On Saturday (July 16), U.S. Senator Dick Durbin made it very clear that he is not happy with the energy consumption of crypto mining.<\/p>\n
Senator Dick Durbin, is \u201ca Democrat from Springfield, is the 47th U.S. Senator from the State of Illinois, the state\u2019s senior senator, and the convener of Illinois\u2019 bipartisan congressional delegation.\u201d He \u201cserves as the Senate Majority Whip, the second highest ranking position among the Senate Democrats.\u201d Senator Durbin has been \u201celected to this leadership post by his Democratic colleagues every two years since 2005.\u201d Also, Durbin is Chair of the Senate Judiciary Committee, and sits on the Appropriations and Agriculture Committees.<\/p>\n
Yesterday, Senator Durbin tweeted abut the \u201cobscene\u201d energy costs of crypto mining:<\/p>\n
One of those that responded to Senator Durbin was Darin Feinstein, Co-Founder of crypto mining solution provider Core Scientific (NASDAQ: CORZ).<\/p>\n
On January 20, U.S. House of Representatives Energy and Commerce Committee discussed the environment impact of crypto mining\u2019s energy consumption:<\/p>\n
https:\/\/youtube.com\/watch?v=NlB0sqzvYfo%3Ffeature%3Doembed<\/p>\n
On March 28, Nic Carter, a Partner at Castle Island Ventures, and Troy Cross, a Fellow at the Bitcoin Policy Institute, talked to journalist Peter McCormack for an interview for episode 481 of the very popular \u201cWhat Bitcoin Did\u201d podcast.<\/p>\n
Here is what Carter said about crypto mining companies:<\/p>\n
\u201cYeah, so a lot of mining companies are publicly traded.\u00a0 There\u2019s maybe 30 in the US alone.\u00a0 And so, by law, they have to disclose all the material facts about their operation, which is really interesting actually.\u00a0 That was not the case two years ago.\u00a0 There were all these miners in China we didn\u2019t know anything about, so that\u2019s a great development.\u00a0 So, there\u2019s a bunch of different models with mining, they\u2019re not all doing the same thing.\u00a0 Many of them are very focused on sustainability, not just because of a capital markets thing, and because being pro-ESG is going to help them with the SEC, or whatever; but just because it\u2019s the right thing to do and because miners have the ability to be discretionary in terms of where they secure energy from.\u00a0 They can buy energy from anywhere.<\/em><\/p>\n \u201cThe main one I\u2019ve seen is just hydro and locating in areas where there was a mismatch between the supply of energy and then the demand.\u00a0 So, places where maybe industrial production dropped off, like Quebec would be a good example, British Columbia, Washington State, upstate New York; these were places where there were big industrial sources of demand for cheap energy.\u00a0 And then, whatever those industries were, like paper-pulping, aluminium-smelting, there was a case of a hockey stick factory in Quebec which is now a Bitcoin mine, those industries left, because we can\u2019t predict what the nature of demand is going to be 30 years from now, but energy gets amortised over new energy installations, they have that kind of lifetime.<\/em><\/p>\n \u201cSo, these mismatches occur, and so then you have huge sources of supply, especially upstate New York, Quebec, Canada, things like that, with hydro and no demand, because all the industries went to China, or whatever, they just got outsourced.\u00a0 So, that\u2019s the first one, that\u2019s very straightforward.\u00a0 You can effectively complete completely hydro based energy, and there absolutely are miners that do that.<\/em><\/p>\n \u201cThe more complex and interesting one, I think, is where miners will co-locate with renewable energy assets, like wind or solar, and these are assets often times that are distressed in some way, because you might have a windfarm that gets built, and then on the plots of land all around that windfarm, you have three more windfarms get built.\u00a0 And so, you then have a correlated generation, where they\u2019re all trying to sell energy to the grid at the same time, and there\u2019s no one there that wants to buy it.\u00a0 And you might have a situation like West Texas, where there\u2019s transmission bottlenecks, where you\u2019ve got 35 gigawatts of load on a sunny, windy day, and only 5 gigawatts of local demand, and only 12 gigawatts of long-term transmission to the rest of the state, so you can\u2019t even really export all the energy.\u00a0 So then, the energy asset owners can\u2019t sell it.<\/em><\/p>\n \u201cAt that point, that\u2019s where Bitcoin miners come in.\u00a0 They say, \u2018We\u2019re going to put a mine next to this windfarm so you\u2019re not going to have to pay any transmission fees\u2019, so the energy\u2019s going to be really cheap for them.\u00a0 However, they can\u2019t run their operations on a solar or wind asset 100% of the time, because the wind doesn\u2019t always blow and the sun doesn\u2019t always shine, so that\u2019s when it\u2019s more complex.\u00a0 At that point, they will engage in grid firming.\u00a0 They will pull energy from the grid to make up whatever the remaining percentage is; and at that point, they\u2019ll just get the default grid mix.<\/em><\/p>\n