Speaker 1: This is Bloomberg Crypto, a daily Bloomberg I Heard podcast,
Speaker 1: and I'm Stacy Marie Ishmael, Managing editor of Crypto for
Speaker 1: Bloomberg News. It's Thursday September. For this episode, we're doing
Speaker 1: something a little bit different. It's based on a conversation
Speaker 1: that two of our reporters, Alison Vers Brill and David
Speaker 1: Pan had with Costa Samaris doing a live Twitter spaces event.
Speaker 1: Costa Samrs is the White House Chief Advisor for Energy Policy.
Speaker 1: He works out of the Office of Science and Technology Policy.
Speaker 1: Our reporters and Costa discussed the recent crypto climate report
Speaker 1: and what's next for u S efforts on climate and
Speaker 1: non crypto. This episode features highlights from that conversation. Hello
Speaker 1: and welcome everyone. Thanks for tuning in today. My name
Speaker 1: is Alison Verse Brol and I'm the cryptop Thanks for
Speaker 1: joining UM. The White House Office of Science and Technology
Speaker 1: Policy released report earlier this month on the climate implications
Speaker 1: of digital assets. Costa and your report. Your office lays
Speaker 1: out some of the concerns about certain approaches for mining
Speaker 1: and verifying crypto transactions, in particular and mechanism known as
Speaker 1: proof of work. You also make recommendations on how to
Speaker 1: address these concerns, including suggesting that the federal government collect
Speaker 1: more data on power usage and work with states in
Speaker 1: the crypto industry to set greener standards. Um, so what
Speaker 1: does the main takeaway you want people to bring from
Speaker 1: this report? Thanks so much for having me, Ali and David.
Speaker 1: It's really a pleasure to be with you. But first,
Speaker 1: before we get started, I just want to make sure
Speaker 1: that folks on understand where we're coming from. I sit
Speaker 1: in the White House Office of Science and Technology Policy,
Speaker 1: and we are the source of scientific and technological advice
Speaker 1: and analysis for the President and the rest of the
Speaker 1: Executive Officer of the President around major policies and plans
Speaker 1: and profits. And we did this report because in March
Speaker 1: the pressure the President issued an executive work called Ensuring
Speaker 1: the Responsible Development of Digital Assets. So the President tasked us,
Speaker 1: the White House Officer as Science and Technology Policy, for
Speaker 1: looking into the energy and environmental implications of crypto assets.
Speaker 1: And so we got started, and we brought together a
Speaker 1: group of interdisciplinary scientists and engineers and economists and others
Speaker 1: to understand these broader issues and present some recommendations. And
Speaker 1: so alle you asked, well, what did we find. Well,
Speaker 1: at the highest level, we found that crypto assets represent
Speaker 1: between point nine and one point seven percent of US
Speaker 1: electricity use, and that the greenhouse gases that are associated
Speaker 1: with crypto assets in the United States are between and
Speaker 1: fifty million metric tons, which is about point forward to
Speaker 1: point eight percent of US g HD emissions. These numbers
Speaker 1: are not big, but they're also not small. And what
Speaker 1: the report lays out is making sure that we have
Speaker 1: a handle on understanding this growing industry and ensuring that
Speaker 1: the benefits for all folks in the United States are
Speaker 1: maximized and the harms are minimized. You mentioned some agencies
Speaker 1: that that should take uh specific actions, either on disclosure
Speaker 1: requirements or setting new standards. I'm curious, like, what's what's
Speaker 1: the next step One might we actually see some action
Speaker 1: coming out of the recommendations made in the report. So
Speaker 1: what did our report find? So first, what was really piking?
Speaker 1: And I think as we see a lot of the
Speaker 1: comments that have come in over the last couple of
Speaker 1: days when we've been talking about this event, is we
Speaker 1: need better information. The public needs information and transparency so
Speaker 1: that we can enable some evidence based policy. And one
Speaker 1: of the recommendations. Actually, the biggest recommendation in this report
Speaker 1: is let's all get better information about this growing industry.
Speaker 1: And that could be voluntary disclosures from UH, from the
Speaker 1: mining industry, it could be surveys from utilities and from
Speaker 1: the Department of Energy UH, and it could be understanding
Speaker 1: from state and local energy environmental agencies. And so with
Speaker 1: some better information, we will be better able to understand
Speaker 1: how to again maximize the benefits and minimize the damages.
