SECTION 3. INFLATION

ADJUSTMENT FACTOR AND REFERENCE PRICE

.01 Inflation Adjustment . The inflation adjustment factor under § 45I(b)(2)(B) for calendar year 2024 is 1.5447.

.02 Reference Price . The Secretary’s estimate of the calendar year 2023 annual average wellhead price per Mcf for all domestic natural gas under § 45I(b)(2) (C)(ii) was calculated by applying the Producer Price Index commodity index for “Natural Gas from the Wellhead” (WPU053101051) ¹ published by the Bureau of Labor Statistics (BLS) as part of its Producer Price Index program, to the 2023 annual average wellhead price ($5.57) published in Notice 2023-58, 2023-34 I.R.B. 536. The annual Producer Price Index commodity index for natural

gas published by the BLS was 173.206 in 2022 and 63.423 in 2023, which implies a ratio of 2023 to 2022 average wellhead prices of 0.366 (63.423/173.206). Therefore, the Secretary’s estimate of the calendar year 2023 annual average wellhead price per Mcf for all domestic natural gas is $2.04 per Mcf (0.366 × $5.57 per Mcf). The one-cent difference is due to rounding.

For years after 2023, the Secretary intends to continue calculating the reference price by application of the Producer Price Index commodity index for “Natural Gas from the Wellhead” (WPU053101051) published by the BLS to the previous year’s reference price.