LITTLE ROCK — Opponents of raising the severance gas tax rate are spouting “claptrap” and trying to mislead the public, the major proponent of a proposed initiated act to raise the tax said Wednesday.
Former gas company executive and two-time Republican candidate for governor Sheffield Nelson told members of the Political Animals Club of Little Rock that the state Chamber of Commerce and gas companies are exaggerating the effect of the increase on royalty owners and people employed by the companies.
“They are giving you wrong figures. ... It’s just part of the game of confusing the people. They don’t mind lying,” he said. “They are taking our natural gas for a pittance.”
Several of the groups opposed to the tax rate increase have accused Nelson of spreading misinformation about the tax.
“We’ve run a very fact-based campaign and all the information we refer to is sourced and the proponents of the measure make claims that are not backed up by any evidence,” said Lucas Hargraves, campaign manager for the coalition Arkansans for Jobs and Affordable Energy, which opposes the rate increase. Hargraves is with The Markham Group, a Little Rock consulting firm.
Nelson’s initiated act, which could appear on the ballot in November, would raise the severance tax rate to 7 percent on the market price of natural gas when it is removed from the ground. The rate now ranges from 1.25 percent to 5 percent. The same rate would apply to every well, and there would be no exemptions for transportation and treatment costs.
He said unemployment in counties where most of the drilling has taken place has increased since 2006, when extracting gas from the Fayetteville Shale took off. He said the 8,000 jobs touted by opponents have gone to people who come from Texas and Oklahoma who travel to Arkansas just to workon rigs.
“Where are all the jobs? I’m telling you the jobs are not there in the sense of Arkansans holding them,” he said. “The real high-paying good jobs are here today and gone tomorrow because they go where the drilling rigs go, and they are going to leave when the natural gas runs out.”
Hargraves called the accusation “absolutely false.”
He said the more than 8,000 jobs is the number that could be lost if the rate is increased. He cited as his source a study paid for by the Conway Chamber of Commerce and conducted by Waco, Texas-based research firm The Perryman Group.
“The natural gas community is employing thousands of Arkansans who have been here for many years,” Hargraves said. “Unfortunately the proponents have tried to distract folks from what this campaign is really about, which is jobs. It’s not about Mr. Nelson.”
Nelson said royalty owners would see their profits decrease by a few cents if the increase were to pass. He said the cost of the rate increase would be passed on to consumers in other states who use the gas.
He said those opposing the tax have spent more than $1 million to persuade people not to sign his petition, and he called that a good sign that the industry is scared that the increase would be approved if it got on the ballot.
“Where there is money there is probably a little more to the story than what they are telling,” he said. “There is a lot more to this story, and they are simply spending a million dollars to try to keep the people of Arkansas from getting to vote on it. I have no reason to lie to you.”
Hargraves said the coalition has spent money encouraging people not to sign the petition because of the jobs that it says are at stake.
“We’re going to work hard to make sure people understand how harmful this would be for Arkansas and for jobs,” he said.
Arkansas, Pages 13 on 05/31/2012