Ducks Unlimited Banquet October 29, 2009, in Fayetteville, Arkansas

Please click on images to move to Flickr site and use magnifying tool above photo to ENLARGE for easy reading.

Green Groups Guild meeting Thursday

From: Green Groups Guild (ggg@listserv.uark.edu) on behalf of ggg (ggg@UARK.EDU)
Sent: Tue 10/13/09 2:31 PM
To: GGG@LISTSERV.UARK.EDU

Meeting 10/15/09 7:00 p.m.
209 Thompson Ave. Three Sisters Bldg on Dickson above Fez Hookah Lounge.
Patrick Kunnecke
GGG President
ASLA Vice President
4th Year Landscape Architecture Student
479-544-1906

Runners and Sponsors sought for Nov. 7, 2009, 5K veterans' memorial race to benefit Fayetteville National Cemetery

Please click on image to move to Flickr site and ENLARGE for easy reading. The Regional National Cemetery Improvement Corporation meets at 10:30 a.m. Saturday October 10 and needs to add sponsor names to the file for the race T shirts and the brochures so that printing can begin. Already, Tyson Foods has donated at the Medal of Honor level and has challenged others to join them at the top of the list, thanks to the effort of RNCIC Secretary Peggy McClain.

Slant drilling remains controversial in Fayetteville Shale natural-gas area

Drilling method sparks dispute
Gas panel, firm spar over rule
By Seth Blomeley
Sunday, October 4, 2009
LITTLE ROCK — The Arkansas Oil and Gas Commission wants to slow down some natural-gas drilling in the Fayetteville Shale, a move opposed by one of the largest producers in the shale, Southwestern Energy Co. of Houston.
“Our biggest fear is not protecting the royalty owner,” said Commission Chairman Chad White of Magnolia. “The commission is the only thing standing between the royalty owner and the [production] company to make sure the [royalty owner] is not ripped off in some way.”
But some county officials question whether the commission’s proposal would lead to more wells being drilled and heavy equipment causing more damage to roads.
“The less wells we have dotted all over the landscape the better [for the roads],” said Faulkner County Judge Preston Scroggin.
The nine-member commission unanimously passed a rule during its July meeting aimed at monitoring types of wells in the Fayetteville shale.
But Southwestern, county officials and some others stood ready to voice opposition during a Sept. 15 meeting of a legislative committee that reviews agency rules and regulations and decides whether to sign off on them.
Anticipating a roughreception in the committee meeting, Larry Bengal, the executive director of the Oil and Gas Commission, asked for the rule to be taken off the agenda, and it was.
Bengal said Southwestern opposes the rule change because it could slow down production in some wells by a month or so.
He’s now working with Southwestern to find a middle ground to present to the commission during its Oct. 28 meeting in Fort Smith.
The Fayetteville Shale natural-gas deposits, located in north-central Arkansas, have been an economic boon to the state, and some officials, including Gov. Mike Beebe, have credited the drilling activity for cushioning the blow of the recession in the state.
From 2008 to 2009, the number of wells in the shale grew from 679 to 1,388.
The disagreement between the commission and Southwestern is over what’s called “cross-unit” drilling.
Much of the drilling in the Fayetteville Shale is horizontal, crossing property boundaries at times.
“The average [cross-drill] is now up to 4,000 feet,” Bengal said. “Some are proposed for 6,000 feet or so.”
That can mean that multiple landowners, gas producers and royalty owners are due proceeds from the sale of the gas.
Bengal said the commission in 2006 developed a way to allow cross-unit drilling using a formula that divides up proceeds on a percentage basis depending on the well.
“We’re the only state that does this,” he said. “It’s a unique methodology. Although I cannot say with absolute certainty no other state has adopted a similar cross-unit-well approach, I am not aware of the issue being addressed similarly in any other major oil- and gasproducing state.”
Officials with the Interstate Oil and Gas Compact Commission in Oklahoma City and the Gas Processors Association in Tulsa didn’t return messages last week.
Arkansas’ cross-unit drilling procedure was established with the purpose of facilitating development of the Fayetteville Shale, but since then it’s brought complications as the industry started drilling longer wells with different types of angles, Bengal said.
