.bloomberg.com/news/articles/2022-04-27/crypto-
archive.epa.gov/epawaste/nonhaz/industrial/special/fossil/ https://www.alleghenyfront.org/epa-pennsylvania-bitcoin-
miners-in-texas-will-need-more-power-than-houston; Jeremy
web/pdf/hoosier-merom.pdf. mining-big-dog-energy-cryptocurrency/; see Midstream, Post,
Blackman, Investors are swarming to crypto in Texas. Can the
Linkedin (last visited Aug 26, 2022), https://www.linkedin.com/
75 Hoosier Energy, 2020 Integrated Resource Plan — Public Version state’s fragile grid deliver? Houston Chronicle (May 16, 2022),
posts/midstream-enterprises-inc%2E_midstream-bitcoin-
Vol. I: Main Report, at 89, 98 (Nov.2, 2020), https://www. https://www.houstonchronicle.com/politics/texas/article/
miningbitcoin-activity-6845779138238930944-NmBd?utm_
in.gov/iurc/files/HoosierEnergy_IntegratedResourcePlan_ Investors-are-swarming-to-crypto-in-Texas-Can-17176539.
source=linkedin_share&utm_medium=member_desktop_web.
Volume1_110220.pdf (Hoosier Energy’s most recent Integrated php.
Resource Plan stated: “Early retirement of Merom in 2023 85 Avi Asher-Schapiro, Coal to Crypto: The Gold Rush Bringing
97 Justine Calma, Texas’ Fragile Grid Isn’t Ready for Crypto Mining’s
provides substantial savings versus retaining the current Bitcoin Miners to Kentucky, Thomson Reuters Found.
Explosive Growth, The Verge (July 14, 2022), https://www.
portfolio through the study period” and “[b]y retiring Merom (Mar. 14, 2022), https://longreads.trust.org/item/
theverge.com/2022/7/14/23206795/bitcoin-crypto-mining-
and replacing it with a number of smaller geographically diverse bitcoin-mining-US-coal-country-climate.
electricity-texas-grid-energy-bills-emissions.
resources, all replacement portfolios improve Hoosier’s single 86 Andrew R. Chow, Fact-Checking 8 Claims About Crypto’s
unit exposure relative to the current portfolio.”). 98 Naureen S. Malik, Texas crypto miners could require as much
Climate Impact, Time Magazine (July 1, 2022), https://time.
power as all of New York state, Bloomberg (Aug. 26, 2022),
com/6193004/crypto-climate-impact-facts/.
https://www.bloomberg.com/news/articles/2022-08-26/texas-
crypto-rush-may-need-as-much-power-as-entire-state-of-n-y.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 30
99 Aggregate Bitcoin energy use data, from August 1, 2021 through 107 U.S. EPA, Avoided Emission Rates Generated from AVERT, 118 See Paul Moore, What Happened to Turtle Creek’s Trophy
July 31, 2022, is sourced from the Cambridge Bitcoin Electricity https://www.epa.gov/avert/avoided-emission-rates-generated- Bassing, Game & Fish Magazine (Oct. 4, 2010), https://
Consumption Index, with a daily estimated power consumption avert (AVERT-based marginal emissions rates for 2021 from www.gameandfishmag.com/editorial/fishing_bass-
at an estimated 85% load factor and assuming ~38% of Bitcoin “uniform energy efficiency” profile). fishing_in_0510_02/243162; Hendrix, The Ups-and-Downs
mining occurred in the United States in 2022. Cambridge Centre of Fishing Turtle Creek, Dubois Cty. Herald (May 24, 2019),
108 Daniel Swinhoe, Aspen Creek Digital Corporation launches 6MW
for Alt. Finance, Cambridge Bitcoin Electricity Consumption https://www.duboiscountyherald.com/sports/local/the-ups-
cryptomine in Colorado Data Center Dynamics (June 28, 2022),
Index: Bitcoin network power demand (last visited Aug. 25, and-downs-of-fishing-turtle-creek/article_8fbf5caa-f629-
https://www.datacenterdynamics.com/en/news/aspen-creek-
2022), https://ccaf.io/cbeci/index; Cambridge Centre for Alt. 5e3f-8959-88775a5cc1c6.html; Ind. Div. of Fish & Wildlife,
digital-corporation-launches-6mw-cryptomine-in-colorado/.
Finance, Cambridge Bitcoin Electricity Consumption Index: Animal Info. Series: Largemouth Bass (Micropterus salmoides)
Bitcoin Mining Map (last visited Aug. 25, 2022), https://ccaf.io/ 109 Even in this case, because the biggest current barrier to (2012), https://www.in.gov/dnr/fish-and-wildlife/files/
cbeci/mining_map (CBECI fraction of consumption by region). renewable development in the U.S. are supply chain constraints, fw-largemounth_bass.pdf.
National marginal emissions rate from is from EPA’s Avoided even this solar development likely displaces building facilities
119 Titan, Immersion cooling for ASIC miners: What is it and
Emissions and Generation Tool (AVERT). U.S. EPA, Emission that would otherwise serve the grid. See Nichola Groom, U.S.
how does it work? (Feb. 10, 2022), https://titan.io/
Rates from AVERT (Mar. 2022), https://www.epa.gov/system/ solar industry warns of slowdown due to supply chain disruptions,
immersion-cooling-for-asic-miners-what-is-it-and-how-
files/documents/2022-03/avert_emission_rates_03-29-22. tariff uncertainty, Reuters (Apr. 28, 2022), https://www.
does-it-work/; Hive OS, Prepare your ASICS for hot summer
xlsx. See also White House OSTP, Climate and Energy reuters.com/world/us/us-solar-industry-warns-slowdown-
days, Medium (June 15, 2020), https://medium.com/hiveon/
Implications of Crypto-Assets in the United States, at 21 due-supply-chain-disruptions-tariff-uncertainty-2022-04-
prepare-your-asics-for-hot-summer-days-f57c77015820.
(Sept. 8, 2022), https://www.whitehouse.gov/wp-content/ 28/#:~:text=April%2028%20(Reuters)%20%2D%20
uploads/2022/09/09-2022-Crypto-Assets-and-Climate- The,from%20Southeast%20Asia%20hit%20home. 120 N2Global, Fire Safety in Cryptocurrency Mining: Case Study (Oct.
Report.pdf (estimating 25-50 million tons in the United States). 22, 2021), https://www.n2global.net/en/media-room/news-
110 Aspen Creek Digital Corp., Homepage (last visited Aug. 26,
highlights/fire-safety-at-cryptocurrency-mining-case-study-by;
100 CO2 emissions from Scherer coal plant (3,564 MW) in 2021, 2022), https://acdigitalcorp.com/.
Levitt Safety, Protect Your Cryptocurrency Mine With These Fire
derived from U.S. EPA’s Clean Air Markets Program Data 111 As further explained by Steve Wright in response to Mitigation Tactics (Mar. 28, 2022), https://www.levitt-safety.
(last visited Sept. 10, 2022), https://campd.epa.gov/data/ congressional representatives, cryptomining companies are com/blog/cryptocurrency-mining/.
custom-data-download. pushed toward fossil-fired resources because (1) “fossil fuel
121 See Rich Miller, Fire at Bitcoin Mine Destroys Equipment,
101 White House OSTP, Climate and Energy Implications of Crypto- plants are finding it more difficult to operate and have been
Data Center Knowledge (Nov. 6, 2014), https://www.
Assets in the United States, at 21 (Sept. 8, 2022), https://www. increasingly curtailed or shut down prior to end of life,” thus
datacenterknowledge.com/archives/2014/11/06/
whitehouse.gov/wp-content/uploads/2022/09/09-2022- creating opportunities to “restart or increase fossil fuel plants
fire-bitcoin-mine-destroys-equipment.
Crypto-Assets-and-Climate-Report.pdf. OSTP relies on EPA’s when they can get revenues greater than variable and fixed
eGRID “non-baseload GHG emissions” rate, a 2007 methodology operations and maintenance costs;” (2) “fossil fuel resources are 122 Amir Rubin, Is Bitcoin Mining Insurable, Examples and Loss
of assessing marginal emissions rates. Today, EPA recommends dispatchable translating to a high probability of being available Characteristics, AREPA, at 14-16 (2021), https://www.
using AVERT, a more sophisticated approaches for marginal around the clock;” and (3) electricity prices. See Stephen Wright, arepa.com/media/xtsbufex/arepa-whitepaper-bitcoin.pdf;
emissions rates. See U.S. EPA, Greenhouse Gases Equivalencies Additional Questions for the Record re: Hearing on Cleaning Up Rebecca Heilweil, Now Might Be a Good Time to Think About
Calculator - Calculations and References (last visited Sept. Cryptocurrency: The Energy Impacts of Blockchains, at 2, https:// Crypto Insurance, Vox (June 17, 2022), https://www.vox.com/
10, 2022), https://www.epa.gov/energy/greenhouse-gases- docs.house.gov/meetings/IF/IF02/20220120/114332/ recode/23171782/crypto-terra-ust-celsius-meltdown-crash-
equivalencies-calculator-calculations-and-references). HHRG-117-IF02-Wstate-WrightS-20220120-SD001.pdf. insurance; Levitt Safety, Protect Your Cryptocurrency Mine With
eGRID’s national “non-baseload” emissions rate for 2020 is These Fire Mitigation Tactics (Mar. 28, 2022), https://www.
112 World Health Organization, New WHO Global Air Quality
1,400 lbsCO2/MWh, while AVERT’s national marginal emissions levitt-safety.com/blog/cryptocurrency-mining/.
