County judges endorse governor's severance tax proposal

The county judges of 11 counties impacted by the Fayetteville Shale Play agreed Thursday to support Gov. Mike Beebe's natual gas severance tax proposal.

In a meeting held in Heber Springs, the county judges decided unanimously that Beebe's proposal, as Faulkner County Judge Preston Scroggin put it, "isn't half bad."

"As usual, it's the art of compromise," Scroggin said. "It wasn't a half-bad deal; we got about 80 percent of what we needed. ... We were assured that our needs would be met."

Beebe's proposal would raise severance tax to 5 percent of the gas value at time of extraction, with "high cost" wells taxed a reduced rate of 1.5 cents for the first three year of operation.

The current tax is three tenths of one cent per 1,000 cubic feet of gas, one of the lowest severance taxes in the nation.

Scroggin said that after debate on the severance tax, most of the discussion was dedicated methods of ensuring the oil and gas industry complies with environmental regulations and makes good on promises to repair roads damaged by trucks hauling heavy equipment and water for fracturing rock. Scroggin said the possibility of bonding roads was discussed to ensure the latter.

Though unrelated to Thursday's meeting of county judges, District 45 Representative Betty Pickett attempted to pass a resolution "meant to send a message of intent by the legislature" that would encourage cooperation between about 20 state and federal agencies expected to have some involvement in overseeing oil and gas industry activity in the Fayetteville Shale play. Pickett said some measure needs to be taken to ensure that the oversight bodies don't cover the same ground, at the same time ensuring that all ground is covered.

Though the resolution failed to find favor among other legislators, Pickett said it was, in some ways, still a victory, as discussions related to the resolution has yielded some of the results the resolution itself was meant to encourage.

"The dialogue has made them more aware of the problems and they are all really going to try and work together."

A special legislative session to bring Beebe's severance tax issue before the legislature is still possible.

(Staff writer Joe Lamb can be reached at 505-1238 or by E-mail at joe.lamb@thecabin.net. Send us your news at www.thecabin.net/submit.)