    [Senate Hearing 118-21]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 118-21

        AIR, CLIMATE, AND ENVIRONMENTAL IMPACTS OF CRYPTO-ASSET MINING:
          LEGISLATIVE HEARING ON S. _, THE CRYPTO-ASSET ENVIRONMENTAL
                            TRANSPARENCY ACT OF 2023

    =======================================================================

                                    HEARING

                                   before the

                          SUBCOMMITTEE ON CLEAN AIR,
                          CLIMATE, AND NUCLEAR SAFETY

                                     of the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS

                              UNITED STATES SENATE

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 MARCH 7, 2023

                                   __________

      Printed for the use of the Committee on Environment and Public Works

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                       _______

                     U.S. GOVERNMENT PUBLISHING OFFICE

    52-481                     WASHINGTON : 2025

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                      THOMAS R. CARPER, Delaware, Chairman
              SHELLEY MOORE CAPITO, West Virginia, Ranking Member

    BENJAMIN L. CARDIN, Maryland         KEVIN CRAMER, North Dakota
    BERNARD SANDERS, Vermont             CYNTHIA M. LUMMIS, Wyoming
    SHELDON WHITEHOUSE, Rhode Island     MARKWAYNE MULLIN, Oklahoma
    JEFF MERKLEY, Oregon                 PETE RICKETTS, Nebraska
    EDWARD J. MARKEY, Massachusetts      JOHN BOOZMAN, Arkansas
    DEBBIE STABENOW, Michigan            ROGER WICKER, Mississippi
    MARK KELLY, Arizona                  DAN SULLIVAN, Alaska
    ALEX PADILLA, California             LINDSEY O. GRAHAM, South Carolina
    JOHN FETTERMAN, Pennsylvania
                   Courtney Taylor, Democratic Staff Director
                   Adam Tomlinson, Republican Staff Director
                                  ----------

             Subcommittee on Clean Air, Climate, and Nuclear Safety

                   EDWARD J. MARKEY, Massachusetts, Chairman
                    PETE RICKETTS, Nebraska, Ranking Member

    BENJAMIN L. CARDIN, Maryland         KEVIN CRAMER, North Dakota
    BERNARD SANDERS, Vermont             CYNTHIA M. LUMMIS, Wyoming
    SHELDON WHITEHOUSE, Rhode Island     MARKWAYNE MULLIN, Oklahoma
    JEFF MERKLEY, Oregon                 ROGER WICKER, Mississippi
    DEBBIE STABENOW, Michigan            DAN SULLIVAN, Alaska
    MARK KELLY, Arizona                  LINDSEY O. GRAHAM, South Carolina
    ALEX PADILLA, California             SHELLEY MOORE CAPITO, West
    THOMAS R. CARPER, Delaware (ex           Virginia (ex officio)
        officio)

                                C O N T E N T S

                                  ----------
                                                                       Page

                                 MARCH 7, 2023
                               OPENING STATEMENTS

    Markey, Hon. Edward, U.S. Senator from the State of Massachusetts     1
    Ricketts, Hon. Pete, U.S. Senator from the State of Nebraska.....     3

                                   WITNESSES

    Altenburg, Rob, Senior Director For Energy and Climate,
      Pennfuture.....................................................     5
        Prepared statement...........................................     7
    Kelles, Hon. Anna R., Ph.D., Assembly Member, New York State
      Assembly, 125th District.......................................    15
        Prepared statement...........................................    17
    Dentlinger, Courtney, Vice President, Customer Services and
      External Affairs and Chief Customer Officer, Nebraska Public
      Power District.................................................    40
        Prepared statement...........................................    42
        Responses to additional questions from Senator Markey........    46

                              ADDITIONAL MATERIAL

    States in support of the Crypto-Asset Environment Transparency
      Act:
        Georgia......................................................    61
        Kansas.......................................................    64
        Kentucky.....................................................    68
        Minnesota....................................................    70
        North Carolina...............................................    74
        Nebraska.....................................................    76
        New York.....................................................    80
        South Carolina...............................................    96
        Tennessee....................................................    98
        Texas........................................................    99
        Washington...................................................   105
        West Virginia................................................   108
    Letters to Senator Markey and Senator Ricketts from:
        Earth Justice................................................   124
        Sierra Club..................................................   167
        National Coalition Against Cryptomining (NCAC)...............   172
        Natural Resources Defense Council (NRDC).....................   175
        Environmental Working Group..................................   181
        Greenpeace USA...............................................   184
    Markey legislation to require an interagency study on the
      environmental and energy impacts of crypto-mining..............   195

        AIR, CLIMATE, AND ENVIRONMENTAL IMPACTS OF CRYPTO-ASSET MINING:
          LEGISLATIVE HEARING ON S. _, THE CRYPTO-ASSET ENVIRONMENTAL
                            TRANSPARENCY ACT OF 2023

                                  ----------

                             TUESDAY, MARCH 7, 2023

                                   U.S. Senate,
             Committee on Environment and Public Works,
                            Subcommittee on Clean Air, Climate,
                                            and Nuclear Safety,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 2:35 p.m. in
    room 406, Dirksen Senate Office Building, Hon. Edward Markey
    (chairman of the subcommittee) presiding.
        Present: Senators Markey, Ricketts, Carper, Whitehouse,
    Lummis.

               OPENING STATEMENT OF HON. EDWARD MARKEY,
              U.S. SENATOR FROM THE STATE OF MASSACHUSETTS

        Senator Markey. Good afternoon, everyone. I am pleased to
    call the Subcommittee on Clean Air, Climate, and Nuclear Safety
    to order for a legislative hearing on the Crypto-Asset
    Environmental Transparency Act, which I have introduced along
    with Senator Merkley and Senator Sanders.
        This is our first subcommittee hearing of the year, so
    Senator Ricketts and I are going to begin, as they say in
    Casablanca, a beautiful relationship over the next 2 years.
        [Laughter.]
        Senator Markey. We are looking forward, of course, to
    working with Senator Carper and Senator Capito as well. We are
    looking forward to partnering with them and their extremely
    helpful staff. Over the course of the next 2 years, there will
    be many important issues that we will be asked to consider.
        We welcome our witnesses. We appreciate your willingness to
    appear today.
        Today is going to be the first Senate hearing ever held on
    the environmental impacts of crypto-mining. They may be mining
    digital assets, but their activities have real-world
    consequences. This is an emergency, an urgent issue. Congress
    needs to be proactive and reactive in tackling it.
        The market size of the global crypto-mining industry was
    estimated at $2 billion in 2022, more than one-third of which
    is in the United States. That industry is forecast to nearly
    quadruple over the next 10 years, which means its threats to
    our environment, health, communities, and climate are set to
    explode.
        Bitcoin mining consumes as much power globally each year as
    the entire Swedish economy. In the United States, carbon
    dioxide emissions from Bitcoin mining are equivalent to the
    annual emissions from as many as 7.5 million gasoline-powered
    cars. Right now, Bitcoin mining in the United States uses as
    much power as we need to light every single home in our
    Country. That demand on our grid is only going to grow.
        That is an amazing number, that Bitcoin alone consumes as
    much electricity as every light on in our Country every day. We
    face an urgent climate crisis, which the Biden Administration
    has committed to addressing by reducing greenhouse gases by 50
    percent by 2030. We know we need to tackle emissions from many
    different sectors of our economy, and I am sure we will have
    hearings on these sectors as well.
        Our first hearing is focusing on the crypto-mining
    industry, because it deserves the spotlight. It has grown
    explosively in the United States over the past 2 years. It is
    extremely energy intensive. We have seen it harm the general
    public while enabling the creation of heavily concentrated
    wealth in our Country.
        We are not here to debate the pros and cons economically of
    crypto currency. We are here to discuss what the impacts are
    environmentally in our society and what we can do to reduce its
    impact. As our expert witnesses will explain, Bitcoin was the
    first-ever crypto asset, and relies on a process known as
    proof-of-work mining. Crypto miners use large banks of
    computers that suck up huge amounts of energy to run
    computations and are awarded new Bitcoins as a result.
        Every 10 minutes, a miner will generate Bitcoins a reward
    that are currently worth nearly $140,000. As the value of
    Bitcoin increases, there is more incentive to run more
    computers, consume more energy and mine more Bitcoins. It is an
    energy arms race for the digital era.
        Bitcoin miners have already had a direct impact on our
    climate by bringing mothballed coal-and gas-fired power plants
    back online to power their operations. It is more than just
    climate issues. Mining equipment creates significant amounts of
    electronic waste. Mining requires huge amounts of water for
    cooling and power generation. Residents from across the Country
    have provided me with testimony of devastating noise pollution
    from neighboring Bitcoin mining facilities.
        With an environmental impact like this, Bitcoin is more
    like digital coal than digital gold. The commodity is virtual,
    but the harm is tangible. While the Bitcoin mining industry
    claims that they can actually be a boon to the environment,
    saying that they can capture and burn vented methane to power
    their operations, or that they can actually improve grid
    stability, we do not have the transparency which we need to vet
    those arguments to see if that assertion is true.
        We do have real-world examples of how the industry is
    already creating real consequences for communities. That is why
    we are here. The Crypto-Asset Environmental Transparency Act
    would mandate a detailed EPA-led study of the environmental
    impacts of crypto mining. The Act would also require crypto
    miners to report their carbon dioxide emissions under the EPA's
    Greenhouse Gas Reporting program.
        The people who profit from Bitcoin mining can not be left
    to grade their own homework. A take-home exam that you grade
    yourself almost always gets an A, that is just human nature at
    work. So we need someone to check that work. We need
    independent, trustworthy, and accurate statistics, so that
    homework gets a grade that is independent.
        I look forward to discussing how the study and reporting in
    my Crypto-Asset Environmental Transparency Act can help inform
    Congress and the general public about these emerging issues.
    All I can say is I am glad we are going to be able to have an
    active subcommittee this year. I am looking forward to
    partnering with the Ranking Member on the subcommittee, Senator
    Rickets. At this point, I would love to recognize you for your
    opening statement.

