Senator Ted Cruz introduces the FLARE Act to repurpose flared gas and use it to mine Bitcoin (BTC)

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.

Senator Ted Cruz has introduced legislation that would empower the oil and gas industry to repurpose flared gas and use it for activities like mining Bitcoin (BTC) and other digital assets.

The bill, named the Facilitating Lower Atmospheric Released Emissions (FLARE) Act, proposes utilizing natural gas produced during drilling operations and providing incentives through modified tax provisions.

One key provision of the FLARE Act would allow companies to immediately deduct the cost of qualified property, such as equipment used for capturing and processing gas, through permanent full expensing.

Usually, companies can claim a portion of an asset’s cost over several years through depreciation. However, full expensing would allow companies to deduct the entire cost in the year the asset is placed in service.

According to a statement by Cruz, the bill directly addresses two pressing challenges: significantly reducing oil and gas industry emissions and encouraging the use of America’s vast energy resources for emerging technologies.

“This legislation brings together two critical policy priorities to support U.S. energy and economic strength,” said Senator Cruz.

“We need to be doing everything we can to reduce emissions and ensure that oil and gas companies have the flexibility they need to quickly deploy new technologies to rapidly reduce emissions.”

The FLARE Act also aims to modify federal treatment of digital asset mining infrastructure to support broader energy and environmental objectives.

Aligning economic incentives with environmental mitigation efforts is crucial, and the bill does so by enabling permanent full expensing for capital used in flare gas repurposing.

This measure will encourage private investment in the technologies and infrastructure needed to reduce emissions and use stranded energy.

The bill has been referred to the Senate Finance Committee, and further legislative action will determine its progress through Congress.

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 new technology and 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 their operations. By colocating with oil fields, miners can capture gas that would otherwise be burned off and use it to create electricity for proof-of-work consensus networks.

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

Bitcoin mining firm MARA (NASDAQ:MARA) Holdings spoke in favor of the legislation, highlighting the provision for full expensing of infrastructure that captures and repurposes flared gas.

The firm said: “MARA supports legislation that recognizes Bitcoin mining’s role in reducing emissions and unlocking stranded energy. We appreciate Senator Cruz introducing the FLARE Act.”

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

Hailey Miller, director of government relations and public policy at the Digital Power Network, said:

“This bill is a monumental step forward for the U.S. energy sector and the digital asset industry. 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 bill.”

According to the coalition, the legislation is expected to reduce the production of harmful emissions, enhance domestic energy production, improve grid resilience through flexible load response, and expand economic opportunities in rural communities.

The bill comes amid signs of improving regulatory clarity for the crypto industry in the U.S., with this proposal adding a positive push by identifying crypto mining as a legitimate industrial use that can transform waste into productive energy.