On April 1, Senator Ted Cruz put forth a new piece of legislation aimed at transforming flared gas into “value-added products,” such as Bitcoin (BTC) and other digital assets.
The proposed bill, named the Facilitating Lower Atmospheric Released Emissions (FLARE) Act, seeks to utilize natural gas generated through oil drilling activities and offers incentives via tax benefits. Under this plan, companies would be allowed to immediately deduct the costs of qualified property rather than having to spread depreciation over multiple years.
Cruz states that this legislation tackles two important issues: it aims to minimize emissions from the oil and gas sector while promoting innovation in energy usage.
By classifying digital asset mining as a value-added endeavor, the legislation could adjust federal monitoring of mining infrastructure to align with broader energy and environmental goals.
The FLARE Act does not create new subsidies; instead, it revises current tax code treatment to bolster private investment in infrastructure designed to reduce emissions. The intent is to synchronize economic incentives with efforts to mitigate environmental impact by permitting permanent full expensing on capital used for repurposing flare gas. The bill has been forwarded to the Senate Finance Committee, and its future progress through Congress will depend on forthcoming legislative actions.
Industry Support
The proposal has been well-received by digital asset companies and policy organizations. Matthew Sigel, who heads digital assets research at VanEck, commented positively, noting, “It’s great to see Senator Ted Cruz advocating for Bitcoin mining as a means to minimize emissions and harness stranded energy. The FLARE Act could lead to more efficient and sustainable uses of flared gas.”
Bitcoin miners are increasingly relying on stranded energy sources, including flared gas, to fuel their operations. By situating themselves near oil fields, these miners can capture gas that would otherwise be incinerated and convert it into electricity to support proof-of-work networks.
This strategy presents flexible load advantages for energy grids, particularly in rural and energy-rich regions.
MARA Holdings, a Bitcoin mining operation, endorsed the legislation, appreciating the provision for full expensing related to infrastructure that captures and repurposes flared gas. They stated, “MARA supports this legislation, acknowledging Bitcoin mining’s contribution to reducing emissions and tapping into stranded energy.”
The Digital Power Network, a coalition of mining and energy enterprises, has formally endorsed the bill. Hailey Miller, the group’s director of government relations and public policy, called this legislation “a significant advancement for the US energy sector and the digital asset field.”
Miller further remarked, “This bill promotes the capture of wasted natural gas, contributing to grid stability, energy innovation, and fostering sustainable Bitcoin mining in the United States. We applaud Senator Cruz for his vision in proposing this innovative legislation.”
The coalition also noted several anticipated benefits from the legislation, including lower emissions, bolstered domestic energy production, enhanced grid resilience through flexible load management, and the creation of more economic opportunities in rural areas.
This bill arrives amid a landscape of increased regulatory clarity for the crypto industry in the US, providing a favorable shift by recognizing crypto mining as a legitimate industrial practice that can convert waste into useful energy.