Air, Climate, and Environmental Impacts of Crypto-Asset Mining: Legislative Hearing on S___, The Crypto-Asset Environmental Transparency Act of 2023 (U.S. Senate Committee on Environment and Public Works, Subcommittee on Clean Air, Climate, and Nuclear Safety)

Hearing	Air, Climate, and Environmental Impacts of Crypto-Asset Mining: Legislative Hearing on S___, The Crypto-Asset Environmental Transparency Act of 2023
Committee	U.S. Senate Committee on Environment and Public Works, Subcommittee on Clean Air, Climate, and Nuclear Safety
Date	March 7, 2023

 

Hearing Takeaways:

• Cryptocurrency Mining: The hearing focused on the growth of cryptocurrency mining, which refers to the process for validating and adding transactions to blockchains. Cryptocurrency miners engage in these activities to obtain newly created cryptocurrency tokens (which can have significant value). Subcommittee Chairman Ed Markey (D-MA) discussed how the market size of the global cryptocurrency mining industry had been estimated at $2 billion in 2022 and mentioned how more than one-third of this industry is in the U.S. He added that this industry is expected to grow significantly over the next decade.
  • Proof of Work Validation: The most popular type of cryptocurrency mining involves proof of work validation. Proof of work validation requires miners to solve complex math problems to add blocks to the cryptocurrency’s blockchain (for which they are rewarded with newly mined tokens). These complex math problems are very energy intensive to solve and generally require large banks of computers. The most popular cryptocurrency (Bitcoin) is based on a proof of work validation system. Subcommittee Chairman Markey, Mr. Altenburg, and Assemblymember Kelles expressed concerns that proof of work validation is inherently wasteful as it leads cryptocurrency miners to consume significant amounts of energy to obtain digital assets with questionable real-world value. They also highlighted how the amount of Bitcoin received from mining is cut in half every four years, which means that more energy is being consumed to obtain fewer cryptocurrencies.
  • Proof of Stake Validation: The second most popular type of cryptocurrency mining involves proof of stake validation. Proof of stake validation requires miners to hold an ownership stake in a network’s cryptocurrency to validate transactions. Miners are randomly selected to add blocks to the network’s blockchain and to validate transactions. Miners that correctly validate transactions will receive newly mined tokens while miners that incorrectly validate transitions will receive a reduced reward. A miner’s likelihood of being selected to mine cryptocurrencies under this system can be increased through holding more of the network’s tokens. The second most popular cryptocurrency (Ethereum) recently transitioned from a proof of work validated network to a proof of stake validated network. Mr. Altenburg and Assemblymember Kelles advocated for the uptake of proof of stake validation among cryptocurrency networks because this validation system uses much less energy than a proof of work validation system.
• Impact of Cryptocurrency Mining on Energy Grids and Consumption: The hearing considered the impact that cryptocurrency mining (particularly Bitcoin mining) is having on the U.S.’s energy grids and consumption. Subcommittee Chairman Ed Markey (D-MA), Mr. Altenburg, and Assemblymember Kelles expressed concerns that the significant energy consumption associated with cryptocurrency mining could undermine the U.S.’s efforts to combat climate change. Mr. Altenburg stated that cryptocurrency miners have an incentive to use energy sources that are available at very high-capacity factors and indicated that these energy sources tend to be fossil fuel or formerly baseload resources. 
  • Externalities Associated with Cryptocurrency Mining: Subcommittee Chairman Markey, Mr. Altenburg, and Assemblymember Kelles expressed concerns that cryptocurrency mining could create negative externalities for nearby communities. These negative externalities include greenhouse gas emissions, air pollution, water pollution, noise pollution, and electronic waste (e-waste). Assemblymember Kelles added that the pollution stemming from cryptocurrency mining activities can harm local tourism industries and lead to health problems in surrounding communities (including asthma, heart attacks, strokes, reproductive damage, and preterm birth). Subcommittee Ranking Member Pete Ricketts (R-NE) and Ms. Dentlinger stated however that state and local governments can address many of these externalities through permitting processes and ordinances.
  • Use of Previously Retired and Less Efficient Power Facilities to Support Mine Cryptocurrencies: Subcommittee Chairman Markey, Mr. Altenburg, and Assemblymember Kelles expressed concerns over how many retired coal and gas-fired power plants have come back online to power cryptocurrency mining operations. They criticized these power plants for being less efficient and heavily subsidized in some instances. They also stated that these power plants could be significant emitters of greenhouse gasses. Subcommittee Ranking Member Ricketts noted however that these power plants are subject to permitting processes and that states can always pull permits of the plants if the plants do not abide by the relevant regulations. 
  • Diversion of Renewable and Carbon-Free Energy for Cryptocurrency Mining: Mr. Altenburg and Assemblymember Kelles expressed concerns that the high energy consumption of cryptocurrency miners is leading renewable and carbon-free energy to be diverted from the energy grid. Subcommittee Ranking Member Ricketts and Ms. Dentlinger suggested however that new industries (such as cryptocurrency mining) could drive the development and deployment of new clean technologies. Ms. Dentlinger discussed how cryptocurrency mining projects have higher load factors, which mean that the projects use energy at steady rates (rather than ramping up and down their energy use). She stated that this dynamic meant that these projects can produce more constant revenue streams for utility companies, which can help finance the development and deployment of clean energy technologies.
  • Impact on Electricity Rates: Mr. Altenburg and Assemblymember Kelles stated that the electricity being consumed to support cryptocurrency mining operations is driving up electricity rates for entire communities. Assemblymember Kelles also noted that while cryptocurrency mining activity could shut off when there is high demand for electricity, she stated that cryptocurrency mining operations often have contracts where they are compensated to shut down during periods of high electricity demand. Subcommittee Ranking Member Ricketts and Ms. Dentlinger stated however that steady electric demand from customers has historically resulted in the most efficient use of electric infrastructure and a lower cost-per-unit of electricity for those customers. They noted how cryptocurrency mining provides such steady electric demand. Ms. Dentlinger further testified that her public utility is not subsidizing cryptocurrency mining through its rates.
  • Impact on Local Economies: Ms. Dentlinger testified that Nebraska local leaders have been “very receptive” to cryptocurrency mining facilities and believed that these facilities could provide “significant” economic development benefits for their communities in terms of economic activity, jobs, and tax revenues. She added that these projects can especially benefit rural areas. Assemblymember Kelles asserted however that cryptocurrency mining operations create minimal jobs and provide “little or no local economic benefit.”
  • Value of Cryptocurrency Mining: A key area of disagreement during the hearing involved whether cryptocurrencies (such as Bitcoin) have inherent value that warrants energy consumption. Subcommittee Ranking Member Ricketts and Sen. Cynthia Lummis (R-WY) argued that a cryptocurrency like Bitcoin has inherent value in that its supply is limited, it is permissionless, and it serves as a store of value. Mr. Altenburg noted that while Bitcoin might have a high cash value, he questioned whether Bitcoin constitutes a productive asset. He asserted that Bitcoin derives all of its value from the views of others. He stated that it is possible to derive the full benefits of blockchain technology without consuming massive amounts of energy.
• The Crypto-Asset Environmental Transparency Act of 2023: The hearing further considered the Crypto-Asset Environmental Transparency Act of 2023, which would require the U.S. Environmental Protection Agency (EPA) to conduct a detailed study of the environmental impacts of cryptocurrency mining. This legislation would also require cryptocurrency miners to report their carbon dioxide emissions under the EPA’s Greenhouse Gas Reporting Program (GHGRP). Subcommittee Chairman Ed Markey (D-MA), Mr. Altenburg, and Assemblymember Kelles expressed support for the legislation and stated that the legislation would provide federal and state policymakers with necessary information to make more informed decisions around cryptocurrencies.
  • Perceived Unfair Treatment of the Cryptocurrency Mining Industry: Subcommittee Ranking Member Pete Ricketts (R-NE) and Sen. Cynthia Lummis (R-WY) expressed concerns that this legislation would hold the cryptocurrency mining industry to a different standard than other energy intensive industries. Subcommittee Ranking Member Ricketts raised concerns that U.S. policies that would single out the cryptocurrency mining industry could cause the cryptocurrency industry to move overseas. He warned that this could lead the industry to move to countries with weaker environmental regulations.

