Please click on image to ENLARGE view of poster.
Solar Power Struggle
Professor Richard Hutchinson of Louisiana Tech University in Ruston will speak on "The Struggle for the Solar Future" at 2 p.m. on Saturday, May 2, at Nightbird Books on Dickson Street in Fayetteville, Arkansas.
An inquiry into environmental change and the obstacles and opportunities in the path of the renewable energy transition.
Sponsored by OMNI Center for Peace, Justice, and Ecology.
Tuesday, April 28, 2009
Wednesday, April 22, 2009
City of Clinton to treat wastewater from gas-production sites
The Morning News
Local News for Northwest Arkansas
Clinton To Begin Treating Water From Gas Drilling
By Rob Moritz
THE MORNING NEWS
LITTLE ROCK — Within two months, Clinton in north-central Arkansas hopes to begin treating water used in the natural gas drilling process, Mayor Roger Rorie said Tuesday.
Rorie said the city has reached agreements with four companies drilling for natural gas in the Fayetteville Shale play to treat the water they use, avoiding the need to store the water on so-called land farms or inject it deep into the earth.
The state Department of Environmental Quality said Monday tests found evidence of environmental contamination in 11 permitted land farms across north-central and western Arkansas. Four of those sites are located within the Fayetteville Shale formation.
"The average citizen doesn't have any idea how much water is used by one of these companies for gas drilling," Rorie said Tuesday, adding that a small drilling site may use 5 million gallons of water, while a large site may use up to 15 million gallons.
Rorie scheduled a news conference for 1 p.m. Wednesday to announce agreements with Chesapeake Energy, Petrohawk Energy Corp., Southwestern Energy Co. and XTO Energy.
Department spokesman Aaron Sadler said state environmental experts have met with Clinton officials and support the plan.
"It's probably a good thing," he said. "If everything can be recycled in a safe manner, then we see this as a big benefit to the environment. It keeps (wastewater) out of land farms and gets rid of a waste stream."
The water will be recycled in an idle sewer treatment plant the city built specifically for processing waste from the Pilgrim's Pride chicken processing plant. The plant closed in October.
Rorie said Siemens Water Technologies, an international company that already recycles water used by offshore oil rigs, is helping provide some of the technical expertise and equipment for the process.
The initial goal is to recycle 630,000 gallons of water a day at the site, with gas companies bringing their used water to the plant in 42-gallon barrels.
"We want a closed loop system where they can take the water back and use it again," he said.
Rorie said he hopes to eventually eliminate the need to store contaminated water on or beneath earth's surface where used drilling water is stored until the chlorides and other chemicals settle and it can be used for irrigation.
"We know this is going to be profitable," he said, adding he did not know exactly how much money the city would make recycling the water. "We do expect a real return ... yes, the city is going to make money, but our number one objective is to clean this water up."
Local News for Northwest Arkansas
Clinton To Begin Treating Water From Gas Drilling
By Rob Moritz
THE MORNING NEWS
LITTLE ROCK — Within two months, Clinton in north-central Arkansas hopes to begin treating water used in the natural gas drilling process, Mayor Roger Rorie said Tuesday.
Rorie said the city has reached agreements with four companies drilling for natural gas in the Fayetteville Shale play to treat the water they use, avoiding the need to store the water on so-called land farms or inject it deep into the earth.
The state Department of Environmental Quality said Monday tests found evidence of environmental contamination in 11 permitted land farms across north-central and western Arkansas. Four of those sites are located within the Fayetteville Shale formation.
"The average citizen doesn't have any idea how much water is used by one of these companies for gas drilling," Rorie said Tuesday, adding that a small drilling site may use 5 million gallons of water, while a large site may use up to 15 million gallons.
Rorie scheduled a news conference for 1 p.m. Wednesday to announce agreements with Chesapeake Energy, Petrohawk Energy Corp., Southwestern Energy Co. and XTO Energy.
Department spokesman Aaron Sadler said state environmental experts have met with Clinton officials and support the plan.
"It's probably a good thing," he said. "If everything can be recycled in a safe manner, then we see this as a big benefit to the environment. It keeps (wastewater) out of land farms and gets rid of a waste stream."
