Outdated Supply and Demand Projections

The Energy Independence and Security Act of 2007
(EISA) was legislation enacted under the assumptions
of declining domestic production of crude oil and far
greater crude oil imports. Both of these assumptions
have been completely reversed by the shale oil
revolution, dramatically increasing North American
energy production and increasing crude oil exports. The
U.S. is now a global oil and natural gas superpower—
not because of biofuels, but through investment in the oil
and gas industry and increases in domestic production.
Our domestic oil and natural gas industry is achieving
the EISA goals of greater energy independence and
security. As further endorsement that the United States
has achieved desired energy security, Congress enacted
legislation in 2015 to allow broader export of crude oil.

In addition EISA07 was based on significantly greater
gasoline demand projections in 2007 than current
projections. The Energy Information Administration’s 2018 Annual Energy Outlook projected 22 percent lower demand in 2022 than was projected in 2007, when
EISA07 was enacted. Furthermore, liquid cellulosic
biofuel technologies were expected to develop within a
few years of EISA07, but by the end of 2017, only one
tenth of one percent of the volume congress had hoped
for was actually produced.

Declining gasoline demand, combined with increasing
mandates, means we are at the limit of blending ethanol
into gasoline (10 percent ethanol or E10) for widespread
use. The EPA rushed through approval in allowing a
blended fuel with up to 15 percent ethanol (E15) without
adequate testing. In addition to compatibility problems
with E15, expanded use of another alternative fuel (E85)
has not occurred due to poor consumer acceptance
and significant infrastructure and cost challenges.

The RFS was based on
economics and security
perspectives that are much
different from the reality of
today’s energy landscape.