Hearing Witnesses:

1. The Hon. Anna R. Kelles, Ph.D., Assemblymember, New York State Assembly, 125th District
2. Mr. Rob Altenburg, Senior Director for Energy and Climate, PennFuture
3. Ms. Courtney Dentlinger, Vice President, Customer Services and External Affairs & Chief Customer Officer, Nebraska Public Power District

Member Opening Statements:

Subcommittee Chairman Ed Markey (D-MA):

• He indicated that the hearing is the first ever U.S. Senate hearing to focus on the environmental impacts of cryptocurrency mining.
  • He referred to the issue of cryptocurrency mining as an “emergency” and called on Congress to address the issue.
• He discussed how the global cryptocurrency mining industry had an estimated value of $2 billion in 2022 and mentioned how more than one-third of this industry is in the U.S.
  • He noted that the cryptocurrency mining industry is forecasted to nearly quadruple over the next ten years.
• He stated that cryptocurrency mining poses threats to the environment, health, communities, and climate and highlighted how Bitcoin mining alone consumes as much power each year as the entire Swedish economy.
  • He also noted how the carbon dioxide emissions from U.S. Bitcoin mining activities are equivalent to the annual emissions from as many 7.5 million gasoline-powered cars.
  • He further noted how Bitcoin mining in the U.S. currently uses as much power as is needed to light every single U.S. home and added that this power demand will only grow.
• He remarked that the U.S. faces a climate change “crisis” and mentioned how the Biden administration has pledged to reduce greenhouse gasses by 50 percent by 2030.
• He stated that the Subcommittee is focusing on the cryptocurrency mining industry because of its recent growth, its energy intensive nature, and its role in driving wealth inequality.
  • He commented that the hearing would focus on the environmental impacts of cryptocurrency mining and would not consider the underlying merits of cryptocurrencies.
• He discussed how Bitcoin relies upon a process known as proof of work mining, which involves energy intensive computations performed by large banks of computers.
  • He explained that Bitcoin miners can receive Bitcoins as a reward for this mining and stated that the incentives to engage in Bitcoin mining will increase as the value of Bitcoin increases.
• He noted that the high energy needs stemming from Bitcoin mining operations has led many coal and gas-fired power plants to come back online to serve these needs. 
• He also highlighted how Bitcoin mining equipment can create “significant” amounts of e-waste and how Bitcoin mining requires large amounts of water for cooling and power generation.
  • He further mentioned how Bitcoin mining facilities can create “devastating” noise pollution.
• He noted that while the Bitcoin mining industry has claimed that it could help the environment through capturing and burning vented methane and improving grid stability, he stated that a lack of transparency made it impossible to assess these arguments.
• He discussed how his legislation, the Crypto-Asset Environmental Transparency Act of 2023, would require the EPA to conduct a detailed study of the environmental impacts of cryptocurrency mining.
  • He also noted that this legislation would require cryptocurrency miners to report their carbon dioxide emissions under the EPA’s GHGRP.
• He asserted that the U.S. needs independent, trustworthy, and accurate statistics for cryptocurrency mining activities.

Subcommittee Ranking Member Pete Ricketts (R-NE):

• He expressed interest in exploring whether the cryptocurrency mining industry can support economic development for his state of Nebraska (as well as for the broader U.S.).
• He recounted how he had signed the Nebraska Financial Innovation Act into law when he previously served as Nebraska’s governor and explained that this law had provided an avenue for financial institutions to invest in the digital assets sector.
  • He commented that this legislation had helped Nebraska to be ranked as the top state by CNBC for developing the crypto economy in 2022.
• He then discussed how companies often seek out locations with business-friendly environments and lower costs and stated that Nebraska’s low electricity costs are attracting many cryptocurrency mining businesses to the state.
• He expressed interest in exploring whether the U.S. is treating the cryptocurrency mining industry differently than other energy intensive industries.
  • He commented that the cryptocurrency mining industry is not unique in its reliance on large data server banks.
• He remarked that the U.S. should enable these different industries to freely compete and not choose winners and losers.
• He raised concerns that U.S. policies that would single out the cryptocurrency mining industry could drive this industry overseas, which could lead the industry to move to countries with weaker environmental regulations.
  • He commented that this situation would result in greater overall greenhouse gas emissions and lost U.S. jobs.

Witness Opening Statements:

Mr. Rob Altenburg (PennFuture):

• He raised concerns over Bitcoin mining and proof of work cryptocurrencies.
• He discussed how Bitcoin is based on the concept of a blockchain, which is an accounting ledger in which each block records transactions.
  • He noted how the concept of a blockchain has been around since the 1980s.
• He stated that the difficulty of creating new Bitcoin blocks helps to keep the Bitcoin blockchain secure and explained that a party that can successfully create a new block on the Bitcoin blockchain is rewarded with newly mined Bitcoin.
  • He highlighted how only one party will receive this reward.
• He discussed how Bitcoin miners will employ large numbers of special purpose computers that make hundreds of trillions of computations per second in their pursuit of Bitcoin rewards.
  • He noted how these computers will use more than three times the energy of the average household and indicated that a single Bitcoin miner may run tens of thousands of these computers on a 24/7 basis.
  • He stated that Bitcoin mining consumes more electricity than 80 percent of states and more electricity than many entire countries.
• He remarked that Bitcoin is wasteful by design and asserted that the wasteful nature of Bitcoin’s proof of work mining system is unnecessary.
• He discussed how there exist alternative mining systems that accomplish the same goals of proof of work mining in a faster and cheaper manner.
  • He highlighted how Ethereum had recently converted from a proof of work system to a proof of stake system and commented that this conversion did not sacrifice functionality.
  • He noted that Ethereum’s new proof of stake system consumes much less energy than their previous proof of work system.
• He then recounted how a Bitcoin mining company in Pennsylvania had announced plans in 2021 to purchase three waste coal fire power plants and to install up to 57,000 miners.
  • He commented that waste coal is a problematic fuel given its low energy value.
• He also mentioned how Pennsylvania inspectors had found that 10 MWs worth of generation had been illegally installed directly at fracked gas well sites in January 2022 for the purposes of Bitcoin mining.
• He remarked that the absence of cryptocurrency mining reporting requirements makes it impossible to know which and many of Pennsylvania’s fracked gas well sites are being used to support cryptocurrency mining activities.
  • He commented that media reports and permit applications regarding the use of fracked gas well sites are “sporadic” and suggested that cryptocurrency miners might be obscuring their activities through simply referring to themselves as data centers.
• He also highlighted how Bitcoin mining can create noise pollution that can travel far distances and noted how persistent noise pollution has been shown to cause problems for both people and wildlife.
• He further discussed how Bitcoin mining operations are occurring at nuclear power plants in Pennsylvania and stated that this mining activity is diverting carbon-free energy from the energy grid.
  • He commented that fossil fuels are often needed to address this diverted carbon-free energy.
• He noted that while cryptocurrency miners often claim that they can easily pause their operations when the energy grid demands more power, he stated that this pausing only occurs when the cost of electricity exceeds the value of Bitcoins.
  • He asserted that Bitcoin mining links U.S. energy prices to the volatility of the Bitcoin market, which he called a terrible idea.
• He stated that the use of cheap electricity to support Bitcoin mining is driving up wholesale energy prices for everyone.

