CRYPTOCURRENCY

Cruz: Bitcoin mining way to fix power grid
Senator says using excess natural gas could raise capacity
By EMILY CALDWELL
Washington Bureau
emily.caldwell@dallasnews.com

WASHINGTON — Texas is still scrambling for long-term solutions to the problems that have plagued the state’s power grid for years, but Texas Sen. Ted Cruz is pushing an unconventional fix: Bitcoin mining.

At a cryptocurrency conference, the Texas Blockchain Summit in Austin last week, Cruz said expanding the state’s booming cryptocurrency mining industry using excess natural gas could be a way to stabilize the grid and increase its energy capacity during emergencies and power outages, like February’s winter storm that left more than 200 Texans dead.

“Because of the ability of Bitcoin mining to turn on or off instantaneously, if you have a moment where there’s a power shortage in a power crisis, whether it is a freeze or some other natural disaster where power generation capacity goes down … they become excess reserves that can strengthen the grid’s resilience by providing a significant capacity of additional power to be available for critical services if and when it’s needed,” Cruz said at the conference on Oct. 8.

And by “they,” Cruz is presumably referring to the power needed to operate the large stacks of computers and machinery used to mine for Bitcoin — an industry known to use more energy than many countries.

“In five years, I expect to see a dramatically different terrain, with Bitcoin mining playing a significant role [in] strengthening and hardening the resiliency of the grid,” Cruz said.

But some experts aren’t so sure.

“There is merit to the idea that more flexible demand makes it easier to balance the ups and downs of supply when wind and solar vary, or when coal and gas and nuclear plants fail,” said Daniel Cohan, associate professor of environmental engineering at Rice University. “But just adding brand new demand to the grid isn’t helpful, or doesn’t fix the shortfalls.”

Additionally, it’s unclear if expanding mining in Texas would make it easier or cheaper for Texas to manage its grid. Now, when the grid is overwhelmed and miners shut their operations down to make the energy they’d normally consume available for other services, some are selling their power supplies back to the grid for a hefty profit.

To explain how Bitcoin mining would expand an energy grid’s capacity and reduce carbon emissions — a point of particular interest to Texas, whose grid collapsed when demand for power exceeded production capabilities during February’s snowfall— both Bitcoin and Cruz point to natural gas and investing in renewable energy.

“Fifty percent of the natural gas in this country that is flared is being flared in the Permian [Basin] right now in West Texas,” Cruz said. “I think that is an enormous opportunity for Bitcoin, because that’s right now energy that’s just being wasted. … Some of the really exciting endeavors that people are looking at is, ‘Can we capture that gas instead of burn it, use it to put in a generator right there on site, use that power to mine Bitcoin?’”

Cryptocurrency miners are looking at using these flares, or stray natural gas unwanted by oil companies, as an opportunity to both reduce carbon dioxide emissions and as an easy way to obtain cheap energy moving forward. But miners aren’t the only ones with a use for that energy.

“We should be capturing more of the natural gas, rather than letting it leak or be flared, but that’s independent of whether we have Bitcoin miners,” Cohan said. “The capture of natural gas can be used for anything; there’s no shortage of customers looking for natural gas to use.”

As Bitcoin and other cryptocurrencies’ value has skyrocketed over the past year, it’s become somewhat of a talking point for Cruz. In August, he proposed an amendment to the $1 trillion infrastructure package in the Senate that would strike a measure of the bill regulating cryptocurrency.

“There is a new and exciting industry in the United States of cryptocurrency, whether Bitcoin or otherwise, that are generating jobs, entrepreneurs who are creating new values. … It is dynamic,” Cruz said on the Senate floor. “And this infrastructure bill … has one little portion in there designed to obliterate cryptocurrency.”

Twitter: @EmilyECaldwell