Guidelines aim to save millions of lives from air pollution (Sept.
rate is 1,534 lbs/MWh, or nearly 10% higher. Current values 22, 2021), https://www.who.int/news/item/22-09-2021-new- 123 Turner Wright, 3K+ Bit Digital hosting partner’s crypto miners go
at U.S. EPA, Avoided Emission Rates Generated from AVERT who-global-air-quality-guidelines-aim-to-save-millions-of- offline after explosion and fire, Cointelegraph (May 20, 2022),
(last visited Sept. 10, 2022), https://www.epa.gov/avert/ lives-from-air-pollution; see also U.S. EPA, Research on Health https://cointelegraph.com/news/3k-bit-digital-hosting-partner-
avoided-emission-rates-generated-avert. Effects from Air Pollution (last updated Feb. 16, 2022), https:// s-crypto-miners-go-offline-after-explosion-and-fire.
102 U.S. House of Rep. Committee on Energy & Commerce Staff, www.epa.gov/air-research/research-health-effects-air-pollution
124 See, e.g., Pia Singh, Bitcoin miners flocked to an upstate New York
Memorandum re: Hearing on Cleaning Up Cryptocurrency: 113 Many facilities also consume additional electricity to cool their town for cheap energy — then it got complicated, CNBC (June
The Energy Impacts of Blockchain, at 5 (Jan. 17, 2022), operations. The White House OSTP estimated recently that “[e] 24, 2021), https://www.cnbc.com/2021/06/24/bitcoin-
https://energycommerce.house.gov/sites/democrats. lectricity for cooling can add anywhere from a low percentage miners-flocked-to-upstate-new-york-for-cheap-energy-then-
energycommerce.house.gov/files/documents/Briefing%20 (for cool climates) to over 100% of the electricity consumed by it-got-complicated.html (“We’ve put in a whole set of building
Memo_OI%20Hearing_2022.01.20.pdf (citing Forex Suggest, the computing equipment itself.” White House OSTP, Climate and safety codes”); PUD Board Acts To Halt Unauthorized Bitcoin
Global Impact of Crypto Trading, https://forexsuggest.com/ and Energy Implications of Crypto-Assets in the United States, at Mining, NCWLife News (Apr. 2018) https://www.ncwlife.com/
global-impact-of-crypto-trading/ (Jan. 10, 2022); U.S. 13 (Sept. 8, 2022), https://www.whitehouse.gov/wp-content/ news/pud-board-acts-to-halt-unauthorized-bitcoin-mining/
EPA, Greenhouse Gas Emissions from a Typical Passenger uploads/2022/09/09-2022-Crypto-Assets-and-Climate- article_f013c62b-15a4-5665-ad39-113a61d5503c.html
Vehicle (Mar. 2018), https://www.epa.gov/greenvehicles/ Report.pdf (citing Stoll et al., The Carbon Footprint Of Bitcoin, (citing fire risk as a factor).
greenhouse-gas-emissions-typical-passenger-vehicle). Cell Press 3, 1–15 (Feb. 16, 2019), https://doi.org/10.2139/
125 Angela Fritz & Judson Jones, Half the country is in drought, and
103 Elesia Fasching & Suparna Ray, Coal will account for 85% of ssrn.3335781; Alex De Vries, Bitcoin’s energy consumption
no region has been spared, CNN (Aug. 4, 2022), https://www.
U.S. electric generating capacity retirements in 2022, US EIA is underestimated: A market dynamics approach. Energy Res.
cnn.com/2022/08/04/weather/drought-map-northeast-
(Jan. 11 2022), https://www.eia.gov/todayinenergy/detail. Soc. Sci. 70, 101721 (Dec. 2020), https://doi.org/10.1016/j.
texas-climate/index.html.
php?id=50838. erss.2020.101721; Cambridge Centre for Alt. Finance,
Cambridge Bitcoin Electricity Consumption Index, https://cbeci. 126 See, e.g., Jeff Keeling, Professor: Bitcoin mining’s model brings
104 As Steve Wright noted in his response to congressional not just noise, but environmental cost that’s under scrutiny,
org/).
representatives, “With cryptocurrency mining the utility is WJHL (updated May 19, 2021), https://www.wjhl.com/
financially exposed to providing transmission and distribution 114 City of N. Tonawanda, Public Notice, Digihost Full Envt’l
news/local/professor-Bitcoin-minings-model-brings-not-
which generally requires a capital investment spread over a Assessment Form, at 5 (Aug. 12, 2021), https://www.
just-noise-but-environmental-cost-thats-under-scrutiny/;
long-life asset. The utility is also financially exposed if it is either northtonawanda.org/documents/legal%20notice/fortistar%20
Robert Houk, Officials press bitcoin company to find a
building generation that could go unutilized or underutilized or by amended%20seqr_2.pdf (the City’s current usage averages 4
solution to noise issues, Johnson City Press (Aug. 23, 2021),
committing generation to serve cryptocurrency load that would million gallons per day).
https://www.johnsoncitypress.com/news/officials-press-
otherwise be sold for a higher long-term value. This is particularly 115 Thomas J. Prohaska, North Tonawanda asks for $30 million in bitcoin-company-to-find-a-solution-to-noise-issues/
a problem for a consumer owned utility where the infrastructure emergency aid to repair sewer plant, Buffalo News (Mar. 12, article_78e62c44-0434-11ec-af1c-bf43ccb2b545.html;
investments are being made in effect by the people who live in 2022), https://buffalonews.com/news/local/government-and- Andy Koen, Noise complaint over crypto mining business led City
the service territory.” See Stephen Wright, Additional Questions politics/north-tonawanda-asks-for-30-million-in-emergency- to buy new equipment, KOAA News (Jul. 26, 2019), https://
for the Record re: Hearing on Cleaning Up Cryptocurrency: The aid-to-repair-sewer-plant/article_91b32598-a145-11ec- www.koaa.com/news/covering-colorado/noise-complaint-
Energy Impacts of Blockchains, at 1, https://docs.house.gov/ b35d-7314fe498fd0.html. over-crypto-mining-business-led-city-to-buy-new-equipment;
meetings/IF/IF02/20220120/114332/HHRG-117-IF02- Andy Fox, What’s That Noise? One of world’s largest bitcoin
Wstate-WrightS-20220120-SD001.pdf. 116 N.Y. State Dep’t of Envt’l Conserv, Greenidge Generation Station:
facilities is too loud, VB neighbors say, Wavy (Aug. 15, 2018),
Water Withdrawal, DEC Permit No. 8-5736-00004/00015,
105 Mining operations at existing hydroelectric facilities are more https://www.wavy.com/news/whats-that-noise-one-of-worlds-
https://www.dec.ny.gov/chemical/123048.html.
complicated to parse. To the extent that the facility would have largest-Bitcoin-facilities-is-too-loud-vb-neighbors-say/;
otherwise marketed its energy to the broader grid and remained 117 U.S. EPA, Nat’l Pollutant Discharge Elimination Norway Council may shut down noisy bitcoin miner, The Local
viable, the cryptomining operation might be utilizing a low System — Cooling Water Intake Structures at Existing (Aug. 21, 2018), https://www.thelocal.no/20180821/
emissions resource that would have otherwise displaced fossil Facilities & Phase I Facilities, 76 Fed. Reg. 22,174, 22,246 norway-council-may-shut-down-noisy-Bitcoin-miner/.
consumption. However, if the hydroelectric facility would have (proposed Apr. 20, 2011), https://www.federalregister.gov/
127 Compass Mining, The Basics of Mining Bitcoin at Home
otherwise been abandoned but for the favorable pricing offered documents/2011/04/20/2011-8033/national-pollutant-
(Aug. 20, 2021), https://compassmining.io/education/
by the cryptocurrency mine, it may have little emissions impact. discharge-elimination-system-cooling-water-intake-
how-to-mine-bitcoin-at-home-basics/.
structures-at-existing; U.S. EPA, Harmful Algal Blooms and
106 The PJM Regional Transmission Organization, which tracks Drinking Water Factsheet (last visited July 11, 2022) https:// 128 Kevin Williams, An Appalachian town was told a bitcoin
marginal resources, states that “in 2021, coal units were 14.1 www.epa.gov/sites/default/files/2016-11/documents/ mine would bring an economic boom. It got noise pollution
percent and natural gas units were 71.7 percent of marginal harmful_algal_blooms_and_drinking_water_factsheet.pdf; see and an eyesore, Wash. Post (Mar. 18, 2022), https://
resources. In 2020, coal units were 17.5 percent and natural generally Steven C. Chapra, Surface Water-Quality Modeling, www.washingtonpost.com/business/2022/03/18/
gas units were 72.6 percent of marginal resources.” Monitoring McGraw-Hill (1997). bitcoin-mining-noise-pollution-appalachia/.