Speaker 1: So that's the first overall recommendation. The second is really
Speaker 1: focused on communities. And now you asked which agencies could
Speaker 1: potentially be involved. This is something where there's a role
Speaker 1: for the federal government, is a role for state and
Speaker 1: local governments, and there's a role for the industry. We
Speaker 1: think agencies like the Department of Energy and the Environmental
Speaker 1: Protection Agency could come together with communities, with states and
Speaker 1: the industry to develop some effective, evidence based environmental performance
Speaker 1: standards for the deployment of this type of tech these
Speaker 1: technologies in communities. We want to make sure that communities
Speaker 1: are protected from air pollution, from water pollution, from noise
Speaker 1: pollution UH and also that these crypto assets are helping
Speaker 1: the grid which there is some innovation that potentially that
Speaker 1: these could do this rather than harming the grid. We
Speaker 1: also see a potential role for the Department Energy and
Speaker 1: others to make sure that as these crypto assets grow quickly,
Speaker 1: that we maintain energy affordability and reliability. And that's one
Speaker 1: of the things that we found that was surprising is
Speaker 1: that this is an industry that can grow really fast.
Speaker 1: And it's not to say that it will continue to
Speaker 1: grow at that rate. The future growth is depends on
Speaker 1: a whole bunch of different factors. But because of the
Speaker 1: ability to grow really fast, we want to make sure
Speaker 1: that the public is protected and that innovation can still
Speaker 1: drive towards net zero emissions, lowest cost electricity, and healthy communities. Well,
Speaker 1: when you you mentioned in there the you know, the
Speaker 1: federal government working with states to address some standards or
Speaker 1: create some standards to address pollution um and in the report,
Speaker 1: you know you mentioned that if that doesn't work, the
Speaker 1: White House may want to consider executive actions or Congress
Speaker 1: may want to consider legislation. Is there sort of a
Speaker 1: tipping point in your mind for when it would be
Speaker 1: necessary to resort to kind of the plan B in
Speaker 1: that particular part of the report, and I think when
Speaker 1: we when we stand on our principles healthy communities, affordable energy,
Speaker 1: getting to net zero emissions, we can have a lot
Speaker 1: of room for current innovation without any additional actions. So
Speaker 1: there's no outline tipping point, there's no spreadsheet that says
Speaker 1: after this other actions should be necessary. But I do
Speaker 1: think it's important that as this industry grows and continues
Speaker 1: to grow, that they grow in in balance and in
Speaker 1: um in connection with the communities that they're operating in. Well,
Speaker 1: and one last question from me, and then I think
Speaker 1: we'll turn to some audience questions. But you know, when
Speaker 1: I talked to the crypto industry UM about some of
Speaker 1: the concerns regarding proof of work, you know, a lot
Speaker 1: of the times they'll give me a sense of being
Speaker 1: unfairly singled out when other industries. Often they'll say cloud
Speaker 1: computing also use a sizeable amount of energy. I'm curious
Speaker 1: to get your thoughts on this, UM and why has
Speaker 1: this become an area that's gotten so much attention. Well,
Speaker 1: the reason that we looked at this is because there
Speaker 1: was an executive order and we were tasked by the
Speaker 1: President to understand this specific industry. I do think UM
Speaker 1: that the the thing that makes this industry different from
Speaker 1: many other types of new and emerging uses is the
Speaker 1: ability to grow fast. As I keep mentioning that UM
Speaker 1: United States was home to about three and a half
Speaker 1: percent of bitcoin mining a couple of years ago, and
Speaker 1: now it's more than thirty and so it's important to
Speaker 1: understand how those trends can develop and how to minimize
Speaker 1: impacts on communities. You know, the last big recommendation that
Speaker 1: we had in this report is really about innovation, and
Speaker 1: you know, I think we'll probably get into it um
Speaker 1: as as we continue this conversation, but there is innovation
Speaker 1: to you use digital assets and crypto assets in in
Speaker 1: reducing greenhouse gas emissions from vented methane, for example, or
Speaker 1: by potentially using crypto assets to take advantage of renewable
Speaker 1: energy that is not able to get to population centers.
Speaker 1: One piece that that was in the report but I
Speaker 1: didn't see get a lot of notice, was that distributed
Speaker 1: ledger technology was used to help the California system reduce
Speaker 1: its electricity use in in its grid stress events that
Speaker 1: were happening in September. And again, as long as we
Speaker 1: stand on those principles, net zero grid, affordable and reliable electricity,
Speaker 1: and not harming communities. I think there's a huge potential
Speaker 1: benefit to driving innovation in this second coming up more
Speaker 1: from the Twitter spaces conversation with Alison Vera Sprawl, David
Speaker 1: Pan and Costa Samaras from the White House. We have
Speaker 1: a question from the audience on UM using stranded methane
Speaker 1: to power mining. So this is from Denny from Duxbury, Massachusetts,
Speaker 1: UM asking can bitcoin mining powered by natural gas that
Speaker 1: would have otherwise been flared to help fund investments in
Speaker 1: renewable energy UM the The example that they give is
Speaker 1: in Texas, some shale drilling rigs are located beyond the
Speaker 1: reach of pipelines, so the gas must be flared, releasing methane.
