Frackademia? Does Industry Have a Role to Play in University Studies of Hydraulic Fracturing?

The University of Texas (“UT”) Energy Institute (“Energy Institute”) released a report in February 2012 purporting to have found no definitive link between hydraulic fracturing (“fracking”) and groundwater contamination.[1]  Instead, the report blamed supposed instances of contamination on faulty well construction or potential surface spills of wastewater produced during shale gas drilling.[2]  Such a report from a research institute at a major university garnered significant attention as industry groups seized upon this supposed good news.[3] 

However, in July 2012, an organization known as the Public Accountability Initiative (“PAI”) released a report criticizing the study by the Energy Institute.[4]  PAI raised a number of concerns with the Energy Institute’s report including supposed specious claims of peer-review, errors in the final draft including missing citations, and potential conflicts of interests.[5]  The conflicts of interest applied both to the Energy Institute and the individual investigators who worked on the study.  According to PAI, the Energy Institute’s ties to the oil and gas industry included donations to the university from corporations including ConocoPhillips, and the Energy Institute’s advisory board members having ties to other oil and gas companies.[6]  According to the Energy Institute’s website, members of the Advisory Council currently have or at one time had ties to companies including Royal Dutch Shell, ConocoPhillips, and XTO Energy.[7]   

However, the most damning charges by PAI were focused on the study’s lead investigator, UT professor Chip Groat.  According to PAI, Groat, a former director of the U.S. Geological Survey, failed to disclose his ties to the oil and gas industry which included serving as a director for Plains Exploration & Production Company (“PXP”).[8]  Groat failed to disclose this association either through ethics reporting to UT or a specific disclosure statement attached to the report.[9]  PAI argued that the failure to disclose this information compromised the objectivity of the study and ruined any potential for the study to be taken seriously.[10] 

In response to the allegations, UT formed a three-person panel to review the Energy Institute’s study and the allegations against Prof. Groat.[11]  However, as soon as the panel was selected, Kevin Connor of PAI raised questions about the panel’s chair Norman Augustine.[12]  The selection of Augustine, a former chairman and CEO of Lockheed Martin as well as appointee to multiple government scientific and technical advisory panels formed by Presidents Clinton, George W. Bush, and Obama, was questioned because he had served as a director for ConocoPhillips.[13]  Augustine served as a director for ConocoPhillips from 1989 to 2008, and he continued to receive payments from the company through a deferred compensation program for retired board members.[14]  To Connor, this did not pass the “smell test.”[15]  However, UT stood its ground saying that Augustine’s past ties to industry paled in comparison to his credentials and reputation from his work on the government advisory panels. 

“I have a hard time imagining that anyone would question the impeccable credentials of Norman Augustine,” UT Provost Steven Leslie said in response to the questions raised by PAI.  “He is the perfect man.”[16]  

Ultimately, the panel, headed by Augustine (“Augustine Panel”), released a scathing report[17] that criticized the Energy Institute for the shortcomings in the fracking report.[18]  As a result, the Energy Institute has ceased to promote the report and has removed it from its website.[19]  Embattled professor Chip Groat resigned in November, and Energy Institute Director Raymond Orbach resigned following the release of the panel’s report.[20]  UT has announced that it will embrace all of the recommendations from the Augustine Panel.[21]  In a twist of irony, PAI’s Kevin Connor praised the Augustine Panel’s report saying that it “sets a strong example for other universities and sends a strong message to the oil and gas industry that this kind of sham research won’t be tolerated or supported by universities.”[22]

Going forward, the question remains: can industry play a role in scientific studies on fracking? 

Perhaps the best way to answer this question comes from looking at what the Augustine Panel found.  The panel’s criticism of the original report was based primarily on Groat’s conflict of interest which the panel felt “could have a bearing on the credibility a reader wished to assign to the resulting work.”[23]  While the report did criticize other aspects of the development of the report,[24] the primary issue was the personal conflict of interest of Groat.  The Augustine Panel did not find any evidence of “intentional misrepresentation” but rather found “very poor judgment coupled with inattentiveness to the challenges of conducting research in an environment inevitably fraught with conflict of interest concerns.”[25]  In the eyes of the panel, the main problem was not Groat’s relationship with PXP but his failure to adequately disclose this information so that anyone reading the study would have all of the facts available to them. 

By focusing on Groat’s conflict of interest, the Augustine Panel directly contradicted PAI’s additional attack on the Advisory Council.  Rather than find an automatic conflict of interest for any potential industry influence, the report focused on the reality that universities and government can benefit from having industry contribute to their studies.[26]  The panel concluded that there was nothing wrong with universities accepting industry support, either financial or from expertise, as long as the appropriate safeguards were available.[27]  According to the panel,

“Indeed, it would be impracticable, and likely inappropriate, to seek to eliminate all ties    that help assure the relevance of university research to the world of practice, particularly            in the field of engineering which by design straddles these two endeavors.  The essential    obligation of a researcher and a sponsoring institution thus becomes one of disclosing             such connections, thereby enabling the reader or listener to weigh that circumstance             along with the merits of the reported result of the research.”[28]

When considering the potential role for industry in scientific studies conducted by universities or government agencies, the Augustine Panel’s admonition for transparency seems to be an important middle ground between the complete exclusion PAI seemed to support and research done with obvious but undisclosed conflicts of interest. 

