Frackers Follow Tobacco's Lead in Funding Research
29 July 2012
By Jim Efstathiou Jr. / Bloomberg News
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
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
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.