In March, the commission started drafting ways to revise the cross-unit drilling rule. Since then, it has gone through nine drafts, according to commission files.
The 2006 rule allows Bengal to make the call on whether to approve cross-unit wells. Parties on the losing end can appeal to the commission.
Now, with the proposed change to the rule, the commission wants to hear each of those cases.
“It’s very hard to write a rule that covers every nuance and every scenario,” Bengal said. “At the commission level, testimony from witnesses can be questioned and you can be more flexible in decisions as opposed to a strict regulatory rule.”
Natural-gas producers would prefer that staff members handle those decisions because it would take less time, he said.
In a Sept. 18 e-mail to thecommission, Southwestern Energy attorney Mark Boling said the “real problem” with the commission’s rule-change proposal is that it “does not allow director the necessary latitude” to approve each application.
Boling, through company lobbyist Danny Ferguson, declined to answer questions from the Arkansas Democrat-Gazette.
Instead, Boling issued a statement that Southwestern’s goals are to “minimize waste” of natural gas, protect rights of royalty owners, “minimize surface disturbance,” and “promote efficient development” of natural gas in the Fayetteville Shale.
A form letter to the commission from opponents, including Southwestern and several county judges, touted cross-unit drilling as a way to reduce the number of wells being drilled, and the access roads and heavy equipment needed to drill them.
The commission countered in papers prepared for the legislative committee that it wasn’t against cross-unit drilling but only wanted to change the approval process.
But White, the commission chairman, said the commission also wants to require that a well be drilled on each drilling section, which is one square mile.
That’s only fair to royalty owners, he said.
Without a well to himself, one royalty owner could only get a percentage of the revenue from the “little sliver” of the cross-unit well coming onto his land from a neighboring section, he said.
What about road and environmental concerns of drilling more wells?
“We’re trying to allow as many wells drilled off the same pad as we can,” White said.
He described a pad as a place where heavy equipment can drill wells in several locations, including other sections, with separate wellheads. He said that would eliminate road damage. But he said more pads may have to be built in some cases.
It’s unclear how another major shale driller, Chesapeake Energy of Oklahoma City, feels about the commission’s plan. White said the company was OK with it. Bengal said they opposed it.
A Chesapeake spokesman, Danny Games, said he was unfamiliar with the issue.
White said he understands the industry seeking to maximize profits, especially with the low price of natural gas. It’s down to $4.64 per 1,000 cubic feet but the price needs to get up to $8 to $10 for the high cost of horizontal drilling to be profitable, he said.
Beebe said last week that he’s studying the issue and has been kept apprised by staff of the debate.
“I hope the commission would be very mindful and protective of the landowners,” Beebe said. “[Royalty owners] don’t normally have as much day-to-day background and knowledge as the [production] companies do.”
The governor said the commission must be the “guardian” of the rights of royalty owners.
Of the nine commissioners, five have either been appointed or reappointed by Beebe, who took office in 2007. The other four were appointed or reappointed by former Gov. Mike Huckabee.
Arkansas, Pages 17, 19 on 10/04/2009

Copyright © 2009, Arkansas Democrat-Gazette, Inc.
All rights reserved.
This document may not be reprinted without the express written permission of Arkansas Democrat-Gazette, Inc.

Material from the Associated Press is Copyright © 2009, Associated Press and may not be published, broadcast, rewritten, or redistributed. Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP materials nor any portion thereof may be stored in a computer except for personal and noncommercial use. The AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing. All rights reserved.

Green-building conference in October 2009

Cities Alive Introduction from Johan A. du Toit on Vimeo.

