U.S. Senator Ted Cruz has put forth a new proposal aimed at providing tax incentives for cryptocurrency miners who utilize flared natural gas to power their operations.
In a statement on April 1, Cruz introduced the Facilitating Lower Atmospheric Released Emissions Act, which he believes will position Texas as the “premier destination for Bitcoin mining.”
The FLARE Act suggests modifications to the U.S. tax code that would permit companies to permanently deduct the full expenses associated with systems designed to capture and reprocess natural gas that would otherwise be flared or emitted.
These mitigation systems would be eligible for 100% expensing starting in 2026.
To qualify, the equipment must take in natural gas and convert it into useful forms, such as electricity, liquid fuels, or computational power for digital asset mining.
The bill specifies several qualifying applications, such as compressing or liquefying gas for transport, producing petrochemicals or fertilizers, and powering oilfield equipment or the electrical grid.
In addition to the incentives, the legislation prohibits foreign entities of concern—including those associated with China, Russia, Iran, or North Korea—from benefiting from these tax breaks. This measure aims to ensure the incentives are reserved for U.S.-aligned operators and bolster domestic energy independence.
By transforming stranded gas into usable energy, Cruz and his supporters argue the bill will not only reduce emissions but also enhance energy innovation and grid reliability, especially during peak demand or adverse weather conditions.
“This bill capitalizes on Texas’s vast energy capabilities, strengthens our status as the heart of the Bitcoin industry, and is beneficial for the environment. I urge my colleagues to promptly consider and advance this legislation,” Cruz stated.
The proposal has already garnered support from industry stakeholders who view it as a dual benefit for both energy and innovation.
Bitcoin mining firm MARA Holdings expressed their backing for the bill in a post on X, indicating that it could help lower emissions and “unlock stranded energy” throughout Texas and beyond.
Last year, MARA partnered with NGON to launch a 25-megawatt micro data center project powered by excess natural gas from oilfields in Texas and North Dakota. The data center aims to harness excess natural gas for electricity to operate data centers, providing energy producers with an efficient solution for managing methane emissions.
Under this new legislation, such infrastructure would qualify as a flaring and venting mitigation system, making it eligible for full permanent expensing. Consequently, MARA and similar firms could deduct the entire installation costs of these systems from their taxable income, starting in 2026.
Even before proposing the FLARE Act, Cruz suggested at the 2021 Texas Blockchain Summit that Bitcoin mining could transform surplus energy from oil and gas operations into productive uses instead of simply flaring it.
“Utilize that power to mine Bitcoin. The beauty of this approach is that by engaging in it, you’re significantly benefiting the environment because rather than flaring natural gas, you’re putting it to constructive use,” he remarked at the time.