Senator Ted Cruz introduces FLARE Act to repurpose flared gas for Bitcoin mining

Senator Ted Cruz introduced legislation on April 1 to repurpose flared gas and use it to generate “value-added products,” like mining Bitcoin (BTC) and other digital assets.

The bill, called the Facilitating Lower Atmospheric Released Emissions (FLARE) Act, proposes using natural gas produced during oil drilling operations and providing incentives through tax advantages. Full expensing would allow companies to deduct the cost of qualified property immediately rather than depreciating it over several years.

According to Cruz, the bill simultaneously addresses two challenges: reducing oil and gas industry emissions and encouraging energy use innovation. 

By labeling digital asset mining a value-added activity, the legislation could shift federal treatment of mining infrastructure to support broader energy and environmental objectives. 

The FLARE Act does not introduce new subsidies but modifies existing tax code treatment to encourage private investment in emissions-reducing infrastructure.

It aims to align economic incentives with environmental mitigation efforts by enabling permanent full expensing for capital used in flare gas repurposing. The bill has been referred to the Senate Finance Committee, and further legislative action will determine its pathway through Congress.

Welcomed by the industry

Digital asset firms and policy groups have welcomed the proposal. Matthew Sigel, head of digital assets research at VanEck, said:

“Great to see Senator Ted Cruz supporting Bitcoin mining as a solution to reduce emissions & unlock stranded energy. The FLARE Act could pave the way for using flared gas more efficiently and sustainably.”

Bitcoin miners have increasingly turned to stranded energy sources, including flared gas, to power operations. By colocating with oil fields, miners can capture gas that would otherwise be burned off, converting it into electricity for proof-of-work consensus networks. 

This approach also offers flexible load benefits for energy grids, particularly in rural and energy-abundant areas.

Bitcoin mining firm MARA Holdings praised the legislation for allowing full expensing for infrastructure that captures and repurposes flared gas. The firm added:

“MARA supports this legislation. It recognizes Bitcoin mining’s role in reducing emissions and unlocking stranded energy.”

The Digital Power Network, a coalition of mining and energy firms, issued a formal endorsement on its website.

Hailey Miller, director of government relations and public policy at the Digital Power Network, called the bill “a monumental step forward for the US energy sector and the digital asset industry.”

Miller added:

“By incentivizing the capture of otherwise wasted natural gas, this bill supports grid stability, energy innovation, and the continued growth of sustainable Bitcoin mining in America. We commend Senator Cruz for his leadership in introducing this forward-thinking legislation.”

Additionally, the coalition highlighted several projected outcomes from the legislation, such as reduced harmful emissions, enhanced domestic energy production, improved grid resilience through flexible load response, and expanded economic opportunities in rural communities.

The bill comes amid improvements in regulatory clarity for the crypto industry in the US, adding a positive push by identifying crypto mining as a legitimate industrial use that can transform waste into productive energy.

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