Judge issues restraining order keeping DOE from tracking bitcoin miners

Earlier this month, the US Department of Energy (DOE) announced its intention to gather basic information about the energy consumed by bitcoin mining. In making the decision, the DOE noted that the share of bitcoin mining happening in the US has shot up by a factor of over 10 just within the last three years, leaving the activity consuming as much electricity as a fairly populous state.

To understand what this means for the US grid and its reliability, the DOE planned to gather information from large bitcoin mining operations within the US. But that plan has now been put on hold by a judge, who issued a restraining order against the DOE in response to a lawsuit filed by miners. In the decision, the judge suggested that bitcoin miners’ issues with the plan were likely to see it permanently blocked.

Mining suit

While it’s theoretically possible to mine bitcoin only during periods where production of renewable energy exceeds demand, doing so would leave a lot of hardware idle most days. In making its decision to monitor these operations, the DOE also gathered evidence that showed mining operations had inflated demand for power from a number of fossil fuel plants and were thus either competing with other users of that power or causing unnecessary carbon emissions. Both of those issues are within the DOE’s purview.

So, the DOE produced an order that would require miners to fill out a survey that would provide insights into how their facilities were consuming electricity. Instead of going through a standard rulemaking process, which could take up to a year, the DOE went a route that involved an emergency order, which requires approval from the Office of Management and Budget, which it received in January.

Bitcoin miners responded with a suit that sought to block the DOE, filed in the Western District of Texas. Texas is a major site of bitcoin mining within the US, and the wind farms of the Texas Panhandle regularly experience periods of production that exceed demand, enabling cheap energy prices. But those aren’t likely to be the only reason the suit was filed there. The District’s Waco Division is also the home of Judge Alan Albright, who gained notoriety for providing such a favorable venue that roughly a quarter of the patent lawsuits in the US were filed there.

The mining companies that filed the suit argued that they’d experience irreparable harms by completing the DOE survey, including the costs of filling it out, and that the risks of doing so would reveal confidential business information. The DOE responded by arguing that the survey should only take a half-hour to complete (one of the plaintiffs put the figure at 40 hours) and issuing a statement suspending the requirement for its completion until late March.

An injunction and beyond

Albright’s decision to issue the injunction is based largely on the fact that the DOE’s decision to delay going forward with the survey was voluntary and could be rescinded at any time.

But he went beyond that by saying that the mining companies were likely to succeed on the merits of their case. In general terms, he noted that the DOE relied on its ability to enact emergency measures, and those are only applicable if there’s a risk of public harm. The DOE will likely try to make the case that elevated carbon emissions and electricity costs both count as public harms, so Albright is suggesting that he’s unlikely to find those compelling.

More specifically, he argued that the DOE was being disingenuous regarding the minimal burden imposed by the survey: “Upon inspection of the Survey itself, the Court finds the 30-minute estimated time of completion is extremely inaccurate, if not grossly misleading.” (In response to the injunction, the DOE has pulled the survey from its website and is not presently providing copies of it to the media.)

Obviously, there’s the potential for an appeal. But, based on the text of this decision, the DOE is likely to lose if this gets to a trial, and that could also end up being appealed. Given the amount of time involved in all of that, the DOE might be better off starting a formal rulemaking process to mandate the completion of its survey in the future. Of course, formal rules can also become the target of lawsuits.

All of which is to say that it’s looking like the DOE is going to struggle to get information out of bitcoin miners. Given the rapid expansion of their energy use in just the past three years, that’s going to make planning for future electricity needs that much more challenging.

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