In Congress, Opposition to Harmful Biofuel Mandate Grows

In a letter to EPA Administrator Gina McCarthy, members of Congress are urging the EPA to reduce the required biofuel volumes under the Renewable Fuel Standard (RFS) for 2014. The letter, signed by more than 150 members from both parties, correctly points out that the RFS is a flawed policy, based on faulty assumptions, that hurts the economy and the environment:

“Unfortunately, despite the best intentions of the RFS, its premise and structure were based on many assumptions that no longer reflect the current market conditions, and the imposition of the 2014 volumes now threatens to cause economic and environmental harm. As Congress continues its bi-partisan work to address these concerns, we are writing to request that the EPA use its authority to adjust the 2014 RFS volumes.”

The RFS is indeed premised on assumptions that are no longer valid. When Congress passed the RFS in 2005 and expanded it in 2007, gasoline consumption was rising while U.S. oil production was falling, prompting Congress to search for alternative fuels to replace what were perceived to be America’s dwindling oil resources. Today, however, the exact opposite is true. Oil production has skyrocketed thanks to advancements in technology that combine hydraulic fracturing and horizontal drilling, while gasoline consumption has leveled off. As a result, U.S. oil imports have fallen from about 60 percent of supply to less than 40 percent.

The Energy Information Administration (EIA) recently announced that U.S. weekly oil production is now at its highest levels since 1992. Over the last two years, domestic oil production grew by almost 1.9 million barrels per day (bpd), an increase of 34 percent. This increase is roughly equivalent to adding Venezuela’s total average annual oil production since 2008 to U.S. production totals.

The RFS is a fatally flawed policy of a bygone era. America’s new energy landscape obviates the need for inflexible government mandates handed down by bureaucrats who think they can precisely predict the country’s fuel needs more than a decade into the future.  As the growing chorus of RFS critics in Congress explain, “the rigid nature of the federal law has not allowed it to change as new realities emerge in the market place.” Government edicts, especially those not based on reality, are destined to hurt American families.

IER Policy Associate Alex Fitzsimmons authored this post.


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