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Chesapeake to lease state forest land for $30 million Tuesday, Jul 29, 2008 By Jason Wiest Arkansas News Bureau LITTLE ROCK - Drilling rigs will now have access to more than 10,000 acres of state forest land after the Arkansas Game and Fish Commission on Monday approved a five-year, $29.5 million lease with Chesapeake Energy Corp. Negotiations lasted more than a year, during which three other companies were vying to lease mineral rights for the land, including 3,949 acres at Gulf Mountain Wildlife Management Area in Van Buren County and 7,578 acres at Petit Jean River Wildlife Management Area in Yell County, commission chairman Freddie Black said. "Allowing exploration on our WMA's was not an easy decision," Black said a commission meeting, noting that hunters, fishermen, birdwatchers and outdoorsmen will be displaced at certain times, but not during the roughly three-month long hunting season when drilling will cease. "The decision becomes easy when we see the opportunity we have to reinvest this money for Arkansans," Black said. The money, including a 20 percent royalty on gas extracted, will be set aside for improvement and wildlife protection projects, though specifics weren't disclosed. Chesapeake's drilling practices are responsible, and the negative impact of drilling should be minimal, Black said. Gov. Mike Beebe, who addressed the commission prior to their decision, encouraged the commission to partner with the Arkansas Department of Environmental Quality and the Arkansas Oil and Gas Commission, perhaps in a way that would enable them to receive some of the lease and royalty revenue. "There will be a lot of people that benefit from this, but those two agencies with the additional workflow generated by the whole Fayetteville Shale play, are most deserving of your consideration," Beebe said. The agencies are charged with ensuring natural gas companies comply with state laws, inspecting their practices and preserving the state's resources. Afterwards, Beebe told reporters many potential environmental issues come into play whenever drilling takes place, and added he wasn't overly concerned about a negative impact. "No forest is pristine as it was before we got here," he said. Others were disappointed in the decision. "I can't see any good in this," said Andy Cheshier, chairman of Citizens Against Resource Exploitation. "I can almost guarantee they will hurt the water. There will be some type of contamination somewhere." Chesapeake spokesman Danny Games said the company pledged to protect the state's resources on the ground. "We already abide by every rule, regulation and permit and operate to the highest of standards," Games said. "We're not looking avert any of that, we just happen to be operating in an area that's to the greater public benefit, so we have to work around the public use of that land." Under a separate agreement, the company will not be allowed to operate in the Little Red River Basin, where the speckled pocketbook mussel, an endangered species, is known to exist. Chesapeake has signed an agreement not to drill in the area and will be restricted in ways they are allowed to cross the river, according to the Game and Fish Commission. The commission already leases mineral rights on other land to natural gas operators, and has more land that lies within the Fayetteville Shale play where mineral rights have not yet been leased, Black said. The nearly $30 million lease is the largest Chesapeake has signed in the state, Games said. |
