SECTION 4. INFLATION

ADJUSTMENT AND CREDIT AMOUNT

.01 Gas Produced from Biomass and Liquid, Gaseous, or Solid Synthetic Fuel Produced from Coal.

In the case of gas produced from biomass and liquid, gaseous, or solid synthetic fuel produced from coal, the inflation adjustment factor for calendar year 2006 is 2.3429. Because the calendar year 2006 reference price exceeds $23.50 multiplied by the inflation adjustment factor, the credit per barrel equivalent of qualified fuel sold in calendar year 2006 is reduced by $2.31, which is the amount that bears the same ratio to the amount of the credit (determined without regard to § 45K(b)(1)) as the amount by which the reference price for the calendar year 2006 exceeds $23.50 (adjusted for inflation) bears to $6.00 (adjusted for inflation).

The phase-out amount is computed as follows: ($3.00 x 2.3429) x [($59.68 - ($23.50 x 2.3429)) / ($6.00 x 2.3429)] = $2.31. The nonconventional source fuel credit under § 45K(a) is $4.72 per barrel-of-oil equivalent of qualified fuels [($3.00 x 2.3429) - $2.31]. .02 Facilities for Producing Coke or Coke Gas . In case of facilities producing coke or coke gas, the inflation adjustment factor for calendar year 2006 is 1.0605. The nonconventional source fuel credit is $3.18 per barrel-of-oil equivalent ($3.00 x 1.0605).