The document discusses the oil and natural gas industry in Arkansas. It provides background on industry groups like Voice of Arkansas and AIPRO that were formed to build awareness of the industry. It outlines Arkansas' history as a natural gas and oil producer and describes the economic benefits the industry brings in terms of jobs, tax revenue, and lower energy costs for consumers and businesses. It also addresses environmental protections and regulations as well as emerging technologies that allow for cleaner production methods.

1. Living in a State of Energy

2. Formed by the Oil & Natural Gas community in 2007 Voice of Arkansas ’s Oil & Natural Gas community Seeks to build awareness of industry and its impact Serves as a resource for the industry Formed by the Oil & Natural Gas community in 2007 Voice of Arkansas ’s Oil & Natural Gas community Seeks to build awareness of industry and its impact Serves as a resource for the industry About AIPRO

3. 1889 - Natural gas first produced in Arkansas 1921 - Oil discovered in Union County Today - Arkansas ranks as the 7th leading natural gas producing state & 17th among oil producing states 25 Arkansas Counties - oil or natural gas production

4. Natural Gas Counties Oil Counties

7. Emerging technologies Economic expansion Environmental concerns Global unrest The Search for Alternative Energy: A Convergence of Challenges

8. Resource Nationalism OPEC 98 % 2 % Investor-owned Companies Government-owned Companies

9. Source: Energy Information Administration; BP; O&G Magazine In July 2011, we imported 351 million barrels at a value of $37 billion. If we could cut our oil imports in half by converting to domestic energy sources, we could pump $18.5 billion per month into the US economy.

11. The Case for Natural Gas Source: ANGA

12. Arkansas: Helping Address This Energy Challenge Our Natural Gas and Oil is Abundant and accessible 10,869 billion cubic feet of gas reserves 28 million barrels of oil reserves Clean burning Produced for America … by Arkansans

13. Cycle of Natural Gas Well Site selection and preparation Drilling the well Completing the well Production Site reclamation Avoiding impact to wetlands, sensitive habitat, significant archeological sites; Addressing/remediating any impact

14. Drilling Technology Vertical Horizontal

15. The Energy of Employment Greater access to more of the shale gas reservoir Higher volumes of natural gas and greater recovery Less environmental impact More aesthetically pleasing

16. The Energy of Employment Approximately 95,000 barrels of water are used to drill and fracture a well, equivalent to : Water consumed by a golf course in 22 days Water used on 6 acres of corn in a season Volume flowing past Little Rock in the AR River every 11 sec Water Usage

17. Recycling and Reuse of Materials Liquid by-products of natural gas drilling as drilling fuel Solids by-products as road base and in construction pads

18. The Energy of Employment Site Reclamation Restoration of easement and work space Repair damages, if any, due to construction Restore land to close-to-original, or improved condition

19. Environmental Protection Agency Bureau of Land Management Federal Energy Regulatory Commission U.S. Army Corps of Engineers U.S. Forest Service U.S. Fish & Wildlife Service Working with Federal Agencies Outreach to Decision Makers

20. Arkansas Department of Environmental Quality (ADEQ) Arkansas Natural Resources Commission (ANRC) Arkansas Oil and Gas Commission (AOGC) Working with State Regulatory Agencies

21. City officials County Quorum Courts Community leaders Working with Local Leadership

22. The Energy of Employment Working for Arkansas Working for Arkansas Estimated employment of over 12,000 total jobs supported by Fayetteville Shale production throughout the state; over 4,500 directly employed by natural gas companies Property assessments in the 25 oil and gas producing counties increased from $8.1 billion to $11.2 billion (20 03-09), an increase of 38.5 percent Natural Gas = Arkansas Jobs and Revenue

23. Better Jobs, Better Wages Average payroll 183% of state average (2004-2008) The average annual income in the Oil & Natural Gas community is $64,000…nearly $30,000 more than the state average.

24. 564 industry-related new businesses have set up shop in Arkansas since 2005. All paying corporate, payroll and sales taxes to the state.

