UT Austin Chooses Oil & Gas Industry Insider to Review Fracking Report

The University of Texas at Austin named a panel of three experts to review its troubled fracking report today. There’s a problem with the panel: it’s being chaired by a longtime oil and gas industry insider. This is the statement we released today in response:

The University of Texas at Austin has taken an important step in initiating a review of its fracking report. The report misled the public about the environmental risks associated with fracking and was led by a professor who failed to disclose his energy industry ties. The university’s proactive approach to addressing this breach of the public trust should be commended.

There are, however, serious questions about the independence of the expert panel the university has named. Given the conflict of interest at the root of this report’s problems, it is extremely troubling that the university chose an energy industry insider to chair the panel. Norman Augustine served for nearly 20 years on the board of oil and gas company ConocoPhillips and its predecessor company, Phillips Petroleum. During that time, he was awarded millions of dollars in stock and cash compensation, some of which he continues to receive in retirement in the form of annual payments of deferred compensation.* Mr. Augustine’s relationship to the gas industry is strikingly similar to that of the original study’s author, Chip Groat, who has earned close to $2 million as a director of drilling company Plains Exploration and Production (PXP).

ConocoPhillips is also one of the University of Texas Energy Institute’s top publicly-named named donors, having given a five-year, $1.5 million grant for energy research in 2010.

Unfortunately, the university’s choice of Mr. Augustine throws the independence of this review into question before it has even begun.

* Note: it appears that Augustine continues to receive annual deferred stock awards from ConocoPhillips to this day. ConocoPhillips’s 2009 proxy states that Mr. Augustine elected to defer $3.1 million in stock awards to a Vanguard account, which was to be paid out in ten annual installments beginning in July 2009 – meaning that he is still receiving these payments. See the footnote on page 62 of ConocoPhillips’ 2009 proxy.

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10 Responses to UT Austin Chooses Oil & Gas Industry Insider to Review Fracking Report

  1. Jim Holst5un says:

    This is an interesting article and shows some of the complexities awaiting UB if it actually decides to do the right thing and investigate the conflicts of interest, if any, connected with its Shale Resources and Society Institute. Clearly, it should not follow the usual intra-industry process of seeking inside review–i.e., asking SRSI whom it would recommend as an outside reviewer; this is the procedure that produced the pseudo-”peer review” of its first report, with disastrous results. It isn’t even enough for the UB Administration to name the review panel, since the UB Administration’s response (or non-response) thus far emphasizes that it, too, has an interest in damping down any talk of conflicts of interest.

    No, the only thing to do is to ask a reputable outside group to nominate a review board–ideally, one whose members are not six or seven-figure beneficiaries of the oil and gas industry, or of the anti-fracking world (if there are any six- and seven-figure beneficiaries of the anti-fracking world–I doubt it). A good choice might be the well-respected American Association of University Professors.

    • Bill says:

      Great information. But, I think the issue is about the risk of water cotanmitanion and who will pay for the clean up should that “unlikely” event occur. If the process is so safe, why aren’t oil and gas companies willing to assume the any liability associated with drilling operations and the “unlikely” event there will be water cotanmitanion? These companies are in a unique position to understand the processes and evaluate the risks. If they feel the processes are so risk free, then why won’t they assume the risk? Why do Michigan taxpayers have to assume the risk of clean up? Liz Brater introduced a bill to that effect but it went nowhere.As to the profitability of these fracking operations, if the Michigan taxpayer has to subsidize fracking operations by assuming the risk of water cotanmitanion, then I would suggest this isn’t a “profitable” business. Perhaps management should do their job and make a profit after paying for ALL costs associated with the operations.

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  6. Emin says:

    In response to who will prifot: roughnecks out of technical schools make starting salaries of 60-80,000/year. Jobs are exploding across the nation. Truck drivers who transport proppant (white sand and water) make anywhere from 60-90,000/year. Investors who want to buy trucks and trailers make HUGE prifots while providing more and more jobs for those who need them. The energy industry (especially natural gas companies) are about to explode on the stock market! Absolutely anyone can prifot from fracking. In the 60 years it has been used to harvest energy, not one case of water contamination has been reported. The main cause of contamination is a process called enhanced oil recovery or secondary recovery that pumps water at extremely high pressures into shallow coal beds and oil reservoirs. Hydraulic fracturing harvests energy reserves from 8-12,000 feet underground.

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