- 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1376, 1377-1378 (D.C. Cir. 1995), as follows: Effective January 1, 1993, the Natural Gas Wellhead Decontrol Act of 1989 repealed NGPA price controls on wellhead sales of natural gas.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.]Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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