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Arkansas Energy Forum Newsletter
November, 2012
In This Issue
Featured Article

 Judge Mike Lincoln
Mike Lincoln
White County Judge
"I saw that water was on the priority list of the natural gas industry... Once I saw that was of importance to them, we developed a 'trust relationship'."
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J. Kelly Robbins
Executive Vice President,
Arkansas Independent Producers & Royalty Owners Association
"Residents should certainly trust the Arkansas Oil and Gas Commission because they have done a wonderful job in making needed regulatory changes."

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A Ripple Effect - One County Judge's Work in Arkansas May Affect the Nation   

 By Susan Dumas and Kate Chagnon 


        White County Judge Mike Lincoln has gained a lot of experience as a negotiator over the years. And that experience is serving him, and the county's residents, well as he guides White County's involvement in the Fayetteville Shale Play.

        Judge Lincoln first came to the area when he attended Harding University, graduating with a degree in religion in 1975. He married a Searcy girl and earned a second degree, this one in education. Mike Lincoln taught elementary students for four years in Searcy before he served as principal for 13 years at Judsonia Elementary, slightly north of Searcy. Later Lincoln accepted a position he held for ten years as Executive Director of Camp Wildwood, a Christian camp in the area. He led the camp through what he calls "a renovation phase."

        It was in that time period that Hurricane Katrina hit the Gulf Coast and scattered evacuees throughout the south. Camp Wildwood housed 80 displaced individuals for 40 days. Judge Lincoln is proud to recall that these folks were one of the only groups of Katrina victims in Arkansas who were able to reside peacefully and without the need for law enforcement supervision. His skills as a negotiator were sharpened because of his experiences with the Katrina victims.

        Shortly thereafter, Judge Lincoln had the opportunity to put his leadership skills to work for the residents of White County when he won the election for White County Judge in 2007. By that time, he had already been a part of the leasing process with the natural gas industry, both on behalf of Camp Wildwood and for his own property. Like many property and business owners in the area, when he first heard about the industry's interest in leasing, he thought "Lord, let there be gas under our property." Judge Lincoln clearly recalls his excitement when seismic testing was being performed in his area and remembers his sense that something significant was about to happen for his county.

        When Judge Lincoln first campaigned, he could tell that voters were concerned about issues such as roads, the environment, and the area's water resources, as these issues relate to the natural gas industry's activity in Arkansas. He vowed to serve as a trustworthy liaison between the community and the companies working there. He developed a reputation for using common sense to work through controversial issues, such as one company's desire to retrieve water from the Little Red River. Many residents did not support this idea, but Judge Lincoln reasoned that if the water wasn't captured, it would run south and leave the area, while water underground would remain if it were left alone instead of drilled to provide for the industry's needs at that time.  

        Judge Lincoln doesn't take all the credit for handling water issues and other concerns of the county residents. He speaks highly of the natural gas industry, an industry that values available water resources and works to protect them. When asked if he met with difficulty in addressing water issues with the natural gas companies, Judge Lincoln reports, "It didn't get to that point, because I saw that water was on the priority list of the natural gas industry. They can't operate without water. They don't want to pollute water. They don't want runoff water. Once I saw that was of importance to them, we developed a 'trust relationship'... they are highly regulated, both [internally] and by federal and state government. Once I was secure that our water sources were not going to be eliminated or polluted, I felt much more comfortable, and our citizens did as well."     


 LINCOLN continued below 

AIPRO: Providing a United Voice for the Industry

By Susan Dumas and Kate Chagnon   


        Mr. Kelly Robbins, Executive Vice President of the Arkansas Independent Producers & Royalty Owners Association (AIPRO), has played a key role in providing members of the oil and natural gas industry in Arkansas with comprehensive resources and a united voice in the community. Robbins, a lifelong resident of Hot Springs, offers a valuable combination of experience and willingness to collaborate, which makes him an effective leader and aid to the industry's rapidly growing presence here in Arkansas.

        Robbins' professional experience includes time spent working on state congressional staffs, with the State Chamber of Commerce and with the Arkansas Forestry Association. After 10 years at the Arkansas Forestry Association, Robbins was selected, in 2008, to serve AIPRO as its executive vice president.

        AIPRO was founded in late 2007, when about 10 - 15 oil and natural gas producers united to form Arkansas's first professional association in this industry. AIPRO was modeled after the Texas Independent Producers & Royalty Owners Association (TIPRO). Once Robbins was selected to lead the organization, he was not shy about contacting similar associations in other states to educate himself and improve AIPRO. "I had no qualms about calling and introducing myself to my counterparts in Oklahoma, Arizona, Kansas, Texas or Louisiana, and I did so when we formed. We had the help of many years of experience of successful trade associations," reveals Robbins.

        Some of the first challenges Robbins faced in his position were making those in the oil and gas community aware of AIPRO's existence and growing the organization's membership base. AIPRO membership is divided into various categories including producers, suppliers/vendors, individuals and royalty members, and totals roughly 150 members with about 300 contacts. The supplier/vendor category is the largest group of members.

        Another challenge faced by AIPRO is raising awareness of the benefits of oil and gas exploration and development among Arkansas residents who are not directly involved with the industry and who live outside of the 25 counties in which production occurs. Although these residents may not receive 'mailbox money,' they do benefit from state revenue generated by various taxes, permits and fees paid by members of the oil and gas community-revenue that often flows right into public schools, roads, and other amenities. Plus, property values have been boosted statewide. In 2012, for the first time in US history, our country saw equal amounts of electricity produced by natural gas as by coal. Natural gas is so clean burning that emissions levels for the first quarter of 2012 are equal to levels seen in 1992. "That's without the government stepping in," adds Robbins.


