US Energy Information Administration to Investigate Cryptocurrency Mining Electricity Consumption, Citing Bitcoin Surge as a Stimulus for Increased Mining Activity

US Energy Information Administration to Investigate Cryptocurrency Mining Electricity Consumption, Citing Bitcoin Surge as a Stimulus for Increased Mining Activity

US Energy Information Administration to Investigate Cryptocurrency Mining Electricity Consumption, Citing Bitcoin Surge as a Stimulus for Increased Mining Activity

According to The Block, the U.S. Energy Information Administration (EIA), a subsidiary of the Department of Energy, will begin investigating the electricity consumption of domestic cryptocurrency mining companies next week.

According to a statement on Wednesday (31st), the Office of Management and Budget (OMB) authorized the investigation on January 26th after the EIA submitted an “emergency data collection request.” The authorization is valid for the next six months. The EIA also plans to solicit public opinion on the energy usage of cryptocurrency miners in the United States.

Joe DeCarolis, Director of the EIA, stated that the surge in Bitcoin prices is evidence for the emergency request. The EIA cited the recent rise in Bitcoin prices as evidence for the emergency request, stating in its document:

“The EIA also states that the severe cold snap in most of the central United States has resulted in a surge in electricity demand. The combination of increased cryptocurrency mining activity and strained power systems exacerbates the uncertainty in the electricity market, which could lead to demand peaks and impact system operation and consumer prices.”

Pierre Rochard, Vice President of Research at Bitcoin mining company Riot Platforms, disagrees with the assessment of the EIA. He quoted a recent report on the impact of cryptocurrency mining on the power grid and stated, “Scientific research is clear, and experts unanimously agree that Bitcoin stabilizes the power grid, and there is no ’emergency’ requiring data collection due to demand response.”

Last month, during the cold snap, the estimated network hash rate of Bitcoin dropped by 25% following the power reduction request made by the Electric Reliability Council of Texas (ERCOT). Charlie Schumacher, Vice President of Communications at cryptocurrency mining company Marathon, stated to The Block at the time, “Many Bitcoin miners in Texas, including Marathon, have scaled back operations in the past few days to support the Texas grid and its citizens during the current cold snap, and this is exactly how it should function.”