Court temporarily blocks Energy Department from collecting data on crypto miners’ energy use

Cryptocurrency miners scored an early win against a mandatory survey that the Department of Energy (DOE) demanded facilities answer concerning their energy use.

The U.S. District Court for the Western District of Texas Friday granted a temporary restraining order that blocks the DOE for two weeks from forcing cryptocurrency mining companies to provide information they say is sensitive to their operations and costly to collect.

Cryptocurrency miners have become a target in President Joe Biden’s goal of building an electricity grid that produces no carbon dioxide emissions by 2035.

“Depending on the energy intensity of the technology and the sources of electricity used, the rapid growth of crypto-assets could potentially hinder broader efforts to achieve U.S. climate commitments to reach net-zero carbon pollution,” the White House said in a 2022 statement.

Electricity demand across the world is growing, and renewable energy can’t keep up with the increases. According to the International Energy Agency, countries are utilizing fossil fuel generation to meet the increased demand.

As with data centers, bitcoin mining facilities use a lot of electricity. According to estimates from the Energy Information Administration (EIA), Bitcoin mining in the U.S. used about 0.6% to 2.3% of all U.S. electricity demand in 2023.

In an effort to gauge the size and scope of cryptocurrency mining in the U.S., and its growth, the EIA issued a mandatory survey to "systematically evaluate the electricity consumption" of the industry. Failure to respond to the survey, according to the NCLA complaint, would subject the companies to fines and penalties.

The demand didn’t sit well with some cryptocurrency miners.

The New Civil Liberties Alliance (NCLA) filed a lawsuit last week against the DOE and the EIA on behalf of the Texas Blockchain Council and one of the council’s members. The plaintiffs argue the survey would provide “sensitive and proprietary information.”

The Office of Management and Budget (OMB) had granted the EIA an emergency clearance that allowed it to pursue the data collection without the required notice-and-comment process that usually accompanies such initiatives.

The EIA argued that the cryptocurrency mining industry had the potential to disrupt the U.S. electricity supply, and absent the survey, “public harm is reasonably likely if normal clearance procedures are followed.”

The EIA’s request, according to the NCLA, was approved two days after it was received. In so doing, the lawsuit argues, the EIA and OMB had violated the Paperwork Reduction Act.

“It is Government 101 that agencies only have those powers that Congress has granted to them and that they are bound to follow the law. From the very outset of this process, DOE and OMB have ignored those simple requirements, harming our clients in the process,” Kara Rollins, litigation council for the NCLA, said in a statement.

In their lawsuit, the plaintiffs also claim that, unlike data centers, bitcoin operations can be quickly shut down during periods of when the grid is facing blackouts due to inclement weather.

The Texas district court Friday granted the temporary restraining order until March 25. In its decision, the court stated that the plaintiffs’ arguments that the OMB and EIA acted in an arbitrary and capricious manner in granting an emergency request are likely to succeed on merits.

“The court believes that Plaintiffs are likely to succeed in showing that the facts alleged by the Defendants to support an emergency request fall far short of justifying such an action,” the ruling stated.

In asking for the order, the plaintiffs had disputed the EIA’s claim that the survey would take only 30 minutes. So far, the plaintiffs said, their cost of compliance has been over 40 hours.

The court agreed, and called the 30-minute estimate to be “extremely inaccurate, if not grossly misleading” and therefore, the plaintiffs had shown that, absent a temporary restraining order, an irreparable injury will result.

As a result of the order, the EIA is halting the mandatory survey and will sequester the data it has already received since it began collecting it on Feb. 5., Reuters reported.

“We’re gratified the Court has temporarily paused the Administration’s latest slapdash effort to circumvent statutory limitations on its ability to bury private industry with burdensome and invasive paperwork demands. We look forward to convincing the Court to put a permanent end to this misbegotten scheme,” Russ Ryan, senior litigation counsel for the NCLA, said in a statement.