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Nelson proposes debates with natural gas firms on severance tax hike Friday, Feb 15, 2008 By Jason Wiest Arkansas News Bureau LITTLE ROCK - Former gas company executive Sheffield Nelson on Thursday challenged natural gas industry executives to debates on the ramifications of a proposed increase in the state severance tax on natural gas. The University of Central Arkansas President Lu Hardin agreed to host a debate at the Conway school at Nelson's request in the wake of comments by gas industry executives that a higher severance tax would mean fewer wells drilled and a ripple effect on local economies in the Fayetteville Shale play. The debates would be a way to "get the true facts out there before the people," Nelson said Thursday after a news conference announcing his plan to debate an executive from a different company at what he hopes will be a series of debates scheduled at college campuses in the Fayetteville Shale play area. Nelson said he hopes to begin with Harold Korrell, president and CEO of Southwestern Energy Co., the largest operator in the shale play. Korrell could not be reached for comment Thursday, and no other gas company executive has agreed to debate the issue with Nelson. SEECO Inc., the Fayetteville subsidiary of Southwestern, released a statement saying the companies and other natural gas producers "are working with the governor's office, state and local officials to develop a plan that does not unduly burden our industry and yet meets the stated objectives of leaders of the state." Arkansas' severance tax on natural gas is one of the lowest in the nation. At three-tenths of one cent per 1,000 cubic feet of natural gas, it netted less than $700,000 for the state last year. Nelson has proposed raising the tax to 7 percent of market value, which he says would raise between $60 million and $100 million in state revenues annually, which his proposal would divide among higher education, highways and city and county aid. This week, state Attorney General Dustin McDaniel approved the language of an initiated act Nelson has proposed for the November general election. The approval cleared the way for supporters of the measure to begin gathering the nearly 62,000 signatures necessary to get the proposal on the ballot. Nelson, a former chairman of Arkla Inc., said he is the best person to debate the gas company executives because his experience in the industry gives him an idea of how companies would react to an increased severance tax. "If they want to vacate in some orderly fashion, there are other companies that would love to come in and take over where they've got gas-producing properties," Nelson said. He said the debates would raise awareness of the issue and get Arkansans interested in seeing that something happens on the severance tax, one way or another. Gov. Mike Beebe also favors increasing the state severance tax but wants all of the additional revenue earmarked for highway improvements. The governor has pushed the gas industry to come to terms with the Legislature on a proposal but also has acknowledged the difficulty in gaining the three-fourths majority in the House and Senate to raise the severance tax. Beebe is scheduled to meet with some legislators today to discuss a variety of topics, which likely will include the severance tax, Beebe spokesman Matt DeCample said Thursday. The governor has not ruled out the possibility of a special session this spring to consider a tax increase and also has said he might push his own initiated act for the November ballot. |
