Elizabeth Warren Calls Texas ‘Deregulated Safe Harbor’ for Bitcoin Miners

Massachusetts Senator Elizabeth Warren and a group of six other US lawmakers have requested information on the energy use and potential environmental impact of bitcoin mining operations in the state of Texas.

In a letter to Electric Reliability Council of Texas (ERCOT) CEO Pablo Vegas, senators called Texas a “deregulated safe haven” for crypto mining companies, adding that “cheap electricity and laissez-faire regulation” of the state raised concerns about the potential of the mining operation to “put additional strain on the state’s power grid.”

One specific piece of information the senators have requested relates to how much electricity crypto miners in Texas are using and how much carbon emissions they have released over the past five years.

Lawmakers also want to know how much Texas regulators are paying bitcoin miners in subsidies to reduce energy use during periods of peak demand.

“Put simply, bitcoin miners make money from mining that is heavy on the grid: And during peak demand, when the profitability of further mining decreases, they collect subsidies in the form of demand-response payments if they turn off their grid mining operate and do nothing,” the letter reads.

Among the companies operating a Bitcoin mining business in Texas, the brief cites Riot Blockchain, the operator of a 750MW facility in Rockdale, which announced in July this year that it had raised about $9.5 million by ceasing operations and selling electricity back to the grid.

The senators noted that this was more than the $5.6 million the company made from the actual sale Bitcoin this month.

Texas energy grid and bitcoin mining

The letter further estimates that Texas is responsible for about a quarter of all bitcoin mining operations in the U.S. and 9% of crypto mining processing power globally, “a share that is expected to reach 20% by the end of next year.”

Around 30 crypto mining companies have come to Texas over the past decade, encouraged by vast amounts of open land, easy access to affordable energy, and low state taxes, according to a recent report by The Texas Tribune.

The increased demand raised fears that the state’s already fragile power grid, which collapsed during an extreme winter storm in February 2021, could be further disrupted.

“Cryptomining significantly increases demand on an already unreliable network, poses tremendous challenges to the transmission and distribution system … and contributes to the global climate crisis,” lawmakers wrote in the letter.

This isn’t the first time Elizabeth Warren, a staunch critic of cryptocurrencies, has spearheaded attacks on the industry, including bitcoin mining activity.

In July, the senator targeted New York-based bitcoin mining company Greenidge Generation, raising concerns about the company’s environmental impact.

Before that, Warren went to twitter to say that “one of the easiest and least disruptive things we can do to fight the climate crisis is to crack down on polluting cryptocurrencies.”

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