* Report centers on EPA's 2009 endangerment finding
* Inspector General does not question EPA CO2 rules
* Republican: report was "rushed, biased, and flawed"
* White House's OMB says EPA followed protocol (Rewrites lead, adds more EPA quotes, cost of report)
By Timothy Gardner
WASHINGTON, Sept 28 (Reuters) - The U.S. Environmental Protection Agency may not have met White House guidelines in laying the groundwork to regulate carbon emissions, a government watchdog said in a report that could fuel Republican efforts to block the agency's new rules on climate.
The EPA's Inspector General on Wednesday accused the agency of not following White House procedures in peer reviewing its so-called "endangerment finding" issued in 2009 that found greenhouse gas emissions were harming human health.
The watchdog said one of the 12 panelists who had reviewed the finding was an EPA employee, something that was not allowed for a so-called "highly influential scientific assessment."
In addition, it said some of the panel's findings were not released to the public, something that was also required.
But the EPA said it did not consider the finding to be classified as a "highly influential" document in part because it relied on information that had already been peer reviewed by the National Academy of Sciences.
The White House's Office of Management and Budget agreed with the EPA. "OMB -- the author of the guidance -- is confident that EPA reasonably interpreted the direction provided and is complying appropriately," Meg Reilly, a spokeswoman at the office said in an email.
Nevertheless, Republican Senator Jim Inhofe, the minority member of the Senate's environment panel who called for the report, said it showed the endangerment finding was inadequate and violated the agency's peer review procedures.
"This report confirms that the endangerment finding, the very foundation of President Obama's job-destroying regulatory agenda, was rushed, biased, and flawed," Inhofe said in a release about the report which cost nearly $300,000. Inhofe, a longtime climate skeptic who is writing a book on global warming called "The Hoax," said he was calling for immediate hearings on the EPA issue.
The EPA said on Wednesday it would consider the inspector general's recommendations to revise its Peer Review Handbook and establish requirements for assessing data.
But it was adamant the science it relied on, from the U.S. Climate Change Science Program, the National Research Council, and the U.N.'s Intergovernmental Panel on Climate Change, was sound.
"The report importantly does not question or even address the science used or the conclusions reached -- by the EPA under this and the previous administration -- that greenhouse gas pollution pose a threat to the health and welfare of the American people," an EPA source said.
Senator Inhofe said that the EPA relied heavily on the U.N.'s climate science panel to make the finding, a claim rejected by EPA administrator Lisa Jackson who has pointed out it also relied on the National Academy of Sciences, the National Research Council and others.
The EPA issued its endangerment finding after the Supreme Court ruled in 2007 the agency could regulate the emissions under the Clean Air Act. The agency had to conclude the emissions were harmful before regulating them.
Since then the EPA has embarked on rules to reduce the emissions from sources including power plants, oil refineries and vehicles.
Last week the Republican-controlled House passed a bill to block the EPA rules, saying they would cost industry billions of dollars and kill jobs. But the measure faces an uphill battle in the Senate and President Barack Obama has vowed to veto it. [ID:nS1E78M1HT]
Environmentalists said the report did nothing to question the science.
"Nothing in this report questions the agency's ability to move forward with global warming emissions rules," said Francesca Grifo, the science integrity director at the Union of Concerned Scientists.
"The inspector general made it clear that EPA followed current guidelines for ensuring that it based its decision on robust scientific analysis."
Reporting by Timothy Gardner; Editing by David Gregorio and Bob Burgdorfer