League of Women voters sponsoring discussion of Arkansas' electric future on September 23, 2009

Concerned about a proposed SWEPCO rate increase and developing energy efficiency?
A panel of experts will discuss the electrical power dilemma facing
Arkansas and ratepayers during a public information program
moderated by Hoyt Purvis, University of Arkansas Journalism Department.
Wed., Sept. 23, 2009, from 6:00 to 8:00 at the Fayetteville Public Library
This is also a special LWVWC membership invitation event. Come early, 5:30 to 6:00, for refreshments and visit the membership table before the program for more information.
Topic:
Arkansas finds itself with a need to expand electrical production at the same time it has overcapacity. A controversial coal-fired generating plant, choice of what fuels should be used in the future, an urgency to upgrade transmission, serious environmental concerns and ratepayer costs combine for a perfect “electrical” storm. Learning what Arkansas is facing and what that means to ratepayers is the focus for this League of Women Voters of Washington County’s public program.
Panel Participants:
Sandra Byrd, VP, Strategic Affairs, Arkansas Electric Cooperative Corporation and former chair of the Arkansas Public Service Commission
Nicholas Brown, President and CEO of Southwest Power Pool, Inc.
Ken Smith, Executive Director of Audubon Arkansas, an organization involved in the lawsuit over the J.W.Turk, Jr. coal-fired plant
Eddie Moore, an attorney working with Audubon on electric efficiency and ratepayers issues and representing the Arkansas Public Policy Panel on energy issues during the 2009 legislative session

PSC chairman spins threat of major ratepayer costs if coal-fired plant not built

Gladys - I believe it was you who asked, at the CCTF meeting a week ago, what was the effect and the status of the recent Ark Appeal Court's judgement against the Turk coal plant. This rather long article is a pretty complete answer to that question. Cheers - Art

Date: Sun, 09 Aug 2009 10:00:00 -0500
From: slcox1@aep.com
Subject: Fw: PSC Chairman Suskie comments on court of appeals ruling of SWEPCO
Turk plant - Ark Business
Swepco Ratepayers Could Be on Hook for Cost of Turk Plant

PSC Chairman Paul Suskie: "If the Court of Appeals' ruling stands, I don't see how a plant can get built anywhere in the state of Arkansas, period."

By Jamie Walden
8/10/2009

"If the Court of Appeals' ruling stands, I don't see how a plant can get built anywhere in the state of Arkansas, period. Whether it's a solar farm, a wind farm, you're going to have to have, I think, amendments to law," Suskie said. "Because of the way the Court of Appeals interpreted it, you would have to have a fundamental rewrite."

Swepco Ratepayers Could Be on Hook for Cost of Turk Plant
By Jamie Walden - 8/10/2009
If Southwestern Electric Power Co. can't complete its embattled John W. Turk Jr. coal-fired power plant in Hempstead County, Swepco customers in Arkansas and elsewhere could be on the hook for more than $876 million.
The case, now on appeal to the Arkansas Supreme Court, appears to hinge on three major issues, one of which could permanently alter the approval process for power plants in Arkansas.
In early 2007, three private hunting clubs and a family trust launched an offensive on the Turk plant, claiming it would harm the environment. In June, the plaintiffs won their case in the Arkansas Court of Appeals. The argument by Hempstead County Hunting Club Inc., Po-Boy Land Co. Inc., Yellow Creek Corp. and Shultz Family Management Co. targeted the approval procedure by the Arkansas Public Service Commission and simultaneously argued that Swepco didn't adequately document a need for the Turk plant or its evaluation of alternative locations.

