UNDATED (KTHV) -- A proposed change to the state's severance tax -- one of the natural gas producers say it could cost jobs and tax dollars.
Arkansas has two different areas where natural gas is drilled in the Haynesville shale in the southern part of the state and the Fayetteville shale in the north.
Gas companies say those landscapes could drastically change if that measure passes. Energy companies say if that happens the natural gas companies drilling these landscapes could disappear.
The Natural Gas Severance Tax Act of 2012 proposes the severance tax on natural gas extracted from within the State of Arkansas to 7 percent of the market of the gas at the time it is extracted from the ground.
It also eliminates various severance tax rates from 1.25 percent to 5 percent, replacing them with the 7 percent rate.
"It's strictly to generate revenue and it will generate revenues to correct the problem they are creating," Nelson said.
"An increase in the severance tax particularly a substantial increase that we've heard about would certainly make producers and operators look at other places," Kelly Robbins from the Arkansas Independent Producers & Royalty Owners say this could mean a loss of jobs and money for the state.
"It's important that our policy and decision makers as well as the public understand that there is a fierce competion for drilling assets for dollars to be used to produce this very valuable resource," Robbins added.
Nelson says this increase will just raise Arkansas to the same level of Nieghboring states' severance tax rate.
"7-percent on $5 gas is only 35 cents. Their complaining as though it's a tremendous expense when in fact it's one of the least expenses they have," Nelson said.
"Doesn't seem fair, doesn't seem equitable, doesn't make common sense if you ask me," Robbins said. "When you have a commodity that it's prices are depressing to go out and do a significant increase in taxing that commodity."