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producer to drill wells or produce gas. See Williams & Meyers,
Manual of Oil & Gas Terms, 866 (9th ed. 1994)("production of gas"
means "bringing forth gas from the earth"); see also sec.
1.167(a)-11(b)(4)(iii)(b), Income Tax Regs. Given this
conclusion, the gathering systems fall squarely within the
language of asset class 46.0. Although asset class 13.2 includes
"gathering pipelines and related storage facilities", those
pipelines and facilities must be used by a producer to fall
within that class.
Petitioner argues that its gathering systems are outside
asset class 46.0 because they do not carry gas within the meaning
of that class. According to petitioner, asset class 46.0
includes only pipelines that move natural gas from a production
plant to an end user such as a distribution facility. Petitioner
asserts that its gathering systems do not transport gas, but
gather and/or process it. We disagree. We decline to conclude
that a pipeline company is carrying gas within the meaning of
asset class 46.0 when it pipes the gas from a production plant to
an end user, but not when it pipes the gas from the well to the
production plant. Although petitioner invites us to draw a
distinction in this case, arguing that its pipelines are
fundamentally different from the transmission systems of other
nonproducers, we decline to do so. Any difference between
petitioner's pipelines and the transmission pipelines of other
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