LITTLE ROCK, Ark (KTHV) -- The over supply of natural gas and low usage rate could jeopardize it's future business boom in the natural state.
Lawrence Bengal with the Arkansas Oil and Gas Commission says last summer there were 70 to 80 wells being drilled per month in Arkansas. This year they're only drilling 40 to 50 per month.
How does this lack of activity and low profit effect the future of the natural gas industry here?
Too much of a good thing...SOME might say.
Randy Zook president of the State Chamber of Commerce says, "This industry could not have had its success in Arkansas at a better time for the state of Arkansas. It's put thousands of people to work. It's generated hundreds of millions of dollars of additional tax revenue."
Natural gas production in the past few years has created it's own growth problem. The boom produced a glut of natural gas and companies nationwide struggle to find room for it.
Zook says demand must catch up with supply.
"So we have to find additional uses for natural gas. And we're DOING that. We for instance are generating as much electricity using natural gas as we are for using coal. This is the first time in our history that this has occurred." says Zook.
As companies are faced with placement and profit--they must choose where to go; where the biggest opportunity is.
Kelly Robbins with Arkansas Independent Producers and Royalty Owners (AIPRO) says that Arkansas is NOT that place right now.
Robbins says, "Rigs that drill for natural gas can also drill for oil. We've seen the price of natural gas tumble by about 70+ percent in the last 3 to 4 years and with that--with less value-- you can imagine the equipment is going to go to places where they can get a commodity of a greater value...oil."
Zook says,"I think we're in the middle of a slow down period --certainly in Arkansas. We're down to 17 active drilling rigs operating in the state from a high point of about 58 drilling rigs just 3 or 4 years ago."
"There are just many other options and places for investors, for businesses, for producers and operators to spend limited capital and limited investment and we're not the only kid on the block any more." says Robbins.
THV confirmed through the Searcy Chamber of Commerce that Weatherford is pulling their operations out of Searcy this month.
Currently there are 3 CNG (compressed natural gas) stations in the state with 2 on the drawing boards according to RObbins.
AIPRO: Arkansas Independent Producers and Royalty Owners
Arkansas State Chamber of Commerce
Arkansas Oil and Gas Commission