Analytics, LLC, State of the Market Report for PJM, Vol. 1, at
22 (Mar. 10, 2022), https://www.monitoringanalytics.com/ 129 Id.
reports/PJM_State_of_the_Market/2021/2021-som-pjm- 130 Kevin Williams, A neighborhood’s cryptocurrency mine: ‘Like
vol1.pdf. a jet that never leaves”, Wash. Post (Aug. 31, 2022), https://
www.washingtonpost.com/business/interactive/2022/
cryptocurrency-mine-noise-homes-nc/.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 31
131 Brian D. Stockman, Bitcoin mine brings heated residents 143 Naureen S. Malik & Michael Smith, Crypto Mania in Texas 160 GeoBitmine, Petition for Reconsideration, at 2, Idaho Pub.
to Ridgway Township meeting, Ridgway Record (Jun. 22, Risks New Costs and Strains on Shaky Grid, Bloomberg Util. Comm’n Case No. IPC-E-21-37 (Jul. 6, 2022), https://
2022), https://www.ridgwayrecord.com/news/bitcoin-mine- (Mar. 15, 2022), https://www.bloomberg.com/news/ puc.idaho.gov/Fileroom/PublicFiles/ELEC/IPC/IPCE2137/
brings-heated-residents-to-ridgway-township-meeting/ articles/2022-03-15/crypto-mania-in-texas-risks-new-costs- Intervenor/Geobitmine/20220706Petition%20for%20
article_00184b60-f27e-11ec-8220-134307a1c971.html. and-strains-on-shaky-grid. Reconsideration.pdf; Ethan Howland, GeoBitmine challenges
Idaho Power’s ‘discriminatory’ rate for cryptocurrency
132 Rob Hackford, Tough questions about North Tonawanda 144 U.S. House Committee on Energy & Commerce Staff,
mining facilities, Utility Dive (Jul. 7, 2022), https://
cryptocurrency facility, WRGZ (Mar. 16, 2022), https://www. Memorandum re: Hearing on Cleaning Up Cryptocurrency: The
www.utilitydive.com/news/geobitmine-idaho-power-
wgrz.com/article/news/local/complaints-continue-about-north- Energy Impacts of Blockchains, at 9 (Jan. 17, 2022), https://
cryptocurrency-mining-rate/626724/; Katelyn Weisbrod,
tonawanda-cryptocurrency-facility-erie-avenue/71-3f0949bc- energycommerce.house.gov/sites/democrats.energycommerce.
Bitcoin Mining Startup in Idaho Challenges Utility on Rates for
9aed-49dd-abad-2fd95dd855db; Rick Pfeiffer, Public weighs house.gov/files/documents/Briefing%20Memo_OI%20
Energy-Gobbling Data Centers, Inside Climate News (Aug. 2,
in on high-energy use zoning, Niagara Gazette (Aug. 25, 2022), Hearing_2022.01.20.pdf.
2022), https://insideclimatenews.org/news/02082022/
https://www.niagara-gazette.com/news/public-weighs-in-on-
145 McKenzie Delisle, Mining operation moves out of city for bitcoin-crypto-mining-idaho/.
high-energy-use-zoning/article_25b936dc-0e1b-11ed-b4e4-
winter, Press-Republican (Nov. 11, 2019), https://www.
030009e8482f.html; (50 people who lived close to the mining 161 In the Matter of the Application of Entergy Arkansas, LLC for
pressrepublican.com/news/local_news/mining-operation-
facility complained about the facility’s noise impacts). a Proposed Tariff Regarding Large Power High-Load Density
moves-out-of-city-for-winter/article_4c86c044-4e1e-5ad6-
(“Crypto Mining”), Direct Testimony of D. Andrew Owens, at 8
133 Vipal Monga, Bitcoin Mining Noise Drives Neighbors Nuts—a 8e6d-0ad19b875e35.html.
(Jul. 28, 2022), Ark. Pub. Serv. Comm’n, Docket No. 22-032-TF,
Giant Dentist Drill That Won’t Stop, Wall Street Journal (Nov.
146 Ariel Drehobl et al., How High are Household Energy Burdens? http://www.apscservices.info/pdf/22/22-032-TF_16_1.pdf.
12, 2021), https://www.wsj.com/articles/bitcoin-mining-
Am. Council for an Energy-Efficient Economy, at ii (Sept. 2020),
noise-drives-neighbors-nuts-giant-dentist-drill-that-wont- 162 Id. at 13 .
https://www.aceee.org/sites/default/files/pdfs/u2006.pdf.
stop-11636730904.
163 Id.
147 Ky. Pub. Serv. Comm’n, Order, In re: Elec. App’n of Big Rivers
134 Lois Parshley, How Bitcoin mining devastated this New
Elec. Corp. for a Certificate of Pub. Convenience & Necessity to 164 Direct Testimony of Caleb Bales, at 7-8 (Jul. 28, 2022),
York town, MIT Tech. Review (Apr. 18, 2022), https://
Construct a 161 kV Transmission Line in McKracken Cty., Ky., Ark. Pub. Serv. Comm’n, Docket No. 22-032-TF, http://www.
www.technologyreview.com/2022/04/18/1049331/
Case No. 2021-002705 (Jan. 14, 2022), https://psc.ky.gov/ apscservices.info/pdf/22/22-032-TF_17_1.pdf.
bitcoin-cryptocurrency-cryptomining-new-york/.
order_vault/orders_2022/202100275_01142022_01.pdf.
165 Steve Wright, Testimony Before the Subcommittee on Oversight
135 Joachim Klement, Geo-Economics: The Interplay between
148 Id.; Ky. Pub. Serv. Comm’n, Order, In re: Elec. Tariff Filing of and Investigations, at 2, 5, U.S. House Committee on Energy
Geopolitics, Econ., and Investments, CFA Inst. Rsch. Found.,
Big Rivers Elec. Corp. & Jackson Purchase Energy Corp., and Commerce (Jan. 20, 2022), https://energycommerce.
at 200 (Apr. 2021), https://www.cfainstitute.org/-/media/
Case No. 2021-00282 (Oct. 14, 2021), https://psc.ky.gov/ house.gov/sites/democrats.energycommerce.house.gov/files/
documents/book/rf-publication/2021/geo-economics-full.pdf;
pscscf/2021%20Cases/2021-00282//20211014_PSC_ documents/Witness%20Testimony_Wright_OI_2022.01.20.
Mark Peplow, Bitcoin poses major electronic-waste problem,
ORDER.pdf. pdf; see also Stephen Wright, Questions for the Record re:
Chem. & Eng’g News (Mar. 14, 2019), https://cen.acs.org/
Hearing on Cleaning Up Cryptocurrency: The Energy Impacts of
environment/sustainability/Bitcoin-poses-major-electronic- 149 Ky. Pub. Serv. Comm’n, Application, In re: Elec. Application
Blockchains (Jan. 20, 2022), https://docs.house.gov/meetings/
waste/97/i11; Economic Times, Bitcoin mining generates tonnes of Ky. Power Co. for an Ord. Approving the Co.’s Amended
IF/IF02/20220120/114332/HHRG-117-IF02-Wstate-
of e-waste: Study (Sept. 21, 2021), https://economictimes. Tariff E.D.R., Case No. 2022-00181 (Jun. 9, 2022),
WrightS-20220120-SD001.pdf.
indiatimes.com/markets/cryptocurrency/bitcoin-mining- https://psc.ky.gov/pscecf/2022-00181/lmscott%40aep.
generates-tonnes-of-e-waste-study/articleshow/86391133. com/06092022040357/KPCO_Application.pdf. 166 Paul Ciampoli, Public power can charge cryptocurrency firms
cms. higher rates: N.Y. PSC, Am. Public Power Ass’n (Mar. 16, 2018),
150 Ky. Energy & Env;t Cabinet, Energy Affordability, https://
https://www.publicpower.org/periodical/article/public-power-
136 Lumerin Protocol, How to prolong your ASIC miner’s lifespan, eec.ky.gov/Energy/Programs/EnergyAffordability/Pages/
can-charge-cryptocurrency-firms-higher-rates-ny-psc.
Medium (Nov. 23, 2021), https://medium.com/lumerin-blog/ default.aspx (“While Kentucky has relatively low energy
how-to-prolong-your-asic-miners-lifespan-360b68140a04; prices, it does have areas with high energy burdens that 167 David Erickson, Missoula County adopts emergency ‘green’
Minery, How Long Do ASICs Last? (May 16, 2022), https:// can threaten a household’s ability to pay for energy, and regulations for cryptocurrency; operators protest, Missoulian
minery.io/blog/how-long-do-asics-last/. force tough choices between paying energy bills and buying (Apr. 4, 2019), https://missoulian.com/news/local/
food, medicine, or other essentials.”); Emily Bennett, WSAZ missoula-county-adopts-emergency-green-regulations-for-
137 For background into the public health and environmental
Investigates | Kentucky Power bill spike, WSAZ (Jan. 28, 2022), cryptocurrency-operators-protest/article_57dd537d-b267-
concerns surrounding electronic waste, see generally Megan
https://www.wsaz.com/2022/01/28/wsaz-investigates- 5443-aa67-822358a1e666.html; David Erickson, Bitcoin
Avakian, E-waste: An Emerging Health Risk, Nat’l Inst. of
kentucky-power-bill-spike/ (explaining that Kentucky Power mining company announces plans for 50-megawatt data center
Env’t Health Scis. (Feb. 2014), https://www.niehs.nih.
ratepayers saw a major increase in their electric bills in in Polson, Missoulian (Jun. 3, 2022), https://missoulian.com/
gov/research/programs/geh/geh_newsletter/2014/2/
January 2022); Avi Asher-Schapiro, Coal to Crypto: The Gold news/local/bitcoin-mining-company-announces-plans-for-
spotlight/ewaste_an_emerging_health_risk_.cfm; U.S. EPA,
Rush Bringing Bitcoin Miners to Kentucky, Thomson Reuters 50-megawatt-data-center-in-polson/article_8da1ad15-ebf1-
Cleaning Up Electronic Waste (E-Waste) (last updated Nov.
Found. (Mar. 14, 2022), https://longreads.trust.org/item/ 5cba-9158-35406e649073.html.