The PSC regulates the construction and location of power plants under the Utility Facility Environmental & Economic Protection Act of 1973. A company must obtain a Certificate of Environmental Compatibility & Public Need, or CECPN, to build a plant.
The PSC also wields the authority to approve the transmission lines that transport the power generated by the plant.
Ever since legislators wrote the utility act in 1973, the PSC has interpreted the method of handing down these approvals in one consistent way. But recently the Arkansas Court of Appeals said the PSC has been doing it wrong all this time.
And/Or
The contentious clause grants the Public Service Commission exclusive and final jurisdiction "for the expeditious resolution of all matters concerning the location, financing, construction and operation of electric generating plants and electric and gas transmission lines and associated facilities in a single proceeding."
The PSC has, for the past 36 years, interpreted the "single proceeding" to mean an issue is heard solely by the commission. "Not in a district court or a circuit court here, not in front of one state agency here, have it all in one place," PSC Chairman Paul Suskie said.
Furthermore, the use of the word "and" in that construction - "electric generating plants and electric and gas transmission lines and associated facilities" - has led the PSC to handle the construction of a plant in one docket and the transmission lines in another docket. Despite the division of those hearings, the PSC thought it was following the law because the proceeding was held by one body.
The Arkansas Court of Appeals, however, interpreted that phrase to mean the plant construction, transmission lines and associated facilities should all be part of one hearing.
"Piecemeal consideration of all the matters concerning a generating plant and its transmission lines corrupts the spirit and letter of the law," the appellate court wrote.
Suskie said that Ed Dillon, an attorney with Entergy in 1973 who helped the PSC staff write the legislation, filed the first application for the White Bluff coal-powered plant in Redfield just months after the legislation was passed. Dillon, with first-hand knowledge of the law, separated the plant application from the transmission lines application.
"It's pretty compelling to me when the attorneys that wrote the law then months later apply it that way," Suskie said.
The Court of Appeals disagreed and was unmoved by the "we've always done it this way" argument.
"Significantly, the APSC's procedure of separating generating plants from transmission lines in CECPN proceedings has never been challenged in a court proceeding. The mere fact that the practice has gone unchallenged cannot create a presumption that it is proper," the appellate court wrote.
Suskie said the PSC contemplated the transmission lines in the first proceeding, but didn't approve the transmission line sites until the second hearing. However, he said that in the first proceeding to approve the plant, the PSC dictated certain rules that Swepco must follow when siting the transmission lines.
The PSC addressed the transmission lines "on the front end because in the orders, we put conditions upon it. And some of those conditions were, 'You could not run transmission lines over sensitive areas and the interveners' property,'" Suskie said.
In this case, the hunting clubs were some of those interveners.
The determination of the sites where the transmission lines would run, however, occurred during a different proceeding. And the plaintiffs argued that affected parties, such as property owners, should know the whole plan, including the sites of the transmission lines, before a plant is approved.
Part of the commission's duty, though, is to make the process "as expeditious as possible." Separating the hearings does just that, Suskie said.
"If you did all those at once, it would extend the time frame. ... It could easily run two years, but the statute requires the Arkansas commission to do it as 'expeditiously as possible,'" Suskie said.

"In the way this case was handled, the Turk plant was approved. And then after it was approved, [Swepco] continued with the processes for approvals, the air permit and so forth. Well, after that took place, we were still in the process of siting the transmission lines."
The PSC approved the Turk plant in November 2007, and then finally gave the nod to the plant's transmission lines in January.
The division of hearings can also be convenient for out-of-state businesses. Because a plant, depending on the size, can often take longer to build than the laying of transmission lines, the time needed to bring an operation online is shorter if a business can start earlier on the plant.
A Question of Need
Regardless of how the Supreme Court rules on the question of whether two PSC proceedings complies with the law - if, that is, the high court chooses to hear the case when it reconvenes after Labor Day - the plaintiffs still allege there is no need for the Turk plant. And proving need is one of the first hoops through which a utility provider must jump before getting a CECPN.
Charles Nestrud of Chisenhall Nestrud & Julian PA of Little Rock, which represents the groups challenging the project, pointed to Swepco's market in Texas.
Because transmission lines for the Turk plant cross state lines, Swepco also had to present its case before public service commissions in Texas and Louisiana.
"Swepco's need has deteriorated. In the Texas proceeding, they couldn't project that they needed this power plant because the need had evaporated," Nestrud said. "If you look at their latest [annual report], their wholesale sales are down, their retail sales are down."
Paul Chodak, president and chief operating officer of Swepco, disputed the notion that the need for the Turk plant had disappeared.
"Now, have we seen an economic downturn? Sure, we've seen an economic downturn. But we're building this plant to last the next 40 years, really the next 60 years," Chodak said. "So what the economy does in a two-year time frame is not the basis by which you build a plant."
Nestrud also contended that a natural gas plant makes more fiscal and environmental sense than a coal plant.
"We believe that now with the cost of this plant having escalated the way it has, with the gas prices having decreased below anybody's projections, and with the cost of carbon-capture for coal plants, this plant could never survive in a cost comparison of alternatives," Nestrud said.
Chodak said Swepco aims for energy diversity with a current portfolio of 60 percent coal plants and 40 percent natural gas facilities.
"To point to one summer where natural gas prices are low - and I'm sure they're forecasted to stay low into the future - I would urge you to go back and look at what gas prices were last year," Chodak said.
"The certainty about forecasts is that they are wrong. I don't know if they are wrong high or if they're wrong low."
Alternative Locations
Finally, the Court of Appeals cried foul at the treatment of alternative locations during the process.
"Swepco's application states that the Hempstead site was selected because it was large enough to accommodate the facility, had water supply, had nearby rail access, and had a property owner willing to sell," the appellate court wrote. "The other sites were not mentioned.
"Staff witness Clark Cotton admitted that Swepco's [environmental impact statement] did not contain a description of the comparative merits and detriments of each alternative location as required" by a section of the utility act.
Plaintiffs' attorney Nestrud agreed. "They didn't look at need and compare that to environmental impacts and to alternatives that were available. So when all that occurs, I don't agree that it's a forgone conclusion that they're going to get a certificate."
Court of Appeals Judge Josephine Linker Hart, in her concurring opinion, addressed what has become a major point of controversy in the case: why the "mostly idle" Union Power Station plant in El Dorado, owned by Entegra Power Group LLC, wasn't considered as an alternative location.