               OPENING STATEMENT OF HON. PETE RICKETTS,
                U.S. SENATOR FROM THE STATE OF NEBRASKA

        Senator Ricketts. Thank you very much, Mr. Chairman, and
    thank you for calling this subcommittee hearing. I am grateful
    for the opportunity to be the Ranking Member on the
    Subcommittee for Clean Air, Climate, and Nuclear Safety.
        I look forward to working with you and the other members as
    well, members on each side of the aisle in EPW. I understand
    that you had a very successful last year with a lot of
    bipartisan legislation coming out.
        I also want to welcome our witnesses that are joining us
    here today. I appreciate you all taking your time to be able to
    be here. Especially I would like to recognize Courtney
    Dentlinger, who made the trip from Nebraska to come and
    testify. She works for Nebraska Public Power District. You may
    not know this, but Nebraska is one of the only, well, I think
    we are the only public power State left in the Country,
    completely a public power State.
        During my tenure as Governor, Ms. Dentlinger actually led
    our Department of Economic Development. She was so good at her
    job that we actually won two Governors Cups for the most
    economic development projects per capita of any State in the
    Country, which not only was great for us back then, but she
    also knows a lot, she is an excellent choice to talk about how
    to market Nebraska both nationally and globally, as she helped
    us win those Governors Cups and helped develop job
    opportunities in Nebraska.
        So today we are here to discuss an emerging industry,
    crypto-asset mining. I am particularly interested in this topic
    as to whether this industry could result in more economic
    development for the State of Nebraska and across the Country.
    While crypto-asset mining may be a relatively new topic for the
    Environment and Public Works Committee, it is actually not my
    first time interacting on this topic and the crypto-economy.
    When I was Governor the Nebraska legislature passed and I
    signed a Nebraska Fiscal Innovation Act into law. This law
    provided an avenue for financial institutions to invest in our
    State and benefit from this emerging sector.
        According to CNBC, my home State of Nebraska was actually
    named the No. 1 State for developing a crypto economy in 2022.
    I am proud that new businesses and new job opportunities
    related to the crypto-currency industry have either located in
    Nebraska, or are considering coming to our State.
        When businesses are looking for a place to open their
    doors, what they are looking for is a business-friendly
    environment, some place that they are being welcomed. They are
    looking for regions also that can help them keep their costs
    low. For crypto asset mining, a key variable of course, as the
    Chairman pointed out, is electricity, one of the key variables
    of their operating costs.
        That is one of the reasons that these businesses are
    choosing Nebraska. Our electricity rates are among the lowest
    in the Nation. Nebraska's average price for electricity per
    kilowatt hour in 2022 was just 9.84 cents.
        In addition to favorable energy prices, the people in
    Nebraska know best how to succeed by getting government out of
    the way. That is one of the things I talked about, a business-
    friendly environment.
        So I am interested in hearing on this topic we are
    discussing today about how we are treating one industry, the
    crypto-asset mining, differently from other electricity
    consumers. Crypto-asset mining is hardly alone in being an
    industry relying on large data server banks. Finance,
    technology, government, academia, many others use significant
    amounts of electricity to power their computing needs.
        We should be providing the tools for open competition in a
    free market by not allowing politicians or bureaucrats in
    Washington, DC. to pick winners and losers. When the Federal
    Government targets an industry it has caustic consequences,
    especially for an industry just beginning its development.
    Overreaching laws and regulations can drive emerging
    technologies overseas. That often goes to countries that have
    fewer environmental regulations than the United States, which
    means you are actually adding to greenhouse gas emissions. This
    also means that we are losing jobs here in America.
        I look forward to hearing our witnesses' testimony to
    explore discussions and opportunities related to crypto-asset
    mining. With that, Mr. Chairman, it is a pleasure to be serving
    with you. I yield back time to you.
        Senator Markey. The feeling is mutual, thank you.
        Thank you, Senator Ricketts. Now we are going to turn to
    our esteemed panel of witnesses. We are going to hear them in
    order. First, we will hear from Rob Altenburg. Mr. Altenburg is
    the Senior Director for Energy and Climate at Citizens for
    Pennsylvania's Future. Before that, he worked for the
    Pennsylvania Department of Environmental Protection, studied
    law at Widener Commonwealth Law School and he is also a combat
    engineer company in the United States Army Reserve.
        Next, we are going to hear from Dr. Anna Kelles. Dr. Kelles
    is the Representative from New York State Assembly's District
    125. Her district covers Tomkins County, where she was born.
    She earned a dual bachelor's degree in biology and
    environmental studies at Binghamton University, and a Ph.D. in
    nutritional epidemiology from the University of North Carolina
    at Chapel Hill.
        Finally, we are going to hear from Courtney Dentlinger. Ms.
    Dentlinger is the Vice President of Customer Services and
    External Affairs at Nebraska Public Power District. She is a
    native of Battle Creek, Nebraska. She earned a bachelor's
    degree in political science, international studies and Spanish
    from Wayne State College and a juris doctorate from George
    Washington University here in Washington, DC, in addition to
    all the very nice things that Senator Ricketts said about you.
        We welcome all of you. Thank you for testifying, and we
    will now in order recognize you for your opening statement. We
    will begin with you, Mr. Altenburg.

       STATEMENT OF ROB ALTENBURG, SENIOR DIRECTOR OF ENERGY AND
              CLIMATE, CITIZENS FOR PENNSYLVANIA'S FUTURE

        Mr. Altenburg. Thank you, Chairman Markey, Ranking Member
    Ricketts, for having me here today. My name is Rob Altenburg. I
    am the Senior Director of Energy and Climate at Citizens for
    Pennsylvania's Future. We are a membership-based non-profit
    environmental advocacy organization.
        I have been working on energy and environmental issues for
    over 30 years. I am here today to share why I am concerned
    about Bitcoin mining and other related proof-of-work crypto-
    currencies. That requires a little bit of background.
        First, for all its high-tech image, Bitcoin is based on a
    simple idea that has been around since the 1980's. It is called
    a block chain. It is basically an accounting ledger where each
    page or block records Bitcoin transactions.
        Part of what keeps this ledger secure is that creating new
    blocks is very, very difficult. Finding or mining a new block
    is a guessing game where the odds of being correct are less
    than one chance in a hundred billion trillion. Much, much lower
    odds than winning the lottery.
        The odds get worse the more miners join the race. The
    winner, the first one to mine a valid block, is rewarded with
    newly mined Bitcoin currently valued at over $140,000 with no
    prizes for second place.
        To be competitive, Bitcoin miners use racks of special
    purpose computers that make trillions of guesses, hundreds of
    trillions of guesses every second. Each of those computers uses
    more than three times the amount of energy as the average
    household and a single miner might run tens of thousands of
    them 24-7. Altogether, Bitcoin consumes more energy, more
    electricity than 80 percent of our States and more than many
    entire countries.
        Bitcoin is wasteful by design. This sort of waste just is
    not necessary. Bitcoin's guessing game system called proof-of-
    work is essentially crypto-currency version 1.0. Newer versions
    accomplish the same thing faster and cheaper. Ethereum, for
    example, recently converted to a newer proof-of-stake system,
    and it can do everything Bitcoin can do and more while using
    just a fraction of the energy.
        For now, though, Bitcoin's system is still dominant. The
    enormous amount of energy it wastes must come from somewhere.
    In Pennsylvania, we are seeing that on the ground.
        In 2021, one company announced plans to purchase three
    waste coal-fired power plants, and install up to 57,000 miners.
    They already have two of these plants in operation. Waste coal
    is a problematic fuel to say the least. As the name implies, it
    has low energy value compared to ordinary coal, so plants need
    to burn even more to generate the same amount of electricity.
    In the process, they emit more ozone precursors, fine
    particulates, acid gases, heavy metals, and it is the second
    most carbon-intensive generation next to residual fuel oil.
        Just in January of last year, State inspectors found 10
    megawatts worth of generation have literally been plugged into
    fracked gas wellheads, and they were using the gas to mine
    Bitcoin without obtaining any permits. This sort of mining is
    increasing, but without clear reporting requirements, it is
    impossible to know which or how many of Pennsylvania's
    thousands of fracked gas wells are being used in this way.
    Media reports and even permit applications are sporadic, and
    even where there are reports, miners may call themselves data
    centers and not mention Bitcoin at all.
        In addition to the problem from drilling and fracking,
    Bitcoin mining also causes noise pollution. The sound of these
    operations has been compared to the whine of a giant dentist's
    drill or a jet engine that never stops. In some cases, it can
    be heard for over a mile away. More than just an annoying
    nuisance that lowers property values, persistent noise
    pollution has been shown to cause health problems for both
    people and wildlife.
        It is not just burning fossil fuels directly that is the
    problem. In Pennsylvania, we are seeing Bitcoin operations at
    nuclear power plants. The operators claim this is carbon--free
    energy, but that does not tell the whole story. We do not have
    a surplus of clean carbon-free energy on our grid. So when
    carbon-free energy is diverted from powering our grid to
    wasteful cryptocurrency, something has to make up the
    difference, and that is often fossil fuels.
        Bitcoin mining is bad for public health and the
    environment. It is bad for the power grid and our wallets as
    well. Miners claim that they can easily pause operations when
    the grid needs power, but that only happens when the
    electricity is worth more than the Bitcoins. Essentially, we
    are linking our electricity prices to the volatility of the
    Bitcoin market, and that is a terrible idea.
        Worse yet, by wasting the cheap electricity on Bitcoin
    mining, wholesale prices go up for everybody else. In short,
    Bitcoin mining is wasteful by design, and waste is never good.
    Thank you.
        [The prepared statement of Mr. Altenburg follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Markey. Thank you, Mr. Altenburg.
        Dr. Kelles, you are up.

