Texas Bitcoin miners seek tax relief for using trapped pit gas
Shelly Hagan and Michael Smith 03/31/2022
(Bloomberg) – The Texas cryptocurrency industry is lobbying state lawmakers to introduce legislation that would eliminate sales taxes on flared gas used to mine Bitcoin, seeking to cut costs and attract more minors to the Lone Star State.
The Texas Blockchain Council, the crypto industry’s lobbying arm, has drafted a bill it hopes will be introduced in the next legislative session, starting in January, the chairman of the board said. counsel, Lee Bratcher. The text is a copy of a Wyoming measure enacted a year ago that reduces state taxes on certain uses of excess gas that would otherwise be trapped at wellheads and flared.
It’s the latest attempt by the cryptocurrency industry to shape politics and make Texas more attractive to miners who use vast computer networks to solve cryptographic puzzles and are rewarded with Bitcoin. Texas lawmakers, with the support of Governor Greg Abbott, have already taken some of the most aggressive steps in the United States to attract the crypto industry, especially Bitcoin.
In May, Abbott signed legislation that makes it easier for businesses to use crypto as collateral for loans and hold them as assets. Abbott also created the Blockchain Issues Task Force, made up of industry insiders, to find other ways to attract crypto investors, developers, and miners.
“This tax abatement is another way Texas is giving people even more incentive to mine Bitcoin,” Griffin Haby, business development manager at crypto-mining firm Limpia Creek Technologies, told a conference. Bitcoin in Houston. He helped draft the bill.
The basic tax on oil and gas producers in the state, called the Texas Severance tax, is 7.5% of the market value of natural gas.
There has been a rush of investors to fuel Bitcoin mines with gas that would otherwise be burned or vented into the atmosphere from oilfields. Proponents say it’s a way to take advantage of energy that would otherwise be wasted while reducing greenhouse gas emissions. But critics say it encourages oil producers to keep drilling instead of moving away from fossil fuels.
Last week, Bloomberg reported that Exxon Mobil Corp. had started a pilot program using its excess natural gas for crypto-mining operations in North Dakota and was considering other sites around the world.