The water will be recycled in an idle sewer treatment plant the city built specifically for processing waste from the Pilgrim's Pride chicken processing plant. The plant closed in October.
Rorie said Siemens Water Technologies, an international company that already recycles water used by offshore oil rigs, is helping provide some of the technical expertise and equipment for the process.
The initial goal is to recycle 630,000 gallons of water a day at the site, with gas companies bringing their used water to the plant in 42-gallon barrels.
"We want a closed loop system where they can take the water back and use it again," he said.
Rorie said he hopes to eventually eliminate the need to store contaminated water on or beneath earth's surface where used drilling water is stored until the chlorides and other chemicals settle and it can be used for irrigation.
"We know this is going to be profitable," he said, adding he did not know exactly how much money the city would make recycling the water. "We do expect a real return ... yes, the city is going to make money, but our number one objective is to clean this water up."
Tuesday, April 21, 2009
ADEQ shows signs of life in effort to reduce massive pollution by natural-gas production sites over Fayetteville Shale
ADEQ NEWS RELEASE
A study conducted by the Arkansas Department of Environmental Quality (ADEQ) found that fluids used in natural gas production have been improperly applied by landfarms operating in the state, thus endangering the environment.
The study findings were released in a report Monday. The report indicated that existing practices had, in many cases, caused environmental harm. Particularly, all 11 sites that land applied fluids at some point had improperly discharged the fluids so as to cause runoff into the waters of the state. Also, chloride concentrations in soil used for land application were abnormally high.
ADEQ Director Teresa Marks ordered the department’s study in November 2008 because of repeated permit violations at some of the sites. At that time, Marks also halted consideration of any new landfarm permit applications until the study was completed.
“With the increase in the number of landfarms and applications for landfarms due to expanded drilling activity in the state, concerns about the resulting environmental impact warranted a closer look at these operations,” Marks said.
ADEQ has taken enforcement actions against all 11 landfarms studied and has sought to revoke permits at two of the sites. Additional enforcement actions are pending and other revocations could be forthcoming.
The study supports changes to all existing or new landfarm permits. The changes include requirements that routine soil and water sampling be conducted at specified locations in the presence of an ADEQ inspector and that fencing be erected around all on-site ponds.
“The results of the study have caused us to put additional measures in place to ensure that these facilities are complying with the terms of their permits and are not causing harm to the soils and waters of the state,” Marks said. “We recognize that there is a waste stream created by the drilling practices that must be dealt with, but we want to make sure it is dealt with in a way that will not cause harm to the environment.”
Scientists in ADEQ’s environmental preservation and water divisions prepared the report. ADEQ employees visited the 11 landfarms between November and January.
Video on environmental damage of natural-gas drilling
On many site visits, the department discovered downstream concentrations of chlorides and total dissolved solids that were higher than those taken upstream.
While landfarm permits prohibit land application of any fluid with chloride levels higher than 3,000 milligrams-per-liter, four facilities held fluids with levels over the permitted maximum.
Soil at eight of the sites contained chloride amounts that exceeded permitted limitations.
The study found that the high chloride content at some sites might irrevocably damage the soils there.
In addition, the study found at nine sites concentrations of total petroleum hydrocarbons (TPH) in amounts that suggested that application of oil-based drilling fluids had taken place. ADEQ permits strictly prohibit such application.
The full report is available on the department’s Web site, www.adeq.state.ar.us. A link to the report is located in the “Hot Topics” section on ADEQ’s home page.
A study conducted by the Arkansas Department of Environmental Quality (ADEQ) found that fluids used in natural gas production have been improperly applied by landfarms operating in the state, thus endangering the environment.
The study findings were released in a report Monday. The report indicated that existing practices had, in many cases, caused environmental harm. Particularly, all 11 sites that land applied fluids at some point had improperly discharged the fluids so as to cause runoff into the waters of the state. Also, chloride concentrations in soil used for land application were abnormally high.
ADEQ Director Teresa Marks ordered the department’s study in November 2008 because of repeated permit violations at some of the sites. At that time, Marks also halted consideration of any new landfarm permit applications until the study was completed.