2, 2021), https://www.epa.gov/international-cooperation/
bitcoin-mining-US-coal-country-climate.
cleaning-electronic-waste-e-waste. 168 See, e.g., Jacob Elkin, New Sabin Center White Paper Assesses
151 Avi Asher-Schapiro, Coal to Crypto: The Gold Rush Bringing the New York State Executive Branch’s Authority to Enact a
138 Alex de Vries & Christian Stoll, Bitcoin’s growing e-waste
Bitcoin Miners to Kentucky, Thomson Reuters Found. Moratorium on the Permitting of Consolidated Proof-Of-Work
problem, 175 Res., Conserv. & Recycling 105901 (Dec. 2021),
(Mar. 14, 2022), https://longreads.trust.org/item/ Cryptocurrency Mining Facilities, Columbia Law School Sabin
https://www.sciencedirect.com/science/article/abs/pii/
bitcoin-mining-US-coal-country-climate. Center for Climate Change Law (Mar. 21, 2022), https://
S0921344921005103?dgcid=author.
blogs.law.columbia.edu/climatechange/2022/03/21/
152 Neb. Public Power District, 2021 Financial Report, at
139 Id.; BBC, Bitcoin mining produces tons of waste new-sabin-center-white-paper-assesses-the-new-york-state-
6, https://docs.nppd.com/2021FinancialReport.pdf;
(Sept. 20, 2021), https://www.bbc.com/news/ executive-branchs-authority-to-enact-a-moratorium-on-the-
Peter Maloney, Bitcoin mining operation to add flexible
technology-58572385; Digiconomist, Bitcoin Elec. Waste permitting-of-consolidated-proof-of-work-cryptocurrency-
load to NPPD’s area, Am. Public Power Ass’n (Mar. 17,
Monitor (last visited Aug 29, 2022), https://digiconomist.net/ mining-facilities/.
2021), https://www.publicpower.org/periodical/article/
Bitcoin-electronic-waste-monitor/.
bitcoin-mining-operation-add-flexible-load-nppds-area. 169 Fitch Ratings, Crypto Mining Poses Challenges to Public Power
140 Peter Howson & Alex de Vries, Preying on the poor? Utilities (Jan. 24, 2022), https://www.fitchratings.com/
153 Matteo Benetton et al., When Cryptocurrency Comes to Town:
Opportunities and challenges for tackling the social and env’t research/us-public-finance/crypto-mining-poses-challenges-
High Electricity-Use Spillovers to the Local Economy, SSRN, at 3
threats of cryptocurrencies for vulnerable and low-income to-public-power-utilities-24-01-2022 (“Digital asset or crypto
(May 2021, last updated Aug. 2022), https://papers.ssrn.com/
communities, 84 Energy Rsch. & Soc. Sci. 102394 (2022), currency mining in the US could pose power supply risks to public
sol3/papers.cfm?abstract_id=3779720.
https://www.sciencedirect.com/science/article/abs/pii/ power utilities unless they are sufficiently mitigated. . . Crypto
S2214629621004813. 154 Id. at 1, 5. mining is energy intensive and requires a considerable amount of
155 See Application of Idaho Power Co. for Authority to Establish power that can significantly increase a utility’s overall electrical
141 Cherokee Scout, Landfill cracking down on ‘foam’ from crypto
a New Schedule to Serve Speculative High-Density Load load. Utilities must balance the revenue prospect of increased
mining (July 26, 2022), https://www.cherokeescout.com/
Customers, at 5, Idaho Pub. Util. Comm’n Case No. IPC-E-21-37 electrical sales with the commitment to procure or generate large
local-newsletter/landfill-cracking-down-foam-crypto-mining
(Nov. 4, 2021), https://puc.idaho.gov/Fileroom/PublicFiles/ amounts of power for crypto mining operations.”).
(“The revisions include language that bans materials such
as polyethylene, polypropylene and similar types of packing ELEC/IPC/IPCE2137/CaseFiles/20211104Application.pdf. 170 Gabriel Pacyniak, Greening the Old New Deal: Strengthening Rural
materials from commercial haulers from any nonresidential 156 Id. at 3. Electric Cooperative Supports and Oversight to Combat Climate
point of origin. . . . [since this] ‘incompressible foam cannot be Change, Missouri Law Review, 413 (2020), https://scholarship.
compacted with our compactor.’”). 157 Id. at 14. law.missouri.edu/mlr/vol85/iss2/20/.
142 For example, in Idaho, investor-owned utility Idaho Power 158 Idaho Power, Compliance Filing — Tariff Schedule 20, Idaho Pub. 171 Cooperatives that receive financing from the Rural Utility Service
requested that cryptominers prepay for required infrastructure Util. Comm’n Case No. IPC-E-21-37 (Jun. 15, 2022), https:// (RUS) of the U.S. Department of Agriculture or sell less than 4
upgrades to prevent stranded assets on remaining ratepayers puc.idaho.gov/Fileroom/PublicFiles/ELEC/IPC/IPCE2137/ million MWh of electricity per year (and any cooperative owned
when the economics of cryptocurrency change. Idaho Pub. CaseFiles/20220705Final%20Approved%20Tariffs.pdf. by members who meet one or both of these qualifications) are
Utils. Comm’n, Application of Idaho Power Co. for Authority to 159 Idaho Pub. Util. Comm’n, Order No. 35428, at 6, Case No. exempt from FERC oversight under the Federal Power Act. As a
Establish a New Schedule to Serve Speculative High-Density IPC-E-21-37 (Jun. 15, 2022), https://puc.idaho.gov/Fileroom/ lender, RUS does impose some requirements on cooperatives,
Load Customers, at 13-14, Case No. IPC-E-21-27 (Nov. 4, PublicFiles/ELEC/IPC/IPCE2137/OrdNotc/20220615Final_ however, these are primarily designed to ensure repayment,
2021), https://puc.idaho.gov/Fileroom/PublicFiles/ELEC/ Order_No_35428.pdf. rather than protect ratepayers. See 16 U.S.C.A. § 824(f) (West
IPC/IPCE2137/CaseFiles/20211104Application.pdf; see also 2015).
Justine Calma, Texas’ Fragile Grid Isn’t Ready for Crypto Mining’s
172 Gabriel Pacyniak, Greening the Old New Deal: Strengthening Rural
Explosive Growth, The Verge (July 14, 2022), https://www.
Electric Cooperatives Supports and Oversight to Combat Climate
theverge.com/2022/7/14/23206795/bitcoin-crypto-mining-
Change, Missouri Law Review, 415 (2020), https://scholarship.
electricity-texas-grid-energy-bills-emissions (“Unfortunately,
law.missouri.edu/mlr/vol85/iss2/20/.
the costs for building out all this infrastructure are often passed
on to consumers — particularly if it’s done at a huge scale under a
rushed timeline as crypto mining might demand.”).

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 32
173 Jim Cooper, Policy Essay: Electric Co-Operatives: From 187 Naureen S. Malik, Texas crypto miners could require as much 202 Laura Counts, Power-hungry cryptocurrency miners push up
New Deal to Bad Deal? 45 Harv. J. on Legis. 335, 352, power as all of New York state, Bloomberg (Aug. 26, 2022), electricity costs for locals, Berkeley Haas (Aug. 3, 2021),
361 (2008), https://harvardjol.com/wp-content/uploads/ https://www.bloomberg.com/news/articles/2022-08-26/texas- https://newsroom.haas.berkeley.edu/research/power-hungry-
sites/17/2013/10/335-376_Cooper1.pdf. crypto-rush-may-need-as-much-power-as-entire-state-of-n-y. cryptominers-push-up-electricity-costs-for-locals/ (quoting
Assistant Professor Giovanni Compiani, one of the co-authors
174 See id. at 349. 188 ERCOT, Fact Sheet (July 2022), https://www.ercot.com/files/
of Matteo Benetton et al., When Cryptocurrency Comes to
docs/2022/02/08/ERCOT_Fact_Sheet.pdf.
175 Haley Cawthon, AboutBit to open new crypto mining facility Town: High Electricity-Use Spillovers to the Local Economy,
in Southern Indiana, Business Journals (May 11, 2022), 189 Naureen S. Malik, Texas crypto miners could require as much SSRN, at 3 (Aug. 2022), https://papers.ssrn.com/sol3/papers.
https://www.bizjournals.com/louisville/inno/stories/ power as all of New York state, Bloomberg (Aug. 26, 2022), cfm?abstract_id=3779720).
news/2022/05/11/aboutbit-merom-mining.html. As of this https://www.bloomberg.com/news/articles/2022-08-26/texas-
203 Fitch Ratings, Crypto Mining Poses Challenges to Public Power
writing, the Merom sale is still subject to FERC approval under crypto-rush-may-need-as-much-power-as-entire-state-of-n-y.
Utilities (Jan. 24, 2022), https://www.fitchratings.com/
Section 203 of the Federal Power Act. See In re Hallador Power
190 33 GW of cryptomining equipment operating at 85% load factor research/us-public-finance/crypto-mining-poses-challenges-
Co., LLC, FERC Docket No. EC22-52.
results in 245.7 TWh per year. Total Florida consumption in to-public-power-utilities-24-01-2022.
176 Kenzie Dillow, Cryptocurrency mining company expanding; 2021 was 244 TWh. Source: Energy Information Administration,
204 See Ky. Pub. Serv. Comm’n, Case No. 2021-00282, In re: Elec.
Utility company investing millions in Paducah, WSILTV Annual Electric Power Industry Report, Form EIA-861. (Last
Tariff Filing of Big Rivers Elec. Corp. and Jackson Purchase
(Jun. 9, 2021), https://www.wsiltv.com/news/consumer/ accessed August 3, 2022). https://www.eia.gov/electricity/
Energy Corp., Order at 12 (Oct. 14, 2021), https://psc.ky.gov/
cryptocurrency-mining-company-expanding-utility-company- data/eia861/
pscscf/2021%20Cases/2021-00282//20211014_PSC_
investing-millions-in-paducah/article_5a08198a-fba2-5c89-
191 MacKenzie Sigalos, Bitcoin miners say they’re helping to fix the ORDER.pdf.
aa8a-1a30502fe567.html.
broken Texas electric grid — and Ted Cruz agrees, CNBC (updated
205 Core Scientific, Inc., Form 10-K, Annual Report, at 11 (for
177 David Zoeller, Bitcoin mining company plans Paducah expansion, Dec. 5, 2021), https://www.cnbc.com/2021/12/04/bitcoin-
year ending Dec. 31, 2021)), https://www.sec.gov/ix?doc=/
Kentucky Today (Oct. 6, 2021), https://www.kentuckytoday. miners-say-theyre-fixing-texas-electric-grid-ted-cruz-agrees.
