Fracking-Study Conflicts Prompt Head of Institute to Quit

Dec. 7 (Bloomberg) -- University of Texas research that determined hydraulic fracturing for natural gas is safe was tainted by a conflict of interest involving the study’s lead investigator, an independent panel has concluded.

After seeing the panel’s findings, the head of the Energy Institute, Raymond Orbach, said he would “assume full responsibility” and resigned his position though he remains on the faculty. The lead investigator, professor Charles Groat, has left the university and the study he oversaw has been withdrawn, according to a statement the school released yesterday.

The “study falls short of the generally accepted rigor required for the publication of scientific work,” the panel said in its report. “Primary among the shortcomings was the failure of the principal investigator to disclose a conflict of interest.”

The university appointed the panel after Bloomberg News reported July 23 that Groat sat on the board of a gas-drilling company, which wasn’t disclosed when the study was released in February.

The findings mark the third blow to industry-friendly fracking research in as many months. The State University of New York at Buffalo shuttered a Shale Resources and Society Institute after the college president said there was a “cloud of uncertainty” over its work. The Marcellus Shale Coalition, an industry group, canceled a study of fracking after faculty members at Pennsylvania State University balked at participating.

‘Strong Signal’

“It sends a strong signal to the industry that our universities are not for sale,” said Kevin Connor, director of the Public Accountability Initiative. The Buffalo-based group, which receives funding from organizations such as the Sunlight Foundation that favor greater government transparency, produced a report on Groat’s industry ties.

The university’s independent “review sheds some much-needed sunlight on problems with the editorial and public relations process surrounding UT’s fracking report,” Connor said.

Groat had been on the board of Plains Exploration & Production Co. since 2007, a relationship he didn’t disclose in the report, or when he presented the Texas findings at the the American Association for the Advancement of Science. As a board member, Groat received 10,000 shares of restricted stock a year, according to company reports. He also received an annual fee, which was $58,500 in 2011.

No Violation

As of March 29 Groat held 40,138 shares in the company, which would be worth more than $1.7 million at yesterday’s closing share price.

Groat, who selected the researchers and edited its summary, said in an e-mail yesterday that the panel backed his contention that he didn’t inject bias into the individual researchers’ papers. “I maintained that my role was not one that would allow this to happen,” he wrote.

The panel also said that Groat, who said he took another job before the controversy erupted over the fracking study, was “probably not in violation of the university’s” conflict of interest policy “as it existed at the time.” It has since been tightened.

The three-member review panel, headed by the former chairman of Lockheed Martin Corp., Norman R. Augustine, recommended that the Energy Institute should “embrace and enforce” the university’s policies on conflicts of interest.

Study Shortcomings

The panel did identify a number of shortcomings with the studies and how they were presented in press releases and by Groat.

The Energy Institute first tried to get America’s Natural Gas Alliance to fund the work, but that fell through after the group demanded that a researcher be replaced and that it be given a final say on its editing, the panel said.

The description of the industry group’s interaction with the Energy Institute is “misleading,” alliance spokesman Dan Whitten said in an e-mail. The group wanted the Texas researchers to review the framework of the Environmental Protection Agency’s ongoing study of fracking and drinking water. What the institute “produced was a proposal focused on public relations and legal review instead of science.”

‘Tentative Conclusions’

Since the project funding was constrained, it didn’t include new scientific studies and was instead a compilation and analysis of previous work, the panel reported. Those individual papers reached “tentative conclusions” and included caveats that weren’t presented in the final summaries, according to the report.

“This apparent distortion of the substance of the white papers became increasingly evident as the project moved through the stages of drafting the summary, media releases, and public presentations,” the panel concluded.

Beyond Groat’s role, “there was also inadequate consideration given to a discussion of the relationship of the Energy Institute and the University of Texas to the oil and gas industry,” the panel wrote. The industry donates to the university and provides research support, it said.

Groundwater Contamination

Groat’s study, titled “Separating Fact from Fiction in Shale Gas Development,” concluded that there’s no evidence of groundwater contamination from hydraulic fracturing, commonly known as fracking. The Feb. 16 press release by the Energy Institute said: “New Study Shows No Evidence of Groundwater Contamination from Hydraulic Fracturing.”

Critics say the practice endangers water supplies and have called for increased government regulation. A draft report by the Environmental Protection Agency a year ago tied fracking to water contamination in Pavillion, Wyoming.

Orbach, 78, had said that he learned of Groat’s connection to the company from a Bloomberg reporter’s inquiry. He was traveling and not available for comment yesterday.

The panel’s findings “demonstrates that the Energy Institute’s actions are not of the highest standards as expected by the University of Texas at Austin,” he wrote in a resignation letter to university Provost Steven Leslie on Nov. 3. He will remain on the university’s faculty.

The university has accepted the panel’s recommendations, according to its statement. The Energy Institute has pulled the study from its website and stopped distributing copies. The contributing researchers should be allowed to redraft their work “into forms suitable for publication in peer-reviewed scientific or academic journals,” the panel wrote.

“The university and the Board of Regents embrace business collaborations and investments in university research, and they aspire to be a national model with public/private partnerships,” the university said in its statement. “Therefore they also aspire to be a national leader in systems oversight, compliance and internal safeguards.”

Groat, the former director of the U.S. Geological Survey, said in an e-mail that he decided to take over as director of the Water Institute of the Gulf in Baton Rouge, Louisiana, early this year, before “any of the issues about me or the report emerged.”

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net