“With the increase in the number of landfarms and applications for landfarms due to expanded drilling activity in the state, concerns about the resulting environmental impact warranted a closer look at these operations,” Marks said.
ADEQ has taken enforcement actions against all 11 landfarms studied and has sought to revoke permits at two of the sites. Additional enforcement actions are pending and other revocations could be forthcoming.
The study supports changes to all existing or new landfarm permits. The changes include requirements that routine soil and water sampling be conducted at specified locations in the presence of an ADEQ inspector and that fencing be erected around all on-site ponds.
“The results of the study have caused us to put additional measures in place to ensure that these facilities are complying with the terms of their permits and are not causing harm to the soils and waters of the state,” Marks said. “We recognize that there is a waste stream created by the drilling practices that must be dealt with, but we want to make sure it is dealt with in a way that will not cause harm to the environment.”
Scientists in ADEQ’s environmental preservation and water divisions prepared the report. ADEQ employees visited the 11 landfarms between November and January.
Video on environmental damage of natural-gas drilling
On many site visits, the department discovered downstream concentrations of chlorides and total dissolved solids that were higher than those taken upstream.
While landfarm permits prohibit land application of any fluid with chloride levels higher than 3,000 milligrams-per-liter, four facilities held fluids with levels over the permitted maximum.
Soil at eight of the sites contained chloride amounts that exceeded permitted limitations.
The study found that the high chloride content at some sites might irrevocably damage the soils there.
In addition, the study found at nine sites concentrations of total petroleum hydrocarbons (TPH) in amounts that suggested that application of oil-based drilling fluids had taken place. ADEQ permits strictly prohibit such application.
The full report is available on the department’s Web site, www.adeq.state.ar.us. A link to the report is located in the “Hot Topics” section on ADEQ’s home page.
Saturday, April 18, 2009
Brown thrashers among the many species to be seen on World Peace Wetland Prairie during Sunday's Earth Day celebration
Please click on image to Enlarge view of one of the many species of birds feeding and picking nesting sites on World Peace Wetland Prairie on April 17, 2009. The elusive brown thrasher is often able to slip into the thickets before a camera can capture its image. But the attraction of scattered brush piles and the excitement of mating season can make them a bit careless.
Tuesday, April 14, 2009
League of Women Voters offers two excellent speakers for Earth Day celebration
Joyce Hale reports:
The League of Women Voters would like to invite non-members to hear one or both of the special speakers we have invited to our state convention. It will be held at the Fayetteville Library on Sat., April 25. As an Earth Day activity, we think that both of these programs have important ecological messages.
Dr. Matlock's presentation is an important big picture of water issues and the reality of future needs. He gave this program to the Annual Meeting of the Fayetteville Natural Heritage Association and was so well received we asked for an encore. If you missed him there, here is a chance to see a fine presentation.
Dr. Theo Colborn is a Paonia, Colorado scientist who has won international awards for her studies of chemical influence of the endocrine system. When she found herself near one the massive natural gas development regions of the West, she and her non-profit science foundation evaluated the process in light of her years of chemical study. Her warnings of the dangers have alerted Congress and residents of impacted areas to the protections that are needed because of Federal safety exemptions granted the oil and gas industry.
I hope you will schedule one or both of these programs into your recognition of Earth Day and pass this information to others. I add more detail below. If you have any questions, please let me know.
Happy Earth Day!
Joyce
10:15 to 11:30 a.m. – "Everything is Connected: Water Quality in Arkansas and Poverty in Africa" by Dr. Marty Matlock, Associate Professor of Ecological Engineering in the Biological and Ecological Engineering Department at the University of Arkansas. Dr. Matlock is deeply involved in sustainability and the impact of humans on ecosystems, especially water. In working toward ecosystem restoration design and management he serves as an advisor for five national organizations and provides technical support for USDA FAS in the Mid-East Peace Process.
2:00 to 3:15 p.m. – “What You Need to Know About Natural Gas Production and Delivery” by Dr. Theo Colborn, who has written and lectured widely on the human health and environmental threats posed by endocrine disruptors and other industrially-produced chemicals at low concentrations in the environment. Dr. Colborn founded a scientific non-profit organization which reports environmental policy development and analysis, environmental advocacy, medical ethics, philosophy and children's environmental health. As a Colorado resident, she has studied the impact of natural gas development and is nationally recognized for warning the public of related health risks.
