The US Department of Energy (DOE) and Energy Information Administration (EIA) have scrapped their emergency survey of Bitcoin mining’s power usage following a lawsuit from industry groups, Reuters and other news outlets reported. This move comes amidst growing scrutiny over the energy consumption of cryptocurrency mining and its potential impact on the environment and power grid stability.

Industry Claims Foul, Cites Legal Concerns

Riot Platforms, a publicly traded Bitcoin mining company, and the Texas Blockchain Council filed the lawsuit, arguing that the survey bypassed legal requirements for public comment and data collection procedures outlined in the Paperwork Reduction Act. The plaintiffs claimed the EIA failed to demonstrate how bypassing these procedures was necessary to prevent “public harm,” a prerequisite for emergency data collection.

Kara Rollins, representing the plaintiffs, told Fortune:

“We were shocked to see how blatantly the law was ignored here… We don’t want politics infecting data.”

The EIA, however, had argued that the urgency of the matter justified bypassing standard procedures, claiming Bitcoin mining “potentially disrupted the electric power industry.”

Bitcoin Mining And The Energy Debate

Bitcoin mining, the process of verifying and adding transactions to the blockchain ledger, relies on complex computers solving complex mathematical problems. This process requires significant amounts of electricity, raising concerns about its environmental impact and potential strain on the power grid.

Bitcoin is now trading at $61.780. Chart: TradingView.com

Initial estimates by the EIA suggest Bitcoin mining may account for between 0.6% and 2.3% of total annual US electricity use. While the industry argues this is comparable to individual states like Utah and Washington, environmental groups like Earthjustice counter that it contributes to greenhouse gas emissions and raises electricity costs for consumers.

In Texas, a major hub for Bitcoin mining, Wood Mackenzie reports that the industry has already driven up electricity costs for non-mining residents by an estimated $1.8 billion annually. However, the industry argues that data centers can actually benefit grid stability by offering flexible demand, allowing them to quickly shut down operations during peak hours or emergencies.

Transparent Data Collection: A Path Forward

The DOE and EIA have agreed to destroy any data collected through the initial survey and will instead pursue a non-emergency version with a 60-day public comment period. This revised approach aligns with the Paperwork Reduction Act and allows for broader stakeholder engagement.

While the lawsuit successfully challenged the initial approach, the incident highlights the need for transparent data collection and open dialogue to address the environmental and economic implications of Bitcoin mining. Gathering accurate data through the revised survey will be crucial for developing informed policies and regulations in the future.

Featured image from Pexels, chart from TradingView