LITTLE ROCK — Making good on an interagency agreement, the Arkansas Game and Fish Commission delivered a $640,000 check to Department of Environmental Quality Director Teresa Marks on Friday - the first installment of a $1 million grant made possible by profits from natural-gas drilling on state land.
The money will be used to hire four inspectors, one inspector supervisor and one enforcement administrator, Marks said.
“Those positions will be dedicated to work on natural-gas drilling activities and issues, so it will include not only the actual natural-gas wells themselves but the land farms, the pipelines all those activities that are associated with natural-gas drilling that could impact the environment,” Marks said after the meeting.
She said the agency would start advertising the positions shortly and hoped to have them in place after the start of the fiscal year, Thursday.
In July 2008, the commission reached a $29.5 million agreement with Chesapeake Energy for the lease of 11,500 acres in the Gulf Mountain and Petit Jean River wildlife-management areas.
The Gulf Mountain site in Van Buren County is situated over the Fayetteville Shale, a geologic formation primarily in north-central Arkansas that’s proved to be rich in natural gas. The lease is for $28.3 million for 4,000 acres.
The Petit Jean River Wildlife Management Area lease totals $1.2 million. That land is considered part of the Arkoma basin, where Chesapeake Energy has natural-gas operations in nonshale formations.
Both leases are for five years at 20 percent royalties, well above the 12.5 percent minimum royalty mandated by state law. If the company produces gas on the land, it can automatically renew the leases.
Drilling in the Fayetteville Shale has been projected to have a $22 billion effect on the economy between 2005 and 2012, according to a study by the University of Arkansas that was partially funded by Chesapeake Energy.
The $640,000 is from estimated proceeds generated for the period of July 1, 2009, through June 30, 2010. A payment of $450,000 is due around this time next year for money generated from July 1, 2010, to June 30, 2011, a spokesman for the Environmental Quality Department said.
Scott Henderson, chief executive officer for the Game and Fish Commission, said now is a perfect time for the grant agreement to kick in.
“They’re about to start drilling for gas. They’ll drill a well this summer I think, so this times out really well for us,” Henderson said. “I’ve got staff up there from Game and Fish that’s looking out for our interests on our property on the public’s behalf.”
Henderson said the three or four Game and Fish employees in the area as well the new Department of Environmental Quality inspectors will be cross-trained under the agreement.
“Our folks will be trained on how to look for what Teresa’s inspectors look for, and her folks are going to get some training from us about things we’re watching for,” he said. “It will sort of double our eyes up there.”
Henderson, who announced on Thursday that he’ll step down from his post Sept. 1, said this is the first time the agencies have had such an agreement.
“We work with DEQ all the time but we’ve never partnered with them quite this way, by providing funds like this,” he said. “This will be our very first well to be drilled on our property, on public property, so we’re very concerned, and we want to do our best to make sure that it’s protected properly.”
Arkansas, Pages 11 on 06/26/2010