Arkansas Blog: That gas tax

I sometimes think only about six people -- outside of those directly affected -- care about the gas severance tax. But that's what blogs are about, in part -- personal obsessions. To me, the removal of a non-renewable natural resource without a payment to the state commensurate with that in other states has always been not only a shame but an enduring emblem of the sway that special interests have held over the legislature.

So I'm deeply interested in the developments since former gas executive Sheffield Nelson forced this back onto the public stage, after Gov. Mike Beebe gave it a good leaving-alone in the 2007 legislature. Yesterday, Beebe said he still thought a legislative solution possible. Legislative leaders were more skeptical. Beebe is probably the better judge. But it boils down to a deal the gas producers will accept. The special interests are still running the show. The question appears to be what type of deduction for drilling activities will be extended to producers. There's been talk that drilling the Fayetteville Shale is more expensive. Nelson has raised questions about that. The shale wells tend to be shallower and lower risk, he says. He doubts the argument about expense. Let's hope we have some believable exposition on this before Beebe gives away the ranch -- again -- to gas producers.

John Brummett is writing about money and political dimensions of the issue today, including a mention of a Conway man who's studied the tax issue and suggests the gas industry's statements about how overall tax burden after a big severance tax increase has been, surprise, exaggerated. Gas lobbyists try to emphasize selective facts to gain advantage? You might as well tell me a newspaper columnist would do that.

Roby Brock at Talk Business takes exception to the notion that a special session must be in March or never. It could follow the May primary, he notes. And he links to a previous article on what other states have done on exemptions, etc.

Comments

"pubic stage"--Max--hurry and fix this typo before DBI riffs off of it. Don't you hate it that the worst typos are never caught by spell check?

Posted by: FromThePines | February 28, 2008 07:31 AM

Could someone please explain why it is necessary for the guv'nor to "negotiate" with the gas companies? I don't see many wage earners or retirees being able to negotiate the amount of tax they pay. And, before I get another cup of coffee, anybody who tells you the gas companies will pack up and leave if we poor dumb arkies raise the severance tax to 15%, is operating on the theory that you ARE a poor dumb arkie. Wake up! Those bastards wouldn't leave the fayetteville shale teat if the sev-tax was 30%.(I met one of the "swells" of Chesapuke in OK city last summer--he couldn't have been happier to be in Arkansas--too much money to be made.) We gotta vote on this and let the guv'nor "negotiate" about something else.

Posted by: ozarkrazo | February 28, 2008 08:38 AM

What difference does it make, whether or not "drilling the Fayetteville shale is more expensive'"? More expensive than what? The point is that irreplaceable natural gas is where it is, and, if energy companies can make a profit by drilling for it, they will. If extracting it is not profitable, they will leave it -- and the citizens of Arkansas -- alone. But a fair tax at least the same as that of Oklahoma and other surrounding states should be simply a cost of extraction of the commodity, just like the cost of mineral rights paid to land owners. We the people should see to it that our elected officials stop thinking of themselves and their work (the government) as servants of any industry, obliged to see to it that they make a profit and, if they can make a profit, that they make more profit right up the limit of their hearts' desire!

Posted by: Snapback | February 28, 2008 08:44 AM

Max: If Beebe's ploy works and the Ledge actually DOES something, does that PRE-EMPT Nelson's initiated act? Can't we override them by popular vote IF it garners enough signatures? Please clarify...

ARK. BLOG: Yes, an initiative could override the legislature. But, realistically, a severance tax with proven revenue in the early years -- not wholly deferred by well cost recapture -- would take the steam out of an initiative campaign.

Posted by: Larry | February 28, 2008 10:22 AM

Max, maybe you could re-post this for the disinterested bunch who don't bother to scroll through to see what else has gone on during the day. . .or maybe you're right--there only six(or 4, counting you).

Posted by: ozarkrazo | February 28, 2008 05:53 PM

Arkansas Blog

That gas tax

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