Energy-hungry Bitcoin moves into sights of US environmental movement: Reuters

Analysis Energy-hungry Bitcoin moves into sights of US environmental movement: Reuters
In places such as New York and Pennsylvania, miners have revived closed fossil fuel plants to power their work (Shutterstock)
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Updated 22 April 2022

Energy-hungry Bitcoin moves into sights of US environmental movement: Reuters

Energy-hungry Bitcoin moves into sights of US environmental movement: Reuters

LOS ANGELES: When China banned bitcoin mining last year, it launched a US cryptocurrency goldrush, with states such as New York, Kentucky and Georgia fast becoming major mining hubs, according to Reuters.

New York state assembly member Clyde Vanel couldn’t be happier.

“It’s a blessing that it’s happening here,” he said, pointing to the jobs the industry could create.

But Anna Kelles, a fellow assembly member, is pushing legislation that would severely restrict the power-hungry mining in New York, placing a moratorium on new mining operations that bring new fossil power sources online.

“We have an industry that in short order is going to derail our climate goals,” she warned.

The debate over the environmental impact of bitcoin mining is intensifying in the United States, with major environmental groups belatedly mounting a national pressure campaign criticizing its use of fossil fuels as the country tries to slash its emissions to meet climate change goals.

Bitcoin miners maintain the decentralized digital currency through a network of energy intensive computers — whose exact energy consumption and carbon footprint are hard to measure.

A 2021 estimate from the industry group CoinShare found that the network was responsible for less than a tenth of a percent of global emissions, while a separate report by the New York Digital Investment Group said it could reach at most 1 percent of global emissions by 2030.

But a study published by economist Alex de Vries, a persistent critic of bitcoin’s energy usage, in the energy journal Joul in March estimated it produced the carbon dioxide equivalent of the nation of Greece.

“We should be pushing bitcoin mining to decarbonize, just like any other industry,” said Margot Paez, a climate change scientist at the Bitcoin Policy Institute, a think-tank.

“But the reality is that, compared to other industries, bitcoin uses an insignificant amount of energy,” she said.

Bitcoin boosters say that other activities — such as running Christmas lights — consume roughly equivalent amounts of energy as the network, and that the social function of bitcoin is worth the energy load.

They also point to a few operations run on renewable energy — in particular in Texas where solar and wind farms are being brought online to power bitcoin mining.

But in places such as New York and Pennsylvania, miners have revived closed fossil fuel plants to power their work — and environmental groups have mobilized. 

“We are in a climate crisis,” said Tefere Gebre, the chief program officer for Greenpeace USA at a recent press conference organized by environmental groups critical of the cryptocurrency.

And bitcoin mining, he said, “is pushing us in the wrong direction at the wrong time.”

New York Regulations

A law written by New York assembly member Kelles, which advanced out of the state’s natural resources committee in March, would place a moratorium on new fossil-fuel-powered bitcoin operations there.

If it passes, “New York will be signaling that it is closed for business,” said Kyle Schneps, director of public policy at New York-based bitcoin and consulting firm Foundry, which opposes the bill.

The fight over bitcoin mining in New York took off last year as residents of the small town of Torrey protested as a bitcoin mining firm took over a closed coal-fired power plant there and converted it into a natural-gas powered mine.

Environmental group Earth Justice has identified a number of other plants around the state it said could be subject to similar conversions — and legislator Kelles has gathered over 40 co-sponsors for legislation that would ban such activity.

Schneps, with Foundry, noted some bitcoin mines are driven by renewable energy, including hydropower, and that they can bring economic benefits.

His own firm has hired over 115 employees in New York, working in a range of roles from software engineering to sales, he said.

New York assembly member Vanel, who opposes the mining moratorium, worries it could drive miners away, saying lawmakers should collaborate with the industry to address any environmental concerns.

But Kelles said that without regulation to ban fossil-fuel-powered bitcoin mining, more dirty energy plants would come back online in the state, undermining its emissions reductions goals.

”Let’s put a pause on this now,” she said. “We spent 30 years getting these dirty plants off the grid.”

Scientists say global fossil fuel emissions must fall by a whopping 45 percent by 2030 to avoid the worst impacts of climate change, including ever-more-dangerous wildfires, floods and heatwaves.

But despite legions of emissions-slashing pledges, carbon pollution continues to rise, with the United Nations predicting a 16 percent hike by 2030, compared to 2010 levels, even if current government carbon-cutting plans are met.

Those on both side of the bitcoin divide agree that what happens in New York will have implications across the United States.

“When it comes to climate politics on a national scale, New York is a power player,” said Mandy DeRoche, a lawyer with Earth Justice, now suing to block expansion of the Torrey bitcoin mine on environmental grounds.