     STATEMENT OF HON. ANNA R. KELLES, PH.D., ASSEMBLY MEMBER, NEW
                  YORK STATE ASSEMBLY, 125TH DISTRICT

        Ms. Kelles. So wonderful to be here today, thank you.
        I would like to voice my support for Senator Markey's
    Crypto-Asset Environmental Transparency Act as the
    representative of the 125th New York Assembly District.
        The environmental and socioeconomic impacts of expanding
    proof-of-work based crypto-currency mining will continue to
    have devastating environmental and socioeconomic consequences.
    It is estimated that cryptocurrency mining facilities for the
    proof-of-work based currency, Bitcoin, used more energy than
    all the processing for Google, Amazon, and Facebook combined,
    more than all the data centers globally combined, and more
    energy than all the solar panels that exist globally.
        In fact, according to Digiconomist, one Bitcoin transaction
    requires approximately 860 kilowatt hours. This is equal to the
    energy needed to power the average U.S. household for 1 month.
    Given that a cryptocurrency mining operation creates minimal
    jobs, for example, a large U.S. operation of 100,000 ASIC
    processors employs 40 staff per shift, yet a year ago made $2
    million per day. Profits for a cryptocurrency mining company
    are thus limited not by labor costs, but rather by the cost of
    electricity.
        As one of the solutions for cheap energy, cryptocurrency
    mining companies work to reopen retired fossil fuel power
    plants like the large-scale facility called Greenidge, in
    Dresden, New York, on Seneca lake. An environment with moderate
    temperatures, clean air, and abundant fresh free water for
    cooling have made New York an ideal location for cryptocurrency
    mining companies.
        In the Finger Lakes, Greenidge provides service directly to
    the cryptocurrency mining operation on their property,
    maximizing their State permit-allowed GHG emissions and
    increasing local air pollution, including nitrogen oxide and
    sulfur dioxide. Due to the frequent replacement of
    cryptocurrency mining processors, the facility has also created
    a notable amount of electronic waste.
        Facilities like Greenidge also negatively impact 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 rings. Water is removed at
    temperatures of 40 to 50 degrees and released back at
    temperatures of up to 108 degrees, killing thousands of fish
    every year, and increasing the risk of harmful algal bloom
    outbreaks that are toxic for both wildlife and humans.
        Gas-fueled power plants also affect the health and quality
    of life in surrounding neighborhoods. Emission of hazardous air
    pollutants are known to cause asthma, heart attacks, strokes,
    reproductive damage and preterm birth. These public health
    impacts are most acutely felt in environmental justice
    communities.
        Noise pollution is another significant concern for
    residents in towns across the Country who have stacks of
    consolidated mining rigs in open fields or mining warehouses in
    their community. The long waves of low-frequency noise ravel
    for miles around the cryptocurrency mining facility and are
    often characterized as sounding like jet engines.
        In addition, according to a Berkeley Haas working paper,
    the power demands of cryptocurrency mining operations in
    upstate New York push up annual electric bills by about $165
    million for small businesses, and $79 million for individuals,
    with little or no local economic benefit.
        Although communities hosting cryptocurrency mining
    facilities experience few economic benefits due to minimal job
    creation and profits going to non-local corporate investors,
    these facilities can threaten other critical industries. In the
    Finger Lakes, for example, the $3 billion annual tourism
    industry that employs over 65,000 people and relies on the
    lakes and the natural environment is directly threatened by the
    polluting activity of Greenidge.
        With respect to meet our climate goals, large scale
    cryptocurrency mining in New York State is significantly
    increasing the State's total base energy demand on the grid,
    putting further pressure on our need for a massive electrical
    line overhaul. Due to the overall increase in base demand, some
    estimates suggest we need to increase our wind and solar
    infrastructure development goals by over 60 percent to meet our
    State climate goals just with the existing in-development and
    proposed cryptocurrency mining operations in New York.
        Other forms of validation, such as proof-of-State, utilize
    far less energy. For example, Ethereum recently transited to
    proof-of-State, resulting in a total immediate energy
    consumption reduction of over 99.9 percent.
        Please pass the Crypto-Asset Environmental Transparency
    Act. We must carefully study the environmental and grid impacts
    of cryptocurrency mining methods, such as proof-of-work mining,
    and implement appropriate statutes and regulations to prevent
    the damage it is doing and will continue to do to our public
    health and environment.
        Thank you.
        [The prepared statement of Ms. Kelles follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Markey. Thank you so much.
        Courtney Dentlinger, whenever you are comfortable, please
    begin.

      STATEMENT OF COURTNEY DENTLINGER, VICE PRESIDENT, CUSTOMER
       SERVICE AND EXTERNAL AFFAIRS AND CHIEF CUSTOMER OFFICER,
                     NEBRASKA PUBLIC POWER DISTRICT

