- Ted Cruz’s FLARE Act could make Texas a leader in sustainable Bitcoin mining.
- Flared gas, an oil extraction byproduct, is wasted due to poor capture infrastructure.
- The FLARE Act incentivizes capturing flared gas for Bitcoin mining use.
Per recent updates, Texas Senator Ted Cruz has introduced a new bill. This bill aims to enhance crypto mining energy use, a major Bitcoin deal. The said bill is called the “Facilitate Lower Atmospheric Released Emissions,” or the FLARE Act. It incentivizes miners to use flared natural gas, an oil extraction byproduct. If this bill is passed, it could position Texas as one of the global leaders in sustainable Bitcoin mining. Here are all the details.
What is Flared Gas, and Why Does It Matter?
Flared gas is a byproduct of oil extraction that is often burned off and wasted due to the lack of infrastructure to capture and use it. Burning flared gas is necessary for safety and operational reasons. However, it often results in a great deal of carbon emissions and wasted energy.
The FLARE Act aims to convert this problem into an opportunity by offering incentives to companies that capture this gas and use it for productive ends like Bitcoin mining. By redirecting this flared gas into mining operations, lawmakers aim to reduce environmental damage while making mining operations more energy-efficient.
The FLARE Act is one of the most innovative bills of the year. So far, it has garnered support from major players in the Bitcoin mining industry, including MARA Holdings and the Digital Power Network advocacy group.
The Key Provisions of the FLARE Act
The FLARE Act proposes changes to the US Internal Revenue Code that could reward businesses (mostly crypto miners) for capturing and using this flared gas. If signed into law, the bill would apply to operations from 2026 or later.
One of the other interesting things about this bill is its restrictions on foreign entities. For example, companies from rival nations like China, Iran, North Korea, and Russia would be prohibited from benefiting. The provision is in line with the US’ efforts to limit foreign influence, especially in major industries.
Senator Cruz himself has long been a crypto advocate, and his latest bill aligns with wider efforts across the country to position Texas as a major hub for Bitcoin mining. He previously introduced a bill to prevent the Federal Reserve from launching a CBDC, in a move that shows his skepticism toward government-controlled forms of money.
How Will This Bill Affect the Crypto Industry?
If approved, the FLARE Act could change the way crypto mining is conducted in the United States. Many major mining firms like MARA Holdings, Riot Platforms, and CleanSpark already operate in Texas. This makes the state the ultimate testing ground for such an initiative.
The legislation comes at a time when Bitcoin mining is going through a major energy transition. Studies show coal use in mining fell from 63% to 20% recently. On the other hand, renewable energy adoption has increased by an average of 5.8% per year. The FLARE Act could push this trend further along by reducing the industry’s dependence on fossil fuels.
