Arkansas – The Natural Energy State

You may have noticed lately that the state’s print and broadcast media have been crowded with ads encouraging you to support or oppose various energy issues and legislation, often in the name of cleaner and less expensive options. All along, we—in Arkansas—have had the answers under our very own feet.

If you live in southern, western or north central Arkansas, you know I’m referring to oil and natural gas. More importantly, no matter where you live in our state, you are a direct beneficiary of this vital economic sector.

The state’s oil and gas industry has a long and proven history in the Natural State, one that has recently become more prolific with the development of the Fayetteville Shale. The University of Arkansas’ Center for Business and Economic Research recently unveiled an analysis measuring (not projecting) the industry’s economic impact in our state (HYPERLINK “http://cber.uark.edu” \t “_blank”cber.uark.edu). Consider some of these key findings:

Almost one-third of the state’s counties have oil or natural gas production.

From 2004 to 2007, Arkansas’s per capita income increased 17%, while earnings in the oil and gas industry grew 92%.
In 2008, the average annual pay in Arkansas was $34,909, while the oil and gas industry’s annual payroll averaged $64,039.

From 2000 to July 2009, employment in the industry sector grew 78%—twice that of the second largest growth sector—while manufacturing declined 32%.

Collections for severance tax on natural gas in 2008 were $1.2 million and the first half of 2009 has generated $13.6 million. The vast majority of the severance tax on natural gas is distributed 70% to our state highways, 15% to our cities, and 15% to our counties.

From 2004 to 2008, overall taxable sales in Arkansas increased 5.3%; whereas, taxable sales increased 28.8% in the 10 oil-producing counties and 21.8% in the 13 gas-producing counties.

In 2008, on average, Arkansas produced more than $11 million of oil and natural gas each day.
Ranked 12th out of the 32 natural-gas-producing states and 17th out of 31 states in the production of crude oil, Arkansas is an energy state.

It has been estimated that the royalty income generated in the Fayetteville Shale alone last year equaled a payroll of 8,000 persons earning $17 per hour. That is significant and likely accounts in part for recent improvements in our state’s per-capita income ranking.

The producers, royalty owners and more than 500 establishments in Arkansas—who directly employ more than 9,000 persons—generate severance taxes, corporate and personal income taxes, sales taxes, fuel taxes, payroll taxes, and numerous other permits and fees. These taxes benefit every Arkansan by supporting education, providing health care services, paving roads and supporting public safety.

The oil and natural gas extracted from the ground right here at home in Arkansas is helping our nation move toward its goal of energy independence. And the more of it we use for transportation and electric power generation needs, the greater the benefits will be for every citizen of our state.

Ads can be persuasive, but be assured of the facts—Arkansas is blessed with the natural resources we need to fuel electric generation, transportation, industrial and residential needs. It is in everyone’s best interest to promote these resources over non-indigenous or foreign fuels. Increasing the domestic use of American oil and natural gas—harvested in Arkansas—benefits us all, right now. We can take pride that Arkansas is the Natural Energy State.

J. Kelly Robbins, Executive Vice President
Arkansas Independent Producers & Royalty Owners Association (AIPRO)
1401 West Capitol Avenue, Suite 440
Little Rock, AR 72201. HYPERLINK “mailto:krobbins@aipro.org” krobbins@aipro.org (501) 975-0565