S/V Drilling Partners, Snyder Armclar Gas Company, Tax Matters Partners - Page 19




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               VASQUEZ, J., dissenting: I agree with the majority’s                   
          conclusion that (1) there are 32,410 BOE of natural gas which               
          constitute “qualified fuels” under section 29(c)(1) eligible for            
          the credit–-15,483 BOE solely attributable to the tight formation           
          and 16,927 BOE from Devonian shale and the tight formation; and             
          (2) petitioner is entitled to one credit for the 16,927 BOE of              
          natural gas produced from both Devonian shale and the tight                 
          formation.  I, however, disagree with the majority’s holding that           
          (1) respondent has conceded that the credit should be indexed               
          under section 29(b)(2) for the 16,927 BOE of natural gas produced           
          from Devonian shale and the tight formation; and (2) pursuant to            
          the concession, petitioner is entitled to index the credit.                 
          Accordingly, I respectfully dissent.                                        
                    Section 29(b)(2) generally provides for an inflation              
          adjustment to the credit.  Within that section, the statute                 
          further provides that “In the case of gas from a tight formation,           
          the $3 [credit] amount * * * shall not be adjusted [for                     
          inflation].”  It is a commonplace of statutory construction that            
          a specific provision will not be controlled or nullified by a               
          general one, particularly when the two provisions are                       
          interrelated and closely positioned.  See HCSC-Laundry v. United            
          States, 450 U.S. 1, 6, 8 (1981).  If gas is derived from a tight            
          formation, the statute specifically does not allow for indexing             
          of the credit.  The 16,927 BOE of natural gas were produced, in             
          part, from a tight formation; therefore, petitioner is not                  
          entitled to index the credit associated with this natural gas.              



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