First-Ever Application by a Cryptomining Company Warrants Intense Scrutiny, Skepticism
WASHINGTON, D.C. – Public Citizen today urged the U.S. Department of Energy to reject a request by a Canadian cryptomining company to export electricity from the U.S. because of concerns that the industry’s enormous use of power harms consumers, our environment and the climate.
In a motion to intervene and comment sent to the department today, Public Citizen called for a comprehensive and skeptical review of the application by DMG Blockchain Solutions Inc. to export power.
DMG is a cryptocurrency mining or “cryptomining” company. Cryptomining is a process in which transactions for various forms of cryptocurrency (like Bitcoin) are verified and added to a digital ledger.
Cryptomining requires vast computing networks, which makes it extraordinarily energy-intensive and can lead to major strains on local U.S. power supplies. This alarming power consumption footprint raises concerns about the suitability and sustainability of this kind of business in localized power markets.
DMG’s application to export power appears to be the first of its kind by this industry, and its approval could result in a rush of similar applications.
The industry’s potential drain on the power grid is raising alarm bells; public utilities in Washington state have enforced moratoria on cryptomining operations, citing overcapacity of substations and increasing power demand.
According to the Congressional Research Service, the power demand from cryptocurrency mining can “exceed the available [local] power capacity and increase customers’ electricity rates.” Cyrptomining’s increased electricity demand can result in the need for more power that may come from fossil fuels.
“The Department of Energy should not approve the request by a Canadian cryptomining company to export electricity from the U.S. to Canada – especially while domestic cryptominers face limits,” said Tyson Slocum, director of Public Citizen’s Energy Program. “The application by such a power-hungry industry requires further study and collaboration on the impact cryptomining has for power markets, consumers, the environment and the climate.”