Shale Oil Production Tax Incentive Act of 1979

Shale Oil Production Tax Incentive Act of 1979 - Amends the Internal Revenue Code to allow a nonrefundable income tax credit equal to $3 for each barrel of shale oil produced by the taxpayer during the taxable year, plus the production credit carryovers and carrybacks for that year.

Reduces the standard $3 per barrel credit proportionately by: (1) the amount of Federal grant funds, if any, used by the taxpayer in the production of shale oil; and (2) the amount by which the adjusted reference price (average daily market price per barrel during the preceding calendar year for certain Arabian light crude oil) exceeds $20.50. Authorizes the President to adjust the amount of the credit (but not higher than $3) when such action is in the national interest.

Requires, as a condition of eligibility for the credit, that the shale oil be produced within the United States or its possessions. Sets forth rules for the Secretary of Energy in computing the adjusted reference price. Requires the Secretary to publish the adjusted reference price, and an explanation of the method and data used in computing it, if such price exceeds $20 per barrel.