Shale summit touts gas exploration's impact

By Sara Greene

LITTLE ROCK — When it comes gas drilling in central Arkansas, the message at a Fayetteville Shale summit in Conway was that the pros outweigh the cons.

The issue was discussed Friday by two panels at the University of Central Arkansas.

Real estate broker J.C. Thornton of Conway touted the economic impact of the gas -exploration industry.

"You don't have to be in the gas industry to benefit from the gas industry. People who work for the gas companies are eating three meals a day at our restaurants, filling up their cars and trucksat our gas stations and shopping in our stores," Thornton said.

Faulkner County Judge Preston Scroggin said the state's budget surplus was a result of investment of natural-gas companies exploring the Fayetteville Shale, a natural-gas deposit in north central Arkansas.

"County judges spend a lot of time talking with the oil and gas industry. I've seen it revitalize smalls towns like Damascus and Center Ridge. The gas companies are helping us with road improvements, and a lot of times the companies come to us with concerns about the road like 'We need to beef this one up for safety,'" Scroggin said.

Conway County Judge Jimmy Hart told the audience the gas industry is good for the entire state. He said he has seen many residents get jobs with the gas companies.

"I get five to 10 phone calls a day about the dust and road conditions due to the big trucks and equipment involved in natural-gas exploration. But I also see people with the best job they've ever had, and they didn't have to leave the state to do it. A skilled person out there, who isn't afraid to get dirty, hot or cold, is in big demand," Hart said.

He used his road crew as an example.

"I have a good road crew. Everytime they go out to Sheepskin Road, they get stopped and offered a job by the gas companies (to work moving earth). Lucky for me they don't take it, because they have cattle, chicken houses and some are even drawing a gas-well check and don't want to work a 12-hour day," Hart said.

John Thaeler, senior vice president of SEECO Inc., which is one of the natural gas companies working in the Fayetteville Shale, is also a geologist.

He briefly discussed how algae, trapped beneath the earth some 300 million years ago, is now producing naturalgas in the Fayetteville Shale.

Thaeler said is hard to know how long the economic impact of the Fayetteville Shale will be felt. That will depend, he said, on natural-gas prices and the business climate in Arkansas, such as increases in the state's severance tax or increases in regulation for the industry. Rising steel prices for the pipes needed for the wells and drilling rigs could also affect the economic impact of the Fayetteville Shale, he said.

"We feel the production phase of the Fayetteville Shale will last 20 to 50 years," Thaeler said. The production phase means a well is producing gas. This follows seismic surveys and the drilling process.

Before 2003 it wasn't feasible to drill for natural gas in the Fayetteville Shale, but new technology has made it profitable to drill in this area, he said.

The first natural gas-producing well in the Fayetteville Shale is Thomas 1-9, which is a gas well in Jerusalem, a small communityin Conway County. The well was started in 2004. Four years later, SEECO has 800 employees working on 569 wells in eight counties.

"It costs between $2.8 to $3 million to drill each well," Thaeler said.

Pipeline construction to get the natural gas to market is another important factor for the industry to continue in Arkansas, he said.

"Even if you have the best well site in the state, if there isn't a pipeline to get it to market, they (natural-gas companies) aren't going to drill your well first," Thaeler said.

Robert Pittman, executive director for the Strategic Growth and the Community Development institutes at UCA, said America's desire for alternative energies for transportation could draw even more industries to the state.

"Compressed natural gas could be used to power vehicles, and hydrogen, which can be used for next generation cars, can be produced using natural gas," Pittman said, adding that most chemical industries are no longer the toxic polluters of the past.

Construction is under wayfor a natural-gas pipeline that stretches 187 miles from Conway County to White County along the route of an existing naturalgas pipeline.

Hart said this was a positive indicator of the natural-gas industry in central Arkansas.

"They don't spend $1.3 million on pipelines they don't need," Hart said.

Hart said so far, he has heard more positive stories than negative ones when it comes to the Fayetteville Shale.

"I'd rather have the economic impact and a few bumps in the road than have totally smooth roads and no economic impact," Hart said.

Rod Bryan, 39, of Little Rock asked a question about the water table during the conference.

In an interview afterward, he said, "We're not prepared to meet the amount of water needed for this industry, much less our agriculture industry. I'm not here to badmouth ADEQ (Arkansas Department of Environmental Quality) or the gas companies. I just want to increase communication between the gas industry and the public."

River Valley Ozark, Pages 63, 70 on 10/09/2008