Code fight 

The showdown in New York coincides with a national campaign by major environmental groups, including the Environmental Working Group and Greenpeace USA, to draw attention to bitcoin’s environmental impact.

The groups are calling for changes in bitcoin’s software code to replace its “proof of work,” protocol — which generates new coins and maintains the network by running energy-hungry computers — with a lower-emissions “proof of stake” mechanism that would reward those who already own the currency.

The campaign, which has taken out major advertisements in national newspapers, was seeded with a $5 million donation from Chris Larsen, a co-founder of proof-of-stake cryptocurrency Ripple.

“We are deadly serious about this. This problem has to be solved,” said Ken Cook, president of the Environmental Working Group.

He said the mainstream environmental movement had been slow to recognize the bitcoin mining threat but groups were now kicking into gear.

“We are on the way to a good transition” away from fossil fuels, he said — but fossil-fuel-powered bitcoin mining “could really offset that transition in a very significant way.”

Paez, of the Bitcoin Policy Institute, opposes carbon-based bitcoin mining but said critics do not understand that mining does not inherently run counter to climate goals, pointing to US mining operations financing new wind and solar generation.

Gloria Zhao, a developer who works on the bitcoin system’s core software, said the mining community has “basically treated as a joke” proposals by environmentalists for changes to bitcoin software, in part because they have not been submitted through a formal mechanism.

Zhao and other bitcoin proponents say crytocurrency’s energy-intensive design is important to maintain the security and decentralization of the network, which allows anyone with access to a computer and electricity to participate.

But Larsen, who funded the environmental campaign, said as more and more mainstream financial institutions invest in bitcoin, pressure will grow on software developers to align the crytocurrency with broader environmental, social and governance (ESG) goals.

“That will put pressure on the core developers to make this change,” he said. “That’s the goal.”

— Thomson Reuters Foundation


Iraq extends Lebanon fuel deal for 1 year

Iraq extends Lebanon fuel deal for 1 year
Updated 13 sec ago

Iraq extends Lebanon fuel deal for 1 year

Iraq extends Lebanon fuel deal for 1 year

BEIRUT: Iraq’s government has agreed to continue supplying Lebanon’s electricity company with heavy fuel oil for another year, Lebanon’s caretaker prime minister said on Thursday, alleviating pressure on Lebanon’s struggling power grid.

Najib Mikati said he had made the request to Iraq’s Prime Minister Mustafa Al-Kadhemi, who agreed to extend the same terms of the agreement signed last year.

In July 2021, Iraq offered the cash-strapped Lebanese government 1 million tons of heavy fuel oil a year in exchange for services including healthcare for Iraqi citizens.

The deal was meant to alleviate Lebanon’s acute power shortage, which last summer reached crisis levels when the government was unable to subsidize fuel imports.

Lebanon subsequently removed those subsidies and domestic fuel prices skyrocketed. Russia’s invasion of Ukraine then further bumped up international prices this year.

With the government unable to provide fuel to public power plants, most homes in the country have been left without state-provided electricity for around 22 hours every day.


Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1


Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1

Updated 5 min 42 sec ago

Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1


Egypt In-Focus — Annual headline inflation rises 1%; M&A activity amounts to $3.2bn in H1


CAIRO: Egypt’s annual headline inflation rose to 15.6 percent in July, up from 14.6 in June, according to the Central Agency for Public Mobilization and Statistics.

CAPMAS attributed the rise in inflation to the increase in food and beverage prices that grew by 23.8 percent, along with growth in commodity and services prices.

M&A activity

Egypt reported a total of 65 mergers and acquisitions deals, valued at $3.2 billion, during the first six months of 2022, according to the EY MENA M&A Insights report.

Deal activity has surged thrice year-on-year during the first half of 2022. The report attributed the surge to “favorable government initiatives including granting a special license to foreign investors.” 

Port agreements

Egypt on Thursday signed two initial agreements for the development of port facilities with Hutchison Ports, Cosco and CMA CGM, Reuters reported citing a Cabinet statement.

The agreements with the international consortium could see investments of up to 800 million, it added.

Gas consumption 

Egypt has launched a plan to rationalize gas consumption in electricity plants in a bid to save foreign currency and achieve financial returns from gas export, according to Daily News Egypt. 

 


Oil rises as IEA hikes 2022 demand growth forecast

Oil rises as IEA hikes 2022 demand growth forecast
Updated 43 min 19 sec ago

Oil rises as IEA hikes 2022 demand growth forecast

Oil rises as IEA hikes 2022 demand growth forecast

LONDON: Oil prices rose by over 1 percent on Thursday after the International Energy Agency raised its oil demand growth forecast for this year as soaring natural gas prices lead some consumers to switch to oil.

