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.