British Columbia Court upholds moratorium on crypto mining projects in Canadian province

A recent ruling by a British Columbia Supreme Court Justice, Michael Tammen, has affirmed the provincial power utility B.C. Hydro’s decision to implement a moratorium on new cryptocurrency mining projects.

The latest decision came as a response to a challenge by Conifex Timber, a forestry company that had ventured into cryptocurrency mining alongside the Tsay Keh Dene Nation, an Indigenous group.

In the Feb. 5 ruling, Justice Tammen deemed the moratorium, established in December 2022, a prudent measure aimed at managing the province’s electrical supply amidst soaring demands from the cryptocurrency mining sector.

He highlighted that the moratorium was neither discriminatory nor unreasonable, aligning with the province’s Utilities Commission Act. The action was rooted in a cost-of-service rationale, addressing the unique and substantial electricity demands of cryptocurrency mining operations, which posed a risk to the affordability and availability of energy for the broader population.

The ruling underscored the massive energy requirements of cryptocurrency mining centers, citing B.C. Hydro CEO Christopher O’Riley’s affidavit that the data centers proposed by Conifex would consume approximately 2.5 million megawatt-hours of electricity annually. This consumption level is equivalent to the energy needed to power and heat more than 570,000 apartments, illustrating the significant impact of such operations on the province’s energy resources.

Despite the court’s decision, Conifex expressed disappointment, suggesting that the ongoing ban overlooks potential benefits, including improved energy affordability, technological innovation, and enhanced grid reliability. The company underscored the missed opportunities for economic growth and is considering an appeal, highlighting its belief in the positive role of cryptocurrency mining for the province’s future.

The issue of cryptocurrency mining’s energy consumption has been a point of contention, not only for its extensive use of electricity but also for its minimal contribution to local job creation.

Minister of Energy, Mines and Low Carbon Innovation Josie Osborne has articulated concerns regarding the industry’s impact on local economies and the environment. She emphasized that the moratorium was a strategic pause necessary to ensure that the province’s energy is used for the most beneficial opportunities in the future.

This decision comes amid a broader discourse on the province’s clean energy and electrification goals, which could be compromised by the disproportionate energy demands of cryptocurrency mining.

B.C. Hydro’s report before the moratorium highlighted the dilemma of catering to the growing energy requests from this sector, which could challenge the achievement of sustainability targets and the electrification of other industries and transportation.

As British Columbia aims to expand its electricity production, with Premier David Eby announcing a $36-billion plan, the government seeks to balance the province’s energy needs with environmental and economic sustainability. The court’s ruling, therefore, marks a significant moment in navigating the complex interplay between emerging technologies like cryptocurrency mining and the imperative to maintain a sustainable and equitable energy framework for all British Columbians.