Congressman Cole Introduces Natural Gas Production Act
Washington, D.C. – In an effort to make natural gas more affordable to American families, Congressman Tom Cole today introduced legislation aimed at increasing the supply of domestically produced natural gas. The Natural Gas Production Act would allow for a tax credit for producing fuel on-shore from a depth of more than 15,000 feet.
"Exploration at levels below 15,000 feet involves significant additional costs and high risks. But if this type of production were tax advantaged, it would become more economically feasible to natural gas explorers and producers," Congressman Tom Cole said.
"The nation is seeing a two percent decline each year in overall gas supplies. Many companies are not drilling exploratory (high-risk) wells, but are drilling wells that accelerate the production of existing reserves," Tom Price, Sr. Vice-President, Investor and Government Relations, Chesapeake Energy Corporation, said. "This legislation would be advantageous to any cooperation that is willing to accept the risk of drilling for new reserves that this country so desperately needs."
The Natural Gas Production Act would extend Section 29 of the U.S. Tax Code to provide a tax credit for producing fuel from non-conventional sources to gas produced onshore from a formation of more than 15,000 feet. The current Section 29 credit includes production from tight sands, oil-produced from shale and tar sands and gas from geo-pressured brine.
"This type of tax advantage currently exists for other categories of drilling that are as difficult to explore as wells below 15,000 feet," Bob May, President of GHK Co based in Oklahoma City, said. "Deep wells are most likely where we will find the next big supply of natural gas. Tax incentives will help producers like us drill new wells and find new gas supplies."
Oklahoma is the third largest producer of natural gas in the United States. This legislation will help them provide natural gas for more Oklahoma families and businesses at an affordable price.
"One of the greatest challenges facing our economy is increasing natural gas prices. Natural Gas is utilized residentially, industrially and commercially. Over one-half of U.S. homes use natural gas as their main heating fuel," Congressman Tom Cole said. "This legislation will help increase natural gas production making it more affordable to American families, farms and businesses."
"This is a very important piece of legislation and we are looking to build momentum for it this year in hopes of passing it next year as part of a greater, comprehensive energy package," Congressman Cole said.