Fiscal policies

Taxation policies

In the 1970s, the US government set up special fund for the development of basic research and core technology research of shale gas.

From the 1970s, the US government began to give tax incentives to the companies who develop shale gas.

In the 1980s, the US government invested more than 6 billion dollars to the development of unconventional gas including shale gas, of which 2 billion is suitable for training and research.

In 1980, the US government passed Energy Unexpected Profit Law and the Law stipulates the government should give 3.5 cents per cubic meter tax subsidies of production tax to production of shale gas from 1980 to 1992, meanwhile production tax in the Texas is exempted.

In the 1990s, the US government established research fund of unconventional oil and gas resources including shale gas for related technology research.

In 1992, the US government passed the Energy Policy Act and the Act formulates that the natural gas producers can deduct percentage depletion preferential amount from total taxable amount in the tax year from 1993. Also, the depletion rate must be not lower than 15% and the maximum depletion preferential amount must not exceed 65% of total taxable income.

In 2004, the US government passed the US Energy Act and the Act prescribes that the government should invest $45 million a year in research fund in the next 10 years to the unconventional natural gas projects including shale gas.

The US government allows to deduct intangible drilling costs, tangible drilling costs and rental costs, to regard the interests of the company as business income, and to provide depletion allowance to the small producers.

In addition, the US government can provide investment and financing to shale gas development projects by means of financial allocation, providing loans or loan guarantees.

The state government is allowed to provide certain tax incentives for the purpose to the development and utilization of shale gas, such as exemption from tax, reducing the tax rate of mining assets.