Speaker 1: If this gas is instead used to power a mobile
Speaker 1: bitcoin mining rig, a portion of those revenues could be
Speaker 1: channeled into renewable energy, thereby hoping the US become more
Speaker 1: energy independent. Any thoughts on this. So, venting and flaring
Speaker 1: methane happens at a bunch of different places. Happens at
Speaker 1: oil and gas well, it happens at landfill, happens at
Speaker 1: some sewage treatment, and some agriculture role. Processes and venting
Speaker 1: and flaring methane at oil and gas wells waste about
Speaker 1: four percent of global methane a year and contributes to
Speaker 1: about four hundred million metric tons of c O two,
Speaker 1: about point seven percent of global greenhouse gas emissions. So
Speaker 1: in a world that gets to net zero emissions, we
Speaker 1: want zero methane flare venting and methane flaring. If methane,
Speaker 1: that would have been vented, So no methane should be
Speaker 1: vented at all. The methane venting is bad. And so
Speaker 1: why is it bad Because methane is a very potent
Speaker 1: greenhouse gas emission. It's twenty seven to thirty times the
Speaker 1: global warming potential of carbon dioxide over a hundred year timeframe,
Speaker 1: and in the near term it's eighty times. It's powerful
Speaker 1: of CEO two. So venting methane directly to the atmosphere
Speaker 1: is bad for climate change, and we want to do
Speaker 1: everything that we can to avoid that. And so typically
Speaker 1: what's happened is vented methane is flare, just lit on fire,
Speaker 1: completely wasted, and it's better that have flared methane than
Speaker 1: vented methane. It would be even better to have that
Speaker 1: methane be captured and used rather than wasted into the air.
Speaker 1: And if mining operations can use vented or flared methane
Speaker 1: to generate the electricity to do mining operations, there can
Speaker 1: be a positive climate impact. So yes, absolutely, we want
Speaker 1: to get venting to zero. We want to get flaring
Speaker 1: as close as possible to zero. Again, this has to
Speaker 1: be done in the understanding of impacts to local communities.
Speaker 1: So flaring is still going to create CEO two. Flaring
Speaker 1: is still going to create some emissions, and it's important
Speaker 1: that additional flaring is not overburdening communities that have historically
Speaker 1: had lots of amount of pollution. All right, well let's
Speaker 1: go ahead then, I think this is a good time
Speaker 1: to kick it over to David Pan, our bitcoin mining reporter.
Speaker 1: So David over to you. Thank you. So here's the
Speaker 1: question from the one of the listeners. So she is asking,
Speaker 1: what are the top three enabling or complimentary policies the
Speaker 1: administration could implement to leverage bitcoin mining as a tool
Speaker 1: for lower and growing house gas emissions. Well, you know,
Speaker 1: the recommendations from our report focus on better information, minimizing
Speaker 1: impacts on communities, and driving innovation, and so those are
Speaker 1: the three the areas that we focused on going forward.
Speaker 1: The question is how can mining drive towards net zero emissions?
Speaker 1: I would put that under our Driving Innovation recommendation, and
Speaker 1: really it's demonstrating the ability and the trend, the preference
Speaker 1: and ultimately, hopefully the majority operating conditions that this industry
Speaker 1: drives towards building additional renewables, building additional storage, getting emissions
Speaker 1: down to net zero as quickly as possible. Thank you
Speaker 1: to Allison, David Anto Costa Samorrow. You can find more
Speaker 1: of Allison's reporting and of David's reporting on the Bloomberg terminal,
Speaker 1: on Bloomberg dot com or on Twitter. Allison is at
Speaker 1: ali their sprill that's a L L y v E
Speaker 1: R s p R I L l E, and David
Speaker 1: is at david Pan Underscore one. That's d A v
Speaker 1: I d p A N Underscore one. On the next
Speaker 1: episode of Bloomberg Crypto for Poets, April might be the
Speaker 1: cruelest month for traders, though September is definitely the one
Speaker 1: to fare. So what's the outlook for crypto prices as
Speaker 1: we head towards the end of the year. Is there
Speaker 1: any sign of a thought in this Crypto Winter, who
Speaker 1: can say or guests m This is Bloomberg Crypto, a
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Speaker 1: Our senior producer is Janet Babin. Associate producer is Moses
Speaker 1: on them Desta wonder At is our engineer. Original music
Speaker 1: by Leo Sidran. I'm Stacy Marie Shmal. We'll be back
Speaker 1: tomorrow