Repeal the RFS

America is a very different place than it was in 2007. That year, just before the United States entered the worst recession in its history, average home prices reached their all-time peak of nearly $330,000, the average wage climbed to $44,500, and gasoline demand hit its all-time high.

Congress responded to the demand uptick by updating the Renewable Fuel Standard (RFS), requiring refiners to add increasing amounts of ethanol and other biofuels to motor fuels through 2022. In the lawmakers’ view, something had to be done to reduce U.S. dependence on foreign oil.

{mosads}Then the Great Recession hit. Gasoline demand declined, imports began to drop precipitously, and advanced drilling technologies encouraged the United States to produce more of its own oil. By 2013, imports had fallen to 33 percent of U.S. oil consumption, the lowest level since 1985, and energy analysts were predicting the possibility of energy independence.

Yet the RFS and its unworkable—and costly—ethanol mandate remain as a relic of an earlier time. Ethanol contains less energy than gasoline, forcing motorists to fill up more often. Ethanol’s corrosive properties also have harmed older vehicle and marine engines.

Despite the fact that oil imports are plummeting, the RFS requires the Environmental Protection Agency with finding ways to add ever-growing volumes of biofuels to the nation’s motor fuels. In 2013, however, refiners hit the so-called “blend wall,” the point at which no more ethanol could be blended into gasoline without exceeding the safe 10 percent concentration limit.

To address this problem, the EPA approved the sale of E15—a blend of 15 percent ethanol and 85 percent gasoline. Then it hinted it might lower the ethanol blending requirement for 2014. These dual announcements led to intense political pressure. Pro-ethanol groups demanded an increase in ethanol, while service station groups warned of the costs and hazards associated with adding more ethanol to gasoline. Unable to make a decision, the EPA punted. On November 21, 2014, the agency said the 2014 ethanol requirement would be revealed in 2015.

The EPA’s non-decision created great uncertainty for everyone in the fuel business. The American Petrochemical & Fuel Manufacturers filed suit against the EPA and advanced biofuels companies warned of lay-offs.  Friends of the Earth, an environmental group, said the RFS was “in absolute chaos.”

In truth, the RFS was flawed from the very beginning. It was based on the premise that gasoline demand would grow exponentially far into the future. It ignored the energy production impact of American innovation in the oil fields. And it failed to recognize that cars and trucks were becoming more fuel efficient and would require less fuel as consumers replaced older vehicles with newer ones.

Now the RFS has outlived its usefulness. Although it raised the consumption of biofuels from 0.0 percent in 1973 to 4.3 percent in 2012, it never lived up to its promise. Rather than making America more energy secure, it raised the cost of food and created an artificial market for biofuels that has proven to be unsustainable.

In a December report issued by the Bipartisan Policy Center, a veritable Who’s Who of biofuel experts offered suggestions on how to fix the RFS. Although they came up with several options, they could not reach consensus. They did agree on one thing, however: “Observers believe that the RFS legislation created a huge aspiration that was not achieved.” What an understatement.

The RFS was a legislative pipedream that attempted to reform America’s fuel system. It didn’t work.  The new Congress should admit that the RFS has failed and repeal it.

Pottle is the founder of Victoram Energy Research and Consulting and the author of the new book: Fueling the Fire: The Battle for America’s Energy Future.