Ted Cruz introduces the FLARE Act to encourage Bitcoin mining with unused gas
Senator Ted Cruz of the United States has proposed a new bill aimed at providing tax incentives for cryptocurrency miners leveraging flared natural gas to fuel their operations.
Cruz announced the Facilitating Lower Atmospheric Released Emissions Act on April 1, expressing his belief that it will position Texas as the “premier location for Bitcoin mining.”
The FLARE Act seeks to amend the U.S. tax code to permit companies to permanently deduct the total cost of systems that capture and repurpose natural gas intended for flaring or venting.
These systems, known as flaring and venting mitigation systems, will be eligible for 100% expensing beginning in 2026.
Eligibility requirements state that the equipment must utilize natural gas to create something beneficial, such as electricity, liquid fuels, or computational power for digital asset mining.
The bill outlines multiple allowable applications, including compressing or liquefying gas for transport, producing petrochemicals or fertilizers, and supplying power to oilfield equipment or the electrical grid.
Moreover, the bill prohibits foreign entities of concern, including those affiliated with China, Russia, Iran, or North Korea, from benefiting from these incentives. This measure aims to ensure that the tax benefits are reserved for U.S.-aligned operators and to bolster domestic energy independence.
Supporters of the bill, including Cruz, argue that converting stranded gas into usable energy will not only lower emissions but also promote energy innovation and enhance grid resilience, particularly during peak demand periods or extreme weather conditions.
“This bill leverages Texas’s immense energy potential, fortifies our status as the foundation of the Bitcoin industry, and is beneficial for the environment. I urge my colleagues to swiftly consider and advance this legislation,” Cruz stated.
The bill has garnered support from industry stakeholders who view it as a beneficial move for both energy and innovation.
Bitcoin mining company MARA Holdings expressed its support for the bill in a post on X, highlighting its potential to decrease emissions and “unlock stranded energy” throughout Texas and elsewhere. See below.
Last year, MARA collaborated with NGON to launch a 25-megawatt micro data center operation utilizing wellheads in Texas and North Dakota. This data center will harness excess natural gas to generate electricity for powering data centers, providing energy producers with an efficient solution for methane mitigation.
According to the legislation, infrastructure like this would qualify as a flaring and venting mitigation system, making it eligible for permanent full expensing. Consequently, MARA and similar operators could deduct the entire cost of implementing such systems from their taxable income, starting in 2026.
Before introducing the FLARE Act, Cruz proposed the concept at the 2021 Texas Blockchain Summit, suggesting that Bitcoin mining could transform excess energy from oil and gas operations into a productive resource rather than simply burning it off.
“Utilize that power to mine Bitcoin. The beauty of this is that, from the moment you’re doing it, you’re making a significant environmental impact by converting natural gas that would otherwise be flared into productive use,” he remarked during the summit.