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Bitcoin's price has soared to record highs. But as U.S. investors pour billions of dollars into the cryptocurrency, others are more concerned about a different cost: its impact on the environment.

That's because mining for bitcoin is extremely energy intensive. One model found the greenhouse gases emitted from mining it could nearly double from 48 million metric tons in 2022 to as much as 90 million tons this year.

This week, our U.S. tech correspondent Avi Asher-Schapiro reports the issue has developed into a national environmental debate. It is pitting the bitcoin mining industry against green groups, and President Joe Biden is getting involved too.

His administration is demanding the industry disclose how much electricity its operations use, and has proposed a 30% excise tax on bitcoin energy use.

"We are not going to meet our clean energy goals if we continue to incentivize this kind of electricity use," said Mandy DeRoche, a lawyer at the environmental group EarthJustice, which has sued to block permits for mining facilities.

But the bitcoin industry has long argued that it should be treated like any other energy consumer. Wyoming Senator Cynthia Lummis, a supporter of bitcoin mining, said a tax would destroy the industry in the United States. 

One of the biggest issues is there is no reliable data on how much energy the bitcoin mining industry uses overall.

Environmental groups highlight cases like a Riot Blockchain facility in Rockdale Texas, which consumes as much energy as the surrounding 300,000 homes.

But bitcoin mining firms say they participate in "demand response" programmes allowing them to turn off their machines to support the grid during times of strain.

Alongside the national debate, fights over the building and expansion of bitcoin mining facilities are spreading around the country, DeRoche from EarthJustice told Avi.

Earlier this month, Arkansas advanced two new laws imposing new licensing requirements and noise restrictions on mines in the state, due to complaints from neighbouring communities.

Another fight is taking place in Pennsylvania, where a community group filed a lawsuit against a bitcoin mine as well as the government regulators who approved it.

They argue it denies citizens' constitutional guarantee to a clean environment, alleging that the burning of coal waste and old tyres to power the bitcoin mine is polluting the community.

A spokesperson for the bitcoin mining company, however, told Reuters last month that its operations actually clean up the area's land and water by utilising waste coal.

And some bitcoin industry groups have been pushing for state-level laws to make it harder for communities to independently regulate local mining operations.

So as bitcoin mining intensifies, who should decide where it takes place? And what does the industry owe communities in exchange?

See you next week,

Jack