Washington passes climate goals for crypto and data centers

Proposals in Oregon and Washington to regulate carbon emissions tied to crypto mining and data centers took opposite paths during the 2023 legislative session.

In Washington, a bill sailed through the House and Senate with relative ease and was signed by Gov. Jay Inslee on Wednesday. The new law mandates that customers of rural utility districts curb the emissions from any electricity they buy on the market, in line with the timelines approved in the state’s Clean Energy Transformation Act.

In Oregon, meanwhile, a bill that sought to impose the emissions reduction timelines laid out in Oregon’s 2021 climate law on crypto miners and data centers failed. Much of the opposition came from the areas with established data centers and crypto operations.

Crypto mining operations and data centers use enormous amounts of electricity. Crypto mining also has been scrutinized for instances when miners discharged heated water back into lakes after it was circulated through server farms, prompting worries about fish death and algae blooms, and how, in some cases, demands from crypto prompted closed coal plants to reopen.

Oregon state Rep. Pam Marsh, D-Southern Jackson County, who sponsored the bill, said Amazon, which operates several data centers in eastern Oregon, lobbied against the bill and organized opposition in the community. She said she also faced misconceptions about the proposal, including fears it was the first step down a slippery slope to regulating a class of utilities that was specifically exempted from the climate legislation. Her attempts to address opponents’ concerns, she said, didn’t change the response to the bill.

“We laid out the issue,” Marsh said. “Rather than pushing what was going to be a very contentious conversation … we decided to regroup, come back and talk about it.”

The two bills weren’t exactly alike. Washington’s 2018 law to phase out nonrenewable energy use, the Clean Energy Transformation Act, already applied to rural, consumer-owned utilities as well as large utilities. Rep. Beth Doglio, D-Olympia, who sponsored the Washington bill, wanted to close a loophole that some crypto mining operations could exploit, which allows them to buy power on the market from nonrenewable sources if the hydroelectric-powered local utility can’t satisfy their demand.

But there was another difference: In Washington, the legislation didn’t have an impact on any Amazon data centers, since the electric utilities the company relies on are already subject to emissions regulations under the state’s clean energy laws.

“I’m just glad we got it done this year, considering what happened in Oregon,” Doglio said.

New regulatory territory

Although crypto mining and data centers have come under fire over the past decade for their high energy use, they’ve been subject to few climate-related regulations in either Oregon or Washington.

Instead, many companies, including Apple, Microsoft and the newer generation of crypto miners, have set their own climate goals to be carbon-negative by a certain year.

Amazon, for example, said on April 4 that it struck a new deal with the Umatilla Electric Cooperative that will increase its renewable power purchases. Amazon claimed its data centers in Oregon are powered with 95% renewable energy and will reach 100% by 2025.

Umatilla Electric Cooperative is the utility that serves Amazon facilities in eastern Oregon. It is consumer-owned, one of the smaller electrical utilities that was exempted from Oregon’s emissions standards in the 2019 climate law. They largely rely on hydroelectric power from the Bonneville Power Administration, but the Oregonian has reported that carbon emissions per megawatt hour from Umatilla Electric Cooperative increased by 543% from 2010 to 2020, a decade in which Amazon built four facilities that use enough power to serve 200,000 homes. The increase in emissions, according to the report, was related to the utility’s purchases of power on the market, often from coal-powered sources.

“That’s what spurred this,” Marsh said. “Because the energy they’re bringing in was dirty energy”

Marsh’s bill would have required all future Oregon data centers and large-scale crypto miners to power their facilities with 80% clean energy by 2030 and 100% by 2040. That’s in line with the timelines to which investor-owned utilities are subject.

An Amazon spokesperson said the company objected to Marsh’s bill “because it did not address the build-out of electric infrastructure that is needed to bring more clean energy to the grid.”

Marsh said she disagrees.

“It is the setting of the objectives that drives the infrastructure and investment that gets to that point,” she said.

But residents who opposed the legislation said it was unfairly targeting important industries in their communities.

Paul Anderes, Union County commissioner and chair of the Eastern Oregon Counties Association, said in written testimony that the bill would eliminate one of the few job-growth and community building opportunities “we so desperately need.”

Planning for the future

In Washington, the bill that state energy officials brought forward to deal with effectively the same potential problem found friendlier audiences.

Glenn Blackmon, energy policy manager for the Washington Office of Energy, said he thinks the fact that consumer-owned utilities were included in the Clean Energy Transformation Act is the main reason for the different treatment.

“In Washington, the purpose … was to hold a nonresidential industrial customer to the same standards as the rest of the community was held to,” Blackmon said.

In Oregon, Marsh said she’s not clear on the best way to address carbon emissions tied to the tech industry.

But she said she is hopeful the bill will advance further if she brings a version back in a future session.

InvestigateWest (invw.org) is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. Reach reporter Kaylee Tornay at kaylee@invw.org.