(WASHINGTON, DC) – Legislation introduced by Congressman Dennis Moore (Third District -- Kansas) to increase domestic natural gas production from marginal and hard-to-reach sources passed in the House today as part of the final conference report on H.R. 6, the Energy Policy Act. The provision extends the section 29 tax credit to wells drilled after the date of enactment and before January 1, 2007.

“This bill is the right thing to do for Kansas consumers and small producers,” said Moore. “The uncertainties in the Middle East and the concerns of consumers underscore the importance of taking immediate steps to expand our domestic energy supply. This legislation is a potent tool for stabilizing natural gas supplies and prices.”

The plan proposed by Moore would extend a tax credit in section 29 of the tax code that provides an added incentive for producers of unconventional liquid fuels to continue production. These fuels -- such as coalbed methane, tight gas sands and gas produced from Devonian Shale -- would not be economically recoverable for producers in most areas of the nation without this incentive.

“With the section 29 tax credit expiring on December 31, 2002, this legislation is essential to keep domestic producers drilling,” said Moore. “I believe it is the best vehicle to provide producers with much needed support and lower natural gas bills for consumers.”

The legislation would:

Extend credits to 2007; Extend credits for certain landfill gas; Cap the output of the well to 200,000 cubic feet of natural gas per day History demonstrates that section 29 can be enormously successful in expanding U.S. production of natural gas. According to a study by the Gas Technology Institute, passage of section 29 led to a tripling in the production of “non-conventional” gas. That same study suggests that an extension of the credit could again be effective in expanding gas supply, moderating prices, and ultimately saving home heating and other consumers billions of dollars.

“This is an idea that will allow domestic natural gas production to increase and stabilize,” Moore said. “It is an idea proven to work, and it needs to be the law.”