The (Shale) play’s the thing 

Money, royalty battles, tax fights, environmental concerns thicken the plot.

BEE BRANCH HIGH RISE:  A drilling operation off Highway 65.
  • BEE BRANCH HIGH RISE: A drilling operation off Highway 65.

Dickie Rambo's story has a typical hardscrabble Arkansas plot. Born and bred in Judsonia, in White County, Rambo now lives seven miles outside of Searcy in a township so small that he doesn't even know what it's called. He drove a truck for most of his life; at the end of his career, he was earning about $11 an hour before he was diagnosed with prostate cancer and retired on disability. Over the course of 30 years, he slowly added to his land holdings — 40 acres in 1979, another 130 in 1994 — so he would have enough space to graze cattle. “I've never made big money,” Rambo said. “Me and my wife just pinched pennies.”

In 2005 all that changed, and rapidly. Rambo never thought he was buying anything more than cheap swaths of lawn. But he was also buying the minerals under them. They were worthless at the time, but that was before energy companies determined there was profit to be made by drilling in the Fayetteville Shale, a natural-gas holding rock formation that has Pope, Conway, Van Buren, Faulkner, Cleburne and White Counties at its heart.

Rambo signed a lease with Chesapeake Energy, the second-largest operator in the shale (Southwestern Energy is the largest), and now his land brings in thousands of dollars a month. His windfall for February was $5,000, and that number will increase as even more wells are dug on his 200 acres. He bought a new camper and a new tractor. Things are good.

Profitable as it has been, though, the drilling has also caused Rambo headaches. It cut into his cattle operations — he had to lease an additional 240 acres for grazing in order to avoid cutting his stock. There is noise, and gas operations spill beyond original expectations. “When they tell you that they're gonna take two or three acres, they end up taking a lot more than that, because it takes roads and stuff to get into your property,” said Rambo. “If you was sittin' over here and you wasn't drawing a penny off of it, it probably would be irritating to some people.”

So by and large, Rambo is pleased with the development — it's making him a wealthier man, after all — but there's more to his situation than a fat royalty check every month.

Rambo's story speaks to the complexity of the shale play, which has introduced a great deal that's foreign to the middle of the state. Activity by the land men and gas companies — more than 550 wells have been drilled over two and a half years — mean an uncertain future for some sleepy towns. To be sure, there has been an influx of capital into many towns that never had much going for them. A gas-company sponsored study released on March 13 predicts that the economic impact of the drilling will amount to $17.9 billion.

With the sheer speed of development and the dazzling numbers, focus has tended to stray from the potential costs of the drilling. There is increased chatter about what Arkansas and its people may be giving up in the bargain. Some express concern about the toll the drilling is taking on the environment. Some feel jilted by mineral rights laws that have left them out of a rush for land leases and royalties. Some are concerned that roads are deteriorating and not being cared for properly. And all the while a debate rages about raising a natural gas severance tax, which, depending on one's view, would either give greater economic stimulus to the state or drive gas companies — along with their money — out of Arkansas. Governor Mike Beebe has called a special legislative session, set to begin Monday, to consider a proposal to raise the tax.



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