Arkansas’ energy industry moves beyond shale and looks renewable energy sources
Ten years ago, a major energy boom began in Arkansas.
That’s when companies began heavily investing in the Fayetteville Shale, which up until 2002 had gone quietly unnoticed as a potential energy source. The shale is described by experts as an unconventional natural gas reservoir on the Arkansas side of the Arkoma Basin and includes many counties in central and eastern Arkansas.
Once the secret was out about the shale gas, the area became a playground for companies seeking new natural gas supplies in the United States.
While corporations and landowners made big money in a short amount of time, environmentalists protested fracking, or hydraulic fracturing, and what was happening to the environment in the Fayetteville Shale. Some historians compared the prosperous time to the 1920s when El Dorado suddenly became the heart of oil production. But by the end of the decade, production slowed.
Now, however, just like in the 1920s, a shift is occurring in the Natural State’s energy sector. As oil and gas prices decline, the shale region faces a downturn.
Earlier this year, Houston-based Southwestern Energy Corp., which has invested more than $10 billion to become the top producer in the Fayetteville Shale, announced it had found a buyer for its conventional oil and gas assets located in East Texas and the Arkoma Basin for nearly $218 million to reduce debt.
Still, the oil and natural gas industry supports 5.9 percent of the state’s total employment with about 92,500 jobs, according to EnergyFromShale.org. However, environmentalists say that number is declining and very little active drilling and fracking occurs at the nearly 5,500 sites across the state.
Lashun Thomas, assistant professor at the University of Arkansas at Little Rock’s Department of Construction Management and Civil and Construction Engineering, said it’s time for the industry to explore new ways to extract gas from the shale if it wants to continue.
“This technology [fracking] brings tremendous benefits to people in many states, including Arkansas,” Thomas said. “However, one of the main concerns of state residents has been pollution, especially the potential for water contamination, a current and particular concern to residents living in regions of the Fayetteville Shale in Arkansas. Now, there is an important need for the development of improved fracturing fluids and methods to achieve better fracturing efficiency as well as minimize potential environmental impact.”
New and improved methods are the message across the energy sector in Arkansas as the state attempts to lure more industry with high-paying jobs. While shale drilling may be slowing, it doesn’t mean the end of the boom in the state. Far from it, in fact. Throughout Arkansas, various energy projects are generating millions of dollars for local and state economies as well as creating thousands of jobs.
Earlier this year, Midcontinent Independent System Operator—or MISO, as it is known—opened a $22 million, state-of-the-art command center in west Little Rock. MISO, which is based in Carmel, Indiana, manages one of the world’s largest energy markets, with more than $37 billion in annual gross market energy transactions. The operation center will control part of a 15-state region stretching from the Gulf of Mexico to Manitoba, Canada.
“We hope to use our presence here not only as a resource to the greater Little Rock community, but as a magnet for other energy-sector firms,” John R. Bear, president and CEO of MISO, said at the time of the opening. “Little Rock can become a major center for science, engineering and technology jobs which will mean a bright future for the city and enhance Little Rock’s reputation as an energy capital.”
MISO decided to locate its center in Little Rock after Entergy Arkansas joined its system, having previously worked with Southwest Power Pool. It will handle electricity distribution to Entergy not just in Arkansas, but also in Texas, Mississippi and Louisiana. Since the 1950s, Entergy handled the electrical grid in those states but regulators recently pressured Entergy to abandon grid management and focus on power generation. Environmentalists have said that with MISO in the picture they hope that clean energy can reach this region—the last frontier in the country to embrace wind and solar power.
With the expansion of the energy sector in Arkansas, a demand for more 21st century technology is emerging, as are valuable jobs in the state.
According to the Arkansas Advanced Energy Foundation, which “promotes greater understanding of advanced energy throughout the state,” showed that more than 770 advanced energy companies are doing business in Arkansas, with annual sales of more than $1.7 billion and employment of more than 16,000 Arkansans. Another 9,300 advanced energy jobs in related industries account for $1.1 billion in sales, which brings the total impact of advanced energy on the Arkansas economy to 25,300 workers and $2.8 billion in output.
Steve Patterson, executive director of the Arkansas Advanced Energy Association, said a recent AAEA poll showed that more than two-thirds of Arkansans prefer renewable energy and energy efficiency over traditional fossil fuel resources. And, he says experts agree.
“There is clear evidence that advanced energy technologies like solar power, energy efficiency and alternative fuels are producing jobs and energy savings in Arkansas,” Patterson said. “With the cost of both solar and wind power continuing to decline, renewable energy is becoming more feasible for consumers who wish to generate their own energy. And we know that energy efficiency is the lowest cost resource. AAEA will continue to promote policies that give Arkansas consumers more energy choices while ensuring that these policies don’t place an unnecessary burden on traditional utility companies.”
In March, Wal-Mart signed a power purchase agreement with Akuo Energy in Chicago for 50 megawatts of capacity from Rocksprings Wind Farm, which will be completed in 2016 near Del Rio, Texas. That action is part of the retail giant’s goal to source 100 percent of its power from renewable energy sources by 2020.
“As Wal-Mart grows around the world, our energy demands will increase—even with dramatic efficiency efforts. Thus, we need to accelerate our efforts to make sure we are serving customers more efficiently and sustainably than anyone else,” the company stated in its corporate report on renewable energy. “Wal-Mart’s Vision 2020 energy goals will further uncouple our growth from our GHG [greenhouse gas] emissions. In fact, we forecast for the first time that the greenhouse gas emissions from our buildings’ energy use will decrease by 2020.”
Although not connected to Wal-Mart, a proposed 80-megawatt wind farm on about 311 acres in unincorporated Washington County, about a mile west of Elm Springs in northwest Arkansas, could become the state’s first large wind-energy project. Dragonfly Industries International, based in Frisco, Texas, estimates the project could cost $100 million. However, resistance exists—and continues to build—among opponents who think the project would be unsafe for the area.
Therein lies an ongoing problem in the state, says Emily Lane, a long-time environmental activist who is working on her doctorate in interdisciplinary leadership studies. She said a shift in mindset will push Arkansas further into the 21st century energy sectors.
“I would say that our state is still foolishly clinging on coal, oil, and natural gas—all nonrenewable and polluting sources of energy,” she said. “We will see what happens in the next legislative session, but in the near term, we will continue to make foolish investments in and arguments for fossil fuels and continue to ignore initiatives to improve energy efficiency and invest in renewable energy.
“Arkansas has six times the roof space needed to power the whole state with solar. We have so much potential to create jobs in the clean energy sector and create sustainable energy, but it’s not on the radar of most of our decision makers right now.”
featured image from UALR Public Radio