It seemed like a good idea at the time: In 2007, the federal government created fuel standards that pushed for renewable fuels as reliance on oil imports intensified.

In 2013, many of the goals set by the government’s Renewable Fuel Standard (RFS) have been met. Greenhouse emissions have been reduced. The nation’s energy supplies are increasingly secure with reliable domestic energy providing independence from imports.

But those goals weren’t achieved through ethanol or other biofuels. Rather, companies in the fields of the Eagle Ford, Bakken, Marcellus and other shale plays dug the United States out of an energy rut, industry officials say.

Oil Production In Eagle Ford And North Dakota (barrels per day)

Source: North Dakota Department of Mineral Resources, Texas Railroad Commission

Despite near term gains, the RFS regulations persist. And a crisis is coming, oil and gas industry officials told Congress at a July 23 hearing. In 2014, new fuel standards required by the RFS could stymie jobs and hobble economic growth.

Advocates for the standards say biofuels have cut or supplanted the need for oil and to move forward the RFS should continue to reduce the need for crude.

At the forefront of the RFS discussion is the blend wall: a mismatch between the number of gallons of gasoline the U.S. market demands and the number of gallons of ethanol the RFS requires to be mixed into that gasoline.

With a 10% limit on the ethanol-to-gasoline ratio, there is a mismatch of roughly 500 million gallons in 2013. Going forward, the amount of biofuels is supposed to increases annually, despite the consumption of gasoline falling considerably.

“Put simply, the RFS, while well-intentioned, is today completely untethered from reality, and unless it is immediately halted will unnecessarily cost our economy and consumers billions of dollars,” said Jack Gerard, president and CEO of the American Petroleum Institute.

Repeal of the RFS seems unlikely. Rep. Fred Upton (R-Mich.), chair of the House Energy & Commerce Committee, said the committee should do all it can to facilitate the domestic oil and natural gas revolution but, “I also see a continued role for renewable fuels and other alternatives.”

However, Upton made it clear the current regulations aren’t practical.

“I hope we can start a discussion that considers a host of potential modifications and updates to the RFS, with the end goal being a system that works best for the American people,” he said.

Proponents of RFS said it’s worked well and that the Environmental Protection Agency (EPA) has the authority to dial back regulations.

Bob Dinneen, president and CEO of the Renewable Fuels Association, credited biofuels for “largely eliminating the need for imported finished gasoline.

“While increased domestic oil production from fracing has also been a factor in reducing petroleum import dependence from 2005 levels, its role has been exaggerated by oil and gas proponents,” Dinneen said, adding that oil production “was actually declining steadily until 2009.”

Dinneen said the EPA will likely provide flexibility in gasoline mandates that raise 2012 biofuel use from 15 billion gallons to more than 20 billion gallons in 2015 and 36 billion gallons in 2022.

Jeremy Martin, a senior scientist for the Union of Concerned Scientists’ Clean Vehicles Program, agreed.

“EPA has the clear authority to reduce the rate of growth between now and 2015 by more than half, and to reduce the 2022 target from 36 billion gallons to 20 billion gallons,” Martin said.

Dinneen added, “EPA has authority to address some of those issues.”

But Rep. Bill Cassidy, (R-LA), was quick to say that a legislative vehicle is needed to assure both sides that changes will be made.

“Our side doesn’t trust the EPA,” he said.

Martin testified that the motive behind the RFS’ legislation -- the Energy Independence and Security Act (EISA) of 2007 -- was to cut U.S. oil use.

Martin said the Union’s goal is to cut by half oil use in the next two decades. RFS and other policies have replaced 10% of gasoline in the United States with corn-made ethanol, he said.

“Cutting oil use remains as urgent a priority now as it was then,” Martin said. Despite increased domestic production and new unconventional oil resources, the economic, environmental, security and climate problems caused by our oil use have not decreased during the five years since the passage of the RFS.”

Martin said oil prices remain high and unstable, and international oil producing regions remain critical security concerns while oil spills continue.

By The Numbers

Source: U.S. Energy Information Administration (EIA).

*2014-2040 Brent prices are in 2011 real dollars

However, Gerard and others noted the United States unlocked its true energy potential without the mandates or subsidies.

An abundance of natural gas in the U.S. has led to power plant conversions, dropping carbon dioxide emissions to a near 20-year low. Oil production has put the nation on the path to unseating Saudi Arabia as the world’s top oil producer. Imports have dropped in the face of record oil production.

Gerard also questioned RFS, since it mandates the use of a “fuel that simply doesn’t exist.”

The amount of commercially available, advanced cellulosic biofuels in the market cannot meet the requirements of the RFS, he said.

“In other words, RFS mandates the use of a phantom fuel that could cost American consumers millions,” Gerard said.

Along with oil companies and refiners, engine makers and restaurateurs testified about the burden RFS is creating.

Todd J. Teske, president, chairman & CEO, Briggs & Stratton Corp., said the blend of a new biofuel, which has 15% ethanol, damages small, non-road engines and outdoor power equipment.

Ed Anderson, a Wendy’s restaurant franchise owner in Virginia, said ethanol has drive food prices higher. He said that RFS costs $30,000 more per restaurant.

“Last year, ethanol industry proponents blamed the drought for high corn prices. This year, those same proponents are now blaming the oil companies,” said Anderson, who represented the National Council of Chain Restaurants. Anderson asked for the repeal of the RFS.