        Ms. Dentlinger. Thank you. Good afternoon, Chairman Markey,
    and Ranking Member Ricketts. Thank you for the opportunity to
    testify today.
        I would like to share a little bit about Nebraska Public
    Power District, or as I will refer to it, NPPD, and the
    territory we serve, to set the stage for my remarks regarding
    our experience with cryptocurrency mining. As Senator Ricketts
    mentioned, Nebraska's electric utility industry is unique and
    the legacy of Senator George Norris. We are the only 100
    percent public power State in the Nation.
        NPPD is a public corporation, and a political subdivision
    of the State. We are not-for-profit. Our rates are set to
    deliver reliable, affordable, sustainable energy and related
    services to our customers. We do not have shareholders; rather
    our customers are in essence our owners. Our approximately
    2,000 employees operate our integrated electric utility system,
    including generation, transmission, and distribution
    facilities. Our chartered territory encompasses all or parts of
    84 of the State's 93 counties, spanning 500 miles from east to
    west.
        The majority of our service territory is rural. The largest
    city we serve has fewer than 35,000 people. Much of the area
    receiving our power supply is farm and ranch land where crops
    and livestock are grown to help feed America and the world,
    along with significant ag processing, and other manufacturing.
    Our 3,200 megawatts of diverse generation located across the
    State includes nuclear, coal, gas, wind, hydro and solar. This
    diverse generation mix helps us meet our customer expectations
    to be reliable, affordable, sustainable and resilient.
        NPPD and our fellow Nebraska utilities are proud to offer
    some of the lowest rates and highest reliability among the 50
    States. We serve our Nebraska customers with a resource mix
    that is 62 percent carbon-free. In 2021, our board set a goal
    of achieving net-zero carbon emissions by 2050, while
    emphasizing the need to maintain reliability and affordability.
        In fact, we are actively pursuing multiple technologies as
    we look to the future of carbon-free energy. NPPD is leading
    Nebraska's efforts along with partners in Iowa and Missouri to
    pursue Federal hydrogen hub designation. We are currently
    conducting a feasibility study to determine potential locations
    for advanced nuclear reactors. We are working with the U.S.
    Department of Energy and several companies on carbon capture
    and sequestration opportunities.
        In Nebraska, like most other States, electric utilities,
    regardless of type, have exclusive retail service areas, which
    include an obligation to serve all customers under just, fair,
    and reasonable rates. We cannot refuse customer based on the
    business they may offer. We generally must serve all electric
    loads agreeing to meet applicable terms of service.
        Just as every generation source has its benefits and
    challenges, so does each type of customer load. Historically,
    steady electric demand from a customer resulted in the most
    efficient use of electric infrastructure at a lower cost per
    unit of electricity for those customers. Today, the variability
    of generation from an increasing amount of renewables, as well
    as other considerations, is allowing for opportunities for new
    tools to be implemented to manage generation and loads,
    including innovative rate designs and demand response.
        In our predominantly non-metro and rural service areas,
    diversification of businesses and economic growth is critical
    as these areas continue to see population declines. In fact,
    local leaders have been very receptive to crypto-mining
    facilities as they have seen the potential for significant
    economic development benefits for their communities.
        An economic impact study performed for a crypto mining
    project in Nebraska showed over a $65 million economic impact
    on Nebraska's economy, nearly 200 associated and direct and
    indirect jobs, and $5.59 million in tax revenue. In rural
    areas, these economic benefits can be significant.
        The projects we have seen have an average wage of $60,000
    per job, higher than our median household income. Unlike
    traditional hyperscale data centers, which often need to locate
    in metro areas for work force and redundant fiber needs, these
    types of crypto operations are more suited for rural areas
    because of smaller work force requirements, less stringer
    redundant fiber requirements. Although the number of jobs is
    smaller, again, these good-paying opportunities can have
    significant impact in a rural area.
        These types of projects can also be more flexible with
    respect to siting and often seek locations where there is
    existing excess or unused transmission capacity. They also have
    very high capacity load factors, running nearly 24 hours a day,
    7 days a week, which is actually a benefit for load-serving
    entities. The load can be very flexible. They often seek
    interruptible rates and can quickly drop loads, which has
    proven to be helpful during local storm damage related events
    and even large-scale grid events, where transmission or
    generation might be insufficient to serve load.
        With that, again, I appreciate the opportunity to share our
    experience with you today. I look forward to any questions you
    may have.
        [The prepared statement of Ms. Dentlinger follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Markey. Thank you so much.
        Now we will turn to a round of questions from the Senators.
    As we work to decarbonize our economy, we have to demystify
    electricity guzzling industries like Bitcoin mining. Bitcoin
    has an outsized effect on our grid and on our climate. Why is
    that? Well, because Bitcoin mining is inherently energy
    inefficient. The more demand there is for Bitcoin, the more
    work it takes to generate new Bitcoin.
        I operated an ice cream truck to pay my way through
    college. So it is like saying that if my truck got worse gas
    mileage, it would be because each new ice cream which I sold
    reduced the energy efficiency of the truck.
        Mr. Altenburg, is it true that Bitcoin's proof-of-work
    mining mechanism is set up to require more energy to earn each
    new Bitcoin as more miners come into the market?
        Mr. Altenburg. Yes, it does. That occurs in two different
    ways. One is the Bitcoin race, the difficulty level of mining a
    new block gets harder the more miners mine. That is on the
    short time scale. We also have the issue on a longer-time scale
    where every approximately 4 years, the amount of Bitcoin that
    you get from mining is cut in half.
        Senator Markey. So Bitcoin mining is like a fuel economy
    regulation in reverse. As time goes on and computers get
    faster, the network automatically adjusts to make sure more
    energy gets used. Mr. Altenburg, even if we improve the energy
    efficiency of crypto mining computers, would that lead to lower
    energy usage?
        Mr. Altenburg. Bitcoin mining is inherently wasteful by
    design. The miners already have incentive to make the mining
    hardware as efficient as they possibly can, because of the
    enormous amount of energy they have to use. The problem is, as
    efficient as they can possibly be, they are not efficient
    enough. They are always going to increase the energy demand.
        Senator Markey. So Bitcoin uses as much electricity as we
    need to power every light in every home in the United States on
    a daily basis. Globally, if Bitcoin mining was a country, it
    would be in the top 30 countries based on energy use worldwide
    above countries like Norway and Sweden.
        Mr. Altenburg, Bitcoin supporters predict that the Bitcoin
    price will increase dramatically in the coming years. Does that
    mean that the electricity demand from Bitcoin mining will also
    increase?
        Mr. Altenburg. As more miners enter the fray, enter the
    mining competition, we do see an increase, we have seen that.
    When Bitcoin was worth $60,000 a Bitcoin, we had more active
    mining than we do at today's prices.
        Yes, it is going to continually get more difficult to mine
    Bitcoin and the amount Bitcoin miners are going to be rewarded
    with is going to continue to get less and less. This system
    will continue to spiral at an exponential rate, using more and
    more energy.
        Senator Markey. Thank you.
        Dr. Kelles, was uncontrolled energy use a factor of concern
    in your assessment of Bitcoin mining in New York State?
        Ms. Kelles. Yes, absolutely. Particularly given the impact
    on one, our climate goals, and two, our energy grid. We have
    very aggressive climate goals. The concern was that amount of
    cryptocurrency mining that was growing rapidly in New York
    State would actually derail our ability to reach our climate
    goals.
        Particularly, the more renewable energy infrastructure we
    put in place, if we divert that to the cryptocurrency mining,
    there is a profound opportunity cost that that exactly same
    renewable energy infrastructure would not be available then for
    all of the existing building infrastructure and transportation
    infrastructure, which are two of the biggest contributors to
    greenhouse gas emissions that we want to get on onto the
    electric grid.
        Senator Markey. Thank you, Dr. Kelles, very much.
        At this juncture, there is a roll call on the floor of the
    Senate right now, and I will leave it up to Senator Ricketts,
    my thought would be that I would hand the gavel over to him, I
    am going to run over and make the roll call and try to get back
    here. It will be a relay race; then he can run over and make
    the roll call as well. Let me turn it over to Senator Ricketts.
        Senator Ricketts.
        [Presiding.] Thank you, Chairman.
        Ms. Dentlinger, we were talking a little bit earlier, and
    you have first-hand knowledge of the economic development that
    we are talking about, the jobs that are created, the
    investment, the tax revenues and so forth that we get from
    investments in our State. Nebraska Public Power is no stranger
    to the crypto industry. What benefits in terms of economic
    development have you seen from new businesses in the crypto
    energy who are locating to Nebraska? Can you expand upon some
    of the things you were talking about before, please?
        Ms. Dentlinger. Thank you, Senator. Absolutely. We have
    actually seen significant benefits from this industry to date,
    mostly farm tax revenues and then job creation. Again, those
    are very good-paying jobs, particularly in rural areas of
    Nebraska. The tax revenues for the State and local political
    subdivisions, we have seen just for one crypto mining facility
    in Nebraska $1.6 million in State sales tax over a 12-month
    period. During that same timeframe, $3.8 million for the local
    taxing authorities.
        That enables infrastructure investments in the host
    communities. In fact, due to those increased tax revenues, that
    Nebraska community has been able to make significant
    enhancements to its regional municipal airport, to attract
    commercial air service to the community, which is important not
    only from a quality of life perspective for the residents
    there, but also for recruiting additional economic development
    prospects to the area.
        Senator Ricketts. Is it also fair to say that it also helps
    to keep property taxes down?
        Ms. Dentlinger. Absolutely. That is certainly a concern in
    the State of Nebraska. Those sales tax revenues help every
    resident at the State on their property tax bill.
        Senator Ricketts. Are you hearing from companies that want
    to locate their crypto industry in the State of Nebraska, who
    have expressed an interest in moving?
        Ms. Dentlinger. We certainly are. There is a great deal of
    interest, due in large part, as you mentioned, to the low rates
    that we have, but also to the rate designs that we have put in
    place. Our customers, both rural public power districts and
    municipalities, are eager to host these opportunities, again,
    because of the tax benefits and the good-paying jobs that they
    bring.
        Nebraska is also rather unique because we have historically
    had additional capacity available. We are the Country's largest
    irrigator, thanks to the Ogallala Aquifer. Many irrigation
    wells have been converted to electric from diesel, because the
    load, while large, is seasonal. Two to 3 months out of the
    year, during the summer, those irrigation wells demand a lot of
    electricity. The remainder of the year, we have additional
    capacity to spare.
        Senator Rickets. Great. One of the things that has been
    mentioned here today is the impact of these facilities on
    emissions, the crypto assets mining businesses are responsible
    for increasing fossil fuel use and driving up greenhouse gas
    emissions. Ms. Dentlinger, my understanding is that Nebraska
    Public Power District is leading the way in the development and
    deployment of new clean energy technology, such as supporting a
    regional hydrogen hub, you mentioned that in your opening
    remarks, and supporting deployment of carbon capture
    technology, which you also mentioned.
        Can you tell us a little bit more about the role new
    industries play in supporting clean energy technology and
    adoption in Nebraska?
        Ms. Dentlinger. Yes. Load growth creates opportunities. As
    you mentioned, we are exploring a number of those currently. We
    are in the process of developing our integrated resource plan.
    New load means an opportunity for additional generation
    resources and clean energy technologies would be part of those
    additions. In fact, any new generation resources we deploy
    would have a lower carbon footprint.
        Loads with higher load factors, such as crypto mining,
    which means they are utilizing electricity at steady rates
    rather than ramping up and down, can produce more constant
    revenue streams, which in turn can help finance those clean
    energy technology deployments.
        Senator Ricketts. To kind of just typify this a little bit
    for me, is it fair to say that if you and your community have a
    crypto currency or crypto asset generating facility that is
    creating more demand for electricity, and because of the scales
    of utility generation, you can actually help reduce the utility
    bills for other customers? Is that fair?
        Ms. Dentlinger. We work very hard to make sure that we are
    not shifting costs among various types of customer classes. We
    certainly are not subsidizing crypto. Those mining operations
    again are so stable in the usage of electricity it actually