AIPRO continued below
LincolnLINCOLN from above   

        The 'trust relationship' Judge Lincoln established with members of the natural gas industry extended beyond the realm of water and related concerns. Judge Lincoln worked diligently to build a working relationship with every company working in White County. He is pleased to say, "I can call someone on my cell, and they will answer, 'Hello, Judge.' They know it's me calling them. That's important to me."

        The strength of Judge Lincoln's working relationships with the industry has been proven in numerous instances. For example, he once hosted a visitor from up north who had concerns about the industry and wanted to see a drill site with his own eyes. Judge Lincoln was able to make three phone calls and, within minutes, had received directions to active drill sites for three different companies and open invitations to visit the sites. In another instance, a woman whose road had recently been affected by activity in her area called on a Saturday afternoon to say she was concerned she wouldn't be able to get to church in the morning. Judge Lincoln was able to call someone with the company working in the woman's area, and even though it was a Saturday afternoon, there was a crew repairing her road within an hour. The woman called to thank Judge Lincoln, who chalks the results up to the time spent cultivating these working relationships. "They don't happen overnight," he says.

        And Judge Lincoln isn't the only county judge in Arkansas who has worked to develop a strong relationship with the industry. The 'Fayetteville Shale Mafia,' as Judge Lincoln has jokingly dubbed the group, includes Conway County Judge Jimmy Hart, Cleburne County Judge Claude Dill (now retired), Faulkner County Judge Preston Scroggin, Van Buren County Judge Bogie (also retired) and Judge Lincoln himself. This group has actively sought to build strong relationships between their local communities, the 75-member Arkansas County Judges Association, and the natural gas industry. The 'Mafia' has addressed environmental issues and legislative issues, including a much-debated severance tax.

        Although the industry's activity in Arkansas has slowed down a bit from its initial pace, Judge Lincoln hopes for the sake of our country that we look to natural gas drilling as a matter of natural security. He feels that natural gas presents a viable, sustainable departure from foreign energy dependence, not to mention a source of jobs desperately needed during our current economic state. If we are able to find a balance, Judge Lincoln predicts that natural gas will set Arkansas apart as a national leader in offering this resource. He has encouraged state and national politicians to offer incentives and establish opportunities for companies and agencies to develop compressed natural gas infrastructure, and he says he will continue to push for this switch. Judge Lincoln's hard work, dedication and perseverance will no doubt benefit the people of Arkansas, and ultimately, the United States of America.


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 AIPRO AIPRO from above


        An additional benefit felt by Arkansas residents and businesses alike is a tremendous savings in utility costs experienced during the past few years. Studies show that in 2010, Arkansans saved over $600M in utility bills thanks to the low cost of natural gas, which was the lowest seen in decades, and electricity made cheaper by utilizing natural gas in its production. Then in 2011, a similar savings of about $505M was experienced. This means that over $1B in utility savings has been enjoyed by the people of Arkansas over the past 2 years because of natural gas. Breaking it down, in 2011, the average savings for a homeowner in Arkansas was $125 for the year.

        There are two state agencies in Arkansas with regulatory and enforcement authority over oil and natural gas production. Regulations put into place by these entities have the same effect on members of the industry as statutory law. "They're the law of the land," says Robbins. The Arkansas Oil and Gas Commission (AOGC), is responsible for regulating what's on pad sites and directly beneath the ground at those locations. Regulatory changes have responded to growth in this industry. AOGC Director Larry Bingle has held his position throughout the development of the Fayetteville Shale. The AOGC has established 107 new regulations and changes to existing regulations to respond to the need for ongoing oversight and governance of the industry. The Arkansas Department of Environmental Quality (ADEQ), is responsible for regulating everything off of a well site, including air quality, water leaving the pads, runoff, and other environmental concerns.

        Just like most Arkansans, Robbins admits that he did not have a background in oil and natural gas production, but he has been an eager student and is well equipped to lead AIPRO. He understands the concerns of some individuals related to the environment and the 'unknowns' of the production process. "Residents should certainly trust the Arkansas Oil and Gas Commission because they have done a wonderful job in making needed regulatory changes. They have led the country in creating disclosure requirements for fluids used in hydraulic fracturing that other states are now considering as well. The AOGC's commissioners are appointed by the governor, and they take their role and their responsibilities seriously, as they should. Arkansans should sleep better at night knowing these folks are doing their jobs."

        Even states with a longer history of oil and natural gas production than Arkansas does, such as Texas and Louisiana, look to our disclosure regulations as a model. Robbins goes on to say, "We did have growing pains, and I think AOGC and ADEQ responded to those growing pains to make sure that development occurs responsibly and safely. These industries are not fly-by-night folks. One company in particular has invested $8B since 2005 here in Arkansas. They don't come here and do that, then tarnish their own name so that they can't continue to operate here, to invest money here, and to try to get a return on that $8B investment."

        Recently, AIPRO collaborated with America's Natural Gas Alliance (ANGA), the American Petroleum Institute (API) and the Chamber of Commerce to create a resource book to help inform those who would like to learn more about the oil and natural gas industry in Arkansas. The reference book discusses who regulates the industry, provides updated statistics, and displays renderings which illustrate the construction of a well and other aspects of oil and gas production. This information has been available previously, but the guide brings it all together for the first time in one comprehensive resource that Robbins hopes new legislators in particular will find useful.

        Speaking of legislators, Robbins is present at the Capitol every day during legislative sessions to represent AIPRO, to answer any questions, and to serve as a watchdog for AIPRO's members. Robbins cautions, "If a state goes too far, you're going to run an industry to a place that has a more business-friendly climate. We want our members to continue to be here, to continue to produce, and to continue to send that 'mailbox money' to Arkansans to help with their retirement and with the college education of their kids, and to help keep people employed."


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