Brent crude futures gained $1.29, or 1.3 percent, to $98.69 a barrel by 1348 GMT, while US West Texas Intermediate crude futures rose $1.45, or 1.6 percent, to $93.38.

“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the Paris-based agency said in its monthly oil report, in which it raised its outlook for 2022 demand by 380,000 barrels per day.

By contrast, the Organization of the Petroleum Exporting Countries on Thursday cut its 2022 forecast for growth in world oil demand, citing the economic impact of Russia’s invasion of Ukraine, high inflation and efforts to contain the pandemic.

OPEC expects 2022 oil demand to rise by 3.1 million bpd, down 260,000 bpd from the previous forecast. However, it still sees a higher overall global oil demand figure than the IEA for 2022.

A rise in US oil inventories last week and the resumption of crude flows on a pipeline supplying central Europe capped further price gains.

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, more than the expected increase of 73,000 barrels.

Gasoline product supplied rose in the most recent week to 9.1 million barrels per day, though that figure shows demand down 6 percent over the last four weeks compared with the year-ago period.

The premium for front-month WTI futures over barrels loading in six months’ time was pegged at $4.38 a barrel on Thursday, the lowest in four months, indicating easing tightness in prompt supplies.

The resumption of flows on the southern leg of the Russia-to-Europe Druzhba pipeline further calmed market worries over global supply.


Egypt to ration electricity to boost gas exports

Egypt to ration electricity to boost gas exports
Updated 52 min 50 sec ago

Egypt to ration electricity to boost gas exports

Egypt to ration electricity to boost gas exports

CAIRO: Egypt’s Cabinet has approved a plan to ration electricity to save natural gas that it will instead divert to the export market to generate foreign currency, it said on Thursday.

Egypt has suffered from an acute foreign currency shortage since Russia's February invasion of Ukraine, which pushed up global commodity prices, led to the collapse of tourism from the two countries and drove up the cost of borrowing.

Under the draft plan, shops and malls will have to limit their use of strong lights and keep their air conditioning at no cooler than 25 degrees Celsius.

Ministries and government facilities will have to turn off lighting at the end of working hours, the statement added. Street lighting will also be reduced.

The government last month postponed a planned increase in electricity prices by six months. The higher prices would have been intensely unpopular among a population that over the last few years has endured a series of harsh austerity measures.

On Tuesday, Prime Minister Mostafa Madbouly said the government hoped to reduce the amount of gas used to generate electricity by 15 percent. He said domestic power plants bought their natural gas at one-tenth the price that it could fetch on international markets.

Europe has been seeking alternative sources of gas to cut its reliance on Russian gas as the war in Ukraine escalates.

Rapid growth in Egypt’s natural gas supplies, boosted by the discovery of the Mediterranean’s largest field, turned it from a net importer to an exporter in late 2018.

Egypt exported 9.45 million cubic meters of liquid natural gas in the first seven months of 2022, up 44 percent from a year earlier, according to Refinitiv data. 


Ethiopia starts power generation from second turbine at mega-dam

Ethiopia starts power generation from second turbine at mega-dam
Updated 11 August 2022

Ethiopia starts power generation from second turbine at mega-dam

Ethiopia starts power generation from second turbine at mega-dam

RIYADH: Ethiopian Prime Minister Abiy Ahmed kickstarted electricity production from the second turbine at its controversial mega-dam on the Blue Nile on Thursday, despite continuing objections by Egypt and Sudan over the project, according to AFP.

Abiy also confirmed that a third filling of the multi-billion dollar Grand Ethiopian Renaissance Dam was under way, a development that led Egypt last month to protest to the UN Security Council.

Thursday’s move came even though there is still no agreement between Ethiopia and its downstream neighbors Egypt and Sudan about the GERD’s operations.

Abiy insisted that the third filling of the $4.2 billion dam — set to be the largest hydroelectric scheme in Africa — was not causing any water shortages for the two countries.

“We have repeatedly told downstream countries, especially Egypt and Sudan, that by generating power we’re developing our economy, as well as (our desire) to see our citizens who live in the dark see light,” he said.

There was “no aim to sideline and harm” those countries, he added.

Ethiopia first began generating electricity at the dam in February. Currently, the two turbines, out of a total of 13 at the dam, are generating 750 megawatts of electricity.

We are ready to face all scenarios after Ethiopia completes the third filling phase of the Renaissance Dam, and we expect an unprecedented rise in the Nile waters after the gates of the dam are opened, the Sudanese Minister of Irrigation Yasser Abbas told Asharq.