Jennifer Washburn: An Unholy Alliance

Jennifer Washburn: An Unholy Alliance
UC Berkeley's $500-Million Deal with BP Challenges Traditional Public-Private Partnerships

Five hundred million dollars is a lot of money -- especially for a public university. When the giant oil company BP announced Feb. 1 that it had chosen the University of California, Berkeley, to lead the largest academic-industry research consortium in U.S. history, University of California officials appeared giddy.

If the deal is approved, BP, formerly known as British Petroleum, will give $500 million over 10 years to create a multidisciplinary Energy Biosciences Institute at UC Berkeley. Berkeley would partner with the Lawrence Berkeley National Laboratory and the University of Illinois at Urbana-Champaign to establish the institute devoted to researching biofuels -- fuels derived from plants and other organisms.

Many university and state officials pronounced the BP alliance a victory for the environment. "A tremendous day for Mother Earth," UC President Robert Dynes declared when the partnership was announced. From a public relations standpoint, BP’s willingness to invest in alternative energy research vastly improved the company’s image, which had been sullied by a refinery explosion in Texas and a 267,000-gallon oil spill from corroding pipelines in Alaska.

But the terms of the research alliance -- and the implications for the UC system -- haven’t received sufficient scrutiny. Shortly after the BP deal was announced, Dynes said, "We are reinventing the research university in this public-private partnership."

He’s right. And that is what’s so troubling.

The BP alliance is not simply an environmental initiative; it is a plan to substantially reinvent -- and privatize -- America’s research universities. Such a radical proposal warrants careful public scrutiny, given that these same universities have given birth to many of America’s most remarkable scientific and technological achievements.

Unfortunately, UC officials haven’t encouraged public debate. After the deal was announced, UC withheld the agreement containing specific terms of the plan for a month. In late March, administrators agreed to let faculty participate in the final contract talks with BP, but only after more than 130 faculty members signed a protest petition calling for the chancellor to investigate whether there was adequate faculty senate review and consultation.

Traditionally, universities have strived to maintain a clear, arms-length relationship with their corporate benefactors over academic research. The BP alliance would break this relationship, effectively turning the university into a contract research organization for industry. As such, the alliance would undermine the university’s academic freedom, its ability to perform independent research and broadly disseminate results. And, possibly, it might undermine the public’s trust.

The plan’s fine print suggests Berkeley’s administrators might have been more concerned with beating out four competing universities to win the BP deal than they were in protecting UC’s public research mission.

The plan would allow BP to station 50 of its employees on the Berkeley and the University of Illinois campuses, where they would "be embedded within the campus research environment" and work with professors and students on research. It would further allow BP to operate its own private, commercial labs on the campuses, where research would be confidential and proprietary.

The plan also dispenses with numerous traditional safeguards designed to protect the university’s independence. It grants BP unusual control over the institute’s research agenda, makes no mention of peer review, downplays commercial conflicts of interest and contains provisions on publication that would violate UC’s written policies, which state: "There can be no fundamental limitation on the freedom to publish as the result of accepting extramural research support." Finally, the plan gives BP exceptionally broad commercial rights to co-own and license the institute’s academic inventions.

In short, for $500 million, the plan would allow BP, a company valued at $250 billion, to turn an academic research institute into its own profit-making subsidiary.

The proponents of the BP alliance are motivated by noble goals. Many are world-renowned scientists, who feel an urgent need to tackle the problem of global warming and are eager to secure research funding. In a Berkeley online interview, Steven Chu, a Noble Prize winner who directs the Lawrence Berkeley National Laboratory, explains: "Partnering with BP we will have the resources to actually carry out some of the things we want to do in order to help save the world."

Gov. Arnold Schwarzenegger also sees an alignment of interests. Under California’s new global warming law -- Assembly Bill 32 -- the state is required to reduce greenhouse gas emissions, such as from vehicles, industries and power plants, by 25 percent in 13 years. The governor believes that energy companies need to help develop alternatives to fossil fuels and has pledged $40 million on top of $30 million in state bonds toward the construction of a Berkeley science facility dedicated to the Energy Biosciences Institute.

Schwarzenegger and Chu are right that energy companies need to be part of the solution. But their participation should not come at the price of Berkeley’s academic integrity and the open scientific process, which the university has long embraced. Otherwise, the state could wind up adopting expensive, new energy alternatives that appear environmentally friendly and boost corporate profits, but fail to significantly reduce carbon emissions or slow climate change.

Berkeley has been down this road before. In 1998, Berkeley signed a five-year, $25-million agreement with Novartis, a Swiss-based pharmaceutical company and a producer of genetically modified crops. The deal allowed Novartis to pay for one-third of the research budget of an academic department; it also granted the company licensing rights to nearly all the department’s most valuable inventions.

This controversial alliance led Berkeley to pay for an external academic team from Michigan State University to study the Novartis arrangement at the request of Berkeley’s faculty senate. The study did not uncover any overt manipulation of the academic research, but it concluded that the Novartis alliance was "outside the mainstream" of academic-industry relationships and badly tarnished the university’s perceived independence on issues ranging from genetically modified agriculture to the environment.

The Michigan State team made several recommendations: Avoid industry agreements that involve complete academic units or large groups of researchers; carefully assess the potential for institutional conflicts of interest; and encourage broad debate early in the process when developing new research agreements. The current UC administration has ignored these in the alliance with BP.