Suskie said that Entegra didn't bid on the Arkansas project and thereby fulfill certain requirements held by the Louisiana Public Service Commission. For the past 10 years, the Federal Energy Regulatory Commission has required utilities to plan by region because transmission lines cross state borders, multiple states are involved in approving a project like the Turk plant.
"The [Louisiana commission] asked for proposals to meet that need, and Entegra never bid."
Arkansas and Texas didn't require Swepco to solicit bids.
Entegra later tried to intervene in the Arkansas docket. Though Suskie wasn't on the PSC at the time, he said the commission saw that move by Entegra as an attempt to block a competitor from entering the market.
"They didn't bid at the proper time. And then they wanted to intervene in the Arkansas docket essentially to block the plant from being built because it's competition," Suskie said.
Holding the Bag
Although Swepco, which has 113,500 customers in Arkansas, has the most cash in play, other parties stand to be affected by the outcome of the case.
The Arkansas Electric Cooperative Corp., which has about 490,000 Arkansas customers, has a 12 percent ownership stake in the plant.
If the Supreme Court takes on the case and sides with the Court of Appeals, Swepco would be forced to restart what has been a multiple-year application process. And if plaintiffs' attorney Nestrud is right and Swepco can't demonstrate a need for the plant this time around, customers would be left holding the $876 million bag.
According to Swepco's most recent quarterly report, the company would seek to increase its rates to recoup $136 million in contract termination fees plus whatever it has invested in the plant thus far. Swepco had spent more than $740 million as of last week on the Turk plant, spokeswoman Kacee Kirschvink said.
"If the Turk Plant cannot be completed and placed in service, Swepco would seek approval to recover its prudently incurred capitalized construction costs including any cancellation fees and a return on unrecovered balances through rates in all of its jurisdictions," the filing states.
So what are the possible outcomes? Suskie said the Supreme Court could kick the case back to the PSC for more hearings, uphold the PSC's procedure or support the appellate court's decision.
"If the Court of Appeals' ruling stands, I don't see how a plant can get built anywhere in the state of Arkansas, period. Whether it's a solar farm, a wind farm, you're going to have to have, I think, amendments to law," Suskie said. "Because of the way the Court of Appeals interpreted it, you would have to have a fundamental rewrite."

Natural-gas drillers ignore consequences of drilling and production and tout 'cleanness' of natural gas

Surface owners minimalized by owners of mineral rights

Fayetteville food drive and Washington County "stop the quarry" efforts touted on square on Saturday July 18, 2009

Please click on images to ENLARGE view of details. The finger points to the area where the red-dirt pit that owners want to convert to a limestone mine sits on the edge of Fayetteville. It is up to the Washington County Quorum Court to see that the proposal is not allowed. Residents of Fayetteville and the rest of Washington County must let their justices of the peace know their feelings about this project or it could become an even uglier disaster than shown on the poster. And the limestone pit is estimated to take 75 years to deplete!