Friday, July 27, 2012
Let's Talk Beer and Fracking | Casey's Last Word
Two research reports were in the news this week.
One is about beer. The other is about fracking.
Let’s talk beer first.
The Texas Craft Brewers Guild released an economic study Monday predicting that the 78 current small craft breweries and brew pubs that now make up an industry with an economic impact of $608 million could grow almost 10-fold, to a $5.6 billion industry in just eight years.
That is, if the Legislature would only reform arcane laws that hand-cuff the industry.
The Legislature should, indeed, do that.
For example, you can go to the store and buy beers produced by brew pubs in California and other states, but not by brew pubs here in Texas such as San Antonio’s Freetail Brewing Company and the Blue Star Brewery.
Why? Because the big corporate breweries don’t want the competition, and they own the Legislature lock, stock and barrel.
Of course I don’t believe the numbers in the study.
For one reason, I never trust any number next to the words “economic impact.”
You usually see the term in connection with “studies” promoting tax breaks or subsidies.
In that context, it invariably means “hype.”
The other reason I don’t believe the numbers is that the author of the study is Scott Metzger, an adjunct professor of economics at UTSA.
He is also owner of San Antonio’s Freetail Brewing Company and a leader in the Texas Craft Brewers Guild.
This is not to say I believe Metzger is dishonest.
To the contrary, he is a highly respected businessman who crafts some excellent, honest beers.
What’s more, he was honest enough to put his name on the report and fully disclose his interests.
That’s more than I can say about the study on fracking.
This study was issued last February by the Energy Institute at the University of Texas to great fanfare.
Headlines from here to Great Britain trumpeted the study as putting to rest a key environmental fear related to the practice of blasting water and chemicals into shale so as to free up trapped oil and gas.
Typical was the Houston Chronicle headline: “Study: Fracturing no threat to groundwater.”
When I read the stories in the Chronicle and the Express-News, I was impressed.
The University of Texas brand gave the study credibility.
But this week, thanks to a non-profit called The Public Accountability Initiative, we learned something about the man in charge of the study.
Charles “Chip” Groat is paid a generous $173,000 a year by the University of Texas for his work as a professor of geological sciences and associate director of the UT Energy Institute.
But he makes more than twice that much annually wearing a different hat – as a member of the board of directors of Houston-based Plains Exploration and Production Company, which is heavily involved in fracking.
Last year, according to public records, the company paid Groat $58,500 in cash as well as stocks valued at $355,400.
According to the Express-News, his stock holdings in the company are currently worth just over $1.5 million.
According to University officials, Groat did not disclose this in an annual filing as required by university policy.
Nor did he disclose it in the report.
The director of the Energy Institute said he was unaware of Groat’s position with Plains Exploration.
So what is the University’s response?
It says it will appoint a panel of experts to conduct a review of the 400-page study, which they hope to be completed in a few weeks.
Oh, and University Provost Steven Leslie said Groat “has been reminded of his obligations to report all outside employment per university policy.”
The provost also said he saw no conflict of interest.
The professor gets over $400,000 annually from a company involved in fracking and has no conflict of interest in leading a study on the practice?
For intellectual honesty, give me the beer guys over the academics.