In mid-January, a massive winter storm swept across the United States, bringing freezing temperatures to Central Texas and forcing residents to stay indoors with their heaters on full blast. The Texas power grid, known for its vulnerability during extreme weather events, managed to stay operational this time thanks to an unexpected source: Bitcoin mining. In a show of solidarity, Bitcoin miners redirected their operations to critical infrastructure, easing the strain on the Texas grid. This phenomenon was not limited to Texas, as evidence suggests that miners in other regions also reduced their operations to support grids across the country during the storm.
Meanwhile, in Washington D.C., the Administrator of the Energy Information Administration (EIA) was drafting a memo to the Office of Management and Budget (OMB) calling for an emergency review of cryptocurrency mining operations. The concern was for ”stressed electricity systems” and “heightened uncertainty in electric power markets”. As a result, the EIA has launched an emergency data collection of mining operations, and the Bitcoin mining industry is scrambling to respond.
The irony of the EIA’s emergency data collection, based on concerns of grid instability, while mining operations have demonstrated grid synergy, is not lost on us. In this article, we will delve into the context of this data collection, the industry’s response, and our thoughts on the situation.
Context of the EIA’s Emergency Order
The EIA is responsible for collecting, analyzing, and disseminating energy information to promote sound policymaking, efficient markets, and public understanding of energy and its impact on the economy and the environment. When a federal agency wishes to collect information from the public, they must seek permission from the OMB and submit an Information Collection Request (ICR). The usual procedure for this is as follows:
1. The EIA internally develops the ICR and obtains internal approval.
2. The ICR is published in the Federal Register for a 60-day notice and comment period, allowing the public to provide feedback.
3. The EIA reviews all public comments and makes any necessary changes to the ICR.
4. The updated ICR is published for another 30-day notice and comment period and is submitted to the OMB for final approval.
5. The OMB reviews all documentation and issues a final ruling on whether the survey will proceed.
The notice and comment period is a critical aspect of the administrative law process, allowing agencies to consider feedback from affected businesses and individuals. It also provides transparency into the decision-making process and allows for industry input on the necessity and direction of the survey.
However, in this case, the EIA and OMB have decided to bypass the notice and comment period and go straight to the data collection stage, citing ”emergency” provisions of the Paperwork Reduction Act. This means that miners are now required to report information on their operations, such as electricity consumption, power providers, and hashrate, under threat of criminal penalties and fines.
Pushing Back on the Emergency Order
The omission of the notice and comment period is concerning for several reasons:
1. The industry is deprived of at least 90 days to coordinate responses, conduct research, and plan legal challenges.
2. Timelines for compliance and coordination with attorneys and team members are significantly shortened.
3. The industry has no opportunity to interface with regulators and provide insights or concerns.
4. The notice and comment period provides transparency into the decision-making process and allows for industry input.
The emergency ICR has been sent to approximately 82 miners, who presumably account for the bulk of the United States’ hashrate. While some miners may not be aware of this survey, several mining advocacy organizations have already issued formal responses. The Texas Blockchain Council (TBC) has strongly opposed the emergency ICR, calling it an “abuse of authority” and pointing to the voluntary data transparency already available in the industry. They also highlight the critical role of miners in stabilizing the grid during extreme weather events.
Dennis Porter of the Satoshi Action Fund suggests that miners should lean into transparent data reporting as the most productive response. He also cautions against escalation and urges miners to participate in the voluntary curtailment survey conducted by Satoshi Action. Twitter has also seen a range of responses, with some pointing out
Urgent Alert: The EIA’s Emergency Information Collection is Cause for Concern
The U.S. Energy Information Administration (EIA) is the leading government agency responsible for collecting, analyzing, and disseminating energy information to the public. This information is crucial for decision-making and policy development related to energy production, consumption, and conservation.
Recently, the EIA announced an emergency information collection that has sparked concern among experts and industry leaders. This collection, which is scheduled to take place from August 31 to September 30, 2021, aims to gather data on the impacts of COVID-19 on the energy sector. While this may seem like a necessary step in understanding the pandemic’s effects on the industry, there are some aspects of this emergency collection that are raising red flags.
In this article, we will delve into the details of the EIA’s emergency information collection and why it is causing concern. We will also explore the potential implications of this collection and what individuals and companies can do to protect themselves and their data.
Understanding the Emergency Information Collection
The EIA’s emergency information collection will gather data from companies in the energy sector, including oil and gas producers, utilities, and renewable energy providers. The data will include information on inventory levels, production, sales, and prices for energy commodities. This information will be used to assess the impacts of COVID-19 on energy markets and inform potential policy responses.
According to the EIA, this emergency collection is necessary due to the unprecedented disruptions caused by the pandemic. The agency claims that the current data collection methods and frequency are not sufficient to capture the full extent of the pandemic’s effects on the energy sector. Therefore, the EIA believes that this emergency collection is essential for providing an accurate and up-to-date picture of the industry.
Reasons for Concern
While the EIA’s intentions with this emergency information collection may be well-meaning, there are some valid concerns that have been raised by experts. These concerns revolve around three main issues – data security, data privacy, and data accuracy.
Firstly, the EIA’s emergency collection is an expansion of its existing survey program, which already collects detailed information from energy companies. This data is highly sensitive and can provide valuable insights into the operations and strategies of these companies. With the emergency collection, the scope and frequency of data collection will increase, raising concerns about data security. In the wrong hands, this data could have significant implications for the affected companies and their competitors.
Secondly, data privacy is also a major concern, especially with the sensitive nature of the information being collected. The EIA has assured that all data will be kept confidential and will only be used for statistical purposes. However, with the rise of data breaches and cyber threats, there is no guarantee that this data will not be compromised. This could have serious consequences for the affected companies and their stakeholders.
Lastly, there are concerns about the accuracy and reliability of the data collected through this emergency collection. With the submission process being rushed and the ever-changing nature of the energy sector, there is a risk of incomplete or erroneous data being included in the final report. This could lead to faulty conclusions and potentially misguided policy decisions.
Potential Implications and Solutions
The potential implications of the EIA’s emergency information collection are far-reaching. The affected companies could face security breaches and privacy violations, damaging their reputation and compromising their operations. Moreover, the potential inaccuracies in the data could result in misguided policy decisions that could have adverse effects on the industry. This emergency collection could also set a precedent for future data collections, which could lead to further security and privacy concerns.
Thankfully, there are steps that companies and individuals can take to protect themselves and their data during this emergency collection. Firstly, it is essential to review and understand the EIA’s data collection and sharing policies to ensure compliance and safeguard sensitive information. Companies should also implement robust data security measures, such as encryption and regular backups, to protect their data in the event of a breach. Additionally, industry leaders can work with the EIA to improve the accuracy and reliability of the data collected and advocate for stronger data privacy protections.
In Conclusion
The EIA’s emergency information collection has raised valid concerns among experts and industry leaders. While the intention behind this collection may be to gain a better understanding of COVID-19’s impacts on the energy sector, the potential consequences cannot be ignored. It is crucial for companies and individuals to understand the implications of this collection and take steps to protect themselves and their data. By working together with the EIA, we can ensure that this emergency collection provides valuable insights while also addressing the concerns raised by industry stakeholders. Government agencies and companies alike must prioritize the security, privacy, and accuracy of data to build trust and foster a more resilient energy sector.