The League of Women Voters would like to invite non-members to hear one or both of the special speakers we have invited to our state convention. It will be held at the Fayetteville Library on Sat., April 25. As an Earth Day activity, we think that both of these programs have important ecological messages.
Dr. Matlock's presentation is an important big picture of water issues and the reality of future needs. He gave this program to the Annual Meeting of the Fayetteville Natural Heritage Association and was so well received we asked for an encore. If you missed him there, here is a chance to see a fine presentation.
Dr. Theo Colborn is a Paonia, Colorado scientist who has won international awards for her studies of chemical influence of the endocrine system. When she found herself near one the massive natural gas development regions of the West, she and her non-profit science foundation evaluated the process in light of her years of chemical study. Her warnings of the dangers have alerted Congress and residents of impacted areas to the protections that are needed because of Federal safety exemptions granted the oil and gas industry.
I hope you will schedule one or both of these programs into your recognition of Earth Day and pass this information to others. I add more detail below. If you have any questions, please let me know.
Happy Earth Day!
Joyce
10:15 to 11:30 a.m. – "Everything is Connected: Water Quality in Arkansas and Poverty in Africa" by Dr. Marty Matlock, Associate Professor of Ecological Engineering in the Biological and Ecological Engineering Department at the University of Arkansas. Dr. Matlock is deeply involved in sustainability and the impact of humans on ecosystems, especially water. In working toward ecosystem restoration design and management he serves as an advisor for five national organizations and provides technical support for USDA FAS in the Mid-East Peace Process.
2:00 to 3:15 p.m. – “What You Need to Know About Natural Gas Production and Delivery” by Dr. Theo Colborn, who has written and lectured widely on the human health and environmental threats posed by endocrine disruptors and other industrially-produced chemicals at low concentrations in the environment. Dr. Colborn founded a scientific non-profit organization which reports environmental policy development and analysis, environmental advocacy, medical ethics, philosophy and children's environmental health. As a Colorado resident, she has studied the impact of natural gas development and is nationally recognized for warning the public of related health risks.
Monday, April 13, 2009
Game and Fish Commission to set aside gas-leasing money
http://www.nwaonline.net/articles/2009/04/11/news/041209arstatelandleases.txt
The Morning News
Local News for Northwest Arkansas
Game & Fish To Set Aside Gas Income
By The Associated Press
LITTLE ROCK — The Arkansas Game and Fish Commission says it will hold onto millions it receives from natural gas leases on state land it manages, pending a judge’s decision on whether the agency can keep the money.
A citizen lawsuit has been filed to challenge the commission’s attempt to not to share the $32 million rather than have it used as state general revenue. The agency has sought to have the lawsuit dismissed, arguing the James Dockery of Little Rock has no standing to sue.
Dockery argues that the money belongs to the state. He also says the park land may need state funding in the future to mitigate harm to the land caused by drilling.
The commission and Dockery’s lawyers reached an agreement earlier this month to keep the lease money separate.
An order released Friday by Circuit Judge James Moody Jr. said now that the state Legislature has appropriated $32,227,000 in gas lease revenue to the commission, the funds “shall be kept in a special gas lease revenue sub-fund SDG 0800 within the Game Protection Fund at the Arkansas State Treasury and the defendant will not expend any of the $32,227,000 in gas lease revenue funds until this court enters a final, appealable order or decree in this case.”
Commission attorney Jim Goodhart said the agreement constituted a “voluntary restraint on our part not to spend the money.”
“The court is being told that both parties are in agreement that the Game and Fish Commission will not expend any of the funds that were being appropriated this session by the Legislature until the court issues a ruling in the case,” he said.
Dockery’s attorney, Q. Byrum Hurst Jr. of Hot Springs, said his co-counsel, Sam Perroni of Little Rock, negotiated the deal.
