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Obama Energy Pick’s Gas Study Faulted Over Industry Ties

March 22, 2013

Obama Energy Nominee’s MIT Gas Study Faulted Over Industry Ties

Ernie Moniz, the Director of the MIT (Massachusetts Institute of Technology) Energy Initiative, at his office at the university. Photographer: James Leynse/Corbis

President Barack Obama’s nominee for energy secretary is drawing criticism for leading a study that minimized risks of natural gas while failing to disclose that some of its researchers had financial ties to the industry.

The nominee, Ernest Moniz, is head of the Massachusetts Institute of Technology’s Energy Institute, which issued a report in 2011 that said the environmental risks of increased drilling and production “are challenging but manageable.”

A report co-author had already agreed to take a position with Talisman Energy Inc (TLM). when the report was released. Another researcher was on the board of Cheniere Energy Inc. (LNG), which is building an export facility for liquefied natural gas.

“The public should have been informed that MIT’s natural gas study was written by representatives of the oil and gas industry,” said Kevin Connor, director of the Public Accountability Initiative, a research group in Buffalo, New York, that is critical of the use of hydraulic fracturing for gas and compiled the details of the industry ties. “Aren’t there academics there not on the payroll of gas companies?”

It’s unlikely this disclosure will harm Moniz’s chances of confirmation. Obama has also supported development of natural gas through fracking, and the Energy Department doesn’t regulate the practice. That is left to the Environmental Protection Agency and Interior Department.

White House

“The president has made clear that natural gas has a central role to play in our nation’s energy future,” Clark Stevens, a White House spokesman, said in an e-mail. “Dr. Moniz’s work at MIT demonstrates his ability to work collaboratively with a wide spectrum of stakeholders on a broad range of energy issues.”

The Senate Energy and Natural Resources Committee scheduled a hearing on Moniz’s nomination for April 9.

The accountability group’s report “Industry Partner or Industry Puppet?” released this week also criticized Moniz for not disclosing in the report that he was on the board of a company that provided consulting to gas utilities.

The Buffalo group has previously targeted what it calls biased academic studies.

It released an investigation last year on the University of Texas Energy Institute and its report on fracking. The school withdrew the study and imposed ethics guidelines on researchers after it was shown that the primary author didn’t disclose that he sat on the board of a gas driller.

Bridge Fuel

While groups such as the Environmental Defense Fund have backed Moniz, some environmental groups have criticized his nomination because he supports natural gas as a so-called bridge fuel from carbon-intensive coal to cleaner energy such as solar. Some local activists say tapping that gas by fracking, in which water, sand and chemicals are shot underground, causes air and water contamination.

Moniz has said there are risks, and industry disclosure and government regulation can contain them. “Research and regulation, both state and federal, are needed to minimize the environmental consequences,” the MIT researchers said in their report.

MIT’s Energy Institute discloses that it is sponsored by companies such as BP Plc (BP/), Saudi Aramco and Duke Energy Corp (DUK)., as well as foundations. When it published its Future of Natural Gas report in 2011, it disclosed the groups and companies that funded that study, including the Clean Skies Foundation, which backs natural gas and has close ties to Chesapeake Energy Corp (CHK).

‘Well Balanced’

MIT professors must file financial disclosure forms with the university, and research is independent of funding, said Victoria Ekstrom, a spokeswoman for the Energy Institute.

Ralph Cavanagh, co-director of the energy and transportation program at the Natural Resources Defense Council, an environmental group critical of fracking, was a member of the advisory board for the study. He called it “well balanced” and a fair report. While Cavanagh has differences with some conclusions, the process “was very much in the spirit of peer review.”

“The highest goal of technical people like myself is: What’s true?” Daniel Cohn, a MIT professor who was part of the study, said in an interview. “And I feel that standard was met here.”

Public Accountability highlighted two main criticisms with the researchers. First, Anthony Meggs, a visiting professor at MIT and the group’s co-chairman, had joined Talisman, the Canadian gas company, by the time the study was released. Nonetheless, at a news conference he presented the finding that fracking’s risks are manageable, identified as a visiting engineer at MIT.

Talisman, Cheniere

Meggs left Talisman in January, spokeswoman Phoebe Buckland said in an e-mail. A draft of the report was compiled in 2010, before Meggs, a former BP executive, joined Talisman, Ekstrom said.

Second, John Deutch, an MIT chemistry professor and former U.S. CIA director, was on Cheniere’s board when the report was released. The report backed the export of LNG, which Cheniere is trying to do.

Deutch, who remains a Cheniere director, didn’t return an e-mail and telephone message asking for comment.

Connor also criticized Moniz for not disclosing that he sat on the board of consulting firm ICF International Inc. (ICFI), which provides research for gas companies, utilities and trade associations. As with all nominees, Moniz has pledged to resign from that board and divest his stock if confirmed.

ICF also contracts to the government and works in other industries, said Steve Anderson, a company spokesman. Only 2 percent of its revenue comes from natural gas, and the company provides clients “independent objective analysis,” he said.

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


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