The Hon. Anna R. Kelles Ph.D. (Assemblymember, New York State Assembly):

• She expressed her support for the Crypto-Asset Environmental Transparency Act of 2023 and stated that expanding proof of work-based cryptocurrency mining will have “devastating” environmental and socioeconomic consequences.
  • She noted how Bitcoin mining facilities are estimated to use more energy than all of the processing for Google, Amazon, and Facebook combined, more energy than all of the data centers globally combined, and more energy than all of the solar panels that exist globally.
  • She indicated that one Bitcoin transaction requires approximately 880 kilowatt-hours, which is equivalent to the energy needed to power the average U.S. household for one month.
• She also noted how cryptocurrency mining operations create minimal jobs and stated that the profits for these operations are limited by electricity costs (rather than by labor costs).
• She discussed how cryptocurrency companies have worked to reopen retired fossil fuel power plants (such as the Greenidge facility in Dresden, New York) to obtain cheap electricity.
  • She commented that her state of New York had become an ideal location for cryptocurrency mining companies because of its moderate temperatures, clean air, and abundant fresh free water for cooling.
• She noted how the Greenidge facility’s cryptocurrency mining operations had contributed to local air pollution (including nitrogen oxide and sulfur dioxide) and had created a “notable amount” of e-waste.
• She also discussed how cryptocurrency mining operations can harm aquatic life due to the large quantities of water withdrawn from freshwater bodies to cool the electrical generation systems and the large-scale computer processor rigs.
  • She commented that these cooling processes result in higher water temperatures that can kill thousands of fish and produce harmful algal bloom outbreaks.
• She then noted how gas fueled-power plants impact the health and quality of life in their surrounding communities and highlighted how the emission of hazardous air pollutants are known to cause various health problems.
  • She commented that these impacts are most acutely felt in environmental justice communities.
• She also mentioned how cryptocurrency mining operations could create noise pollution problems for nearby residents.
• She further referenced a paper from the Haas School of Business at the University of California, Berkeley that had found that power demands of cryptocurrency mining operations in upstate New York had driven up the region’s annual electric bills for small businesses and individuals.
  • She added that this paper had found that the region’s cryptocurrency mining operations had provided “little or no local economic benefit.”
• She remarked that cryptocurrency mining operations can threaten critical industries for many communities, such as agritourism.
• She then discussed how New York’s large scale cryptocurrency mining is “significantly” increasing the state’s total base energy demand on its energy grid.
  • She noted how there were estimates that this increased base energy demand would force the state to increase its wind and solar infrastructure development goals by over 60 percent to meet its climate goals.
  • She indicated that these estimates only account for New York’s existing, in development, and proposed cryptocurrency mining operations.
• She stated that other cryptocurrency validation systems (such as proof of stake mining) utilize “far less” energy.
  • She mentioned how Ethereum’s recent transition to a proof of stake mining system reduced energy consumption by over 99.9 percent.
• She called on Congress to pass the Crypto-Asset Environmental Transparency Act of 2023 and stated that the U.S. must carefully study the environmental and energy grid impacts of different cryptocurrency mining methods.
• She further asserted that the U.S, must implement appropriate statutes and regulations to prevent the environmental and public health damages associated with cryptocurrency mining.

Ms. Courtney Dentlinger (Nebraska Public Power District):

• She first noted that Nebraska is unique in that it is the only 100 percent public power state in the U.S. and explained that her utility company, Nebraska Public Power District, is a public corporation and a political subdivision of the state.
  • She indicated that most of her utility company’s service territory is rural and that the largest city that the company serves has fewer than 35,000 people.
  • She mentioned how her utility company’s diverse generation includes nuclear, coal, gas, wind, hydropower, and solar power.
• She testified that Nebraska Public Power District and Nebraska’s other public utilities provide some of the lowest energy rates and highest reliability among the 50 states.
  • She noted that her utility company’s resource mix is 62 percent carbon free and testified that her utility company aims to achieve net-zero carbon emissions by 2050.
  • She also mentioned how her utility company is currently pursuing multiple technologies (including hydrogen, advanced nuclear, and carbon capture and sequestration) to achieve its carbon-free energy goals.
• She then noted how electric utilities in Nebraska have exclusive retail service areas that include an obligation to serve all customers under just, fair, and reasonable rates and commented that this dynamic exists in most states.
  • She indicated that electric utilities in Nebraska are barred from refusing customers based on their lines of business and must generally serve all electric loads agreeing to meet applicable terms of service.
• She stated that steady electric demand from customers has historically resulted in the most efficient use of electric infrastructure and a lower cost-per-unit of electricity for those customers.
• She remarked that the variability of electricity generation (which she partially attributed to the increasing use of renewable energy sources) is allowing for opportunities for new tools to be implemented to manage generation and loads.
  • She indicated that these new tools include innovative rate designs and demand response.
• She stated that the diversification of businesses and economic growth is critical in the Nebraska Public Power District’s predominantly non-metropolitan and rural service areas.
  • She commented that this diversification and growth is especially key given how these service areas are experiencing population declines.
• She testified that Nebraska local leaders have been “very receptive” to cryptocurrency mining facilities and believed that these facilities could provide “significant” economic development benefits for their communities.
  • She mentioned how an economic impact study performed for a cryptocurrency mining project in Nebraska had found that the project would lead to an over $65 million impact on Nebraska’s economy, nearly 200 associated direct and indirect jobs, and $5.5 million in tax revenue.
• She remarked that the economic benefits associated with cryptocurrency mining projects can be significant in rural areas and noted how these projects provide an average salary of $60,000 per job.
  • She indicated that this salary level is higher than the state’s median household income.
• She stated that cryptocurrency mining operations tend to be better suited for rural areas because of smaller workforce requirements and less stringent fiber requirements.
  • She added that cryptocurrency mining projects can be more flexible with regard to siting requirements and noted how these projects are often located in areas with excess or unused transmission capacity.
• She further mentioned how cryptocurrency mining operations tend to operate on a 24/7 basis, which she called beneficial for load-serving entities.
  • She noted how these operations can quickly adjust their loads in response to emergency events.