“The Game and Fish Commission was very reasonable in agreeing to segregate the money,” Hurst said. “We always believed the court would’ve entered that order anyway, but, of course, you never know, and it would’ve taken some time to get that litigated.”
Hurst noted that there was testimony during the legislative session about problems arising as the Fayetteville Shale is developed by natural-gas drilling operations.
“I think it was sort of eye-opening that although the shale is a great revenue source, there are problems in lots of areas,” Hurst said.
Goodhart said the agreement would simply save time and money for each side.
The commission voted in July 2008 to accept the terms of the leases with Chesapeake Energy for drilling rights in the Gulf Mountain and Petit Jean River wildlife management areas after taking bids on the opportunity to explore the lands. The leases will allow the Oklahoma City-based company to have access to more than 7,500 acres in the Petit Jean River WMA in Yell County and nearly 4,000 acres in the Gulf Mountain WMA in Van Buren County.
Both leases are for five years but they are automatically renewable if the company finds gas. The leases carry a 20 percent royalty payment — well above the 12.5 percent minimum royalty that state law mandates. If the company produces gas on the land, it can automatically renew the leases.
The Legislature considered a number of bills related to natural-gas drilling.
The Morning News
Local News for Northwest Arkansas
Game & Fish To Set Aside Gas Income
By The Associated Press
LITTLE ROCK — The Arkansas Game and Fish Commission says it will hold onto millions it receives from natural gas leases on state land it manages, pending a judge’s decision on whether the agency can keep the money.
A citizen lawsuit has been filed to challenge the commission’s attempt to not to share the $32 million rather than have it used as state general revenue. The agency has sought to have the lawsuit dismissed, arguing the James Dockery of Little Rock has no standing to sue.
Dockery argues that the money belongs to the state. He also says the park land may need state funding in the future to mitigate harm to the land caused by drilling.
The commission and Dockery’s lawyers reached an agreement earlier this month to keep the lease money separate.
An order released Friday by Circuit Judge James Moody Jr. said now that the state Legislature has appropriated $32,227,000 in gas lease revenue to the commission, the funds “shall be kept in a special gas lease revenue sub-fund SDG 0800 within the Game Protection Fund at the Arkansas State Treasury and the defendant will not expend any of the $32,227,000 in gas lease revenue funds until this court enters a final, appealable order or decree in this case.”
Commission attorney Jim Goodhart said the agreement constituted a “voluntary restraint on our part not to spend the money.”
“The court is being told that both parties are in agreement that the Game and Fish Commission will not expend any of the funds that were being appropriated this session by the Legislature until the court issues a ruling in the case,” he said.
Dockery’s attorney, Q. Byrum Hurst Jr. of Hot Springs, said his co-counsel, Sam Perroni of Little Rock, negotiated the deal.
“The Game and Fish Commission was very reasonable in agreeing to segregate the money,” Hurst said. “We always believed the court would’ve entered that order anyway, but, of course, you never know, and it would’ve taken some time to get that litigated.”
Hurst noted that there was testimony during the legislative session about problems arising as the Fayetteville Shale is developed by natural-gas drilling operations.
“I think it was sort of eye-opening that although the shale is a great revenue source, there are problems in lots of areas,” Hurst said.
Goodhart said the agreement would simply save time and money for each side.
The commission voted in July 2008 to accept the terms of the leases with Chesapeake Energy for drilling rights in the Gulf Mountain and Petit Jean River wildlife management areas after taking bids on the opportunity to explore the lands. The leases will allow the Oklahoma City-based company to have access to more than 7,500 acres in the Petit Jean River WMA in Yell County and nearly 4,000 acres in the Gulf Mountain WMA in Van Buren County.
Both leases are for five years but they are automatically renewable if the company finds gas. The leases carry a 20 percent royalty payment — well above the 12.5 percent minimum royalty that state law mandates. If the company produces gas on the land, it can automatically renew the leases.
The Legislature considered a number of bills related to natural-gas drilling.
Sunday, April 5, 2009
Jim Bemis suggests forming local chapters of independent producers and royalty owners
In case you missed. Maybe we ought to start a local chapter of the "Arkansas Independent Producers and Royalty Owners Association " I've seen the Texas version, but didn't know we had the association in Arkansas.
