A series of bills that would affect the regulation of natural gas drilling and hydraulic fracturing (hydrofracking) operations in Arkansas failed to clear a hurdle in the state's House Committee on Agriculture, Forestry and Economic Development Thursday and appeared unlikely to move to the full House during the current legislative session.

HB 1394, which would mandate studies of all watersheds in the Fayetteville Shale and regulate water usage in the natural gas drilling industry, failed to receive enough votes to be passed out of the committee. The bill would require well operators to test "all fresh water supplies" within 2,500 feet of an oil or gas well if surface owners provide "credible evidence...of pollution of a fresh water supply" within that distance.

Following the vote, the bill's sponsor, Rep. Homer Lenderman (D-Brookland), referred the bill to interim study, a procedural move which allows legislators to confer with industry officials, the state's Department of Environmental Quality and Oil and Gas Commission before bringing the legislation back for another vote.

"We will work with all of those people together to hopefully come up with a good legislative document," Lenderman told NGI's Shale Daily Friday afternoon.

But because the Arkansas legislature meets only every other year and the 2011 legislative session is scheduled to adjourn April 1, the committee isn't likely to see HB 1394 again for two years, he said.

Four other bills targeting the natural gas industry for greater scrutiny of drilling operations, which were introduced by state Rep. Kathy Webb (D-Little Rock) last month (see Shale Daily, Feb. 17), were withdrawn by their author Wednesday before a committee vote and were also recommended for interim study. Those bills would create a program for the annual inspection of gas wells and more often during drilling and hydrofracking (HB 1392); require gas drilling operators to post bonds sufficient to cover the cost of gas well closure and site remediation (HB 1393); require drillers to monitor for air pollutants and to take measures to reduce air emissions (HB 1395); and require gas companies to reveal the volumes of water and hydrofracking fluids used in their operations (HB 1396).

The committee meeting Wednesday drew such a large crowd of both supporters and opponents of the bills that some observers were forced to wait outside the hearing room.

"We went in there very much with the premise that oil and gas wants to be a good neighbor, oil and gas wants to be environmentally friendly [and] we want oil and gas here," Lenderman said. "We want to keep them here, we want the jobs, but there may be some things that need to be considered."

It is unlikely that any significant legislation concerning the oil and gas industry will be passed by the Arkansas legislature this year, he said. HB 1399, which would limit noise in gas fields to "no more than 50 decibels at 250 feet," and HB 1400, which would create a "Landowners' Bill of Rights," requiring more disclosure of industry activities on private property, have yet to be voted on by the committee.

The Arkansas Public Policy Panel (APPP) recently issued a report urging state lawmakers to strengthen regulation of oil and gas development in the Fayetteville Shale and encouraged them to use moratoria as needed (see Shale Daily, March 18). The APPP released a separate report last month outlining what the panel believes are risks from shale gas development and making several recommendations to minimize them (see Shale Daily, Feb. 24).

Natural gas interests in Arkansas also are facing the prospect of higher severance taxes if a recently launched ballot initiative is successful and voters going to the polls think the industry should pay more in taxes (see Shale Daily, Feb. 11).