- Bitcoin mining companies are flocking to Texas.
- Global fuel prices have risen in the wake of Russia's war against Ukraine.
- Rep. Pete Sessions wants Texas Bitcoin mining to be a key component of U.S. energy policy.
Here's the latest Washington, D.C. politician to publicly embrace Bitcoin: Rep. Pete Sessions, a 12-term Republican congressman from Waco, Texas.
Rep. Sessions today tweeted, "Bitcoin mining will play a critical role in rebuilding energy independence in the USA." His mini-missive comes three days after Sessions tweeted, in language that mirrors Senator Cynthia Lummis (R-WY), "Bitcoin is aligned with American values and will strengthen the dollar."
Sessions should know. His state, once synonymous with oil, is the epicenter of a Bitcoin mining boom. According to data from fall 2021, Texas provides the fourth-highest hashrate of any state, with 14%. (Hashrate is a measure of how much power is being supplied to the Bitcoin network.)
But Texas' influence is likely even higher than that figure, given the large mining facilities that have either begun popping up in the past year or are in the works. For example, Argo purchased 300+ acres in West Texas last spring, while Foundry is partnering with or gobbling up solar and hydroelectric firms in the state.
— Cynthia Lummis 🦬 (@CynthiaMLummis) March 21, 2022
Why the Lone Star State?
"Texas is such a goldilocks zone for bitcoin mining it’s unreal," tweeted Coin Metrics co-founder Nic Carter over the weekend, citing "supportive policymakers" and the state's energy infrastructure.
Sessions is far from the only Texas politician to hail Bitcoin. Senator Ted Cruz has been increasingly aligning himself with cryptocurrency, while Governor Greg Abbott sees Bitcoin mining as a way to stabilize the state's largely deregulated power grid while taking advantage of its large stores of untapped energy, including natural gas that can be burned but not transported. Texas also has plenty of wind and solar power to go around.
Texas is such a goldilocks zone for bitcoin mining it’s unreal.
- Supportive policymakers
- Energy DNA
- Most deregulated market, cheap power
- Islanded grid, has to buy lots of ancillaries
- Most renewable grid, most negative pricing events
— dark nic (@nic__carter) March 19, 2022
In all, it has by far the largest net (summer) capacity of any state with 65% more than #2 California, according to the U.S. Energy Information Administration. And its lawmakers want to use that capacity to bring in money from crypto firms.
"It’s a wonder that there’s mining anywhere else," tweeted Carter. "Texas is just unreal in terms of mining suitability."
Texas now has the perfect opportunity to hone its sales pitch beyond the Bitcoin mining firms it's been courting to a larger public that is still forming an opinion on cryptocurrency. After Russia invaded Ukraine, the U.S. and allied Western countries levied crippling sanctions against the country. Slight problem, though: Russia supplies an estimated 8% of the world's oil.
Therefore, those sanctions, plus voluntary pullouts from companies looking to decrease their exposure to public blowback or inadvertent sanctions violations, has helped push energy prices upward while re-igniting Republican calls for the U.S. to become energy independent.
In this line of thinking, there's no need to worry about the consequences of sanctioning Russia if the U.S. doesn't need the energy it provides (though it can still be hit with higher prices on imports from countries that do).
Sessions clearly aligns with this view. And he, along with a growing group of Texas pols, is pushing his state to get it done.