Jim
Environmentalists, gas firms split on lobbyists' influence
BY CHARLIE FRAGO
Posted on Sunday, April 5, 2009
URL: http://www.nwanews.com/adg/News/256566/
The 87th General Assembly is the first to convene after the increase in the severance tax on natural gas last year, and as the legislative session nears its end, opinion is divided on how powerful the gas lobby has become and what that means for the state.
Environmentalists say companies like Southwestern Energy Co. and Chesapeake Energy Corp. have pushed legislation to increase the power of an industry that many say has helped the state avoid the worst of a nasty recession.
The companies referred questions to a gas industry association official who said the industry was surprised that some bills considered by industry officials to be noncontroversial - like establishing that a majority of the Oil and Gas Commission shall be experienced in those fields - drew fire.
But the gas industry, said J. Kelly Robbins, executive vice president of the Arkansas Independent Producers and Royalty Owners Association, didn't come to the state Capitol "with a plateful of things trying to get enacted" in the session scheduled to end Thursday.
Many lawmakers say that the drilling in the Fayetteville Shale has been an important boost. That may have produced some hesitation among legislators to challenge an economic engine estimated by University of Arkansas at Fayetteville researchers to have had an impact of more than $2.3 billion in 2008.
"It's an industry that we'd like to keep in Arkansas. If we do too much, it might be what pushes them over the edge as far as exploiting our minerals," said Rep. Jonathan Dismang, R-Beebe, who has challenged natural gas companies on several occasions this session.
But Rep. Bruce Maloch, DMagnolia, co-chairman of the Joint Budget Committee, said he didn't think the gas companies had exerted too much influence.
"I've never been in a meeting public or private where it's been said, 'Hey, we've got to do something for these guys,'" Maloch said.
Here are some of the higherprofile issues involving natural gas this session:
Legislation to ensure that a majority of the nine-member commission have experience in development, production or transportation of oil or gas failed in its first try in the House.
Some members, including Dismang, questioned if it would unfairly restrict the influence of royalty owners and others.
Eventually signed into law as Act 389, Robbins said he was surprised that the bill sponsored by Rep. Garry Smith, D-Camden, became a "lightning rod" for criticism of the industry.
Maloch agreed, saying most boards and commissions have a majority of members with experience in whatever industry that board oversees.
But not every board has the power of the Oil and Gas Commission, said Rod Bryan of the Arkansas Conservation Alliance, an environmental organization.
"They have offices in three cities and the power of an agency. They call them a commission so that they can have their cake and eat it, too," Bryan said.
Maloch's proposal to codify a prudent operator standard for oil and gas companies to protect them against lawsuits also drew attention.
A 2000 Arkansas Supreme Court ruling awarded $109 million to royalty owners after the court found that gas companies had sold gas at below-market rates to a sister company.
The ruling contained "dicta" - or judicial remarks not directly related to the ruling - that oil and gas companies had a fiduciary responsibility to royalty owners.
Examples of a fiduciary responsibility are an executor of an estate and an heir or a guardian and a ward, Maloch said. That kind of legal arrangement requires that any action only be done in the best interests of the heir or ward, he said.
"I don't know of any business that operates that way," Maloch said. "That would mean that the mineral owner could demand that the natural gas company drill a well to extract $500,000 worth of gas even if it costs $3 million to drill the well."
Maloch's legislation, now Act 719, codifies the "prudent operator standard" already in practice in courts in Arkansas and neighboring states, he said.
That standard requires companies to act in good faith and for the mutual benefit of the company and royalty owner.
The Senate changed the bill to remove language that some attorneys thought would benefit the gas companies in negotiations, said Sen. Jim Luker, D-Wynne.
Luker said the gas industry has "put money in the pockets of people who had been of modest means," but "those who don't directly benefit financially are not quite as satisfied."
"Our job is to try to strike a balance," he said.
"People fussed for a long time that we weren't taxing them enough. We finally got it done and they said we didn't do enough. Well, we got them paying something," Maloch said.
