Key Highlights
- Texas Senator Ted Cruz puts forward a bill aiming to incentivize crypto miners using flared gas.
- The bill, called the FLARE Act, aims to repurpose wasted natural gas produced during oil & gas operations to offer incentives.
- The crypto Industry welcomes the proposal, voicing their favour of the bill
- The move comes amid ongoing regulatory corrections in the U.S. crypto landscape.
Texas Senator Ted Cruz submitted legislation on April 1 to incentivize crypto miners to repurpose flared gas as energy for generating “value-added products” like mining Bitcoin (BTC) and other digital assets.
The bill, called the Facilitating Lower Atmospheric Released Emissions (FLARE) Act, suggests using natural gas produced during oil drilling operations and offering incentives through tax advantages. Full funding would facilitate companies to immediately reduce the cost of qualified property rather than depreciating it over several years.
Based on the text of the proposed bill, the FLARE Act intends to amend the US Internal Revenue Code to incentivize market participants, including digital asset miners, to use gas in value-added products that would otherwise be vented or flared.
Cruz is a Republican US Senator who has been serving since 2013 and sometimes comes forth with legislations that align with mainstream figures in his party, including US President Donald Trump. According to Cruz, the bill aims to solve two challenges: reducing oil and gas industry emissions and simultaneously encouraging energy use innovation.
The legislation could change federal treatment of mining infrastructure to aid broader energy and environmental objectives by making crypto mining a value-added activity. If signed into law, the bill would impact properties put into service from 2026 onwards.
The FLARE Act does not put forward new subsidies, but adjusts existing tax code treatment to support private investment in emissions-reducing infrastructure. The proposal intends to align economic incentives with environmental mitigation efforts by promoting full expensing for funding used in flare gas repurposing. The bill has been sent to the Senate Finance Committee, and further legislative action will decide its pathway through Congress.
Crypto Industry in Favour of the Bill
Digital asset firms and policy groups have received the proposal with enthusiasm. Mathew Sigel, head of digital assets research at VanEck, expressed his happiness over Senator Ted Cruz’s outlook for Bitcoin mining as a means of solution to reduce emissions and putting the wasted energy to use. He pointed out that the FLARE Act could lead to using flared gas more efficiently and sustainably.
Lately, there has been an increase in Bitcoin miners using stranded energy sources like flared gas to fuel their operations. By shifting toward oil fields, miners can capture wasted gas and convert it into electricity that can be used for proof-of-work consensus networks. This will also pave the way for energy grids in rural and energy-abundant areas.
Crypto mining firm, MARA Holdings, expressed its support for the legislation for enabling full expensing for infrastructure to repurpose wasteful flared gas.
The Digital Power Network, a coalition of mining and energy firms, posted a formal endorsement of the FLARE Act on its website, highlighting several expected outcomes from the implementation of the legislation, such as improved domestic energy production, grid resilience, reduced harmful emissions, and economic opportunities in rural communities.
Furthermore, Hailey Miller, director of government relations and public policy at the Digital Power Network, called the bill a huge milestone for the US energy and crypto industries.
Other Crypto bills in the US Congress
In addition to the energy incentives proposed in the bill, Cruz mentioned the legislation also bans entities owned by China, Iran, North Korea, or Russia that may be operating in Texas from similarly recovering their funds. Many US miners, like MARA, CleanSpark, and Riot Platforms, are running in the state.
It is yet undecided whether Cruz’s bill will be a legislative priority in the Senate, as Congress goes through bills to regulate stablecoins and create a market infrastructure for digital assets in the U.S. Some lawmakers have also introduced bills potentially prohibiting a US CBDC and eliminating obstacles to regulation to encourage Americans to invest in crypto for their retirement plans.
The bill comes amid advancements in regulatory clarity in the crypto industry in the U.S., further adding a positive step by identifying crypto mining as a legitimate process that can be utilized to transform waste into a productive source.