    helps systemically for those costs that we do socialize to
    bring the costs down for every user.
        Senator Ricketts. Yes, so because you have to give that
    consistent demand, you can keep it relatively, other people's
    rates, relatively lower, is that fair?
        Ms. Dentlinger. Yes. Consistent usage, 24-7, can actually
    be the most efficient use of electric infrastructure.
        Senator Ricketts. All right, great. Thank you.
        Mr. Carper.
        Senator Carper. Mr. Chairman. Been in the Senate less than
    3 months, he is already chairing committees.
        [Laughter.]
        Senator Carper. Thank you for letting me work into the
    lineup.
        I want to start off by thanking Senator Markey, our Chair,
    for today's hearing on his legislation that seeks to shine a
    light on the impacts of cryptocurrency on our environment. I
    held the first oversight hearing in Congress on cryptocurrency
    almost 10 years ago on November 18th, 2013, when I was
    privileged to be Chairman of the Homeland Security and
    Governmental Affairs Committee. Today, we are here having the
    first hearing in the Senate that is focused on the
    environmental impacts of cryptocurrency.
        Regardless of what they believe about the role of
    cryptocurrency in the global economy, I hope we can all agree
    that cryptocurrency should not be increasing pollution that
    affects the air we breathe and the water we drink, or that
    otherwise degrades our climate and our environment.
        Today we know that some cryptocurrencies require a massive
    amount of energy to power and control the temperature literally
    of thousands of computers, which run, I am told, all day and
    all night. I am told that cryptocurrency currently uses up to
    1.4 percent of our Nation's electricity, 1.4 percent of our
    Nation's electricity. That is as much electricity as is needed
    to light every home in this Country.
        When I first saw that, I had to read it twice. That is as
    much electricity as is needed to light every home in this
    Country.
        As many industries are looking to reduce their energy
    usage, we have heard today that cryptocurrency electricity
    usage is surging as the need for additional computing power
    grows. We have also heard today that there is a lack of data on
    where and how this power is being generated.
        I am going to start with a question for Mr. Altenburg.
    First of you, then Ms. Kelles. Are there ways for
    cryptocurrency to have fewer environmental impacts and still
    allow communities to benefit from the economic engine that it
    can provide?
        Mr. Altenburg. Certainly, Senator. Our main concern is
    about proof-of-work cryptocurrency, which is the system that
    Bitcoin uses. This system is wasteful by design. Part of the
    mechanism for generating new Bitcoin requires using enormous
    amounts of energy.
        The No. 2 cryptocurrency by market cap in the Nation right
    now, Ethereum, uses just a tiny, tiny fraction of that. There
    are literally dozens of competing technologies that can
    accomplish everything Bitcoin can do and more, without using
    that enormous amount of electricity.
        Senator Carper. Say again the approach that uses so much
    less electricity? Say it again.
        Mr. Altenburg. Could you repeat the question?
        Senator Carper. Yes. You just said that there was an
    alternative that uses a lot less electricity to create. What
    was it?
        Mr. Altenburg. Ethereum is a competing cryptocurrency. It
    uses a system call proof-of-stake. That is a class of systems
    that can reduce energy while still maintaining blockchain
    technology and cryptocurrency.
        Senator Carper. Thank you.
        If I could, Ms. Kelles, same question. Are there ways for
    cryptocurrency to have fewer environmental impacts and still
    not reduce the benefit from the economic engine that it can
    provide?
        Ms. Kelles. Absolutely. I wanted to note with respect to
    Bitcoin first, Bitcoin is one of the most consolidated
    cryptocurrencies on the planet. Point zero one of the accounts
    own about 27 percent of the currency. To say that this is a
    currency accessible to all people is misinformation.
        What was previously mentioned, proof-of-stake, is another
    form of validating. There are about 16 different kinds of
    validations of cryptocurrencies. Proof-of-stake is the second
    most common. That is what Ethereum is built on. Ethereum also
    proved that you can convert, you can change from proof-of-work
    to proof-of-stake, sort of in the middle of flying the plane,
    when the blockchain is already active.
        It is possible for ones who are using proof-of-work to
    shift over and reduce their total energy consumption by over 99
    percent.
        The thing that is also really important is that proof-of-
    stake is in many ways more nimble. It is really the validation
    system where a lot of smart contracts are used, where there is
    a lot of the innovations and decentralized finance Web3
    systems. I would actually say that proof-of-stake is where we
    can see a lot of, expect a lot of the innovation to happen, and
    not on more dinosaur proof-of-work based validation methods.
        Senator Carper. Thanks very much for that.
        I am going to come back to you, Mr. Altenburg. What types
    of data or further research is needed to better understand to
    monitor and to mitigate the energy and climate impacts of
    cryptocurrencies?
        Mr. Altenburg. Thank you, Senator. One of the big problems
    we are seeing right now, particularly in Pennsylvania, is a
    lack of knowledge. We have asked even regulators where all the
    crypto mines are, and they really can not say with any degree
    of certainty. We have had a situation that happened in January
    2021, where inspectors from the State's department of
    environmental protection showed up at a fracked gas well and
    found Bitcoin mining hardware plugged in. Nobody applied for
    permits, nobody notified anybody. These operations can just
    startup overnight.
        That is why the reporting requirement of the Crypto-Asset
    Transparency Act is particularly important, so we will have
    some ability to see where these facilities come into
    communities. Sometimes when they come into the communities,
    they say they are a data center, they do not even mention
    crypto mining. Even the community has no idea what is going on
    next door.
        Senator Carper. I am a United States Senator, but I have
    been a recovering Governor for 22 years. As a former Governor,
    I love to learn what works well at the State level and do more
    of what works well, find out what works and do more of that.
    States and Governors are pretty good at that when it comes to
    addressing difficult problems.
        What are some of the lessons learned from your experiences
    addressing pollution from cryptocurrencies in New York that may
    not have been mentioned yet in this hearing?
        Ms. Kelles. I would elaborate on one, two that have been
    mentioned but have not really been extensively discussed, which
    is, one, the impact on water quality. We have a facility that
    started the conversation here, and I mentioned it in my
    testimony, Greenidge. They pull up to 140 million gallons of
    water a day from a lake and use that to cool the facility, then
    release it back into a Class C trout stream. Trout show signs
    of stress and start to die out at over 70 degrees temperature,
    and the water released is up to 108 degrees temperature.
         It is seriously affecting the ecosystem, and also
    affecting all the livelihoods around that area, including
    fishing, hunting, the agrotourism industry, as I mentioned,
    which we have the Napa Valley of the east. The wine industry
    here is really important. Not only does the facility affect the
    water quality, but it also affects the experience because of
    profound noise pollution.
        The other thing we have not talked about as much, and I
    think it is really important, is the opportunity cost of
    investing significantly in cryptocurrency mining operations. We
    have huge amounts of greenhouse gases as a State, as I said
    earlier, from our buildings, and from our transportation and
    other aspects of our industry, of our State economy. It is
    going to be a significant challenge to get all those onto
    electrification. The more cryptocurrency mining we have in the
    State that is feeding directly off the grid, the harder it will
    be to get all of those onto the grid because of the strain we
    experience.
        I will say one last thing, which is, I hear often from the
    proponents that cryptocurrency mining can act as a battery.
    That is simply not true. It does not produce any energy, it
    does not store any excess energy. It can shut off when there is
    high demand, but in most cases that I have read of, in fact it
    actually has a contract, like in Texas, where it gets paid to
    shut off. In fact, Texas makes, in some cases, cases that I
    have read, more money when they shut off than when they do run
    their facility.
         I would not say that that is a cost-free battery storage
    system in place. It is an opportunity cost, and we really
    should be focusing on investing in the renewable energy
    infrastructure and long-term storage to create a long-term
    renewable energy infrastructure for our State.
        Senator Carper. Thank you very much. Mr. Chairman, let me
    say thank you for bringing this together, and bringing our
    witnesses to consider this issue. Frankly, it is not something
    as we are going through the battle, the fight on climate change
    and crafting legislation, whether it is the climate provisions
    in the Bipartisan Infrastructure Bill, whether it is the work
    we did in the Inflation Reduction Act, it's not something that
    I think many of us have thought about. Thank you for bringing
    it to us. Thanks to our witnesses for joining us today.
        Senator Markey.
        [Presiding.] Thank you, Mr. Chairman, very much.
        A lot of this just fits into the frame of energy
    efficiency. My mother would always say, your father and I are
    going to donate your brain to Harvard Medical School as a
    completely unused human organ. She would say, you have to learn
    how to work smarter and not harder. I would be 10, 11, 12, she
    would just keep saying the same thing.
        When I authored the appliance efficiency laws in 1987, for
    example, the air conditioning is 80 percent of peak demand in
    Texas in the summer. If they doubled the efficiency, it would
    be half the electricity that people would have to purchase.
    They fought it, but once the law passed, they did it. The same
    thing was true for refrigerators, for stoves. They figured it
    out.
        Same thing was true for automobiles. I used to make the
    amendment every year on the House floor to increase economy.
    The auto industry said, you just do not know how hard it is. We
    finally, in 2007, we passed my bill. Then Elon Musk just went
    to the markets and said, hey, I will be able to meet the
    standard. Give me money for all-electric vehicles.
        That is what we are talking about here. We are just talking
    about, in my mother's words, working smarter and not harder and
    getting the same results.
        Senator Carper. Could I just say, I think our parents were
    talking with each other, even back then.
        Senator Markey. You know, a correct assessment of our
    untapped human potential, I agree with you. I am sure it is a
    miracle that we are here from their perspective, given our
    attitudes at age 10.
        [Laughter.]
        Senator Markey. The Bitcoin network uses a mechanism called
    proof-of-work to issue new Bitcoins to miners. The problem is
    in the name itself, you need to prove you have done a lot of
    work and used a lot of energy in order to get awarded any
    Bitcoin. We can not be fooled into thinking that this amount of
    energy must be used in order to participate in crypto-asset
    markets. Other assets, like Ethereum, use methods that cut
    energy use by 99.9 percent.
        Mr. Altenburg, could Bitcoin change its code to save
    substantial amounts of energy?
        Mr. Altenburg. Ethereum certainly did that, switch from
    proof-of-work to proof-of-stake. Whether or not Bitcoin itself
    can arrange to do that, that would remain to be seen. It is
    certainly possible.
        Senator Markey. It is possible. If it is possible, and it
    is more energy efficient, and it gets the same result, they
    could move in that direction and still achieve their economic
    goals.
        This is not an issue that is built into blockchains. It is
    an issue that has been into Bitcoin, which is the difference.
    It all depends upon how that company or industry approaches the
    issue of energy efficiency. All power plants are held to the
    same emissions standards; all trucks are held to the same
    emissions standards. Crypto assets do not have those across-
    the-board standards. Some like Bitcoin get away with damage
    that the others would never dream of.
        That has to be the goal, because we know that Bitcoin
    mining will also increase if they have more energy efficiency
    standards which they use. In our opinion, does a higher Bitcoin
    price mean more incentive for Bitcoin miners to use more
    energy? You do agree with that?
        Mr. Altenburg. We have seen that in practice.
        Senator Markey. You have seen that in practice. We just
    have to recognize that, and then take the analogous situation
    with refrigerators, stoves, air conditioning, automobiles, and
    just say that we are not looking to end refrigeration or
    automotive technology, we are just saying that we should be
    more efficient, we should be more aware of the emissions into
    our atmosphere that are avoidable.
        On the one hand, this is a very innovative sector
    economically. They tout themselves as innovators. All we are
    asking for them to do is look across the board at innovation,
    not just that one idea, but embracing innovation and energy
    efficiency, innovation in the technologies which they use in
    order to generate their innovation.
        That is why this hearing is so important, so that we can
    have a meeting of the minds over mining, so that we benefit
    from all of the lessons we have learned over the last 30 years
    that people thought were absolutely impossible to implement.
        I thank you all again for the information. Let me turn
    again to Senator Ricketts.
        Senator Ricketts. Thank you, Mr. Chairman.
        Mr. Altenburg, you had mentioned a couple of things that
    you said were problems with Bitcoin generation or I think you
    were talking about Bitcoin in particular. You mentioned they
