US Senator Warren Leads Congressional Group's Probe Into Bitcoin Mining Energy Use in Texas

A group of seven Democratic lawmakers in Washington, D.C., led by Sen. Elizabeth Warren of Massachusetts, are looking into the energy usage and carbon emissions of the bitcoin mining industry in Texas as well as the impact on the grid and local consumers.

In a letter Wednesday addressed to Pablo Vegas, the CEO of the Electric Reliability Council of Texas (ERCOT), the group expressed concerns that bitcoin mining's enormous demand for energy in Texas is straining the state's grid, adversely impacting consumers and U.S. climate goals. ERCOT manages the Texas electricity grid, which operates independently from the rest of the country.

"Crypto mining is adding significant demand to an already unreliable grid [and] contributing to the global climate crisis," claim the lawmakers, who further assert miners are benefitting at the expense of consumers from "huge ERCOT subsidies in the form of demand response agreements."

So-called demand response programs mean that when demand for energy across the grid is high, miners power down their operations in exchange for energy credits that they can use in the future, thus releasing power back to the struggling grid. About 1 GW of mining powered down this summer as heatwaves swept across the state.

The Democratic lawmakers see things differently: "In simple terms, the bitcoin miners make money from mining that produces major strains on the electric grid' and during peak demand when the profitability of continuing to mine decreases, they then collect subsidies in the form of demand response payments when they shut off their mining operations and do nothing."

Bitcoin miners flocked to Texas following a ban on the industry in China last year, then the largest hub for crypto mining in the world, due to its seemingly abundant energy and friendly regulation.

There are now about 1.5 gigawatts (GW) of crypto mining in Texas, with another 5 GW set to connect to the grid by the end of 2023, according to the local industry association and lobbying group, Texas Blockchain Council (TBC). ERCOT has said that it has 33 GW worth of applications from miners on its desk, but the TBC said that includes some double counting. At any rate, ERCOT has slowed down application approvals as it tries to figure out in detail how miners can be integrated in the grid.

Besides Warren, the letter was signed by Senators Sheldon Whitehouse (D-R.I.) and Edward J. Markey (D-Mass.), as well as Representatives Al Green (D-Texas), Katie Porter (D-Calif.), Jared Huffman (D-Calif.) and Rashida Tlaib (D-Mich).

It's but the latest salvo from Warren against bitcoin and the miners over environmental and other concerns. Last year, she spoke out against Greenidge Generation, a natural gas-powered bitcoin miner in New York state, which eventually saw its air permits denied in July.

Read more: The End of the Texas Bitcoin Mining Gold Rush