REFILE-UPDATE 1-Obama energy adviser rejects calls to end biofuels mandate

Thu Jul 18, 2013 11:56pm IST

(Refiles to remove extraneous characters from para 3) (Adds more Zichal comments, background on RFS, upcoming hearings)

By Valerie Volcovici

WASHINGTON, July 18 (Reuters) - President Barack Obama's energy and climate adviser on Thursday dismissed calls by critics, including oil companies and some Republican lawmakers, to repeal a federal mandate for the use of renewable fuels.

"Calls to repeal the Renewable Fuel Standard (RFS) are nothing but short-sighted," said Heather Zichal, deputy assistant to the president for energy and climate change.

Zichal spoke at an event in Washington held by the Advanced Biofuels Association and "The Hill," a media outlet that covers Congress and the White House.

She said the RFS, which calls for increasing amounts of biofuels to be blended into U.S. gasoline and diesel supplies, plays a key role in the administration's push to reduce greenhouse gas emissions and slash oil imports.

Current policy requires refiners to buy biofuel credits, known as RINs, from renewable fuel producers to comply with the mandate. Prices of RINs have risen sharply this year.

"We are confident that EPA (the Environmental Protection Agency) can implement the statute in a way that continues to provide the benefits that Congress envisioned while addressing challenges in the fuels marketplace," Zichal said.

Oil companies have complained about spiking RIN costs this year, as the United States nears a point where the law will require the use of more ethanol than can physically be blended into the fuel supply at the mandated rate of 10 percent per gallon of gasoline.

The CEO of oil refiner Valero told the Senate Energy Committee earlier this week that the RFS "needs to be completely redone." Valero is the world's largest independent oil refiner but also owns 10 ethanol plants.

Various actions have been proposed in Congress to amend the Renewable Fuel Standard. A House Energy and Commerce subcommittee plans two days of hearings on the RFS next week.

(Reporting by Valerie Volcovici; editing by Ros Krasny, Gerald E. McCormick and Andrew Hay)

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