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By Valerie Volcovici
WASHINGTON (Reuters) - Environmental regulators are likely to unveil rules on Friday dictating how much ethanol and other renewable fuels must be blended into the U.S. gasoline supply in 2014, following weeks of lobbying by the oil and biofuels industries, industry sources who have been briefed on the process said on Thursday.
Environmental Protection Agency (EPA) Administrator Gina McCarthy testified before a House panel on Thursday that the proposed Renewable Fuel Standard (RFS) for 2014 was "soon to be proposed."
Some industry sources briefed by the agency said were told they would see the proposal as soon as Friday.
Rumors have circulated, based on a leaked draft of the EPA's proposals, that the agency will require less corn-based ethanol to be blended into U.S. gasoline in 2014 than the 14.4 billion gallons now required by law, and less than the 13.8 billion mandated for this year. Gasoline producers had pushed for a lower ethanol requirement, while ethanol makers and farmers had pushed to maintain current levels.
McCarthy added at the hearing of the House Science Committee that once released, the proposal will "take some time" to finalize.
Petroleum industry lobbyists have threatened to sue the EPA if the 2014 biofuel requirements are not finalized by the end of November.
McCarthy defended the administration's approval of the sale of E15, a gasoline blend with 15 percent ethanol content, for vehicles younger than the 2001 model year. Much of the gasoline sold in the United States contains 10 percent ethanol.
Opponents say the higher ethanol blend damages some car engines and is a way for regulators to favor the renewable fuels industry.
Congressman Jim Sensenbrenner, a Wisconsin Republican, asked McCarthy if the EPA planned to conduct further testing of the safety of the fuel.
McCarthy said the EPA stands by its current research with the Department of Energy. "We continue to believe E15 is appropriate and, where available, is being used by vehicles that are 2001 and younger," she said. About 70 percent of U.S. cars and light trucks are approved for the higher ethanol blend.
Pro- and anti-ethanol groups have made a fierce push to sway the EPA's proposal, which has been pending with the White House's Office of Management and Budget since August 30.
Groups were still lobbying at the eleventh hour. Fuels America, a biofuel group, has aired television advertisements this week urging the EPA to "protect the renewable fuel standard."
U.S. Agriculture Secretary Tom Vilsack, at an event in Washington on Thursday, said he did not know if the biofuel mandate will be lowered for 2014 or when the proposal would be released. But the government is not "moving away" from its support of renewable fuels, he said.
Vilsack also said that USDA needed to be more active in pushing the owners of pumping stations for wider distribution of fuel with blends of ethanol that exceed the legal requirement.
Over the past decade, U.S. drivers have purchased more than 10 million flex-fuel vehicles, which can run on E85, a fuel containing 85-percent ethanol fuel. But finding gasoline stations that sell E85 fuel can be difficult, especially outside the Corn Belt, where much of the U.S. ethanol supply originates.
(Reporting by Valerie Volcovici, editing by Ros Krasny)