RE: GAS-L: Gasification tax credits

["OConor.Richard" <Richard.OConor@minergy.com>]

Hi, Can you advise me if Section 29 would be applicable to the vitrification (melting) of biomass from dried sewage sludge? 

-----Original Message-----
From: FMurrl@aol.com [mailto:FMurrl@aol.com]
Sent: Monday, October 21, 2002 9:44 AM
To: tombreed@attbi.com; tmiles@trmiles.com
Cc: gasification@crest.org; Stoves@crest.org
Subject: Re: GAS-L: Gasification tax credits

Tom, Tom and All:

Tax credits are my life, and I am happy to put in two cents here to complete the overview.

Section 29 of the Internal Revenue Code was enacted in 1980 as a response to the Arab Oil Embargo, and included provisions for tax credits for oil from unusual sources, natural gas from particular types of formations, synthetic fuels from coal, including the gasification of coal. I was unaware of any portion of the credit that could be taken from gasifying either wood or other forms of biomass, but I just may have missed that.

The tax credits started out quite modestly, and over the years have been driven higher by inflation, such that the current tax credit is now about US$1.08 per million BTUs. Some of the tax credits remain in effect until the end December of 2007.

Gasification definitely qualifies under this US tax credit program. However, to qualify for program, the unit producing the energy had to be in service no later than 30 June 1998, and must have been built in accordance with an "engineering, procurement and construction" contract executed no later than 31 December 1996.

Section 29 has been under review for expansion in the Senate Energy Bill, that is pending in conference committee. It is unknown whether the provisions will be passed by the conference committee.

Regards,
Fred Murrell
Biomass Development Company
Bradenton Florida USA