Congressional Question Period:

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey remarked that Bitcoin mining has an “outsized” impact on the U.S.’s energy grid and climate. He asserted that Bitcoin mining is inherently energy inefficient and explained that an increase in demand for Bitcoin causes the Bitcoin mining process to become more energy intensive. He asked Mr. Altenburg to confirm that Bitcoin’s proof of work mining mechanism is designed to require more energy consumption to earn each new Bitcoin as more miners enter the market.
  • Mr. Altenburg answered affirmatively and stated that this increased energy consumption occurs in two ways. He first explained that the difficulty associated with mining a new block increases as more miners enter the space. He also explained that the amount of Bitcoin received from mining is cut in half every four years.
• Chairman Markey reiterated that Bitcoin mining would become more energy intensive over time. He asked Mr. Altenburg to indicate whether improving the energy efficiency of cryptocurrency mining equipment would result in lower energy consumption.
  • Mr. Altenburg remarked that Bitcoin mining is inherently wasteful by design. He acknowledged that Bitcoin miners already have an incentive to make their mining equipment as efficient as possible because of the energy intensive nature of cryptocurrency mining. He remarked however that the energy required to mine Bitcoins will always increase.
• Chairman Markey noted how Bitcoin consumes the same amount of electricity as is needed to power every light in every home in the U.S. on a daily basis. He also indicated that the energy consumption associated with Bitcoin would put Bitcoin in the top 30 countries in terms of energy consumption. He noted how Bitcoin supporters have predicted that the price of Bitcoin will increase “dramatically” in the coming years. He asked Mr. Altenburg to indicate whether the electricity demands from Bitcoin mining will also increase.
  • Mr. Altenburg remarked that the entrance of more parties into the Bitcoin mining space will lead to an increase in electricity demands. He noted how there had been more Bitcoin mining activity when the price of Bitcoin was around $60,000 than there is today when the price of Bitcoin is much lower. He stated that it will become increasingly difficult to mine new Bitcoins and that Bitcoin mining rewards will shrink over time. He asserted that this system will result in more energy consumption.
• Chairman Markey asked Assemblymember Kelles to indicate whether uncontrolled energy use had been a factor or concern in New York’s assessment of Bitcoin mining.
  • Assemblymember Kelles answered affirmatively. She stated that New York had been concerned that the energy consumption associated with Bitcoin mining would impact the state’s ability to achieve its energy goals and harm the state’s energy grid. She also mentioned how New York had been concerned that the state’s renewable energy infrastructure could be diverted to Bitcoin mining activities.

Subcommittee Ranking Member Pete Ricketts (R-NE):

• Ranking Member Ricketts asked Ms. Dentlinger to discuss the economic development benefits that Nebraska Public Power District has experienced from new cryptocurrency businesses locating in Nebraska.
  • Ms. Dentlinger remarked that the cryptocurrency industry has brought significant benefits to Nebraska in terms of tax revenues and job creation. She added that these jobs are good paying and are often located in rural areas. She testified that one Nebraska cryptocurrency mining facility had generated $1.6 million in state sales tax over a 12-month period and $3.8 million in local taxes. She stated that this new tax revenue had enabled infrastructure investments in the host communities. She commented that these infrastructure investments both improve quality of life for the communities and can attract more economic development to the communities.
• Ranking Member Ricketts asked Ms. Dentlinger to indicate whether Nebraska’s tax revenue generated from cryptocurrency projects enables the state to reduce property taxes.
  • Ms. Dentlinger answered affirmatively. She stated that this increased tax revenue benefits all Nebraska residents through enabling lower property tax rates.
• Ranking Member Ricketts asked Ms. Dentlinger to indicate whether cryptocurrency companies are interested in locating their operations within Nebraska.
  • Ms. Dentligner remarked that cryptocurrency companies are interested in locating their operations within Nebraska. She largely attributed this interest to the state’s low energy rates and energy rate designs. She stated that Nebraska Public Power District’s customers (including rural public power districts and municipalities) are eager to host cryptocurrency companies because of the tax revenues that they generate and the good paying jobs they provide. She then discussed how Nebraska is unique amongst states in that it has traditionally maintained additional energy capacity. She noted how Nebraska is the U.S.’s largest irrigator, which she attributed to the Ogallala Aquifer. She highlighted how many of Nebraska’s irrigation wells are electric and demand significant amounts of energy during the summer months. She stated however that these irrigation wells do not require energy during the non-summer months, which results in the state having additional energy capacity to spare.
• Ranking Member Ricketts then noted how concerns have been raised that cryptocurrency mining businesses are driving fossil fuel consumption and increasing greenhouse gas emissions. He stated however that Nebraska Public Power District is a leader in the development and deployment of new clean energy technologies. He indicated that these efforts include the development of a regional hydrogen hub and the deployment of carbon capture technology. He asked Ms. Dentlinger to discuss the role that new industries play in supporting the adoption of clean energy technologies in Nebraska.
  • Ms. Dentlinger remarked that load growth creates opportunities and indicated that the Nebraska Public Power District is currently exploring several of these opportunities. She stated that clean energy technologies would help Nebraska Public Power District to serve this new energy demand. She testified that any new regeneration resources from Nebraska Public Power District would have a lower carbon footprint. She discussed how cryptocurrency mining projects have higher load factors, which mean that the projects use energy at steady rates (rather than ramping up and down their energy use). She stated that this dynamic means that cryptocurrency mining projects can produce more constant revenue streams for utility companies, which can help finance the development and deployment of clean energy technologies.
• Ranking Member Ricketts asked Ms. Dentlinger to indicate whether a cryptocurrency mining project could reduce utility bills for other customers through providing more consistent demand for electricity.
  • Ms. Dentlinger remarked that the Nebraska Public Power District works diligently to ensure that it does not shift costs amongst various customer classes. She testified that the Nebraska Public Power District is not subsidizing cryptocurrency mining through its rates. She stated however that the stable electricity usage patterns of cryptocurrency mining operations had enabled the Nebraska Public Power District to reduce its socialized costs. She commented that this reduction has resulted in lower energy costs for all its customers. She stated that consistent usage of electricity can be the most efficient use of electric infrastructure.

