Frackers follow tobacco's lead in funding research
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Pennsylvania remains the largest state without a tax on natural gas production, thanks in part to a study released under the banner of Penn State University.
The 2009 report predicted drillers would shun Pennsylvania if new taxes were imposed, and lawmakers cited it the following year when they rejected a 5 percent tax proposed by then-Gov. Ed Rendell.
"As an advocacy tool, it worked," Michael Wood, research director with the nonprofit Pennsylvania Budget and Policy Center in Harrisburg, said in an interview. "If people wanted to find a reason to vote against having the industry taxed in that way, that gave them reason to do it."
What the study didn't do was note that it was sponsored by gas drillers and led by an economist, now at the University of Wyoming, with a history of producing industry-friendly research on economic and energy issues. The researcher, Tim Considine, said his analysis was sound and not biased by industry funding.
As the United States enjoys a natural-gas boom from a process called hydraulic fracturing, or fracking, producers are taking a page from the tobacco industry playbook: funding research at established universities that arrives at conclusions that counter concerns raised by critics.
Cary Nelson, president of the American Association of University Professors, who made the tobacco analogy, said companies and their trade associations are "buying the prestige" of universities that are sometimes not transparent about funding nor vigilant enough to prevent financial interests from shaping research findings.
The Penn State report is not the only example.
A professor at the University of Texas at Austin led a February study that found no evidence of groundwater contamination from fracking. He did not reveal that he is a member of the board of a gas producer. Company filings examined by Bloomberg indicate that in 2011, he received more than $400,000 in compensation from the company, which has fracking operations in Texas.
A May report on shale gas from the State University of New York at Buffalo contained errors and did not acknowledge "extensive ties" by its authors to the gas industry, according to a watchdog group. One of the authors was Mr. Considine, the same economist who wrote the Penn State study.
"It's a growing problem across academia," Mark Partridge, a professor of rural-urban policy at Ohio State University, said. "Universities are so short of money, professors are under a lot of pressure to raise research funding in any manner possible."
In 2008, private sources provided about 6 percent of all academic research funding, according to a June report from the Washington-based AAUP. The figure excludes gifts, endowments for new faculty appointments, consulting or speaking fees, honoraria, seats on company boards, commercial licensing revenue, or equity in startups.
Controversy has followed when research too closely supports a corporate agenda. Litigation against tobacco companies helped reveal a decades-long effort that relied on academic research to suppress the dangers of smoking. Today, schools of public health at Columbia University, Harvard, Johns Hopkins and others ban tobacco funding, according to the association's report.
More recently, the 2010 documentary film "Inside Job," reported that the financial-services industry paid university economists to testify in Congress and in antitrust cases, serve on boards of directors, and give speeches to the companies and industries they study, without disclosing the inherent conflicts of interest.
As questions have arisen about the environmental and economic implications of fracking, the same pattern is appearing.
Fracking, in which millions of gallons of chemically treated water and sand are forced underground to break shale rock and free trapped gas, has lowered energy prices, created jobs, and enhanced national security, according to a task force formed by President Barack Obama's Energy Secretary Steven Chu. It is displacing coal, lowering U.S. output of pollution blamed for global warming.
Critics say the benefits may not outweigh the environmental and health risks. Fracking has been linked to groundwater contamination in Pennsylvania, high ozone levels in Wyoming and to headaches, sore throats and difficulty breathing for people living close to wells in Colorado. Burying wastewater from drilling has been linked to earthquakes in Ohio, Arkansas and other states.
Some of the controversies on fracking research center on the Marcellus Shale, a gas-rich geological formation that stretches from New York to Tennessee.
In 2009, with drilling interest on the rise in Pennsylvania's share of the Marcellus, Mr. Rendell proposed a severance tax similar to one in West Virginia -- a 5 percent levy on the value of gas produced plus 4.7 cents for every 1,000 cubic feet. The tax would have generated about $100 million in its first year. Opponents cited the Penn State study, which found that drilling would decline by more than 30 percent under the tax. Mr. Considine, a former professor of energy and environmental economics at Penn State's College of Earth and Mineral Sciences, was the lead author.
"The high level of drilling activity in Pennsylvania is a function of relatively lower taxes," according to the report. "This competitive advantage should be maintained."
The study drew complaints prompting William Easterling, dean of Penn State's College of Earth and Mineral Sciences, to investigate.
In a June 9, 2010 letter to the Responsible Drilling Alliance, a Williamsport, Pa., group that supports a tax, Mr. Easterling also cited as a "clear error" the failure to disclose industry funding in the initial July 24, 2009 report.
An Aug. 5 version identified the sponsor, Marcellus Shale Coalition, which provided a grant of about $100,000. News reports referred to the work as a Penn State study.
First Published July 29, 2012 12:00 am