- 19 -19
the effective date of the repeal of the NGPA, so that the
processing of well-category determinations could be continued.
Consequently, respondent argues this leads to the conclusion that
FERC and other local regulatory agencies were authorized to make
well-category determinations.11
11 These circumstances were described in Marathon Oil Co. v.
FERC, 68 F.3d 1376, 1377-1378 (D.C. Cir. 1995), as follows:
Effective January 1, 1993, the Natural Gas
Wellhead Decontrol Act of 1989 repealed NGPA price
controls on wellhead sales of natural gas. As a result
of the Decontrol Act, the Commission eliminated
incentive prices for tight formation gas produced from
wells "spudded" * * * or "recompleted" after May 12,
1990. A year later, however, the Omnibus Budget
Revenue Reconciliation Act of 1990 instituted a tax
credit for natural gas from newly drilled wells in
tight formations. In order to be eligible for the tax
credit, the natural gas must (1) be produced from a
well drilled or a facility placed in service after
December 31, 1979 and before January 1, 1993 and (2) be
sold before January 1, 2003. The Budget Act further
provides that "the determination of whether any gas is
produced from * * * a tight formation shall be made in
accordance with section 503 * * * [NGPA]." Thereafter,
the Commission [FERC] announced its intention to
continue to process the initial determinations of
agencies despite their loss of regulatory significance,
until January 1, 1993. The Commission later extended
this deadline to April 30, 1994 so long as the
application for an initial determination was filed with
the agency by December 31, 1992. However, the
Commission said that it "will not accept determinations
where the well was spudded or recompletion commenced on
or after January 1, 1993." Explaining the reason for
continuing to review agency determinations for a
transition period, the Commission stated that "while
NGPA Section 107 well category determinations have no
price consequence, they are necessary to obtain the
Section 29 tax credit." [Citations omitted.]
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