Full Committee Chairman Tom Carper (D-DE):

• Chairman Carper remarked that Congress should work to ensure that cryptocurrencies do not increase pollution. He noted how certain cryptocurrencies currently require significant amounts of energy to power their operations. He highlighted how cryptocurrencies currently consume 1.4 percent of the U.S.’s total electricity. He raised concerns over how the cryptocurrency industry’s energy usage is surging in response to a growing need for computing power. He also raised concerns that there is a lack of available information regarding where and how this energy for the cryptocurrency industry is being generated. He asked Mr. Altenburg and Assemblymember Kelles to indicate whether it is possible for cryptocurrencies to reduce their environmental impacts while also enabling communities to economically benefit from these technologies.
  • Mr. Altenburg answered affirmatively. He stated that he is concerned about cryptocurrencies that employ a proof of work validation method (such as Bitcoin). He asserted that the proof of work validation method is wasteful by design. He noted however that Ethereum (which is the second largest cryptocurrency based on market capitalization) uses significantly less energy than Bitcoin. He stated that there exist “dozens” of technologies that can accomplish everything that Bicoin can do without consuming large amounts of electricity.
• Chairman Carper asked Mr. Altenburg to elaborate on how other validation methods for cryptocurrency transactions could use less energy than the proof of work validation method.
  • Mr. Altenburg discussed how Ethereum uses a proof of stake validation method. He stated that the proof of stake validation method uses less energy than proof of work valuation method while enabling the same benefits of blockchain technology.
  • Assemblymember Kelles stated that cryptocurrencies could have lower environmental impacts while still providing economic benefits. She also noted how 0.01 percent of Bitcoin accounts own about 27 percent of all Bitcoins. She commented that this concentrated ownership of Bitcoins undermined the claim that Bitcoins are an accessible cryptocurrency. She then discussed how there are about 16 different types of cryptocurrency validation methods and noted how the proof of stake validation method is the second most common validation method. She indicated that Ethereum uses a proof of stake validation method. She also noted how Ethereum had originally used a proof of work validation method and had successfully converted to a proof of stake validation method. She stated that this transition from proof of work-validated systems to proof of stake-validated systems could reduce a cryptocurrency’s energy consumption by over 99 percent. She further remarked that the proof of stake validation method is nimbler than the proof of work validation method and highlighted how proof of stake systems are supporting many smart contracts, decentralized finance (DeFi) innovations, and Web 3 systems.
• Chairman Carper then asked Mr. Altenburg to identify additional research and data that is needed to better understand, monitor, and mitigate the energy and climate change impacts of cryptocurrencies.
  • Mr. Altenburg remarked that there currently exists a lack of knowledge regarding the energy and climate change impacts of cryptocurrencies. He noted how Pennsylvania regulators did not know exactly where all of the commonwealth’s cryptocurrency mining operations are located. He recounted a January 2021 incident where inspectors from the Pennsylvania Department of Environmental Protection had found unauthorized cryptocurrency mining hardware at a fracked gas well. He noted that the Crypto-Asset Environmental Transparency Act of 2023’s reporting requirement would help regulators to learn when new cryptocurrency mining operations have been set up. He also highlighted how many cryptocurrency mining operations will often attempt to hide their mining activities through falsely claiming that they are operating as data centers.
• Chairman Carper then asked Assemblymember Kelles to discuss additional lessons that New York had learned from its efforts to address the pollution impacts of cryptocurrencies.
  • Assemblymember Kelles discussed how cryptocurrency mining can impact water quality and mentioned how New York’s Greenidge cryptocurrency mining facility can pull in up to 140 million gallons of water from a nearby lake for cooling purposes. She noted how this facility’s use of this water harms the region’s trout, which in turn impacts the region’s fishing, hunting, tourism, and wine industries. She added that this facility emits significant noise pollution. She then discussed how there are opportunity costs associated with significant investments in cryptocurrency mining operations. She noted how New York’s various industries already consume significant amounts of energy and are working to transition to clean electricity sources to reduce their greenhouse gas emissions. She stated that increased cryptocurrency mining activity will make it more difficult for New York’s various industries to access clean electricity sources. She lastly noted that while cryptocurrency mining activity could shut off when there is high demand for electricity, she stated that cryptocurrency mining operations often have contracts where they are compensated for shutting down during periods of high electricity demand. She commented that these cryptocurrency mining operations are thus not cost free in nature. She concluded that cryptocurrency mining undermines efforts to build out renewable energy infrastructure and long-term storage capacity.

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey discussed how the Bitcoin network employs a proof of work validation mechanism to issue new Bitcoins to miners. He called the proof of work validation mechanism problematic because it forces Bitcoin miners to consume large amounts of energy to obtain the new Bitcoins. He noted that other cryptocurrencies (such as Ethereum) use different validation mechanisms that consume significantly less energy than the proof of work validation mechanism. He asked Mr. Altenburg to indicate whether the Bitcoin network could change its validation mechanism to consume less energy.
  • Mr. Altenburg stated that it is technically possible for Bitcoin to change its validation mechanism to consume less energy.
• Chairman Markey emphasized that having the Bitcoin network transition away from a proof of work validation mechanism would be possible and more energy efficient without sacrificing the overall goals of Bitcoin. He asserted that the energy inefficiency associated with cryptocurrency mining is not a blockchain technology problem and is instead a Bitcoin-specific problem. He asked Mr. Altenburg to indicate whether higher Bitcoin prices would create an incentive for Bitcoin miners to consume more energy.
  • Mr. Altenburg answered affirmatively and stated that higher Bitcoin prices have already led Bitcoin miners to consume more energy.
• Chairman Markey mentioned how Congress has previously mandated higher efficiency standards for appliances and automobiles and commented that these higher efficiency standards had been successful in reducing avoidable emissions. He suggested that similar efficiency standards be applied to cryptocurrency mining.

Subcommittee Ranking Member Pete Ricketts (R-NE):

