Three years ago, Bitcoin miners flocked to the state of Texas. The Lone Star State offered cheap power, plentiful supplies of renewable energy, and an accommodating regulatory climate. Some mining companies already operated there, but when China banned crypto mining in May 2021, a mass migration began. Texas was fast becoming “a Mecca for Bitcoin miners,” said Greg Abbott, the state governor. But lately, the mood has shifted.
Texas residents have complained that industrial-scale Bitcoin mines are driving up energy prices and destroying the quality of life of those living nearby. Meanwhile, politicians are demanding clarity over crypto mining’s impact on both the environment and the stability of the ailing Texas energy grid. The industry has been forced onto the defensive.
On February 22, the Texas Blockchain Council (TBC), a pro-mining lobbying group, filed a lawsuit against three parts of the federal government: the US Department of Energy, US Energy Information Administration (EIA), and the White House Office of Management and Budget. It objects to an “emergency” data request initiated in January that required mining firms in Texas to disclose details about their energy usage. Riot Platforms, which operates North America’s largest Bitcoin mining facility in Rockdale, Texas, is a coplaintiff.
The complaint alleges that the federal government concocted illegitimate reasons for expediting the survey, forgoing a process that would have allowed mining companies to object. The disclosure of “highly proprietary” information, the suit claims, would “immediately and irreparably harm” the affected businesses. The survey, says TBC president Lee Bratcher, unfairly singled out an “out of favor” industry.
On February 23, the judge in the case issued an order preventing the government from collecting further data. Less than a week later, the case was stayed indefinitely: The government had withdrawn its survey and agreed to destroy all data it had gathered.
The lawsuit is just the latest flareup of a broader fight over Bitcoin mining in Texas. Detractors and government agencies trying to understand the industry’s full impact have so far been forced to scrape together only “piecemeal information,” says Adrian Shelley, an energy policy expert and branch director of consumer advocacy group Public Citizen.
Riot Platforms did not respond to requests for comment.
In February 2021, Governor Abbott found himself in a political bind. A powerful winter storm had knocked out some of the state’s aging fossil fuel power plants, triggering a blackout that pitched 4.5 million homes into darkness. By the time the storm had abated and power was restored, 246 people had died. Abbott needed a way to shore up the grid. He saw an opportunity in the crypto mining industry.
Cryptocurrency mining is a process whereby computers race to solve a mathematical puzzle and the victor is rewarded with a batch of freshly minted crypto tokens. Today, the competition among miners is such that large fleets of specialized, energy-guzzling hardware are necessary to stand a chance of winning.
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