Archives/edgar/data/1839341/000119312522088850/
com/state/bitcoin-mining-company-plans-paducah-expansion/ html.
d268076d10k.htm.
article_bea8ae26-7bc7-5994-b703-d26745cc9d27.html.
192 Tech Transparency Project, Cryptocurrency Miners’ Sweetheart
206 In its Form 10-K, Marathon offers that its stock value of $3.1
178 Naureen S. Malik & Michael Smith, Crypto Mania in Texas Deal with Texas Threatens an Already Fragile Grid, at 2-3 (July
billion is based on the closing sale price of registrant’s common
Risks New Costs and Strains on Shaky Grid, Bloomberg 21, 2022), https://www.techtransparencyproject.org/sites/
stock as quoted on the Nasdaq Capital Market on June 30,
(Mar. 15, 2022), https://www.bloomberg.com/news/ default/files/Crypto%20Texas%20Report.pdf (citing Alex Liegl
2021. See Marathon Digital Holdings, Inc., Form 10-K, Annual
articles/2022-03-15/crypto-mania-in-texas-risks-new-costs- (@alexanderliegl), Twitter (Aug. 6 2020), https://twitter.com/
Report, at 1, 19 (for year ending Dec. 31, 2021), https://www.
and-strains-on-shaky-grid. alexanderliegl/status/1291395637318234112).
sec.gov/ix?doc=/Archives/edgar/data/0001507605/0001493
179 Id. 193 Naureen S. Malik, Crypto Miners in Texas Need ‘Approval to 15222006446/form10-k.htm.
Energize’ in New Grid Hurdle, Bloomberg (Mar. 30, 2022),
180 Fitch Ratings, Crypto Mining Poses Challenges to Public Power 207 Stronghold Digital Mining, Inc., Form 10-K, Annual Report, at 16
https://www.bloomberg.com/news/articles/2022-03-30/
Utilities (Jan. 24, 2022), https://www.fitchratings.com/ (for year ending Dec. 31, 2021), https://www.sec.gov/ix?doc=/
texas-crypto-miners-need-approval-to-energize-in-grid-hurdle.
research/us-public-finance/crypto-mining-poses-challenges- Archives/edgar/data/0001856028/000162828022007706/
to-public-power-utilities-24-01-2022. 194 Id. sdig-20211231.htm.
181 Provided by Fossil Free Tompkins. See also N.Y. State Senate 195 Bloomberg Wire, Texas now requiring crypto miners to seek 208 Alex Brown, Startup to Establish Crypto Mining Facility in
Finance Committee & Assembly Ways and Means Committee, ‘approval to energize’ before plugging into grid, Dallas Morning Sullivan County, Inside Ind. Business (May 11, 2022),
Joint Leg. Hearing in the Matter of the 2022–2023 Exec. Budget News (Mar. 30, 2022), https://www.dallasnews.com/business/ https://www.insideindianabusiness.com/articles/
on Envt’l Conservation, at 2:31:32 (Feb. 1, 2022), https://www. energy/2022/03/30/texas-now-requiring-crypto-miners-to- startup-to-establish-crypto-mining-facility-in-sullivan-county.
youtube.com/watch?v=NaB5hqsEqMM&t=9092s (New York seek-approval-to-energize-before-plugging-into-grid/; Chris
209 Susan Arbetter, Greenidge Generation permit renewal draws
State Energy Research and Development Authority President Reeder & Miguel Suazo, ERCOT Now Requires Cryptocurrency
supporters, critics over cryptocurrency mining, NY State
Doreen Harris stated, “There could be a very significant impact Miners to Provide Info. on Their Impact to the Texas Power Grid,
of Politics (Oct. 13, 2021), https://nystateofpolitics.com/
on New York’s load resulting from crypto, depending on the JDSupra (Apr. 6, 2022), https://www.jdsupra.com/legalnews/
state-of-politics/new-york/politics/2021/10/13/greenidge-
penetration of the resource.”); Lois Parshley, How Bitcoin mining ercot-now-requires-cryptocurrency-6065651/.
generation-permit-renewal-draws-supporters--critics-over-
devastated this New York town: Between rising electricity rates
196 Morgan Riddell, Brenham officials discuss cryptocurrency cryptocurrency-mining. In contrast, Finger Lakes region’s driving
and soaring climate costs, cryptomining is taking its toll on
and their ability to sustain energy demands that come with it, economic engine, where Greenidge is located, is agriculture and
communities, MIT Tech. Review (Apr. 18, 2022), https://www.
KBTX (Mar. 28, 2022), https://www.kbtx.com/2022/03/29/ tourism. This generates $3 billion into New York’s economy
technologyreview.com/2022/04/18/1049331/bitcoin-
brenham-officials-discuss-cryptocurrency-their-ability- annually and supports approximately 60,000 jobs — all of which
cryptocurrency-cryptomining-new-york/ (One town official in
sustain-energy-demands-that-come-with-it/. rely heavily on clean air and water. Sen. Gillibrand, Legislation
Plattsburgh “recalls one prospector calling to see if he could get
197 Josh Saul, Georgia is becoming the new hot spot for growing To Designate Finger Lakes Region As A National Heritage Area
five gigawatts—‘I said, “Excuse me. That’s a quarter of what New
crypto in the U.S.—and Bitcoin miners are taking notice, Passes Key Committee (Mar. 12, 2018), https://www.gillibrand.
York state uses on a given day!”’ Plattsburgh was soon receiving a
Fortune (Feb. 7, 2022), https://fortune.com/2022/02/07/ senate.gov/news/press/release/senator-gillibrands-legislation-
major mining application every week.”).
georgia-hot-spot-bitcoin-mining-us-crypto-energy/. to-designate-finger-lakes-region-as-a-national-heritage-area-
182 Erica Proffer, Here is why death totals from Winter Storm Uri passes-key-committee; see also Tourism Economics, Economic
may vary, KVUE (Feb. 15, 2022), https://www.kvue.com/ 198 Avi Asher-Schapiro, Coal to crypto: The gold rush bringing bitcoin Impact of Visitors in New York (2019), https://www.fingerlakes.
article/weather/winter-storm/here-is-why-death-totals-from- miners to Kentucky, Thomson Reuters Found. (Mar. 14, 2022), org/sites/default/files/Research%20Center/Oxford%20
winter-storm-uri-may-vary/269-f2bf277f-74d9-443b-ab2e- https://longreads.trust.org/item/bitcoin-mining-US-coal- Economics/Finger-Lakes-2019-NYS-Tourism-Economic-
ff89f336f3ec. country-climate; see also Igor Makarov & Antoinette Schoar, Impact.pdf; Tourism Economics, The Economic Impact of
Blockchain Analysis of the Bitcoin Market, Nat’l Bureau of Econ. Tourism in New York (2018), https://assets.simpleviewinc.
183 Chris Stipes, New Report Details Impact of Winter Storm Uri
Rsch., Working Paper No. 29396, at 4 (Oct. 2021), https:// com/simpleview/image/upload/v1/clients/fingerlakesvc/
on Texans, Univ. of Houston (Mar. 29, 2021), https://uh.edu/
www.nber.org/system/files/working_papers/w29396/w29396. NYS_Tourism_Impact_2018_Finger_Lakes_CLIENT_294d3cec-
news-events/stories/2021/march-2021/03292021-hobby-
pdf (“The top 10% of [cryptocurrency] miners control 90% [of 3088-4351-bf64-2439830d34d1.pdf.
winter-storm.php.
mining] and just 0.1% (about 50 miners) control close to 50%
184 Tech Transparency Project, Cryptocurrency Miners’ Sweetheart of mining capacity.”). 210 Adam Willis, Large-scale crypto mining data center planned
Deal with Texas Threatens an Already Fragile Grid (July 21, for western North Dakota oil patch, In Forum (Jan. 26, 2022),
199 Bill Estep, Kentucky’s digital gold rush. What’s behind the crypto https://www.inforum.com/business/large-scale-crypto-mining-
2022), https://www.techtransparencyproject.org/sites/
mining boom in coal country? Lexington Herald Leader (Apr. data-center-planned-for-western-north-dakota-oil-patch.
default/files/Crypto%20Texas%20Report.pdf (citing Riot
21, 2022), https://www.kentucky.com/news/state/kentucky/
Blockchain, Inc., Form 10-Q, Quarterly Report (Aug. 23, 2021), 211 U.S. House Committee on Energy & Commerce Staff,
article259880855.html.
https://seekingalpha.com/filing/5677790); Fortune, How Memorandum re Hearing on Cleaning Up Cryptocurrency: The
Riot Blockchain capitalized on a hot Texas summer to make 200 Bootstrap Energy, LLC, Project Corpus Christi Energy Park, at Energy Impacts of Blockchains, at 9 (Jan. 17, 2021), https://
more money selling power than mining crypto, https://fortune. 22–24 (Mar. 25, 2022), https://corpuschristi.legistar.com/ energycommerce.house.gov/sites/democrats.energycommerce.
com/2022/08/13/riot-blockchain-bitcoin-mining-texas- View.ashx?M=F&ID=10675758&GUID=10B47135-9684- house.gov/files/documents/Briefing%20Memo_OI%20
electric-grid-subsidy/ (Aug. 13, 2022) (“For many hours, spot 416F-A8C0-D46E8AA2B5AE; see also City of Corpus Christi, Hearing_2022.01.20.pdf.
prices soared so high that Riot could sell power to Ercot for 50 Agenda Memorandum re Disannexation and Amendment
Industrial District #2 Boundaries, at 2 (Mar. 3, 2022) https:// 212 Pia Singh, Bitcoin miners flocked to an upstate New York town
or more times the low fixed price it was paying” for electricity to
corpuschristi.legistar.com/View.ashx?M=F&ID=10666001&GU for cheap energy — then it got complicated, CNBC (June 24,
mine cryptocurrency).