Copyright © 2001-2009 Arkansas Democrat-Gazette, Inc. All rights reserved. Contact: webmaster@nwanews.com
Jim
Environmentalists, gas firms split on lobbyists' influence
BY CHARLIE FRAGO
Posted on Sunday, April 5, 2009
URL: http://www.nwanews.com/adg/News/256566/
The 87th General Assembly is the first to convene after the increase in the severance tax on natural gas last year, and as the legislative session nears its end, opinion is divided on how powerful the gas lobby has become and what that means for the state.
Environmentalists say companies like Southwestern Energy Co. and Chesapeake Energy Corp. have pushed legislation to increase the power of an industry that many say has helped the state avoid the worst of a nasty recession.
The companies referred questions to a gas industry association official who said the industry was surprised that some bills considered by industry officials to be noncontroversial - like establishing that a majority of the Oil and Gas Commission shall be experienced in those fields - drew fire.
But the gas industry, said J. Kelly Robbins, executive vice president of the Arkansas Independent Producers and Royalty Owners Association, didn't come to the state Capitol "with a plateful of things trying to get enacted" in the session scheduled to end Thursday.
Many lawmakers say that the drilling in the Fayetteville Shale has been an important boost. That may have produced some hesitation among legislators to challenge an economic engine estimated by University of Arkansas at Fayetteville researchers to have had an impact of more than $2.3 billion in 2008.
"It's an industry that we'd like to keep in Arkansas. If we do too much, it might be what pushes them over the edge as far as exploiting our minerals," said Rep. Jonathan Dismang, R-Beebe, who has challenged natural gas companies on several occasions this session.
But Rep. Bruce Maloch, DMagnolia, co-chairman of the Joint Budget Committee, said he didn't think the gas companies had exerted too much influence.
"I've never been in a meeting public or private where it's been said, 'Hey, we've got to do something for these guys,'" Maloch said.
Here are some of the higherprofile issues involving natural gas this session:
Legislation to ensure that a majority of the nine-member commission have experience in development, production or transportation of oil or gas failed in its first try in the House.
Some members, including Dismang, questioned if it would unfairly restrict the influence of royalty owners and others.
Eventually signed into law as Act 389, Robbins said he was surprised that the bill sponsored by Rep. Garry Smith, D-Camden, became a "lightning rod" for criticism of the industry.
Maloch agreed, saying most boards and commissions have a majority of members with experience in whatever industry that board oversees.
But not every board has the power of the Oil and Gas Commission, said Rod Bryan of the Arkansas Conservation Alliance, an environmental organization.
"They have offices in three cities and the power of an agency. They call them a commission so that they can have their cake and eat it, too," Bryan said.
Maloch's proposal to codify a prudent operator standard for oil and gas companies to protect them against lawsuits also drew attention.
A 2000 Arkansas Supreme Court ruling awarded $109 million to royalty owners after the court found that gas companies had sold gas at below-market rates to a sister company.
The ruling contained "dicta" - or judicial remarks not directly related to the ruling - that oil and gas companies had a fiduciary responsibility to royalty owners.
Examples of a fiduciary responsibility are an executor of an estate and an heir or a guardian and a ward, Maloch said. That kind of legal arrangement requires that any action only be done in the best interests of the heir or ward, he said.
"I don't know of any business that operates that way," Maloch said. "That would mean that the mineral owner could demand that the natural gas company drill a well to extract $500,000 worth of gas even if it costs $3 million to drill the well."
Maloch's legislation, now Act 719, codifies the "prudent operator standard" already in practice in courts in Arkansas and neighboring states, he said.
That standard requires companies to act in good faith and for the mutual benefit of the company and royalty owner.
The Senate changed the bill to remove language that some attorneys thought would benefit the gas companies in negotiations, said Sen. Jim Luker, D-Wynne.
Luker said the gas industry has "put money in the pockets of people who had been of modest means," but "those who don't directly benefit financially are not quite as satisfied."
"Our job is to try to strike a balance," he said.
"People fussed for a long time that we weren't taxing them enough. We finally got it done and they said we didn't do enough. Well, we got them paying something," Maloch said.
Copyright © 2001-2009 Arkansas Democrat-Gazette, Inc. All rights reserved. Contact: webmaster@nwanews.com
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