Even when research is funded by industry, the university normally holds the reins of control. The alliance with BP is different. It asserts that the Energy Biosciences Institute’s director will be "proposed" by BP; its associate director will be "employed by BP" and other high-level positions will be filled by BP appointees, giving the company power to set the research agenda, control the purse strings and oversee daily operations. The plan acknowledges this shift: "(BP’s) business-industry leadership will strongly differentiate the EBI from other primarily academic research enterprises."

This is worrisome. Historically, universities have recognized they can’t serve two masters: objective science and the bottom line. That’s why most universities try to keep the academic and commercial spheres distinct.

The BP deal ignores this tradition. By allowing BP scientists to set up labs inside of academic facilities, the plan states it will foster the "flow" of information between the "open" academic and "proprietary" corporate sides of the institute and encourage extensive research collaborations between BP scientists, professors and students.

This information flow appears to benefit BP more than the university. Up to 30 percent of BP’s $500-million grant may be spent inside BP’s proprietary labs. Any faculty or student who wishes to enter BP’s labs would have to obtain "controlled card-key access." In contrast, BP employees would have open access to more than a dozen world-class, publicly funded laboratories at Berkeley, Lawrence Berkeley National Laboratory and the University of Illinois. BP employees would also have privileges, usually reserved for faculty, including the ability to participate in designing and delivering courses and mentoring students. At one faculty senate forum, a graduate student remarked: "I didn’t come to this university to be lectured on climate change or energy by British Petroleum, which is in this to make a profit."

The alliance cavalierly suggests that the academic and corporate-proprietary sides of the institute will "comfortably accommodate" one another. But this contradicts years of university-industry experience. Industry scientists place a premium on secrecy and commercial profitability; academic scientists are more interested in the open exchange of scientific knowledge and fundamental research.

It’s worth remembering why this open culture is important to preserve: The biotechnology and the computer revolutions were born out of research performed in academia, not in industry. It’s possible that the next great breakthrough in environmental technology will also spring from this open academic environment.

The BP plan violates a bedrock academic principle: That all campus-based research be published, or openly shared. The University of California’s official policies on publication emphasize that the open exchange of information is fundamental to the advancement of science and education. That’s why Berkeley bans all classified military research from campus. Yet the plan specifies that BP’s 50 scientists on campus would "have no obligation to publish."

Intellectual property is another area where the alliance could distort UC’s public mission. Universities, as a rule, hold the intellectual property rights in their research, no matter how it is funded. To foster innovation and competition, universities generally try to permit more than one company to license their discoveries for commercial purposes. The alliance with BP, by contrast, would give the energy company privileged access to many of the institute’s inventions. It allows BP to co-own intellectual property in some instances and to receive exclusive, albeit time-limited, commercial licenses, as well. These two options, whenever exercised, would grant BP a monopoly, blocking commercial competition.

Beth Burnside,the vice chancellor of research, reassured Berkeley’s faculty senate that these intellectual property arrangements with BP follow "standard research procedures." But the plan notes that some of these terms "deviate from standard policy" and would "require exceptions to policy in order to be implemented."

Another area of concern involves the research. The plan states the Energy Biosciences Institute is dedicated to finding "long-term technological solutions to global energy challenges." However, when BP invited Berkeley and the other universities to apply for its research grant, it specified a targeted research area: The development of genetically modified crops and other organisms, which could be converted to lower polluting transportation fuels or be used to enhance the extraction and utilization of fossil fuels.

At campus forums and in the media, many Berkeley professors have challenged the narrowness of the institute’s research agenda, noting that it fails to consider solar, wind and other promising areas of energy research. Whenever you have one corporation issuing a research grant of this size, it can skew the university’s research agenda. In an effort to bring money into their labs, faculty will tailor their research to suit the sponsor’s interests. In this case, BP’s commercial interest is biofuels.

The plan promises to study the "productivity, cost effectiveness, land use, and environmental impacts" of biofuels. But given BP’s influence, many professors have questioned how balanced this research will be. Currently, biofuels require so much energy to produce that they are not energy efficient. And they pose other serious drawbacks, as well: Industrialized farms for biofuel production may further exacerbate topsoil erosion, water contamination, deforestation and other problems.

Jay Keasling, a chemical engineering professor affiliated with the BP project, told the faculty senate that "risk assessment" will be built into everything the institute does. But given BP’s commercial interest, will the public be able to trust this research?

Given that there’s nothing in the plan that calls for independent selection of specific academic research projects -- a process often governed by scientific peer review -- can the Energy Biosciences Institute be trusted to pursue research that might prove that biofuels are the wrong alternative energy choice?

BP executives and university leaders from the partner institutions are working out a final contract. An agreement could be ready for the UC president and the regents to sign in July. It’s possible that the current plan could be re-written to better protect the university’s autonomy.

However, this would necessitate major reform of the plan: The university would have to remove BP’s private labs and employees from campus; rescind BP’s leadership role in the institute; and adopt a truly independent system for selecting research projects and allocating funds, one driven by scientific merit not commercial criteria.

BP has already accepted the current plan as the basis for awarding its contract to Berkeley, so major reform is unlikely. The best option now is to throw out this deal and start fresh.

Tadeusz Patzek, an engineering professor at Berkeley who worked as an industry scientist at Shell, recently commented in an op-ed article for the Daily Californian that the BP alliance would turn Berkeley into a better corporation. "But if UC Berkeley becomes yet another corporation," he asked, "will there be another great public university to take its place?" That’s what UC officials and regents need to ask themselves before they sign this deal.

New America Foundation, 08/04/07