    were talking about bringing online three waste coal plants in
    Pennsylvania, is that right? Again, I am from Nebraska, I am
    not from Pennsylvania, I do not know all the rules.
        Wouldn't each of those plants have to be permitted to be
    able to go into operation? To get those permits, wouldn't they
    have to comply with the overall emissions targets for the State
    of Pennsylvania?
        Mr. Altenburg. There are two waste coal plants that are in
    operation. They were existing waste coal plants that were in
    operation and they were operating at very, very low-capacity
    factors. All these plants are heavily subsidized.
    Pennsylvanians pay 60 percent of the energy cost for the
    Bitcoin miners of these plants through subsidies from taxpayers
    and ratepayers.
        Yes, they do, the plants do meet their current permits, but
    they are increasing their emissions because of Bitcoin mining.
        Senator Ricketts. Is there a real limit on what they would
    be able to generate as far as power because they are generating
    more emissions? Or do they have some sort of grandfather clause
    that allows them to just continue to generate?
        Mr. Altenburg. The State established permit limits for them
    based on the fact they are 90-megawatt plants each. They were
    operating, again, at much lower capacity. They weren't
    operating anywhere near that before Bitcoin mining started. Now
    they have ramped up their capacity.
        Where they are, we believe operating under their permit
    limits, they are still emitting a lot more than they were just
    a few years ago.
        Senator Ricketts. Okay. You also mentioned something about
    Bitcoin operators plugging into fracking gas wells, and that
    was illegal, is that my understanding? There are laws against
    them doing that? Is that right? Without getting a permit, that
    is.
        Mr. Altenburg. They plugged it in without a permit. The
    Department of Environmental Protection issued a notice of
    violation in that case. I believe there is still litigation in
    process over that.
        Senator Ricketts. Essentially what you are saying is, it
    was illegal for them to do that in the first place, so they
    were breaking the laws anyway, right? Is that accurate?
        Mr. Altenburg. I believe they were. That has not been
    determined.
        Senator Ricketts. Not been proved yet. Okay. You also
    mentioned the noise pollution as well. Help me again with
    Pennsylvania. Are there rules or permits? do not you have to
    get a permit or something with regard to noise or generation
    for facilities?
        Mr. Altenburg. Noise pollution is generally handled by
    local municipalities. It has traditionally been handled as a
    local nuisance issue. One of the recent fracked gas wells that
    is going into operation, Bitcoin, is in the location of the
    State called the Pennsylvania Wilds, which is some of our most
    pristine habitat. Frankly, there are not a lot of neighbors in
    that area to file noise pollution complaints. What we have is a
    considerable amount of wildlife that the tourism industry
    depends on. This noise pollution could directly impact the
    tourist industry. There really is not a strong regulatory
    mechanism.
        Senator Ricketts. There would be a local entity, maybe a
    county or something like that, who could put limits on how much
    noise you could generate, is that accurate? There is some form
    of local government there to put in those.
        Mr. Altenburg. There is local government. I do not know the
    extent of their authority toward noise pollution.
        Senator Ricketts. Okay. Dr. Kelles, I think you also
    mentioned that noise pollution was one of the things, I think
    you described it as a jet engine, is that right?
        Ms. Kelles. Correct.
        Senator Ricketts. Same question to you, is not the local
    entities, like a county or a city that would put in ordinances
    or whatever to say, hey, you can only have so much noise
    allowed?
        Ms. Kelles. Yes, and there actually has been some effort
    like my colleague mentioned. There are limits on how much they
    can prevent and permit. There have been, there is at least one
    example of a moratorium on cryptocurrency mining because of
    issues of noise and all the safety issues, health and safety
    issues. It was a temporary one. They were able to do a
    temporary one there, yes.
        Senator Ricketts. Ms. Dentlinger, we are running out of
    time here, so I will ask you to be brief. In your experience,
    NPPD, I know that some counties in Nebraska have ordinances
    with regard to say, wind setbacks for noise, and so forth. Is
    that your experience in Nebraska as well?
        Ms. Dentlinger. Yes, I speak from my previous economic
    development experience. Typically we would see zoning
    regulations both within municipalities and then within
    counties. If they wanted to regulate decibels levels from any
    industry, as you mentioned, we have seen that recently with
    wind, they put those regulations in place.
        Senator Ricketts. Great. Thank you.
        Senator Markey. As I said in my opening remarks, this
    virtual commodity has real-world impact. We do not know the
    total scope of the environmental effects of crypto mining. The
    White House Office of Science and Technology has specifically
    called for more information but they do not have the authority
    to call for it, which is the why the Crypto-Asset Environmental
    Transparency Act is so important.
        Mr. Altenburg, do you agree that this legislation would
    provide more transparency and disclosure which could help us to
    oversee and understand the environmental impacts of crypto
    mining? It is almost alone in the entire American economy, kind
    of sealed off from the knowledge, the information everyone
    should have about the environmental impacts of the industry.
        Mr. Altenburg. In Pennsylvania, we have an environmental
    rights amendment to our constitution that guarantees the
    public, actually the ownership of their public natural
    resources. One of the big things we are seeing with
    cryptocurrency and the lack of transparency is the public does
    not know where these facilities are coming in, they do not know
    where they are using the power. They do not know where the
    power is being used, they do not know where the pollution is.
        As long as we have that, the State is not in a position
    where they are going to be able to effectively regulate these
    facilities.
        Senator Markey. When I was growing up in Ward 2 in Malden,
    Malden is a city about four miles north of Boston, my
    grandfather got off the boat from Ireland, worked on the Malden
    River, and I grew up three blocks from there. My mother, when I
    was about 10, again, much more intelligent than I am, she would
    say, Eddie, whatever you do, do not swim in the Malden River.
    It was kind of black with a pre-Jimi Hendrix purple haze over
    it.
        [Laughter.]
        Senator Markey. All the industries used the Malden River as
    a dumping ground, the coal industry, every Converse All-Star
    was made in my home ward, 8,000 people just using the Malden
    River. It was obviously an era where there really weren't a lot
    of regulations. There was kind of a black cloud over our
    neighborhood growing up.
        On the other side of town, they didn't have a black cloud,
    where other people lived. In my home ward, it was kind of the
    working-class ward. Every city has a ward like that.
        My goal here is just to provide transparency, the
    disclosure that could help us to see and understand
    environmental impacts of crypto mining. Dr. Kelles, is that an
    unreasonable thing to ask, that people just understand what the
    impacts are?
        Ms. Kelles. Absolutely not an unreasonable thing to ask. We
    can not improve our environment if we do not know how it is
    being used and we do not know what is happening around us. A
    perfect example is, we are now aware of the coal piles that
    were being used for providing energy, the coal piles that are
    left over and sitting on the road bank edges in Pennsylvania.
        Now because of the fact that that made it into the news,
    otherwise we would not have known, we are having an honest
    conversation about it. The proponents would say, it is better
    to burn it than let it sit there and have the pollutants like
    the mercury leak into the waterways.
        I would ask in that conversation, which is better, that it
    pollutes the water or pollutes the air? If we do not have
    transparency, we do not have disclosure, we can not have an
    honest conversation about that. Neither one of those pollutions
    are what we are looking for. Of course, burning it, then we end
    up with the ash. That is another pollutant.
        It is a great analogy, just like with coffee, running water
    over coffee grounds like the ash, we just farm more coffee, or
    in this case mercury, out than if you ran water over whole
    coffee beans, which is the actual unburned coal. Which one is
    worse?
        Again, we can have that honest conversation but we can not,
    if do not have the disclosure and we do not have the
    transparency.
        Senator Markey. Again, you make the case for more
    transparency because you can not manage what you do not
    measure. Unfortunately, we do know that harms are being felt
    now by families across the Country. I have received testimony
    from 12 States, from Georgia to Washington State, about the
    damage that crypto mining is already doing in their
    communities. I would ask unanimous consent that this testimony
    be included in the record.
        Without objection, so ordered.
        [The referenced information follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Markey. We are joined by Senator Lummis from
    Wyoming. Let's turn and recognize you, Senator, for a round of
    questions.
        Senator Lummis. Thank you, Mr. Chairman.
        My first question is for Mr. Altenburg. What does a digital
    asset mining operation look like? Are there shovels digging in
    the ground? What does it look like?
        Mr. Altenburg. It depends on the location. The mining sites
    that are being placed at our fracked gas wells are essentially
    semi-trailers that have methane gas powered generators that are
    plugged into the well, and big shipping containers full of
    racks of Bitcoin miner.
        Senator Lummis. A Bitcoin miner is actually a computer?
        Mr. Altenburg. It is about the size of a toaster, and it
    uses three times the energy of a house.
        Senator Lummis. There is a bunch of toasters in a line,
    sometimes they are dipped in fluids so they run cooler, they
    can be air-cooled, they can be water-cooled. It is basically
    just a computer?
        Mr. Altenburg. Yes.
        Senator Lummis. Is that computer that is mining Bitcoin
    directly emitting pollutants?
        Mr. Altenburg. No, its energy source, its electric source,
    is what is emitting.
        Senator Lummis. Okay. Now let's take an EV charging
    station. If that EV charging station is powered by electricity
    from natural gas or coal, should not it also have the same
    monitoring that is being requested by this bill?
        Mr. Altenburg. I think the issue is looking how efficiency
    is measured. All sources of electricity, whether it is the
    lights or the speaker system here, are going to use electricity
    and produce a certain amount of work for that electricity.
        The issue with Bitcoin and proof-of-work cryptocurrency is
    the work that we are doing is not actually necessary to have
    cryptocurrency or to have blockchain technology.
        Senator Lummis. Okay. Let's talk about gold. Where does
    gold come from?
        Mr. Altenburg. It is mined.
        Senator Lummis. It is mined, Okay. Is energy expended in
    producing gold?
        Mr. Altenburg. Yes.
        Senator Lummis. Okay. Is gold absolutely essential?
        Mr. Altenburg. For certain technologies, it is.
        Senator Lummis. Is it Congress' job to decide whether an
    energy use is worthwhile or not? Surely you have heard that
    Bitcoin is digital gold, because it is limited to 21 million
    Bitcoin ever to be mined, it is permission-less, which means
    you do not have to rely on a third party, a trusted third party
    to do transactions or to hold it. It is a store of value, and
    that is commonly agreed to.
        You have gold, it is a store of value, you have Bitcoin, it
    is a store of value. They both consume energy to produce.
        Now, is it Congress' role to say gold is a more worthwhile
    use of energy than Bitcoin?
        Mr. Altenburg. There is a long history of that very thing.
    We have energy efficiency standards for appliances, we have
    CAFE standards for vehicles. For most air pollution, for most
    new air pollution sources, there are legal requirements that
    before they operate, they install the best available technology
    to reduce the pollution.
        We do make those decisions every day.
        Senator Lummis. We are still mining coal in this Country.
    We are still producing natural gas, and we have the cleanest-
    burning natural gas in probably the world, here in the United
    States, and produce it in the most environmentally sound
    manner. It is a hydrocarbon.
        If my car is oil-consuming or natural gas consuming, is it
    a less worthy use of energy than energy that comes from coal
    and natural gas but is converted to electricity for an EV?
        Ms. Altenburg. Using vehicles, our entire transportation
    network requires a certain amount of energy. There are economic
    benefits that we get from that transportation network.
        Senator Lummis. My time is about up, so thank you.
        I have a question for Ms. Dentlinger. Do you view digital
    asset mining operations as a negative for the power sector?
        Ms. Dentlinger. I certainly do not speak for the entire
    power sector. Within the State of Nebraska, we have actually
    seen benefits. We have not seen the drawbacks that have been
    mentioned during the hearing today. Most of those have just
    been managed locally, whether by the municipality, by the
    county, or by the Nebraska Department of Environment and
    Energy.
        Senator Lummis. If you have a natural gas well and you are
    venting the natural gas because that well is not hooked up to a
    gathering line, is it better to vent it into the atmosphere, or
    is it better to use the energy to produce something of value?
        Ms. Dentlinger. In my opinion, it is much better to
    actually use the energy and produce something of value.
        Senator Lummis. Thank you. Mr. Chairman, I yield back.
        Senator Markey. Thank you so much.
        Air pollution is a major area of concern around crypto