• Ranking Member Ricketts noted how there are waste coal plants in Pennsylvania that might be brought online to support cryptocurrency mining operations. He asked Mr. Altenburg to indicate whether these waste coal plants would need to receive permits from Pennsylvania in order to go into operation. He also asked Mr. Altenburg to indicate whether these waste coal plants would need to comply with Pennsylvania’s overall emissions targets.
  • Mr. Altenburg noted how Pennsylvania has two existing waste coal plants that had been operating at very low-capacity factors that are now supporting Bitcoin mining activities. He stated that these waste coal plants are heavily subsidized and indicated that Pennsylvanians pay 60 percent of the energy costs for the Bitcoin miners at these plants. He acknowledged that while these waste coal plants do comply with their current permits, he indicated that Bitcoin mining is driving up the emissions at these plants.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether these Pennsylvania waste coal plants that are supporting Bitcoin mining operations are limited in their ability to generate power.
  • Mr. Altenburg noted how Pennsylvania maintains power generation limits for waste coal plants. He indicated that the waste coal plants being discussed had been operating at a fraction of their total capacities prior to the start of their Bitcoin mining activity. He stated that these waste coal plants have since significantly ramped up their operating capacities because of Bitcoin mining activity. He acknowledged however that these waste coal plants appear to be operating under their permit limits.
• Ranking Member Ricketts also asked Mr. Altenburg to confirm whether Bitcoin miners had illegally made use of fracked gas wells to power their operations.
  • Mr. Altenburg mentioned how a Pennsylvania Bitcoin mining operation had used a fracked gas well to power their operations without obtaining a permit. He indicated that this case is still being litigated.
• Ranking Member Ricketts further noted how Mr. Altenburg had claimed that many Pennsylvanian Bitcoin miners are emitting significant noise pollution. He asked Mr. Altenburg to indicate whether Pennsylvania maintains rules governing noise pollution.
  • Mr. Altenburg noted that local municipalities in Pennsylvania typically handle noise pollution and indicated that these municipalities typically handle noise pollution as a local nuisance issue. He mentioned how a Pennsylvania fracked gas well that is supporting Bitcoin mining operations is in a remote location. He indicated that there are few neighbors in this location that can file noise complaints. He stated however that the noise pollution stemming from this Bitcoin mining operation impacts the area’s wildlife, which in turn impacts the area’s tourism industry. He commented that there did not exist a strong regulatory mechanism for addressing the noise pollution in this instance.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether a local entity in Pennsylvania could impose limits on the noise that can be generated from a Bitcoin mining operation.
  • Mr. Altenburg stated that he did not know the extent of the authorities with which local entities in Pennsylvania could address noise pollution.
• Ranking Member Ricketts also asked Assemblymember Kelles to indicate whether a local entity in New York could impose limits on the noise that can be generated from a Bitcoin mining operation.
  • Assemblymember Kelles noted that there have been some efforts in New York to address the noise pollution associated with Bitcoin mining. She mentioned how one jurisdiction in New York had imposed a temporary moratorium on cryptocurrency mining because of noise pollution, fire safety, and health safety issues.
• Ranking Member Ricketts further asked Ms. Dentlinger to indicate whether a local entity in Nebraska could impose limits on the noise that can be generated from a Bitcoin mining operation.
  • Ms. Dentlinger stated that both Nebraska municipalities and counties can impose zoning regulations to address noise pollution. She mentioned how these municipalities and counties have adopted regulations to address the noise pollution stemming from wind energy equipment.

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey remarked that the total impact of cryptocurrency mining remains unknown and noted how the White House Office of Science and Technology Policy (OSTP) has called for the collection of more information on this topic. He indicated however that the OSTP lacks the authority to compel the collection of this information. He stated that the Crypto-Asset Environmental Transparency Act of 2023 would support the collection of this cryptocurrency mining information. He asked Mr. Altenburg to indicate whether the Crypto-Asset Environmental Transparency Act of 2023 would provide more transparency and disclosures regarding cryptocurrency mining and would enable more informed policymaking on cryptocurrency mining issues.
  • Mr. Altenburg mentioned how Pennsylvania’s constitution guarantees the public with ownership of the commonwealth’s natural resources. He stated that the lack of transparency associated with cryptocurrency mining prevents Pennsylvanians from knowing about energy consumption and pollution within the commonwealth. He asserted that the absence of this information undermines Pennsylvania’s ability to effectively regulate cryptocurrency mining.
• Chairman Markey reiterated his interest in bringing transparency to the environmental impacts of cryptocurrency mining. He asked Assemblymember Kelles to indicate whether it is unreasonable to demand transparency regarding the environmental impacts of cryptocurrency mining.
  • Assemblymember Kelles called it reasonable for policymakers to ask for transparency regarding the environmental impacts of cryptocurrency mining. She stated that the U.S. could not improve its environment if it does not know how it is being used. She discussed how media reports had uncovered that coal piles on the riverbank edges in Pennsylvania are being used to provide energy for Bitcoin mining operations. She noted that while many Bitcoin miners will argue that the use of these coal piles for energy will prevent pollutants from leaking into the waterways, she highlighted that the burning of this coal will cause air pollution. She remarked that the absence of information regarding the energy consumption of cryptocurrency mining activities prevents policymakers and the public from accurately assessing the tradeoffs associated with these activities.
• Chairman Markey mentioned how the Subcommittee had received testimony from 12 states regarding the damage resulting from cryptocurrency mining activities.

Sen. Cynthia Lummis (R-WY):

• Sen. Lummis asked Mr. Altenburg to describe what a cryptocurrency mining operation looks like.
  • Mr. Altenburg stated that cryptocurrency mining operations can vary based on location. He noted how the cryptocurrency mining operations located near fracked gas wells tend to be semi-trailers with methane gas-powered generators that are plugged into the gas wells. He also indicated that these operations generally involve shipping containers full of racks of Bitcoin mining equipment. He noted that a Bitcoin mining computer is about the size of a toaster and uses three times as much energy as a house.
• Sen. Lummis asked Mr. Altenburg to indicate whether a Bitcoin mining computer is directly emitting pollutants.
  • Mr. Altenburg answered no. He stated however that the Bitcoin mining computer’s energy source is emitting pollutants.
• Sen. Lummis then asked Mr. Altenburg to indicate whether an electric vehicle (EV) charging station should be subject to the same types of transparency requirements being requested in the Crypto-Asset Environmental Transparency Act of 2023.
  • Mr. Altenburg noted how all items that use electricity will produce some level of emissions. He stated that the problem with Bitcoin and other proof of work-validated cryptocurrencies is that these cryptocurrencies consume electricity unnecessarily.
• Sen. Lummis then discussed how the mining and production of gold involves energy expenditures. She asked Mr. Altenburg to indicate whether gold constitutes an essential material.
  • Mr. Altenburg stated that gold is an essential material for certain technologies.
• Sen. Lummis stated that Bitcoin is “digital gold.” She highlighted how there will only ever exist 21 million Bitcoins, Bitcoin is permissionless (which means that one does not have to rely upon a third party to hold or transact in Bitcoin), and Bitcoin acts as a store of value. She noted that both Bitcoin and gold require energy to produce. She asked Mr. Altenburg to indicate whether Congress should be able to deem gold a more worthwhile use of energy than Bitcoin.
  • Mr. Altenburg remarked that Congress has a long history of regulating the energy use of certain activities. He highlighted how appliances are subject to energy efficiency standards and how automobiles are subject to Corporate Average Fuel Economy (CAFE) standards. He further noted how most new air pollution sources must install the best available technology to reduce their emitted pollution. He concluded that Congress already makes decisions about what constitutes an appropriate energy expenditure.
• Sen. Lummis asked Mr. Altenburg to indicate whether a traditional car that uses fossil fuels is a less worthy use of energy than an EV whose electricity source is powered by fossil fuels.
  • Mr. Altenburg stated that the U.S. transportation network involves energy consumption and that this transportation network provides economic benefits.
• Sen. Lummis interjected to ask Ms. Dentlinger to indicate whether digital asset mining operations are a net negative for the power sector.
  • Ms. Dentlinger stated that digital asset mining operations had benefited her state of Nebraska. She testified that Nebraska has not experienced the same drawbacks associated with these operations as the other witnesses had discussed. She indicated that the state’s municipalities, counties, and the Nebraska Department of Environment and Energy have managed most of the drawbacks associated with these operations.
• Sen. Lummis posited a scenario where there is a natural gas well that is not connected to a gathering line. She asked Ms. Dentlinger to indicate whether it is better to vent this well’s gas into the atmosphere or to use the well’s energy to produce something of value.
  • Ms. Dentlinger stated that it would be better to use this natural gas well’s energy to produce something of value.

