Bad gas | Arkansas Blog

Thursday, March 1, 2007

Bad gas

Posted By on Thu, Mar 1, 2007 at 9:29 AM

The conservation community is buzzing louder still about legislation expected from Sen. Bob Johnson, 2005's would-be despoiler of Lake Maumelle, who's now carrying water, so to speak, for Chesapeake, the energy company hoping to pull billions in gas out of the Fayetteville shale and leave neither severance tax money nor enlightened land protection policies behind.

We've mentioned this corporate anti-lawsuit bill previously. It's an end-of-the-session special, but hallway buzz is that there has been a rift among some potential legislative sponsors and that Stephens exploration interests might even be having cold feet about climbing on board. Stephens' conventional gas production poses less risk to the environment than shale exploration and, last we heard, existing law hasn't prevented Stephens from making a decent profit in Arkansas under existing laws to protect the land..

Here's one analysis of what Johnson's expected bill would do:

  • Restricting compensation for landowners who are damaged by oil and gas companies to compensation for the value of their land only -- not for legal fees, lost production value, nor any punitive damages if the oil or gas producer was just flagrantly negligent.
  • The value of your land will not be set by you or a judge, but by binding arbitration.  Worse yet, it's called baseball arbitration where the arbiter can choose either the landowner's assessment, or the companies assessment, but can not make any compromise. 
  • If a landowner sues the company because of arbitration award is too small, it will not be heard in a normal court but in a type of court much less friendly to landowners, and that the loser will have to pay legal fees for both sides.

This is based on a draft of the bill, which hasn't been filed and could well be changed. When filed, it will be described as a land protection measure. Cue laugh track.

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