ID=E7BE68AC-B0F7-4198-B758-739D20E1814D (“However, 2021). https://www.cnbc.com/2021/06/24/bitcoin-miners-
185 Cynthia & George Mitchell Found., Statement: Never Again One flocked-to-upstate-new-york-for-cheap-energy-then-it-got-
staff’s financial analysis concludes the City will forego
Year Late: A Reliability Report Card (Feb. 14, 2022), https:// complicated.html.
$70,501,509 over a ten-year period if the same development
www.cgmf.org/blog-entry/475/Statement-Never-Again-One-
were constructed and operated outside of an Industrial District 213 Lois Parshley, How Bitcoin mining devastated this New
Year-Later-%7C-A-Reliability-Report-Card.html. See also
Agreement in the city limits.”). York town: Between rising electricity rates and soaring
Cynthia & George Mitchell Found., Report: Never Again: How to
201 City of Corpus Christi, Agenda Memorandum re Disannexation climate costs, cryptocurrency mining is taking its toll on
Prevent Another Major Texas Electricity Failure (Jun. 3, 2021),
and Amendment Industrial District #2 Boundaries, at communities, MIT Tech. Review (Apr. 18, 2022), https://
https://cgmf.org/blog-entry/435/REPORT-%7C-Never-Again-
2 (Mar. 3, 2022) https://corpuschristi.legistar.com/ www.technologyreview.com/2022/04/18/1049331/
How-to-prevent-another-major-Texas-electricity-failure.html.
View.ashx?M=F&ID=10666001&GUID=E7BE68 bitcoin-cryptocurrency-cryptomining-new-york/.
186 ERCOT, Seasonal Assessment of Resource Adequacy for
AC-B0F7-4198-B758-739D20E1814D. 214 Steve Wright, Testimony Before the Subcommittee On Oversight
the ERCOT Region (SARA) Winter 2021/2022 (Nov. 19,
And Investigations, House Energy and Commerce Committee,
2021), https://www.ercot.com/files/docs/2021/11/19/
at 3 (Jan. 20, 2022), https://energycommerce.house.gov/
SARA_Winter2021-22.pdf; Erin Douglas, Texas grid vulnerable
sites/democrats.energycommerce.house.gov/files/documents/
to blackouts during severe winter weather, even with new
Witness%20Testimony_Wright_OI_2022.01.20.pdf.
preparations, ERCOT estimates show, Texas Tribune (Nov.
20, 2021), https://www.texastribune.org/2021/11/20/
texas-grid-ercot-winter-estimates/.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 33
215 David Jeans, Data in the Dark: How Big Tech Secretly 227 Core Scientific, Press Release, North American Blockchain 239 Author’s calculation from CAISO, Production and Curtailments
Secured $800 Million in Tax Breaks for Data Centers, Infrastructure Leader Core Scientific to Expand Current Capacity Data — 2021 (last visited Aug. 29, 2022), http://www.caiso.
Forbes (Aug. 19, 2021), https://www.forbes.com/sites/ With New 300MW Denton, Texas Data Center (Oct. 7, 2021), com/Documents/ProductionAndCurtailmentsData_2021.
davidjeans/2021/08/19/data-in-the-dark-how-big-tech- https://corescientific.com/press/north-american-blockchain- xlsx. There were 15,675 five-minute intervals in 2021 where
secretly-secured-800-million-in-tax-breaks-for-data- infrastructure-leader-core-scientific-to-expand-current- curtailment for solar and wind were >= 200 MW. Since there are
centers/?sh=2e6992fc6b43. capacity-with-new-300mw-denton-texas-data-center/. 105,120 five-minute intervals in a year, that is equivalent to just
under 15%.
216 Avi Asher-Schapiro, Coal to crypto: The gold rush bringing 228 Core Scientific, Inc., Form 10-K, Annual Report, at 5 (for
bitcoin miners to Kentucky, Thomson Reuters Found. year ending Dec. 31, 2021), https://www.sec.gov/ix?doc=/ 240 See Rui Shan & Yaojin Sun, Bitcoin Mining to Reduce the
(Mar. 14, 2022), https://longreads.trust.org/item/ Archives/edgar/data/1839341/000119312522088850/ Renewable Curtailment: A Case Study of CAISO, at 6 Fig. 3 (Aug.
bitcoin-mining-US-coal-country-climate. d268076d10k.htm 7, 2019), http://dx.doi.org/10.2139/ssrn.3436872.
217 Bitcoin Mining Council, Bitcoin Mining Council Survey Confirms 229 Id. at 8; Tenn. Valley Auth., TVA at a Glance (last visited Aug. 29, 241 See generally Square Bitcoin Clean Energy Initiative, Bitcoin is
year on year improvements in sustainable power mix (Apr. 25, 2022), https://www.tva.com/about-tva/tva-at-a-glance. Key to an Abundant, Clean Energy Future (Apr. 2021) https://
2022), https://bitcoinminingcouncil.com/bitcoin-mining- assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlTt7
230 Core Scientific, Inc., Form 10-K, Annual Report, at 6 (for
council-survey-confirms-year-on-year-improvements-in- QK/e7bcba47217b60423a01a357e036105e/BCEI_White_
year ending Dec. 31, 2021), https://www.sec.gov/ix?doc=/
sustainable-power-mix-and-technological-efficiency/. Paper.pdf; Sean Stein Smith, Crypto Power Usage Is Helping To
Archives/edgar/data/0001839341/000119312522088850/
Spur Renewable Energy Investments, Forbes (June 5, 2022),
218 Laurie Clarke, How do we solve bitcoin’s carbon d268076d10k.htm.
https://www.forbes.com/sites/seansteinsmith/2022/06/05/
problem? Guardian (Jan. 30, 2022), https://www.
231 Argo Blockchain, LLC, 2021 Sustainability Report, at 6 (Aug. 18, crypto-power-usage-is-helping-to-spur-renewable-energy-
theguardian.com/technology/2022/jan/30/
2022), https://assets.website-files.com/61817e625cc1f4f31 investments/?sh=64dc7eef2cb6; Brady Dale, Industry argues
how-do-we-solve-bitcoins-carbon-problem.
f76f168/62fd4268c4845b503ae68e2b_Argo%202021%20 how bitcoin drives demand for renewables, Axios (May 24,
219 Cambridge Centre for Alt. Finance, 3rd Global Cryptoasset Sustainability%20Report%20v9%20WEB.pdf. 2022), https://www.axios.com/2022/05/24/crypto-bitcoin-
Benchmarking Study, at 11 (Sept. 2020), https://www.jbs. mining-industry-demand-for-energy-renewables; Ariana Garcia,
232 For more about RECs, see, e.g., S&P Global, Problematic
cam.ac.uk/faculty-research/centres/alternative-finance/ The Texas grid can survive a boom in cryptocurrency mining—but
corporate purchases of clean energy credits threaten
publications/3rd-global-cryptoasset-benchmarking-study/. for how long? Houston Chronicle (Nov. 1, 2021), https://
net zero goals, https://www.spglobal.com/esg/insights/
220 Claiming carbon neutrality on the basis of proximity is not the problematic-corporate-purchases-of-clean-energy-credits- www.chron.com/politics/article/texas-power-grid-crypto-
only way miners have inflated their environmental credentials. threaten-net-zero-goals; Bloomberg, Flawed Renewable mining-16572771.php.
For example, Riot Blockchain, one of the largest single Bitcoin Energy Credits Are Derailing Climate Efforts (June 9, 2022), 242 Square Bitcoin Clean Energy Initiative, Bitcoin is Key to an
miners in the United States, in a response to a Senate inquiry, https://www.bloomberg.com/news/articles/2022-06-09/ Abundant, Clean Energy Future (Apr. 2021) https://assets.
cites its smaller Massena, New York existing hydro-connected flawed-renewable-energy-credits-are-derailing-climate-efforts. ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlTt7QK/
facility as a “sustainable energy source” and cites the average e7bcba47217b60423a01a357e036105e/BCEI_White_Paper.
233 Greenidge Generation Holdings Inc., Greenidge Generation Bitcoin
generating mix of Texas for its much larger Whinstone facility, pdf.
Mining Operation To Be Carbon Neutral in 2021 and Beyond
claiming that since wind and solar comprise 28% of the grid,
(May 14, 2021), https://www.prnewswire.com/news-releases/ 243 Compute North, Compute North Begins Energization of 280MW
that it is somehow supporting renewables. Riot Blockchain, Inc.,
greenidge-generation-bitcoin-mining-operation-to-be- TIER 0™ Data Center Colocated on West Texas Wind Farm (Aug.
Letter from Jason Les, Chief Executive Officer of Riot Blockchain,
carbon-neutral-in-2021-and-beyond-301291782.html; Peter 8, 2022), https://www.computenorth.com/news_release/
Inc., to U.S. Senators and Representatives (Feb. 24, 2022),
Mantius, Greenidge Wows Wall Street With Story of ‘Carbon compute-north-begins-energization-of-280mw-tier-0-data-
https://www.warren.senate.gov/imo/media/doc/Riot%20
Neutral’ Bitcoin Mining; But Is It Only ‘Window Dressing?’, center-co-located-on-west-texas-wind-farm/.
Response%20Letter%202.24.20223.pdf. Similarly, in early
Waterfront Online (Aug. 26, 2021), https://waterfrontonline.
