Page 41 - ATR 2 2012 web 2

shale,
Continued from page 26

vehicles because it burns clean and puts “this iNdustry has iNVested millioNs of
less wear and tear on an engine. dollars iN arkaNsas. they Need to kNow
General Motors produces two vans there’s Not goiNg to be coNstaNt chaNges iN
and is planning to produce two trucks
that run on CNG. The fuel is favored the regulatioNs. they Need to kNow there’s
by businesses and city governments that Not goiNg to be coNstaNt chaNges
operate fleets. iN the tax laws”
Navistar recently announced it will
produce a full line of full size Class 8
tractors beginning in 2012. (see related —kelly robbiNs,
profile article on Boone Pickens) executiVe Vice presideNt,
arkaNsas iNdepeNdeNt producers aNd royalty owNers
fUElINg STaTIoNS aNd TaxES
Two additional challenges are a lack
of fueling stations and pending propos- It is taxes, specifically a proposal the severance tax on natural gas, even
als to tax the fuel. Robbins said vehicles to raise the natural gas severance tax though it was dramatically increased
using CNG, for example, can’t travel too in Arkansas, that has been a tug-of-war in 2009,” Hanna said. “Because of
far from their refueling stations, and subject this year. depressed market prices since the new
while the businesses that use CNG are “That’s our single, No. 1 current tax structure was enacted, the severance
big enough to afford such specific tech- issue,” Robbins said. tax has not generated as much revenue
nology, the individual consumer can not. Former gas company executive as predicted.
While large volumes of natural gas Sheffield Nelson is gathering signatures “Does it make sense to increase
are produced at home, and used in the to put his proposal to raise the natural a tax on a commodity because prices
home, Robbins said, it will take some gas severance tax from 5 percent to 7 have fallen? A sustained drilling envi-
work before it can help ease motorists’ percent on the November general elec- ronment will certainly do more for the
financial pain. “We just don’t have that tion ballot. state than this ‘get-it-now’ attitude.
on every corner like we do regular gas “This industry has invested mil- There is one sure way to discourage
stations,” Robbins said. lions of dollars in Arkansas,” Robbins drilling activity: create economic disin-
Yet while the U.S. and other coun- said. “They need to know there’s not centives and increase regulation.”
tries grapple with ways to make new going to be constant changes in the Nelson has said removing exemp-
fuel sources accessible, the natural gas regulations. They need to know there’s tions to the 2008 increase, the first in
industry is providing jobs. not going to be constant changes in the more than 50 years, and raising the
AIPRO president Bill Hanna, presi- tax laws.” severance tax would generate the $250
dent of Hanna Oil and Gas Co. in Fort Nelson has until July 6 to gather million.
Smith, is serving as AIPRO president at least 62,507 signatures to qualify Opponents, including many vocal
and he underscored the employment the measure for the general election. royalty owners who rallied at the State
angle in his message to the group in its He has estimated that the severance Capitol last month, said the increase
2011 annual report. tax increase would generate about $250 would give Arkansas one of the highest
“Jobs are the key for a rebounding million annually, with the first $20 natural gas severance tax rates in the
economy and our oil and natural gas million going directly to cities for their country and make it hard to compete
community is doing its part to provide road needs. with surrounding states like Texas,
good, high-paying positions,” Hanna A previous tax hike was approved in which ranks first in the country in
said. “Today, oil and natural gas support 2008, and the shale industry, obviously, natural gas employment to the tune of
more than 30,000 Arkansans working opposes the proposed new increase. close to 1.3 million jobs or 12 percent
at an average annual salary of $64,000, Robbins noted there was an increase of of the state’s working men and women.
which is $30,000 higher than the state 4,000 percent in the first 36 months of “We would see a reduction in drill-
average. collection after the last tax hike. ing operations here,” Robbins said.
There are also more than 550 new “Now along comes a plan that “What’s most important right now is
industry-related businesses that have set would it increase it by another 400 or we would see a reduction in the number
up shop in Arkansas —all paying corpo- 500 percent,” Robbins said. of well paying jobs this industry sup-
rate, payroll and sales tax.” “There is an ongoing effort to raise ports.”

ArkAnSAS trucking report | issue 2 2012 41