 
 
— Caleb Osborne, Articles Editor


[1] The original version of this report has been removed from UT Energy Institute’s website as discussed below. See Norman Augustine, Rita R. Colwell, and James J. Duderstadt, A Review of the Processes of Preparation and Distribution of the Report “Fact-based Regulation for Environmental Protection in Shale Gas Development,” November 30, 2012, energy.utexas.edu/images/stories/review_panel_final%20_report12-12.pdf. 

[2] See Jack Z. Smith, UT Study Finds No Direct Link Between Fracking and Groundwater Contamination, Fort Worth Star-Telegram, Feb. 17, 2012, http://www.star-telegram.com/2012/02/16/3741872/ut-study-finds-no-direct-link.html

[3] See e.g., Mike Norman, UT ‘Fracking’ Study Dispels One Drilling Worry, Raises Others, Fort Worth Star-Telegram, Feb. 23, 2012, http://www.star-telegram.com/2012/02/23/3758663/ut-fracking-study-dispels-one.html

[4] Public Accountability Initiative, Contaminated Inquiry: How a University of Texas Fracking Study Led by a Gas Industry Insider Spun the Facts and Misled the Public, Public Accountability Initiative, http://public-accountability.org/2012/07/contaminated-inquiry/

[5] In a twist of irony, PAI’s report itself contained errors, including citations to the “Dallas Star-Telegram.”  Unfortunately, this appeared to be a failed attempt to reference the Fort Worth Star-Telegram, the venerable newspaper for Dallas’ neighbor to the west.  As anyone from the Dallas-Fort Worth Metroplex would be quick to point out, Dallas and Fort Worth are two very different places. Id. at 1-3.

[6] Id. at 18-21.

[7] It is worth noting that Fred Krupp, president of the Environmental Defense Fund, also serves on the Advisory Council.  See also Advisory Council, University of Texas Energy Institute, http://www.energy.utexas.edu/index.php?option=com_content&view=article&id=96&Itemid=166.

[8] See PAI, supra note 4, at 13-14.

[9] Although Groat as a University of Texas employee is required to disclose financial conflict, university records indicate that Groat had not disclosed his ties to Plains in the two most recent filings.  See Terrence Henry, Texas Professor on the Defensive Over Fracking Money, State Impact Texas, http://stateimpact.npr.org/texas/2012/07/24/texas-professor-on-the-defensive-over-fracking-money/

[10] PAI, supra note 4, at 13-14.

[11] Asher Price, UT Announces Panel That Will Look Into Fracking Study, Austin American Statesman, http://www.statesman.com/news/news/local/ut-announces-panel-that-will-look-into-fracking–1/nRNTy/

[12] Id.

[13] Id.

[14] Vicki Vaughan, Fracking Watchdog Is Linked to Oil Industry, San Antonio Express-News, http://www.mysanantonio.com/news/local_news/article/Fracking-watchdog-is-linked-to-oil-industry-3794547.php.

[15] Id.

[16] See id.

[17] See Augustine, supra note 1.

[18] Terrence Henry, Review of UT Fracking Study Finds Failure to Disclose Conflict of Interest, State Impact Texas, http://stateimpact.npr.org/texas/2012/12/06/review-of-ut-fracking-study-finds-failure-to-disclose-conflict-of-interest/.

[19] Jim Efstathiou Jr. and Mark Drajem, Texas Energy Institute Head Quits Amid Fracking Study Conflicts, Bloomberg, http://www.bloomberg.com/news/print/2012-12-06/texas-energy-institute-head-quits-amid-fracking-study-conflicts.html

[20] Groat retired from UT and has accepted a position as director of the Water Institute of the Gulf.  See id.

[21] UT has announced that Orbach will remain in his position as a tenured faculty member and that his resignation only applied to his work with the Energy Institute. Id.

[22] See Henry, supra note 18.

[23] Augustine Report, supra note 1, at 9.  Ironically, the Augustine Panel went on to conclude that Groat’s failure to disclose likely did not violate the conflict of interest rules in place at the time.  However, based on the recommendations of the panel, UT’s rules have been revised.  See id. at 9-10.

[24] The Augustine Panel criticized Groat and others for failing to adequately represent the tentative nature of the report in the press releases, announcements, and other presentations that accompanied and followed the fracking study. See id. at 10-11.

[25] Id. at 9.

[26] Id. at 10.

[27] Id.

[28] Id. at 9-10. 

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