2022, Marathon announced its “commitment” for its “mining 244 Marathon Digital Holdings, Form 10-Q, Quarterly Report (June
blog/2021/08/26/greenidge-wows-wall-street-with-story-
operations to be 100% carbon neutral by the end of 2022.” 30, 2022), https://ir.marathondh.com/sec-filings/all-sec-
of-carbon-neutral-bitcoin-mining-but-is-it-little-more-than-
Marathon Digital Holdings, Marathon Digital Holdings Announces filings/content/0001493152-22-021799/form10-q.htm.
window-dressing/.
Intent to Transition Hardin, Montana Bitcoin Mining Operations
245 U.S. EIA, Form 860. 2021 Early Release. File 3_2_Wind_Y2021_
to More Sustainable Power Sources (Aug. 5, 2022), https:// 234 HBO, Carbon Offsets: Last Week Tonight with John Oliver.
Early_Release. https://www.eia.gov/electricity/data/eia860/xls/
ir.marathondh.com/news-events/press-releases/detail/1282/ Season 9 - Episode 21 (Aug. 22, 2022), https://pressroom.
eia8602021ER.zip.
marathon-digital-holdings-announces-intent-to-transition. warnermedia.com/na/video/carbon-offsets-last-week-tonight-
However, the mining company is served by a coal-heavy utility john-oliver?language_content_entity=en; Raphael Calel et al., 246 Texas Blockchain Council, Bitcoin Mining (last visited Aug. 29,
in North Dakota (Otter Tail Power, through a hosting agreement Do carbon offsets offset carbon? Centre for Climate Change 2022), https://texasblockchaincouncil.org/bitcoin-mining.
with Applied Blockchain) as well as a direct agreement with a gas Econs. & Policy, at 1 (Nov. 2021), https://www.lse.ac.uk/
247 Lancium Balancing Energy, Lancium Breaks Ground On First
plant in Texas (Wolf Hollow, through a hosting agreement with granthaminstitute/wp-content/uploads/2021/11/working-
Clean Campus In Fort Stockton, Texas (Sept. 15, 2021), https://
Compute North in Granbury, TX). paper-371-Calel-et-al..pdf.
lancium.com/press-release/lancium-breaks-ground-on-first-
221 Argo Blockchain LLC, 2021 Sustainability Report, at 6 (Aug. 18, 235 For more on blockchain-enabled offset tracking, see, e.g., Andrew clean-campus-in-fort-stockton-texas/.
2022), https://assets.website-files.com/61817e625cc1f4f31 Bruce, The Near-Term Future Of Blockchain: Tracking Carbon
248 Robert Walton, Texas Expands Industrial Demand Response
f76f168/62fd4268c4845b503ae68e2b_Argo%202021%20 Offsets, Forbes (Aug. 16, 2021), https://www.forbes.com/
Program As Grid Goes to the Brink of Rolling Outages, Utility
Sustainability%20Report%20v9%20WEB.pdf. sites/forbestechcouncil/2021/08/16/the-near-term-future-
Dive (July 15, 2022), https://www.utilitydive.com/news/
of-blockchain-tracking-carbon-offsets/?sh=2cebf2585790;
222 Id. at 11. texas-expands-industrial-demand-response-program-as-grid-
Akshat Rathi & Natasha White, The Biggest Crypto Effort to End
goes-to-the-brink/627358/.
223 Id. at 4, 7. For this particular instance, it is worthwhile to note Useless Carbon Offsets Is Backfiring, Bloomberg (Apr. 7, 2022),
that voluntary RECs (such as those in Texas) are created as https://www.bloomberg.com/news/articles/2022-04-07/ 249 Robert Walton, Bitcoin mining as a grid
an additional value stream from producers that have typically the-biggest-crypto-effort-to-end-useless-carbon-offsets-is- resource? ‘It’s complicated.”, Utility Dive (Feb.
built cost-effective clean energy and are seeking incremental backfiring; Justine Calma, Crypto Can’t Fix Carbon Offsets — But 17, 2022), https://www.utilitydive.com/news/
revenues. Texas RECs are the lowest cost (and least meaningful) Crypto Fans Are Trying Anyway, The Verge (Aug. 18, 2022), bitcoin-mining-as-a-grid-resource-its-complicated/617896/.
RECs in the nation. Amanda Luhavalja, Texas Renewable Energy https://www.theverge.com/2022/8/18/23310254/ 250 U.S. EIA, Reserve electric generating capacity helps keep the
Credit Markets Advance; Green-E Prices Back Off, S&P Global carbon-offset-credits-crypto-tokens-adam-neumann-wework. lights on (June 1, 2012), https://www.eia.gov/todayinenergy/
Market Intelligence (Aug. 28, 2020), https://www.spglobal.com/ detail.php?id=6510.
236 See, e.g., Wattum Mgmt., Bitcoin Mining as a Solution to
marketintelligence/en/news-insights/latest-news-headlines/
the Energy Curtailment Dilemma (Sept. 21, 2021), https:// 251 U.S. Dep’t of Energy, Demand Response, https://www.
texas-renewable-energy-credit-markets-advance-green-e-
wattummanagement.com/blog/bitcoin-mining-as-a-solution- energy.gov/oe/activities/technology-development/
prices-back-off-60107962.
to-the-energy-curtailment-dilemma/; Russell Gold, Bitcoin grid-modernization-and-smart-grid/demand-response.
224 Marginal emissions rates have been the subject of study for well Miners Could Save the Texas Grid — or Sink It, Texas Monthly
over a decade. Kris R. Voorspools & William D. D’haeseleer, The (Aug. 2022), https://www.texasmonthly.com/news-politics/ 252 Ironically, in touting their extreme flexibility to load interruptions,
Influence of the Instantaneous Fuel Mix for Electricity Generation texas-bitcoin-mining-solar-power-grid/; Nic Carter & Ross proof-of-work currency miners are acknowledging the limited
on the Corresponding Emissions, 25 Energy 1119-38 (2000), Stevens, Bitcoin Net Zero (Sept. 2021), https://assets. benefits of their operations — only the company’s Bitcoin
https://doi.org/10.1016/S0360-5442(00)00029-3; EPA website-files.com/614e11526f6630959fc98679/616 accretion rate, and therefore profit margin, notices the
offers a tool designed for state air regulators to assess the value df63a27a7ec339f5e6a80_NYDIG-BitcoinNetZero_SML. interruption.
of clean energy programs by assessing the marginal emissions pdf; @MinersetCrypto, Bitcoin is the ultimate green tech, 253 ERCOT issued “conservation appeals” to Texas ratepayers and
value of the programs. U.S. EPA, Avoided Emissions and Twitter (Apr. 22, 2022), https://twitter.com/MinersetCrypto/ business on July 10, 2022 and July 13, 2022 –along with
Generation Tool (AVERT), https://www.epa.gov/avert. status/1517555906896175107; Margot Paez & Troy Cross, a statement on May 13, 2022, to calm anxiety by Texans of
Bitcoin and the Energy Transition, Bitcoin Policy Inst. (last visited blackouts during unseasonably hot weather during the month
225 For an example, imagine a system with only two generators:
Aug. 29, 2022), https://uploads-ssl.webflow.com/627aa61567 of May. See ERCOT, ERCOT Issues Conservation Appeal to
a nuclear power plant with effectively constant output, and a
6bdd1d47ec97d4/62f41b9ce54e014f9869efa7_OSTP.docx. Texans and Texas Businesses (July 10, 2022), https://www.
gas-fired power plant that ramps up to meet peak loads, and
pdf. ercot.com/news/release?id=90030206-5cf5-db8e-13d1-
turns down at night. Assuming there is enough excess in the
system, a new load entering the system will drive an increase 237 California Independent System Operator (CAISO), Managing f8fe2bd0128f; ERCOT, REVISED: ERCOT Issues Conservation
in the output of the gas plant, as the nuclear plant is unable to Oversupply (2022), http://www.caiso.com/informed/Pages/ Appeal to Texans and Businesses (July 13, 2022), https://
adjust upwards. The average emissions rate of the system would ManagingOversupply.aspx. Based on January — July 2022 data. www.ercot.com/news/release?id=f91df9ae-7a4d-5148-
reflect the combined emissions rate of the nuclear plant and 36b1-d7bd1f0f5bb4; ERCOT, Statement by Electric Reliability
238 Per author’s calculation, 200 MW at an 85% load factor for Council of Texas Interim CEO, Brad Jones on current grid
the gas plant; but the incremental load had no bearing on the
one year is ~1.5 million MWh (200 MW * 8760 hours * 0.85). conditions (May 13, 2022), https://www.ercot.com/news/
operations of the nuclear plant. Therefore, the emissions that
which matches the total curtailment of solar and wind from release?id=8b772e9e-51d0-4c3c-e653-1e5079f28e89.
matter are the marginal emissions — i.e., the emissions rate of the
January 2021 to December 2021 = 1.5 million MWh. CAISO,
gas plant alone. 254 David Pan, Bitcoin Miner Made Millions in Credits by Shutting
Managing oversupply, http://www.caiso.com/informed/Pages/
226 S. P. Holland et al., Why Marginal CO2 Emissions Are Not ManagingOversupply.aspx; CAISO, Production and Curtailments Rigs During Texas Heat, Bloomberg (Aug. 3, 2022), https://www.
