This sick system gives those who extract minerals, those who pillage this planet, tax credits proportional the degreee to which they strip resources bare and destroy them forever.
The fact is that whatever total capacity was figured in previous tax statements, that total is being reduced and so the percentage any future extractions are figured to take will be a higher number and so will be rewarded by the IRS, assuming only that BP pays taxes in the US or that they have similar power over tax laws in the UK as the other planet-eaters have in the US.
Introduction
Depletion is the using up of natural resources by mining, quarrying, drilling, or felling. The depletion deduction allows an owner or operator to account for the reduction of a product's reserves.
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Who Can Claim Depletion?
If you have an economic interest in mineral property, you can take a deduction for depletion. More than one person can have an economic interest in the same mineral deposit.
You have an economic interest if both the following apply.
* You have acquired by investment any interest in mineral deposits.
* You have a legal right to income from the extraction of the mineral to which you must look for a return of your capital investment.
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There are two ways of figuring depletion on mineral property.
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Cost Depletion
To figure cost depletion you must first determine the following.
* The property's basis for depletion.
* The total recoverable units of mineral in the property's natural deposit.
* The number of units of mineral sold during the tax year.
<and so on> - From
http://www.groco.com/readingroom/oil_gasdepletion.aspx (edit one typo)