Texas Judge Turns Out The Lights On Federal Survey Of Cryptominers' Energy Consumption

A Texas judge has granted a temporary restraining order that prevents the US federal government surveying domestic cryptocurrency miners about their energy consumption.

The order was requested [PDF] five days ago by the Texas Blockchain Council, an industry trade group, and Riot Platforms, a Nevada-based business that operates cryptocurrency mining infrastructure.

The cryptocurrency organizations argued that the federal government's survey – conducted by the US Energy Information Administration (EIA), an independent data analysis agency within the Department of Energy – is an unjustified political contrivance.

On January 24 the Office of Management and Budget (OMB) authorized the EIA to conduct an emergency survey of the US cryptocurrency industry based on concerns expressed by Joseph F DeCarolis of the EIA about potential public harm after the price of Bitcoin rose by more than 50 percent in three months. As the price of Bitcoin rises, so do the incentives to mine more of it.

"The combined effects of increased cryptomining and stressed electricity systems create heightened uncertainty in electric power markets, which could result in demand peaks that affect system operations and consumer prices, as happened in Plattsburgh, New York in 2018," DeCarolis wrote in a letter [PDF] to the OMB.

He argued that cryptocurrency mining now represents as much as 2.2 percent of US electricity consumption and that reports suggest a correlation between cryptocurrency mining and high energy prices in states like Georgia, New York, and Texas.

EIA on its website estimates "electricity usage from Bitcoin mining based in the US to range from 25 TWh to 91 TWh. That estimate represents 0.6 percent to 2.3 percent of all United States electricity demand in 2023, which was 3,900 TWh." Bitcoin production also guzzles water.

Other cryptocurrencies like Ethereum are less energy intensive, as they don't rely on solving computationally demanding puzzles – a mechanism called proof-of-work. Instead they rely on proof-of-stake – a consensus-based system that's claimed to be 2000 times more energy efficient than the Bitcoin mining process.

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China in 2021 banned cryptocurrency mining, along with cryptocurrency-based transactions.

EIA aimed to provide the US government with reliable data about the energy usage of cryptomining operations, given that energy availability is a national concern. The agency sought to survey 82 cryptocurrency mining facilities in the United States.

According to DeCarolis, the survey "will take each respondent 0.5 hours to complete the survey every month …" The financial incentive to fill in the form prior to the specified deadline was significant. Firms selected for the survey faced a civil penalty of up to $12,937 for failing to comply.

Riot Platforms and the Texas Blockchain Council, whose membership includes some 25 crypto mining firms, objected, arguing that EIA's demand for data failed to follow proper procedures, posed a significant business burden, and that no emergency exists.

"The Survey’s emergency processing request seems to have been in response to political pressure, rather than any actual likely public harm," the two organizations argued in their brief.

Riot Platforms claimed that it has already spent more than 40 employee hours trying to respond to the EIA survey – eighty times the EIA’s half-hour estimated completion time.

Judge Alan Albright, US district judge for the Western District of Texas, found the plaintiffs' arguments compelling enough to grant their TRO request, which requires the EIA to suspend its data collection until a preliminary injunction hearing, scheduled for Wednesday, February 28, can be held.

Noting that the plaintiff companies appear likely to prevail in their claims about impropriety of the emergency declaration, the judge also expressed skepticism about the EIA's estimated survey completion time.

"Upon inspection of the Survey itself, the Court finds the 30-minute estimated time of completion is extremely inaccurate, if not grossly misleading," the judge wrote.

The EIA declined to comment, citing ongoing litigation. But the agency acknowledged the TRO by noting, "EIA will not enforce any requirement to file Form EIA-862 nor seek or impose any fines, penalties, or other adverse consequences based on a failure to respond to the survey through March 22, 2024."

If the court grants a preliminary injunction, the EIA may have to wait much longer before it gets any mining data. ®