Decreasing For US Electricity: Estimates and Implications For Data — Monthly, http://www.caiso.com/Style%20Library/caiso/ bloomberg.com/news/articles/2022-08-03/bitcoin-miner-
Climate Policy (Feb. 14, 2022), https://www.pnas.org/doi/ csv/curtailmentsMonthly.csv. made-millions-by-shutting-rigs-during-texas-heat.
full/10.1073/pnas.2116632119.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 34
255 Riot Blockchain, Riot Blockchain Announces July 2022 259 Severin Borenstein, Crypto Mining for a More Stable Grid? 267 Raynor de Best, Bitcoin average energy consumption per
Production and Operations Updates (Aug. 3, 2022), https:// Energy Inst. at Haas (Mar. 21, 2022) (emphasis added), transaction compared to that of VISA as of April 25, 2022,
www.riotblockchain.com/news-media/press-releases/ https://energyathaas.wordpress.com/2022/03/21/ Statista (Apr. 25, 2022), https://www.statista.com/
detail/135/riot-blockchain-announces-july-20. crypto-mining-for-a-more-stable-grid/. statistics/881541/bitcoin-energy-consumption-transaction-
comparison-visa/. In fact, the latest data from Statista finds
256 Eamon Barrett, Texas Bitcoin Miners Are Getting Paid To Shut 260 Bitcoin Mining Council, Global Bitcoin Mining Data Review: Q2
that 1 Bitcoin transaction is equal to 2,188.59 kWh of energy,
Down and Give Electricity Back to the Power Grid, Fortune (July 2022, at Slide 8 (July 2022), https://bitcoinminingcouncil.
whereas 100,000 VISA transactions account for 148.63. By
12, 2022), https://fortune.com/2022/07/12/texas-bitcoin- com/wp-content/uploads/2022/07/2022.07.19-BMC-
this estimate, 1 Bitcoin transaction could actually account for
miners-paid-shut-down-power-grid-electricity-blackout-heat/. Presentation-Q2-22-Presentation.pdf (“Bitcoin mining energy
1.47 million VISA transactions (2,188.59 / 148.63 = 14.72 *
use is only 0.15% when compared to the world’s total energy.”).
257 See, e.g., MacKenzie Sigalos, Bitcoin miners say they’re helping 100,000 = 1.47 million).
The figures used in this comparison are misleading because they
to fix the broken Texas energy grid — and Ted Cruz agrees, CNBC
compare Bitcoin energy against all other consumptive energy 268 These recommendations do not include the wholesale move
(Dec. 5, 2021), https://www.cnbc.com/2021/12/04/bitcoin-
purposes, including electricity, transportation and shipping, away from proof-of-work cryptocurrencies, which would reduce
miners-say-theyre-fixing-texas-electric-grid-ted-cruz-agrees.
industry, heating, cooling, agriculture, and cooking. According electricity consumption from cryptocurrencies tremendously.
html (“Miners commit to buying a certain amount of power,
to the Bitcoin Mining Council, Bitcoin already consumes 253
and either use it for mining if the grid doesn’t need it, or sell 269 David Morley, Zoning for Data Centers and Cryptocurrency
billion kWh, or 1% of global electricity production, Bitcoin Mining
it back at a profit if the grid demands it.”); Naureen S. Malik Mining, Am. Planning Ass’n (Jun. 2022), https://www.planning.
Council, Global Bitcoin Mining Data Review at 6; see U.S. EIA,
& Michael Smith, Crypto Mania in Texas Risks New Costs and org/publications/document/9249180/.
International Data World Electricity (last visited Aug. 29, 2022),
Strains on Shaky Grid, Bloomberg (Mar. 15, 2022), https://
https://www.eia.gov/international/data/world/electricity/ 270 See, e.g., Chelan Cnty., WA. Pub. Util. Dist., Cryptocurrency Zoning
www.bloomberg.com/news/articles/2022-03-15/crypto-
electricity-generation. & Planning Discussion — UPDATE, https://www.chelanpud.org/
mania-in-texas-risks-new-costs-and-strains-on-shaky-grid
docs/default-source/commission/outreach-on-cryptocurrency.
(“Upgrades to the power system will be needed because the 261 Andrew R. Chow, Fact-Checking 8 Claims About Crypto’s
pdf; Missoula Cnty., MT, Cryptocurrency Mining Zoning
grid ‘can’t handle all of this new load,’ said Evan Caron, a former Climate Impact, Time Magazine (July 1, 2022), https://time.
Regulations (Feb. 2021), https://www.missoulacounty.us/home/
power trader in Austin who invests in energy technology. New com/6193004/crypto-climate-impact-facts/.
showpublisheddocument/72870/637460579331670000;
investments in the transmission system are typically shared
262 George Kamiya, Data Centres and Data Transmission Networks, Josh Blaschke, Brenham Planning and Zoning to Consider
among Ercot’s consumers and show up in their utility bills.”);
International Energy Agency (Nov. 2021), https://www.iea.org/ Prohibiting Commercial Crypto Mining at Homes, KWHI (Mar.
Chris Tomlinson, Crypto could raise Texas electric prices if not
reports/data-centres-and-data-transmission-networks. 28, 2022), https://kwhi.com/2022/03/28/brenham-
planned well, Houston Chronicle (Apr. 15, 2022), https://www.
planning-and-zoning-to-consider-prohibiting-commercial-
houstonchronicle.com/business/columnists/tomlinson/article/ 263 Joshua Aslan et al., Electricity Intensity of Internet Data
crypto-mining-at-homes/; Becky Long, No Commercial Crypto
Crypto-could-raise-Texas-electricity-prices-if-17081552.php Transmission: Untangling the Estimates, 22(4) J. of Indus.
Mining Allowed, Clay County Progress (Aug. 4, 2022), https://
(“Crypto-miners often brag they can shut down in five seconds Ecology 785 (2017), https://onlinelibrary.wiley.com/
www.claycountyprogress.com/local/no-commercial-crypto-
if the grid needs the power, but rising cryptocurrency values doi/10.1111/jiec.12630; Albrecht Fehske et al., The global
mining-allowed; Robert C. Peck et al., Ordinance Prohibiting
make voluntarily ‘saving the grid’ less attractive. Miners are footprint of mobile communications: The ecological and economic
Cryptocurrency Mining Industries from Operating in Clay
enrolling in ERCOT programs where they are paid to shut down, perspective, 49(8) IEEE Commc’n Mag., at 55-62 (Aug. 2011),
County (Aug. 4, 2022) https://www.clayconc.com/_files/
creating an additional cost.”); Sabrina Toppa, In Texas, an Influx https://ieeexplore.ieee.org/document/5978416.
ugd/fe4bcd_163aefda66f243cfb4f8c41bd27ebce5.pdf;
of Crypto Miners May Mean Higher Elec. Bills for Consumers, 264 Neel Dhanesha, The daunting task of making cryptocurrency Local Law, Cryptocurrency and Data Mining, Village of Rouses
The Street (Mar. 16, 2022), https://www.thestreet.com/ climate-friendly, Vox (Apr. 18, 2022) (“There hasn’t been any Point, NY, https://ecode360.com/RO0588/laws/LF1301408.
crypto/news/in-texas-the-influx-of-crypto-miners-may-mean- time in the history of bitcoin where increasing machine efficiency pdf; Plattsburgh cryptocurrency regulations unveiled, Sun
higher-electricity-bills (explaining that “upgrades to the local led to less energy consumption,” said Alex de Vries, founder of Community News (Oct. 12, 2018), https://suncommunitynews.
electricity grid may soon involve an increase in electricity fees the website Digiconomist, which tracks the sustainability of com/news/67515/plattsburgh-cryptocurrency-regulations-
for consumers across the Lone Star state”); Karin Rives, Crypto cryptocurrencies.”), https://www.vox.com/recode/23005493/ unveiled/; Rick Pfeiffer, Council Approves High Energy Use
mining industry’s greening campaign raises new questions, cryptocurrency-bitcoin-climate-friendly. Further, standard Zoning Code Changes, Niagara Gazette (July 5, 2022), https://
S&P Global (May 4, 2022), https://www.spglobal.com/ energy efficiency requirements will not be sufficient. As the www.niagara-gazette.com/news/local_news/council-approves-
marketintelligence/en/news-insights/latest-news-headlines/ value of mining rewards has increased, more sophisticated high-energy-use-zoning-code-changes/article_0e52c27e-
crypto-mining-industry-s-greening-campaign-raises-new- mining equipment has developed. See, e.g., Namcios, News Intel fccd-11ec-a5e9-2fedad86de16.html; Andrew Sullivan, Lansing
questions-69679254 (“concerns are growing that the Launches New Bitcoin Mining Chip, Blockscale, Bitcoin Magazine Pursues Zoning Changes to Prohibit Crypto Mining, Ithaca.
industry could be using too much of the state’s wind capacity (Apr. 4, 2022), https://bitcoinmagazine.com/business/ com (Feb. 10, 2022), https://www.ithaca.com/news/lansing/
and could drive up power prices for homes and businesses.”); intel-launches-new-bitcoin-mining-chip-blockscale. lansing-pursues-zoning-changes-to-prohibit-crypto-mining/
see also Ariana Garcia, The Texas grid can survive a boom in
265 Rachel Rybarczyk et al., On Bitcoin’s Energy Consumption: article_0105f92e-89c3-11ec-a7bd-f3306528469b.html.
cryptocurrency mining—but for how long? Houston Chronicle
(Nov. 1, 2021), https://www.chron.com/politics/article/texas- A Quantitative Approach to a Subjective Question, Galaxy
power-grid-crypto-mining-16572771.php. Digital, at 8, 13 (May 2021), https://docsend.com/view/
adwmdeeyfvqwecj2.
258 Robert Walton, Conservative approach to Texas grid operations
could cost consumers $1.5B this year, says market monitor, 266 Alex de Vries, Renewable Energy Will Not Solve Bitcoin’s
Utility Dive (June 24, 2022), https://www.utilitydive.com/news/ Sustainability Problem, 3(4) Joule 893 (Apr. 2019),
texas-grid-ercot-market-monitor-consumers-puc/626018/. https://www.sciencedirect.com/science/article/pii/
S254243511930087X.

THE ENERGY BOMB How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now 35