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey expressed concerns over how cryptocurrency mining is contributing to air pollution. He mentioned how cryptocurrency miners are bringing coal and gas-fired plants back online. He also noted how some cryptocurrency miners are using waste coal to power their operations. He asked Mr. Altenburg to indicate whether he had seen instances where cryptocurrency miners have kept dirty and inefficient power plants online.
  • Mr. Altenburg remarked that cryptocurrency miners appear to have increased the use and output of two waste coal power plants in Pennsylvania.
• Chairman Markey remarked that the energy generation associated with powering cryptocurrency mining operations can threaten the U.S.’s ability to achieve its climate change goals and accelerate climate change. He asserted that Congress must therefore work to address the cryptocurrency industry’s energy consumption as part of its efforts to combat climate change. He asked Assemblymember Kelles to indicate whether cryptocurrency mining jeopardizes the ability of the federal government and state governments to address climate change.
  • Assemblymember Kelles answered affirmatively. She mentioned how her state of New York has 49 retired power plants and explained that these power plants are less efficient and uncompetitive with power plants that use more modern technologies. She stated that the cryptocurrency industry is purchasing many of these retired power plants and turning them back on to support their mining efforts. She commented that these power plants are driving a “significant” increase in greenhouse gas emissions, even if they are being converted from coal to natural gas. She highlighted how natural gas power plants generate methane emissions and noted how methane is a stronger greenhouse gas than carbon dioxide. She remarked that this new cryptocurrency mining activity is thus harming New York’s ability to meet its climate change goals. She noted how New York had imposed a moratorium on the ability of cryptocurrency mining companies to turn these retired power plants back on.
• Chairman Markey noted how cryptocurrency miners can burn flared or vented methane gas to power their mining operations. He stated that the U.S. must reduce its methane emissions and mentioned how the Inflation Reduction Act of 2022 contains a methane emission reduction program. He asked Mr. Altenburg to indicate whether there exist better ways to address flared and vented methane than using it to power Bitcoin mining operations.
  • Mr. Altenburg remarked that Bitcoin miners have merely sought to justify their wasteful uses of energy. He stated that flared methane would be better used to augment energy distribution pipelines than to support Bitcoin mining efforts.
• Chairman Markey interjected to comment that if there exist better ways to deal with vented methane, then fossil fuels should be avoided in the first place. He stated that the mining of cryptocurrencies carried several negative impacts and reiterated his call for more transparency around cryptocurrency mining activity. He commented that the Crypto-Asset Environmental Transparency Act of 2023 would not ban cryptocurrency mining and would simply require increased transparency around this activity. He mentioned how Congress had previously passed policies to reduce energy consumption in other industries and stated that industries tend to be unnecessarily resistant to these types of policies.

Subcommittee Ranking Member Pete Ricketts (R-NE):

• Ranking Member Ricketts asked Assemblymember Kelles to confirm that cryptocurrency miners were going to bring back online 49 retired power plants.
  • Assemblymember Kelles indicated that New York has 49 retired power plants and that there had been concerns that these power plants would be brought back online to support cryptocurrency mining activities. She commented that bringing these power plants back online could undermine New York’s efforts to combat climate change. She noted that New York had thus imposed a moratorium on the purchasing of retired power plants by consolidated cryptocurrency mining corporations. She indicated that this moratorium did not apply to power plants connected to the state’s energy grid or power plants that use renewable energy infrastructure onsite. She stated that this moratorium is narrow in scope and is meant to provide New York with time to measure the cryptocurrency mining industry’s impact on the state. She commented that the Crypto-Asset Environmental Transparency Act of 2023 has a similar objective.
• Ranking Member Ricketts asked Assemblymember Kelles to indicate whether the power plants that had been brought back online to support cryptocurrency mining operations had undergone the permitting process.
  • Assemblymember Kelles noted that one cryptocurrency mining company had used a retired power plant’s existing permits to authorize their operations. She indicated that New York had recently denied this company’s request for an extension of its air permit on the grounds that the power plant’s activities no longer aligned with the state’s Climate Leadership and Community Protection Act. She noted however that the company has appealed the state’s denial of the air permit’s extension and that the case remains in litigation. She commented that it would likely take years to resolve this litigation. She also noted how this cryptocurrency mining company had been out of compliance with its water permit. She stated that this company had initially failed to put a screen on the pipe drawing water from a nearby lake, which had resulted in the killing of a “significant” amount of wildlife. She indicated that the company had just recently installed this required screen. She added that this water permit will soon be up for renewal.
• Ranking Member Ricketts asked Assemblymember Kelles to confirm that New York can use its permitting processes to address the emissions associated with cryptocurrency mining.
  • Assemblymember Kelles stated that New York cannot fully rely upon its permitting processes to address the emissions associated with cryptocurrency mining. She noted that while New York can use its permitting processes to address cryptocurrency mining facilities that operate within power plants, she highlighted how there exist a wide range of cryptocurrency mining facilities. She noted how cryptocurrency mining operations are often located in shipping containers and warehouses that are connected to the state’s energy grid. She also stated that there are opportunity costs associated with having the state’s energy resources being used to support cryptocurrency mining operations.
• Ranking Member Ricketts interjected to ask Assemblymember Kelles to confirm that any power generation source for cryptocurrency mining operations would need to receive a permit.
  • Assemblymember Kelles stated that a cryptocurrency mining operation can obtain energy from the state’s power grid and indicated that the electricity generating facilities connected to the state’s power grid would be permitted.
• Ranking Member Ricketts remarked that anything that is going to generate emissions will need to undergo the permitting process.
  • Assemblymember Kelles interjected to state that there is a difference between energy generation and energy usage. She noted that energy generation is regulated while energy usage does not require permits. She remarked that there might exist an opportunity cost associated with diverting the state’s energy resources toward supporting cryptocurrency mining activities. She noted how New York is working to transition its energy grid onto renewable energy infrastructure and indicated that cryptocurrency mining activities would significantly increase base load energy consumption. She stated that New York would need to significantly increase its renewable energy infrastructure to satisfy this demand and questioned whether such an increase would be feasible. She noted how New York’s ability to develop renewable energy infrastructure is constrained by available land and other factors.
• Ranking Member Ricketts asked Assemblymember Kelles to indicate whether different states would have different needs with regards to power generation and clean air standards.
  • Assemblymember Kelles answered affirmatively. She remarked however that any increased energy demands being imposed on an energy grid will require the production of more renewable energy infrastructure to make that energy grid completely renewable.

