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oil equivalent of fuels produced.
2. Petitioner’s Argument
Petitioner contends that, under a literal reading of section
29, S/V is entitled to a double credit for the 16,927 BOE’s of
natural gas it produced from a tight formation and from Devonian
shale. Petitioner acknowledges that the legislative history
indicates that section 29 provides a fixed credit amount
(initially $3) per 5.8 million Btu’s of energy produced, but
contends that section 29, as enacted, does not. Petitioner
contends that neither section 29 nor any other authority
prohibits a double credit. We disagree.
The credit under section 29(a) is $3 times the BOE of
“qualified fuels”. (Emphasis added.) Section 29(c)(1) provides
that three fuels, i.e., oil, gas, and synthetic fuels, may
qualify for the credit. Gas qualifies for the credit if it is
produced from geopressurized brine, Devonian shale, coal seams,
tight formation, or biomass. See sec. 29(c)(1)(B). Section 29
does not create a separate tight formation credit and Devonian
shale credit. The definition of BOE in section 29(d)(5) provides
a uniform means of calculating the quantity of each qualified
fuel produced and sold. S/V produced and sold a total of 32,410
BOE’s of qualifying natural gas in the tax years at issue. Of
this total, S/V produced and sold 16,927 BOE’s of gas from both a
tight formation and Devonian shale. Since gas produced from
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