msnbc.com staff and news service reports
updated 11/10/2010 10:38:49 AM ET 2010-11-10T15:38:49

An inspector general says the White House edited a report about the administration's moratorium on offshore oil drilling to make it appear that scientists and experts supported the idea of a six-month ban on new drilling.

The Interior Department's inspector general says the changes resulted "in the implication that the moratorium recommendation had been peer reviewed." But it hadn't been.

Still, the report said the administration did not violate federal rules because it had offered a formal apology and already publicly clarified the nature of the expert review.

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The website Politico was first to report the inspector general's findings. The Associated Press on Wednesday obtained a copy of the report, which has not been publicly released.

The report says that in May, a staff member working under White House energy adviser Carol Browner returned edited versions of the report's executive summary to the Interior Department, with language altered to imply that the panel of seven outside analysts who reviewed a draft of safety recommendations endorsed the ban, Politico reported.

Some of the peer reviewers complained, the Politico report said, and the department apologized to them in early June. Interior Secretary Ken Salazar met with some of them personally and spoke to them on a conference call, according to Politico.

The Competitive Enterprise Institute, a free-market think tank, called for Browner's firing.
"President Obama should fire Carol Browner for this manipulation of science," said Myron Ebell, the CEI’s director of energy and environment.

Deepwater drilling, high profits
Big Oil companies have come to depend on deepwater drilling to replenish their reserves.

Major oil and gas companies know the geology of the Gulf much better than other parts of the world, and taxes and royalties for projects in U.S. waters are considered to be much lower than foreign operations. It's also much easier and cheaper for them to deliver the oil to the consumer.

And wells in the Gulf can be very profitable. Drilling projects there typically break even when oil sells for $50 to $60 per barrel. It's currently trading near $87 per barrel.

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The oil companies' reliance on the oil-rich deposits below the Gulf grew as they became more adept at pumping crude from the sea floor. In March, a month before BP's well ruptured, the industry produced 52.6 million barrels of oil from Gulf wells. That's the highest total for that month in records dating back go 1981.

The U.S. drilling moratorium brought well-drilling activity to a relative standstill over the summer, and new production wells were put on hold.

Legal wrangling over permits
The Interior Department ended its drilling ban on Oct. 12. A federal judge said Tuesday that settlement possibilities were discussed at a closed-door hearing at which lawyers for the government and oil and gas industry sparred over delays in issuing permits.

The government doesn't seem to dispute the allegation that it has not issued a single permit that would allow the resumption of any previously suspended drilling activities, saying in a late Monday filing that it must ensure applications meet regulations toughened after the Gulf of Mexico oil spill.

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Since lifting the ban, the government has received one application for a permit to drill a new well and one to drill a sidetrack. It also received three revised applications for permits to drill. All are pending.

The government said it also is reviewing an unspecified number of applications filed before the moratorium was lifted to make sure they comply with toughened regulations.

The Associated Press contributed to this report.

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