EXCLUSIVE: House Majority Whip Tom Emmer says the Biden administration is abusing its power to unfairly target another corner of the $2 trillion cryptocurrency industry – bitcoin miners, FOX Business has learned.
In a letter sent this week to the Office of Management and Budget, the Minnesota Republican demanded answers from the agency about its recent approval of an emergency request from the Energy Department’s analytical agency – the Energy Information Administration – for 82 bitcoin mining firms to share proprietary information regarding their energy consumption. The OMB is responsible for signing off on information collection requests from federal agencies.
Bitcoin miners are responsible for powering the network behind the world’s largest digital currency, using computers to mine for bitcoin tokens. The computers, powered by high-energy servers, compete to solve complicated mathematical equations.
Environmentalists have criticized mining for its copious amounts of energy consumption, potentially resulting in negative effects on the environment.
The EIA says it will use the information gathered in the survey to create an analysis of the energy implications of crypto mining in the U.S.
Emmer says the request oversteps the EIA's administrative authority; it uses the term "emergency," to demand the information, but hasn't proven that bitcoin mining is a threat to public safety.
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The letter, obtained exclusively by FOX Business, is also raising alarm bells in Congress for bypassing standard protocols of the Paperwork Reduction Act that requires federal agencies to first seek public comment on proposed information gathering.
Bitcoin mining companies will face criminal and civil penalties, including fines of up to $10,000 per day if they do not comply with the request for information, which they must provide on a monthly basis through the end of July.
"Forcing bitcoin miners to share proprietary information or else they’ll face criminal penalties is problematic on its own, but the decision to evade normal clearance procedures for this kind of 'experimental and provisional' ploy is completely unacceptable," Emmer told FOX Business in an interview. "The OMB’s abuse of its emergency powers demands an explanation."
In its January press release announcing the approval of the EIA’s emergency request, the OMB said the request was granted because the EIA’s mining survey is "experimental and provisional" and part of a new standard of data collection the agency’s looking to enforce for bitcoin miners.
In its own press release, the EIA justified its emergency measure due to the rising price of bitcoin, leading to more mining and increased energy production. The agency also referred to a "major cold snap" in the U.S. that may put stress on the country’s power grids, already under pressure, they say, from bitcoin miners.
Press officials at the OMB and EIA did not immediately respond to FOX Business’ request for comment.
The debate over whether bitcoin mining is indeed detrimental to the environment is becoming a larger part of the political conversation surrounding energy conservation in the U.S., as ownership of bitcoin grows. Critics say bitcoin mining contributes to dangerous carbon emissions, while proponents say the process can be done using clean energy sources.
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"The EIA doesn’t seem to understand how bitcoin mining works," said Sam Lyman, director of public policy at bitcoin mining giant Riot Platforms. "We have the unique ability to prepare for cold snaps by shutting down our operations and selling unused power back to the grid to prevent strain."
"This is just another attempt by political actors in Washington to vilify bitcoin miners to advance an anti-crypto agenda," he added.
Emmer’s letter also says the administration may be attempting to implement so-called Scope 3 climate policies, which aim to track emissions that occur within a company’s supply chain. Many public companies have been fighting back against increasing pressure from the Biden administration to disclose information regarding their carbon footprint and the footprints of the companies in their supply chains.
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The Securities and Exchange Commission, under Biden appointee Gary Gensler, is attempting to pass new climate disclosure rules that would mandate public companies to report carbon emissions as part of their compliance requirements.
So-called Scope 1 reporting would require companies to report their direct emissions, while scopes 2 and 3 would require a company to report its indirect emissions that occur from sources in its supply chain.
"The scope of this survey suggests the administration may be attempting another avenue to implement Scope 3 climate policies, which received overwhelmingly negative public feedback when proposed by the SEC," Emmer wrote.
The rule proposal, which the commission hopes to vote on this year, has been one of the agency’s most controversial ever, receiving over 5,000 public comments, many criticizing the need for Scope 3 reporting.
Opponents of the proposal say aside from the burdensome cost of compliance, the SEC is also exceeding its congressional mandate by dabbling in so-called environmental, social and governance (ESG) policies that have become synonymous with the political progressive left, which is against energy production in the U.S.
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In 2022, a group of six Democratic lawmakers, led by progressive Massachusetts Sen. Elizabeth Warren, penned a letter to the Energy Department and the Environmental Protection Agency urging the agencies to require crypto-mining companies to report their "disturbing" energy use and associated carbon emissions.
Emmer believes the Biden administration will try to use the information gathered from miners to continue to push both its anti-energy and anti-crypto narratives. The administration’s approach to crypto regulation has been called "hostile" by industry participants and supporters, including Emmer and several of his GOP colleagues on the House Financial Services Committee, like Patrick McHenry and French Hill.
Emmer himself has become known as a fervent supporter of digital asset policy, supporting friendly legislation proposals and calling out crypto critics who he believes stand in the way of industry innovation, such as Gensler.