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey asked Mr. Altenburg to indicate whether cryptocurrency mining supports or undermines the U.S.’s goal of having a clean, affordable, and reliable electricity grid.
  • Mr. Altenburg remarked that cryptocurrency mining undermines the U.S.’s goal of having a clean, affordable, and reliable electricity grid. He stated that the use of nuclear energy to power cryptocurrency mining operations results in the diversion of carbon-free energy from the U.S.’s energy grid. He disputed the assertions that increasing cryptocurrency mining could lead to the adoption of more solar energy and commented that this increased adoption of solar energy is not occurring. He stated that cryptocurrency miners have an incentive to use energy sources that are available at very high-capacity factors and indicated that these energy sources tend to be fossil fuel or formerly baseload resources. He remarked that the U.S. will require clean and renewable energy to decarbonize its energy grid and commented that proof of work cryptocurrency mining constitutes a wasteful use of energy.
• Chairman Markey asked Mr. Altenburg to indicate whether more disclosure around cryptocurrency mining would stifle or encourage innovation within the cryptocurrency mining industry.
  • Mr. Altenburg remarked that more disclosure around cryptocurrency mining would help regulators to make more informed decisions.
• Chairman Markey stated that the goal of the Crypto-Asset Environmental Transparency Act of 2023 is to provide transparency around a variety of environmental impacts related to cryptocurrencies. He noted how many people that live near cryptocurrency facilities report significant noise pollution from the facilities. He asked Assemblymember Kelles to indicate whether cryptocurrency mining facilities produce nonstop noise that can impact quality of life (especially in rural communities).
  • Assemblymember Kelles answered affirmatively and stated that the noise pollution stemming from cryptocurrency mining is impacting the ability of people to enjoy nature. She also remarked that there exists “disturbing” data regarding the impact of this noise pollution on animal species. She highlighted how noise pollution impacts birds and noted how the bird population is already experiencing declines.
• Chairman Markey interjected to ask Assemblymember Kelles to discuss how cryptocurrency mining facilities are using excessive amounts of water.
  • Assemblymember Kelles noted how the Greenidge facility pulls in up to 140 million gallons of water every day and releases this water at “significantly” higher temperatures. She mentioned how this water usage from cryptocurrency mining facilities is leading to “massive” surges in algal bloom outbreaks, which harm wildlife and humans.
• Chairman Markey lastly asked Assemblymember Kelles to discuss how each Bitcoin transaction is tied to the same amount of e-waste as throwing away two iPhones.
  • Assemblymember Kelles noted how there is research showing an exponential increase in e-waste directly tied to cryptocurrency mining. She also highlighted how a large percentage of e-waste produced every year is exported from high-income countries to low- and middle-income countries. She noted how these low- and middle-income countries often have much weaker and less enforced regulations regarding the dismantling, recycling, and refurbishing of e-waste. She mentioned how the World Health Organization (WHO) estimates that 12.9 million women and 18 million children and adolescents work in the informal waste sector. She expressed concerns that these women, children, and adolescents can be exposed to toxic e-waste.

Subcommittee Ranking Member Pete Ricketts (R-NE):

• Ranking Member Ricketts noted how Mr. Altenburg had repeatedly asserted that cryptocurrency mining constitutes a wasteful use of energy. He noted however that newly mined Bitcoin is worth $144,000. He asked Mr. Altenburg to indicate whether this high price for newly mined Bitcoin demonstrates that Bitcoin mining activity has value.
  • Mr. Altenburg noted that while Bitcoin might have a high cash value, he questioned whether Bitcoin is actually productive for the overall economy. He stated that Bitcoin lacks intrinsic value and derives all of its value from the views of others.
• Ranking Member Ricketts asked Mr. Altenburg to indicate what blockchain technology could be used for.
  • Mr. Altenburg noted that blockchains themselves have many potential applications, including smart contracts. He indicated that Bitcoin is currently not capable of supporting smart contracts while Ethereum can support smart contracts. He also discussed how blockchains could be used to securely record data.
• Ranking Member Ricketts interjected to note how it is very difficult to break a blockchain’s encryption.
  • Mr. Altenburg noted that blockchains are fully transparent and stated that it is very difficult to alter a blockchain’s contents.
• Ranking Member Ricketts asked Mr. Altenburg to describe the types of people who find value in Bitcoin.
  • Mr. Altenburg stated that currency speculators are the main people that find value in Bitcoin. He commented that these people are purchasing Bitcoin on the hope that other people will find Bitcoin more valuable in the future.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether Bitcoin can be used to purchase other items.
  • Mr. Altenburg answered affirmatively.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether this ability to use Bitcoin as a means of payment demonstrates that Bitcoin has value.
  • Mr. Altenburg noted that while Bitcoin might have a market value, he questioned whether Bitcoin has a productive value. He asserted that the only real value stemming from Bitcoin is transaction fees as part of the extension of the Bitcoin blockchain. He remarked that it is possible to derive the full benefits of blockchain technology without consuming massive amounts of energy. He concluded that Bitcoin does not add anything new to the economy.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether a physical product is necessary for something to have value.
  • Mr. Altenburg acknowledged that Bitcoin does have a market value. He asserted however that Bitcoin is not a productive asset.
• Ranking Member Ricketts asked Mr. Altenburg to indicate whether the U.S. government ought to decide what people can and cannot spend money on.
  • Mr. Altenburg remarked that the U.S. government already limits the ability of people to spend money. He stated that appliance efficiency standards constitute a limit on the ability of people to spend their money.
• Ranking Member Ricketts interjected to assert that an appliance efficiency standard is different from a prohibition on spending money on a certain item.
  • Mr. Altenburg stated that the U.S. often impose limits on what people can purchase for environmental, national security, and energy security reasons. He asserted that Bitcoin constitutes a wasteful and unnecessary asset.
• Ranking Member Ricketts then asked Ms. Dentlinger to address how the Nebraska Public Power District approaches different industries in terms of its rate schedule. He asked Ms. Dentlinger to indicate whether the Nebraska Public Power District imposes additional requirements on certain industries.
  • Ms. Dentlinger remarked that the Nebraska Public Power District is “very agnostic” in terms of which industries are customers. She noted how the Nebraska Public Power District maintains different rates for different customer classes (e.g., residential, commercial, industrial). She stated that the Nebraska Public Power District does not consider what industry their customers belong to.
• Ranking Member Ricketts asked Ms. Dentlinger to identify the Nebraska Public Power District’s largest power user.
  • Ms. Dentlinger indicated that Nucor Corporation is the Nebraska Public Power District’s largest power user.
• Ranking Member Ricketts asked Ms. Dentlinter to indicate whether Nebraska Public Power District imposes disclosure requirements on Nucor Corporation regarding their power generation.
  • Ms. Dentlinger answered no.
• Ranking Member Ricketts asked Ms. Dentlinger to indicate whether Nebraska Public Power District charges Nucor Corporation a special rate because of their high-power usage.
  • Ms. Dentlinger stated that Nucor Corporation tends to pay a lower rate for their power usage given their high and consistent energy consumption.
• Ranking Member Ricketts highlighted how Nucor Corporation’s high and consistent energy consumption leads to more efficient energy generation. 

Subcommittee Chairman Ed Markey (D-MA):

• Chairman Markey first remarked that the EPA does collect information about Nucor Corporation’s emissions. He then expressed concerns over how the energy efficiency of Bitcoin has not been improving and stated that there now exist more energy efficient cryptocurrencies. He called on the U.S. to track the environmental impacts associated with Bitcoin and commented that his legislation, the Crypto-Asset Environmental Transparency Act of 2023, would provide such tracking.