    mining, as miners are bringing coal and gas fired plants back
    online, or even using dirtier sources of energy, like waste
    coal in order to buy power for their mining rigs. Mr.
    Altenburg, have you seen instances where crypto miners have
    kept dirty and inefficient power plants online?
        Mr. Altenburg. It certainly appears they have, especially
    in the two waste coal power plants in Pennsylvania. Prior to
    Bitcoin mining operation, they were running at very, very low
    capacity factors.
        Coal-fired power plants tend to run 60, 70, maybe 80
    percent or more of the time. They tend to want to run full out
    at a very constant rate. These plants were running closer to 10
    percent of the time. When Bitcoin came into operation, part of
    the goal was to increase the output of these power plants.
        Senator Markey. The energy use of Bitcoin, especially if it
    brings carbon-intensive generation back onto the grid, could
    threaten our climate goals and supercharge climate change. We
    already know we are living through unprecedented climate chaos.
        If Congress turns a blind eye to an energy-intensive energy
    like Bitcoin while it works to tackle climate impacts, it is
    like a plumber who tries to fix an overflowing bathtub while
    the faucet will not stop running. The problem will not go away,
    and the damage will just get worse if you do not deal with the
    potential dangers that are right in front of you.
        Dr. Kelles, do you agree that crypto mining jeopardizes
    State and Federal climate commitments?
        Ms. Kelles. Absolutely, to answer it in the context of what
    you were just speaking about. In New York State, we have about
    49 retired power plants. They are retired, because they are
    less efficient, they are all using older technologies, single
    cycle turbine technology, and cannot compete on the market with
    the more modern dual cycle turbine technology, for example.
    They were mothballed.
        The crypto currency mining industry is buying up power
    plants in New York State and turning them back on and running
    them up to their full greenhouse gas emissions allowable
    permits. That is a situation where we had these facilities that
    were at zero emissions, they were shut down because of
    inefficiency.
        Even if they are converted, as one of them was from coal to
    natural gas, we still have a significant increase in greenhouse
    gas emissions from a facility net zero which is where we were.
    Of course, everyone knows at this point that methane is a
    stronger greenhouse gas than carbon dioxide. Although coal is
    less clean with respect to all the types of particulates that
    it releases into the air, with the gas-fired power plant,
    particularly with the single cycle turbine that is less
    efficient, we are of course having significant increases in
    methane that is released through the entire process of getting
    the gas to the facility and then of course from the facility.
        It is significantly, I believe, hurting our ability to
    reach our climate goals. We see another facility that is
    working to come online, and we have all the others that are in
    our State.
        We are very worried. That is why New York State put a
    moratorium on any of these power plants being turned back on by
    large scale corporate crypto currency miners, so that we
    ourselves could do a full-scale investigation of the impact of
    crypto currency mining on our ability to reach our climate
    goals.
        Senator Markey. Thank you. Industry figures claim that
    Bitcoin miners can burn flared or vented methane gas to power
    their mining operations. We know that we need to cut down on
    our methane emissions. That is why we passed an historic
    methane emission reduction program as part of the Inflation
    Reduction Act.
        I am curious as to whether these claims hold water. Mr.
    Altenburg, do you believe there are better ways to deal with
    flared and vented methane than using it to power Bitcoin mining
    operations?
        Mr. Altenburg. What we have seen with Bitcoin mining, the
    innovation we have seen has been innovation in ways to justify
    that wasting energy is good. Methane is particularly one of
    those situations.
        If you have a situation where you have enough methane that
    you can capture, that you are flaring, if you can capture it to
    run a Bitcoin mine, you might as well capture it and put it
    into the distribution pipeline and get useful work out of it.
    There is no need to waste the energy that we are wasting on
    Bitcoin.
        Senator Markey. If there are better ways to deal with
    methane, we should avoid fossil fuels in the first place. At
    the end of the day, we have direct reports of harms and
    significant projections of impacts in our society. That is just
    why we need more transparency across the board.
        That is why we are fighting for it today. We are not saying
    ban, we are not saying do not ban, we are saying, let's just
    know what is happening. Information will be helpful for
    everyone, no matter where they live. Just understand, like my
    mother did, just do not swim in the Malden River. She didn't
    have any evidence except for the black cloud over our home
    ward, which wasn't over the other seven wards in Malden. The
    EPA wasn't even created for 20 more years after I was a boy.
        Obviously, you just can not be working off your gut. You
    need information.
        If the industry is confident in its positive contributions
    to the environment, they should welcome the transparency of the
    Crypto-Asset Environmental Transparency Act that would provide
    that information. Really only vampires are afraid of the
    sunshine. In the same way that so many devices that we plug in
    at night now, we are all plugging in all these devices every
    night. They are almost vampires consuming all this electricity.
        I had this big battle about 15, 18 years ago with the
    computer industry. They were of course God's gift, oh my
    goodness, do not ask us to do an more, didn't we do a great job
    in just providing you with all these laptops at home? do not
    ask us to do anything else.
        I just said to them, is there any way you could cut the
    electricity consumption for the home computer when it is just
    on overnight in default position, when you have your kids'
    pictures up all night? Can you just cut that electricity
    consumption overnight? Oh, you have no idea how difficult that
    is, oh my goodness, you are asking us to figure out something
    like that after we have given you the great gift of home
    computers?
        Of course they figured it out. Why would we have 100
    million devices unnecessarily consuming electricity when you
    can just put the fix in to make sure it is more efficient while
    getting the benefit of the new technological breakthrough.
        That is just kind of the default position of a new group of
    geniuses in their little industry, you can not actually call
    upon us to have any additional burdens when all we are saying
    is, like my mother, work smarter, not harder. Just use a more
    efficient way of doing it.
        Let me again turn to Senator Ricketts for more questions.
        Senator Ricketts. Thank you, Mr. Chairman.
        Dr. Kelles, you had said that in New York, that the crypto
    industry was going to turn on 49 plants that had been retired,
    is that accurate?
        Ms. Kelles. No, what I said is we have 49 power plants. The
    concern is that there was a trend beginning, we saw one
    purchased and turned back on, and another purchased in the
    permitting process and turned back on with the existing rigs
    that they have. We have 49 in the State.
        The concern was if that trend continued without us
    evaluating the full impact on our ability to reach our climate
    goals with respect to GHG emissions, water impacts, and air
    quality impacts, that we might not reach our climate goals.
        The idea of course was that we needed to stop that
    particular trend. I want to be clear: this was a very narrow
    moratorium. It was specifically on the purchasing of retired
    power plants in the State by consolidated crypto currency
    mining corporations. Of course, you and I probably can not
    afford on our own to buy a retired power plant. This did not
    pertain to those that plugged into the grid or those using
    renewable energy infrastructure onsite.
        It was narrow, but the intention was to give us the
    opportunity in time to not have the full extent of the impact,
    which I think is fundamentally parallel to what you are trying
    to do with this piece of legislation, to capture the data and
    be able to do a full analysis.
        Senator Ricketts. Presumably, the other plants went through
    a permitting process, is that accurate? At least the one plant
    that did get up and running went through a permitting process
    and got permitted, so that was in operation, is that accurate?
        Ms. Kelles. The first use, the permits that had been in
    place, and they got an extension of those permits, but then
    they went through a renewal process this last year and actually
    were denied an extension of that, the air permit, because it
    was recognized that the permit and the activity that was being
    used for that facility no longer aligned with our Climate
    Leadership and Community Protection Act. That is currently in
    the courts, because that was appealed. That will go through, I
    presume, for potentially even years. That was the initial
    process.
        The water permit was extended at the time. Actually for 4
    years they were out of compliance with the permit that required
    that they put a screen up on the pipe that was pulling water
    into, from the lake, and then into the facility. Therefore,
    because there wasn't a screen, it was killing wildlife, a
    significant amount of wildlife.
        Last year, they did finally put that screen in and are now
    compliant. They were given a couple extra months to become
    complaint.
        That is with the water permit. We will see what happens
    with the renewal of that permit.
        Senator Ricketts. It is safe to say though, there is a
    process in place for the permits, and they go through the
    process, and the State itself was deciding whether or not to
    give those permits, is that right? You just said that the State
    denied them on the air permit.
        There is a way in place to be able to address the
    emissions, correct?
        Ms. Kelles. Not fully. Those are only the facilities that
    are in power plants. As we have talked about, there are many
    different types of facilities, so they can be mini-rigs inside
    shipping containers in a field, which is very common. They can
    be in a warehouse, all of those plugged into the grid. They can
    be plugged into the grid but doing net metering so paying for
    hydroelectric. Then there is the question of opportunity costs.
        The reason for the requirement for the full environmental
    impact assessment----
        [Simultaneous conversations.]
        Senator Ricketts. Everything that is going to provide power
    to any of these crypto things is going to have to be permitted,
    right?
        Ms. Kelles. No, not necessarily. You are pulling directly
    from the grid and you have a warehouse on your property, even
    if you have a different type of business, that does not require
    a permit.
        Simultaneous conversations.]
        Senator Ricketts. The power that is generated to go into
    that warehouse has to be permitted, right?
        Ms. Kelles. Not necessarily, no.
        [Simultaneous conversations.]
        Ms. Kelles. If you say there is no power generation, then
    there is no power generation. If you are plugged directly into
    the grid, you are not producing your own energy.
        Senator Ricketts. Somebody is producing the energy if it is
    supplying it, right?
        Ms. Kelles. The grid. Yes. It may be buying the energy from
    the grid, that is just the grid. If they want to pay more of an
    electricity bill, they will.
        Senator Ricketts. Somebody has to put power into that grid,
    which means it has to be permitted some place, right?
        Ms. Kelles. What is permitted would be the hydroelectric or
    any of the electrical generating facilities, but not a
    warehouse that is tied onto the grid.
        Senator Ricketts. Dr. Kelles, I think you are missing my
    point, that anything that is going to generate power, that is
    going to create emissions, is going to be permitted. There is a
    rule and system in place to be able to handle that, and you
    yourself have demonstrated in New York that you are taking
    steps to limit emissions based upon what you want to do in New
    York. In fact putting a moratorium on bringing on any of these
    other lines.
        You are actually----
        Ms. Kelles. I am being very clear, with all due respect,
    being very clear, there is energy generation and there is
    energy usage. Energy generation is regulated. Energy usage, if
    you have a restaurant or a warehouse, or if you have a
    superstore, you are not permitted for your energy usage. Usage
    is not the same as generation.
        Generation, a generator is permitted. If you are not a
    generator, then you are not permitted in that way.
        Senator Ricketts. Right, and that was my point, that all
    this power generation, not the use, the power generation is
    permitted, and New York is taking steps to do it.
        Ms. Kelles. The question is whether or not there is an
    opportunity cost, because the energy that is used, the
    significant amount of energy that is used, when we are trying
    to get our entire grid onto renewable energy infrastructure, if
    we are increasing our baseload on that grid significantly, then
    we will have to increase significantly our renewable energy
    infrastructure construction goals. The question is whether or
    not we have the land infrastructure and other ability to reach
    those goals. We have limited amount of land that we can build
    solar on, for example, and it competes directly with
    agricultural land and food production.
        There are limits.
        Senator Ricketts. Is Nebraska New York? And vice versa, is
    New York Nebraska?
        Ms. Kelles. No, it is not.
        Senator Ricketts. They are different States. It is fair to
    say that different States are going to have different needs
    with regard to power generation and permitting and clean air
    and things like that?
        Ms. Kelles. Yes, and I would say with a caveat that any
    increased energy demands that you are putting on a grid means
    that you will need to produce more renewable energy
    infrastructure to make that grid completely renewable.
        Senator Ricketts. Thank you, Dr. Kelles. I have run way
