[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
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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.]
[all]