25. Increase in Arkansas’ Tax Revenue $1.3 million in natural gas severance tax payments in 2008 $27.5 million in natural gas severance taxes paid in 2009 $54 million in natural gas severance tax payments in 2010 $15 million in oil severance tax payments in 2010

26. The Energy of Employment Mineral owners: bonus & royalty payments Surface owners: drill sites & easements Businesses: well services co ’s, suppliers, service industries Non-profit organizations: charitable giving Counties, cities, schools, hospital districts: ad valorem taxes Shareholders Who Else Shares in the Revenue?

27. Energizing Education

28. The Case for Natural Gas Approximate amount of natural gas we use in this country comes from right here in North America. Domestic Shale Gas Plays in North America Source: ANGA 98 %

29. The Case for Natural Gas Source: ANGA Abundant America has as much natural gas as Saudi Arabia has oil. 100 YEARS Enough for more than The U.S. has 2,552 Trillion cubic feet of natural gas

30. Nat Gas vs. Conventional Gasoline Source: CNG prices captured in March 2011 by CNGPrices.com Gas prices reflect city average on March 28 from GasBuddy.com On average, CNG costs 44% less than gasoline Seattle CNG - $1.75 Gas - $3.78 Salt Lake City CNG - $1.29 Gas - $3.43 San Francisco CNG - $2.39 Gas - $4.08 Los Angeles CNG - $2.15 Gas - $4.04 San Diego CNG - $2.80 Gas - $4.02 Dallas CNG - $2.29 Gas - $3.49 New York CNG - $2.63 Gas - $3.80 Ft. Lauderdale CNG - $1.99 Gas - $3.66 Atlanta CNG - $2.19 Gas - $3.47 Bismarck CNG - $1.95 Gas - $3.51 Detroit CNG - $2.00 Gas - $3.57 Wash., DC CNG - $2.40 Gas - $3.74 Denver CNG - $2.30 Gas - $3.37 Nashville CNG - $1.65 Gas - $3.46

31. The Energy of Employment Cleaner, more affordable energy for your home More Compressed Natural Gas vehicles Municipal transit systems, fleet vehicles, heavy duty trucks running more efficiently – with 23% lower greenhouse gas emissions than diesel What Will Increased Usage Mean For You?

32. The Impact of Natural Gas Abundance on Arkansas Consumers Utility Savings by Class in 2010 Residential Commercial Industrial Per customer $124 $1,682 $185,622 Percent 14% 28% 24% Study by Navigant Consulting, September 28, 2011

33. The Energy of Employment The Arkansas Energy Office (AEO) has applied for federal funds which would support the conversion to compressed natural gas (CNG) or liquefied natural gas (LNG) powered vehicle and also subsidize the building of fueling infrastructure. The program provides: $2 million fund for CNG vehicle conversion $400k for incentivizing fuel station construction Arkansas NGV Opportunity

34. The Energy of Employment Officially opened May 13, 2011, One of only four CNG fueling stations in the state One of two stations open to the public in Arkansas (joining Fort Smith) and the first in Central Arkansas Will help power SWN ’s own fleet as well as those from CenterPoint Energy and Conway Corp Conway Honda dealership will carry consumer CNG models of cars SWN ’s New CNG Station - Damascus, AR

35. Transforming the State

36. $370 $420 $360- 395 $320 $0 $0 $300. 00 $75 Competing Shale Plays Severance Tax Comparisons Revenue per $10,000 of taxable gas sales ($1,000 of taxable sales each year for 10 years, assumes $4.00/mcf gas) $617. 50

37. $370 $420 $805 $320 $0 $0 $300. 00 $75 If Arkansas Passes 7% Flat Severance Tax $617. 50

39. The Energy of Employment Let’s Keep Arkansas Open for Business: Vote “NO” on increasing taxes

40. 1401 W. Capitol Ave., Suite 440 Little Rock, AR 72201 Office (501)975-0565 measter@aipro.org