    over. Thank you, Mr. Chairman.
        Senator Markey. Absolutely no problem. I love this subject.
    Honestly, every question we are asking is vastly expanding the
    body of knowledge for all the Senators. This is the frontier in
    terms of issues. It gets kind of arcane until you have the
    discussion, then you can keep reducing it down to a more simple
    understanding of what we are talking about.
        I love any question that anyone has, because I am learning
    from all of this as well.
        Mr. Altenburg, do you think crypto supports or undermines
    our national goal for clean, affordable and reliable
    electricity?
        Mr. Altenburg. It certainly does, even in the situation
    where we have crypto mining coming from our new plants, that is
    diverting carbon-free energy from the grid. We heard testimony
    or you have heard people say that doing things like using more
    Bitcoin mining can incentivize solar or bring more solar on the
    grid.
        That is not what we are seeing happening on the ground. The
    Bitcoin miners are incentivized to use energy sources that are
    available at very, very high capacity factors. In almost all
    cases, those are fossil fuel or formerly baseload resources.
    Those resources we have to, if we are going to decarbonize our
    grid, we are going to need clean, renewable generation. Wasting
    energy on unnecessary proof-of-work mining, when we can have
    crypto currency and blockchain technology without that is just
    counterproductive.
        Senator Markey. Do you think that more disclosure would
    stifle or actually encourage innovation in this industry?
        Mr. Altenburg. More disclosure always helps regulators. I
    speak from working for 22 years as a State regulator. Having
    the information to back up our decisions is absolutely
    essential.
        Senator Markey. I just have a couple more questions. Do you
    have any additional, Senator? You do, great.
        It is the goal of the legislation to provide transparency
    in all types of environmental impacts. People who live near
    crypto mining facilities have said ``It is like living on top
    of Niagara Falls, it is like a jet that never leaves.''
        Dr. Kelles, is it true that crypto mining facilities
    produce non-stop noise which can affect quality of life,
    especially in rural communities?
        Ms. Kelles. Yes, absolutely. That is what I hear also from
    constituents around the State, that it has not only
    significantly impacted their own experience, because many of
    them are in fields, many of them are in places where there are
    not that many people. We have examples of a large-scale crypto
    currency mining operation near trails, and it is significantly
    impacting people's ability to appreciate nature and get away,
    because it is like standing on a tarmac, is what I have heard
    from people.
        There is also some disturbing data on the impact of the
    noise on animal species, birds, which I think is actually
    particularly disturbing given the estimates of decline in birds
    that we are already seeing.
        Senator Markey. Could you also talk about the facilities
    using water in excess of necessary quantities?
        Ms. Kelles. Yes. The facility that began this conversation,
    as I spoke of earlier, Greenidge, does pull in up to 140
    million gallons of water a day and releases it at significantly
    higher temperatures. One thing that I have not emphasized is
    that we have seen massive surges in harmful algal bloom
    outbreaks all throughout all of the Finger Lakes, the Great
    Lakes, even coastal areas. That can be directly impacted by
    increasing temperatures from these facilities.
        That is also harmful. It is harmful for all the wildlife
    and also toxic for humans.
        Senator Markey. One final question, which is that some of
    the supplemental testimony which has been submitted today
    states that each Bitcoin transaction is tied to the same amount
    of e-waste as throwing away two iPhones. Could you talk about
    that?
        Ms. Kelles. Yes, absolutely. The e-waste, there is some
    research showing a massive, exponential global increase in e-
    waste directly tied to cryptocurrency mining. I would also note
    it is not just the existence of e-waste which in and of itself
    is concerning, but a large percentage of e-waste produced every
    year is exported from high income countries to low and middle
    income countries where regulations on dismantling, recycling,
    and refurbishing may be lacking or even poorly enforced.
        According to the WHO, an estimated 12.9 million women, and
    I think it was 18 million children and adolescents as young as
    5 years old work in the informal waste sector, which
    potentially exposes them to toxic e-waste. Their goal in this
    work is often to recover copper and gold from used electronics,
    risking exposure to harmful chemicals such as lead, mercury,
    nickel, brominated flame retardants and polycyclic aromatic
    hydrocarbons.
        All of these are highly correlated with some health issues
    like stillbirth and premature birth, low birth weight and
    length, and exposure to lead, of course, we know has a lot of
    neurological issues, increasing rates of ADHD, behavioral
    problems, sensory integration difficulties. Huge, huge, issues
    that we are not discussing sufficiently with respect to the
    health and the escalating e-waste from this industry.
        Senator Markey. Thank you so much.
        Senator Ricketts?
        Senator Ricketts. Thank you, Mr. Chairman.
        Mr. Altenburg, so you have many times throughout the course
    of the day today have described this as wasteful energy. I
    think you said it should be used for useful work. You also said
    that a Bitcoin, once you mine it, is worth $144,000, right?
        Mr. Altenburg. That is what the market value is.
        Senator Ricketts. Doesn't that mean, if there is a market
    for it, that somebody considers it valuable because they are
    willing to pay for it?
        Mr. Altenburg. People certainly see a cash value. The
    question of what does it do productive for the economy, Warren
    Buffet had said in an interview not too long ago that when you
    buy Bitcoin, you have nothing. The only thing you really have
    is the hope that somebody else is going to pay more.
        Senator Ricketts. What do you use the blockchain technology
    for, right?
        Mr. Altenburg. A blockchain itself could be potentially
    used for a lot of different things, smart contracts was one of
    the things mentioned, which Bitcoin is not currently capable of
    doing, but Ethereum is. Certainly recording data in a secure
    way.
        [Simultaneous conversations.]
        Senator Ricketts. You talked about before how hard it was
    to break that encryption, right?
        Mr. Altenburg. It is not the encryption. The blockchain is
    very transparent. You can see everything that is on it. What it
    is, what has happened it is very, very difficult to change. It
    is basically a write-once structure.
        Senator Ricketts. Okay. Then who are the people that find
    value in Bitcoin?
        Mr. Altenburg. Mostly currency speculators.
        Senator Ricketts. Okay, and who are they speculating with?
        Mr. Altenburg. They are buying Bitcoin hoping that somebody
    tomorrow will buy it for more.
        Senator Ricketts. Okay, so, but somebody, you are
    generating this Bitcoin and then you can turn that Bitcoin in
    to buy other things, right?
        Mr. Altenburg. Yes.
        Senator Ricketts. It does actually have value?
        Mr. Altenburg. Yes.
        Senator Ricketts. Somebody is willing to pay for it.
        Mr. Altenburg. There is no doubt there is a market value to
    it. The question is, are we actually gaining something. When we
    build a bridge, we have built a physical asset. When we build a
    car or a cell phone, there is a physical asset. Bitcoin does
    not have that. The only real value you have is potentially
    transaction fees as part of extending the blockchain.
        We can do all the blockchain stuff. We can have all of that
    without using anywhere near the amount of energy that Bitcoin
    uses. It is not adding anything new to the economy.
        Senator Ricketts. When you say you do not have anything
    physical, do you have to have something physical to have value?
        Mr. Altenburg. Again, there is a distinction between, is
    there a market value, yes. People are willing to spend money
    for it. When we are evaluating whether this is a reasonable
    thing to do, people are willing to spend money on lots of
    things. Are they the best choice?
        Senator Ricketts. Is it the government's job to tell people
    they can or cannot spend money on the things they wish to
    choose to?
        Mr. Altenburg. As Senator Lummis said, in a lot of cases,
    the government does exactly that. We have plant sufficiency
    standards.
        Senator Ricketts. Well, that is very different. A plant
    sufficiency standard is very different than saying, you can or
    cannot spend your money on something, right? I am not telling
    you you can not buy an appliance, I have standards for how you
    produce them, but I am not telling you you can not buy one. It
    seems to be what you are implying when you are talking about
    this Bitcoin being wasteful.
        Mr. Altenburg. I am looking at it in this context of things
    like efficiency standards. We do that all the time for whether
    it is environmental reasons, for pollution, whether it is
    national security reasons, for energy security. There is a long
    history of the government making judgments about these
    industries are wasteful, it is inappropriate, it does not put
    us in a good position going forward. I think Bitcoin is one of
    them. It does not bring anything unique that we need.
        Senator Ricketts. Ms. Dentlinger, in Nebraska, NPPD, how do
    you look at different industries with regard to the rates you
    charge? Do you have any additional requirements on different
    industries? Do you treat them differently with regard to things
    like disclosure or anything like that? Is there an analogy here
    somewhere?
        Ms. Dentlinger. No. We are very agnostic to whatever the
    industry that is actually using the industry. We have different
    rates for different customer classes, whether it is residential
    or commercial or industry. Beyond that, we are not looking into
    the industry.
        Senator Ricketts. Who is your largest power user in the
    State of Nebraska?
        Ms. Dentlinger. Currently, Nucor Steel.
        Senator Ricketts. Okay, so Nucor Steel. Do you ask them to
    disclose anything with regard to their power generation?
        Ms. Dentlinger. No.
        Senator Ricketts. Do you actually charge them a separate
    rate because they are using so much power?
        Ms. Dentlinger. No, actually, again, because they are using
    so much and using it so regularly, the rate that they pay tends
    to be lower, because it is a more efficient use of our assets.
        Senator Ricketts. again, it is one of those things where as
    you are generating more or you have a customer who is using
    more energy and it is more stable, as Nucor Steel is, you are
    actually charging them less because it actually is more
    efficient to generate that power.
        Ms. Dentlinger. Yes. We are cost-of-use, our rates are
    based on what it costs us to produce and deliver the
    electricity. That is reflected in our industrial rates.
        Senator Ricketts. Great. Thank you.
        Senator Markey. I thank Senator Ricketts, I thank all of
    our witnesses. Of course, Nucor's emissions are captured by the
    EPA. That is a part of the public record, what their emissions
    are.
        In general, I would say this has been one of the most
    informative hearings that the Congress has had in a long time,
    about a subject that is just not had the attention which it
    needs. I thank all of our witnesses for your great testimony
    today. We are going to proceed on this subject because
    ultimately we just need to ensure the information is out there.
        Bitcoin is the first cryptocurrency, but it is not staying
    current with other assets like Ethereum. Its impacts are real,
    but its energy efficiency innovation is not developing at the
    same time. Bitcoin is like if we still insisted on using whale
    oil to light our homes instead of energy efficient LEDs. That
    is the gap between proof-of-work that Bitcoin uses, and other
    systems like proof-of-stake that Ethereum uses. One is 99
    percent more energy efficient that the other.
        It is just good to get that out there to make it clear that
    there are other ways of doing business.
        We are talking today about unavoidable, untracked
    environmental impacts. We track emissions and impacts of mines,
    of cars, of power plants. We have a drain on our system with
    Bitcoin that is not accounted for. Other crypto assets like
    Ethereum produce value while using 99.9 percent less energy.
        It is climate, it is air, it is noise, it is water, it is
    waste. These computer motherboards are harming Mother Earth. We
    do not know the extent of the damage, we do not have anyone
    checking the work of crypto mining companies that argue they
    are helping the planet or the grid.
        That is why the Crypt-Asset Environmental Transparency Act
    is so important, and States like New York or Pennsylvania or
    Massachusetts or Nebraska are taking a case by case approach to
    this new power sucking powerhouse industry. We need a Federal
    approach just so we have the information out there as to what
    the climactic impacts are.
        The Senate Environment and Public Works Committee is the
    ideal forum to consider legislation which would do just that.
    They are unlikely to have this hearing over in the Banking
    Committee, the Financial Services Committee. This is our job.
    Our job is to look at these aspects of this new technology.
        I thank my colleagues for their participation in this
    hearing. I am very grateful to our witnesses today.
        Before I adjourn, some housekeeping. I would like to ask
    unanimous consent to submit for the record a variety of
    materials that include letters from stakeholders that relate to
    today's hearing. Without objection, so ordered.
        [The referenced information follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Markey. All Senators will be allowed to submit
    written questions for the record through the close of business
    on March 14th. We will compile those questions and send them to
    the witnesses and ask each witness to reply to the Senators by
    March 28th.
        With that, this hearing is adjourned.
        [Whereupon, at 4:19 p.m., the hearing was adjourned.]

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