Bill filed that would regulate environmental footprint of crypto mining operations in Arkansas

In its upcoming 2025 session, state lawmakers will be considering legislation that would place more regulations on cryptocurrency mining operations across the state.
Sen. Bryan King (R-Green Forest) has submitted a bill that would regulate the environmental footprint of the energy-intensive data centers that are used to mine cryptocurrency. Such operations have been opening up across the country, including in more rural states, like Arkansas.
In 2024, the state Legislature passed laws that imposed noise limits on crypto mines, limited the ownership of the data centers by certain foreign entities and allowed local governments to have some oversight of the operations. The new regulations were passed retroactively after, in 2023, the state Legislature approved the Arkansas Data Centers Act, a law that limited the government’s ability to regulate the industry.
The mining operations are seen by some as economic opportunity for Arkansas; but the data centers faced widespread public backlash due to noise pollution near the communities where they are located. There are mining operations in Faulkner County near Bono as well as in DeWitt and elsewhere.
King, a Republican representing a rural district covering parts of six different counties, proposed the latest bill to give the state of Arkansas the authority to regulate the water and electricity usage of data centers. During the 2024 legislative session, King was one of the several legislators working to regulate data centers as reported by the Arkansas Advocate.
King could not be reached for comment on his bill as of the publication of this story.
The proposed legislation would allow state regulators to take action “against a blockchain network or a digital asset mining business if the impact of the blockchain network or digital asset mining business threatens the critical groundwater supplies,” according to a draft of the bill.
It would also allow regulators to monitor electricity use by the operations.
Crypto mining facilities require enormous amounts of electricity to operate as well as use substantial volumes of water for cooling purposes. According to a United Nations University and Earth’s Future journal study, during 2020 – 2021, the global bitcoin mining industry used an amount of electricity that would rank it 27th in the world if it were a country, placing the industry above Pakistan, which has a population of 230 million, in terms of energy consumption.
Cryptocurrency enterprises use data centers to “mine” crypto currencies, like Bitcoin, thus creating the term crypto mining. Arkansas’s current regulations on data centers apply to data centers used for specifically for mining digital currencies.
King’s bill would empower the Natural Resources Commission, a commission under the state Department of Agriculture, to produce rules to collect information on and regulate the water usage of data centers. Computers tend to overheat, especially when under the strain of intensive computing processes, like crypto mining or artificial intelligence, making cooling with large amounts of water essential.
His bill would also instruct the Arkansas Public Service Commission, which regulates utilities such as electricity and gas companies, to produce rules monitoring the electricity use of data centers. If passed, the law would allow the Public Service Commission to “direct a utility to halt service to a blockchain network” if the reliability of the electric grid is threatened by the electricity usage.
Data centers have popped up all around rural Arkansas in recent years, with a notable center in Cabot to be used for cryptocurrency seeing recent controversy in Lonoke County Circuit Court.
The Arkansas Oil and Gas Commission voted to begin rulemaking for data centers in Dec. 2024, with rules outlining how individuals and companies can qualify for a permit and what violations of the permit would entail. The Oil and Gas Commission is accepting public comments on the proposal until Jan. 13, 2025. Currently operating data centers for cryptocurrency would also have to apply for and receive a permit within 90 days of the Oil and Gas rules being finalized.
If King’s bill passes the legislature and is signed by the Gov. Sarah Sanders, three state agencies would be producing rules to regulate the data centers. The legislative session is set to begin on Jan. 13 of this year.
Source link