An agency under the US Interior Department’s Office of Inspector General has revealed that oil and gas firms in the country are diverting natural gas to fuel their crypto mining operations without paying federal royalties.

Proof-of-work (PoW) based cryptocurrency miners using natural gas to power their bitcoin mining operations without paying federal royalty may be in for a hard time, as US authorities are now set to tackle offenders.

According to a document recently published by the Office of the Inspector General for the Department of the Interior (DOI OIG), oil and gas firms in the US are taking advantage of the lack of clear-cut regulatory policy for crypto mining to channel the country’s natural gas for their own bitcoin mining businesses without paying their dues, to the detriment of the nation.

The watchdog stated:

“Following discussions with the Colorado Oil and Gas Conservation Commission (COGCC), we learned that crypto mining units have been placed on or near lands and areas leased for federal mineral development. W observed these crypto miners and found that they divert gas from Federal leases to generators that power the mining units.”

Moreover, the agency claims these activities generate revenues for private companies without the leaseholder paying mineral royalties. The authorities also insist that mining operations result in the loss of mineral revenues by the DOI.