Nebraska Governor Jim Pillen recently signed LB526 into law. This new legislation would put strict regulations on crypto mining operations throughout the state. The legislation’s intent is to harden the electrical grid’s infrastructure. It will protect other homes and businesses from unreliable service and addresses all of the growing public concern over the energy consumption of crypto mining. Crypto mining operations are facing existential political forces all over the globe. This comes after bipartisan outcry over their massive energy usage and possible environmental and health effects.

Addressing Energy Consumption

We can all agree that crypto mining — especially Bitcoin mining — is an extremely energy-intensive industry. As of early 2023, Bitcoin mining used more energy than 167 countries, including Qatar and Portugal. Americans are concerned about the demands placed on power grids. Perhaps most importantly, they are deontologically worried about using non-renewable energy sources because of their environmental effects.

Today, Nebraska produces around 49 percent of its electricity from renewables. It’s this windfall of ultra-cheap electricity that has fueled an enormous influx of crypto mining operations into the state. This influx has sparked fears about the strain this growth could put on the state’s electrical grid.

"With the opportunity in expanding this emerging industry, comes responsibility." - Nebraska Gov. Jim Pillen

LB526: Guardrails for Crypto Mining

LB526 sets some important new restrictions on crypto mining facilities operating in Nebraska. The bill would provide utilities with the authority to limit energy usage by crypto facilities. It requires these facilities to cease operation during peak demand periods. This policy move is meant to avoid creating excess demand on the grid and jeopardizing the continuity of critical services, including emergency operations.

"This bill provides the guardrails needed to ensure that our electrical grid can handle the increased demand. By requiring mining operations to contribute to grid upgrades and be transparent about their energy use, we're protecting our infrastructure." - Nebraska Gov. Jim Pillen

In addition to addressing climate impact, the legislation requires transparency around energy consumption and ensures that every mining operation pays for grid improvements. This protects taxpayers by making sure that these facilities take on a portion of the financial responsibility tied to their energy needs.

Global Concerns and Alternatives

The associated environmental consequences of crypto mining’s energy usage are not just a Nebraska problem. In Texas, residents have filed lawsuits against Bitcoin mining facilities, citing noise pollution and health problems such as hearing loss, vertigo, and insomnia. Tehran, Iran's capital city, experienced rolling blackouts in late 2024, with officials suspecting illegal crypto mining as a contributing factor.

Some regions are exploring alternative approaches. Bhutan’s approach entails using its hydropower resources to provide a renewable 100% of the energy needed for any crypto mining, limiting the same environmental worries. On the one hand, it’s true that some crypto networks are moving in a more sustainable direction. Ethereum, by moving to a proof-of-stake system in 2022, was able to make a 99.95% reduction in energy use.