Arkansas Has Gas
In the last couple years, interest in Arkansas’ Fayetteville Shale natural gas has grown significantly. Chesapeake Oil quietly purchased mineral rights to more than 2 million acres of land and are drilling at a prolific rate in White County. In the first year of drilling, sales taxes for the county (its only source of revenue) rose ten percent. Drilling has only picked up since then and royalty checks are yet to be received from leasers. The county has the potential to make a lot of money!
The problem is dealing with the roads that will get destroyed from the come and go of trucks hauling everything that goes into the drilling process. The roads in this county are absolutely not made for the 70-80 thousand pound trucks. They are the cheap chip seal stuff. Not only do they not stand up well to heavy trucks but they are difficult to repair.
I’m a bit worried that Chesapeake Oil will drill its gas, folks will get some nice checks in the mail, the wells will dry up, and White County will not be any better off that it began.
Governor Beebe is currently trying to impose a 7% severance tax on the purchase price of the gas. Currently, Arkansas has a ridiculously low severance tax which brings in about $600,000 a year. This new severance tax would have brought in 92 million dollars had it been in place last year. The money would go straight to the Department of Transportation.
Of course there is a huge constitutional issue that always plagues revenue raising attempts in Arkansas which I don’t want to spend too much time on. To make a long story short, there is going to be a long, heated battle between the Governor, the General Assembly leadership, and I think the Supreme Court over this tax proposal.
On the local level, counties and cities need to begin establishing a road repair fund with the additional sales taxes they will be making. If they begin planning now, they can have some fantastic roads by the time they are all done with drilling.
I really think this can be a wonderful asset to our state. It is extremely important though that people don’t become greedy and that citizens become informed about what is going on. I also believe citizens should demand that this severance tax get raised. This is truly in everyone’s best interest.
When I see there trucks driving by, I always misread their logo as “Cheapskate.”
thechrisberry.com
29 Feb 08 at 4:23 am
Perhaps they could use the additional tax revenue to expand Highway 67 into a 4-lane highway, or even help the god-awful situation of the Little Rock death trap of a highway.
S.C. Denney
29 Feb 08 at 6:05 am
I hate…HATE express lanes. They are the most anachronistic befuddlements known to this universe.
Chris McNeal
29 Feb 08 at 6:16 am
They need to do something about highway 64. Speed limit 55, 40-45 through towns, between Searcy and Memphis. Do you have any idea how many students at Harding are from Memphis? I don’t either, but I’d say it’s a lot, guessing by the number of cars I see pulled over on the side of 64 on my way to and from.
thechrisberry.com
29 Feb 08 at 7:05 am
One of the reasons why so many people avoid Arkansas is because their largest h/w is a two-laner.
S.C. Denney
29 Feb 08 at 1:54 pm
I’m with TheBerry on this one. I was born and raised in Arkansas. Relatives in West Memphis, school at Harding, and a father in New Orleans, I have seen 64 more than I care to admit.
I would vote for the proposed tax, IF every dollar goes toward, not expanding, but improving roads like 64 and especially the LR/Mem. I-40 route; what a mess!
Small roads, among other “backwards, country sundries,” are what helps keep Arkansas the natural state.
Buckleman
29 Feb 08 at 4:56 pm
As for White County, highway 16 is what concerns me most. It goes right along where all the wells are and is the route to Heber Springs. That road will be ruined.
Chris McNeal
29 Feb 08 at 7:29 pm