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Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

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Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#11

Post by polyfractal »

rgbrenner wrote: post #9
exabrial wrote: post #8

Good lord... The companies here are dirty, but lets not forget the EPA for creating the problem in the first place!

What problem did the EPA create exactly? They created a rule that the company disagreed with? That does not give them a right to break it. That's not how the law works.

Err...the EPA didn't create a law that the company disagreed with. They created a regulation that was designed to incentivise the importation of renewable fuels.

Someone at Bioversal Trading was clever enough to realize that they could make more money gaming this regulation then actually selling their cargo. Therefore, they ran the train back and forth a dozen times and wracked up money from the Government.

Dirty? Yeah. Fraudulent? Potentially, depending on how the regulation was written.

If anything, it speaks to the danger of hidden incentives in otherwise innocent-looking regulations.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#12

Post by 001sky »

rgbrenner wrote: post #9
exabrial wrote: post #8

Good lord... The companies here are dirty, but lets not forget the EPA for creating the problem in the first place!

What problem did the EPA create exactly? They created a rule that the company disagreed with? That does not give them a right to break it. That's not how the law works.

Did you read the article?

The EPA was the one issuing credits, apparently against its own rules. That is arbitrage of something with zero cost and greater-than-zero value in the market, not fraud. There is no "protest" against this rule evident in the article, etc.

Both the Canada Border Services Agency and the US EPA have launched investigations into the possibility of fraud, although the companies claim that the practice was totally legal.

So, according to the article, there is no evidence that there was fraud. But there is apparently a case of poorly designed or executed issuance procedures for these credits.

Also, the idea of the credits is a little odd. To promote the "measurement" of biofuels? Well, they are doing that...so, nobody is doing anything (evidently) against the policy intentions. So, unless there is some form of un-evidenced criminality...this looks like bad rules/management...more than anything else.

Ethics nothwithstanding.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#13

Post by SideburnsOfDoom »

gsibble wrote: post #10

Hilarious. Sounds legal and I doubt they would have done it otherwise. Good example of why most regulation is ridiculous because it's generally easy to find and exploit loopholes.

> Sounds legal

On the contrary, sounds a lot like a standard "carousel fraud"

> and I doubt they would have done it otherwise.

... Which happens despite being illegal.

> Good example of why most regulation is ridiculous

Laws aren't perfect, lets try no laws!

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#14

Post by vinhboy »

dsr_ wrote: post #6
gojomo wrote: post #3

If Bioversal/Verdaso employees who cooked this up ever apply to YC, they have a good answer for the "Tell us about the time you most successfully hacked some (non-computer) system to your advantage?" question.

It won't be successful if the company pays more in fines than it earned in profit.

that never happens.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#15

Post by rgbrenner »

001sky wrote: post #12
rgbrenner wrote: post #9

Earlier quoted context omitted.

What problem did the EPA create exactly? They created a rule that the company disagreed with? That does not give them a right to break it. That's not how the law works.

Did you read the article? The EPA was the one issuing credits, apparently against its own rules. That is arbitrage of something with zero cost and greater-than-zero value in the market, not fraud. There is no "protest" against this rule evident in the article, etc. Both the Canada Border Services Agency and the US EPA have launched investigations into the possibility of fraud, although the companies claim that the pr…

Fair enough. I went back and read the article more carefully.

The EPA was issuing credits for importing biofuel.

So the company decided to ship fuel out of the country and back in to make it look like they were importing fuel, and therefore earn the credits.

Sorry, but that's fraud.

There's nothing here that is wrong about the EPAs program or behavior. They want renewal energy to be imported, and are offering a credit for that.

That this company is willing to misrepresent their goods to claim a credit they are not entitled to is not the EPAs fault.

That there was a glitch in the EPAs system does not entitle the company to take advantage.

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#16

Post by rayiner »

exabrial wrote: post #8

Good lord... The companies here are dirty, but lets not forget the EPA for creating the problem in the first place!

Yes, let's blame the government for people abusing regulations. Except the regulations we like, of course. We'll call it "arbitrage" when we abuse regulations we don't like, and "fraud" when we abuse regulations we do like (like property).

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#17

Post by [deleted] »

dsr_ wrote: post #6
gojomo wrote: post #3

If Bioversal/Verdaso employees who cooked this up ever apply to YC, they have a good answer for the "Tell us about the time you most successfully hacked some (non-computer) system to your advantage?" question.

It won't be successful if the company pays more in fines than it earned in profit.

[deleted]

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#18

Post by ryguytilidie »

dsr_ wrote: post #6
gojomo wrote: post #3

If Bioversal/Verdaso employees who cooked this up ever apply to YC, they have a good answer for the "Tell us about the time you most successfully hacked some (non-computer) system to your advantage?" question.

It won't be successful if the company pays more in fines than it earned in profit.

If the US government is involved in the prosecution, we can pretty much guarantee that we will make it worth their while. It's usually something like "oh you made 500m profit from fraud? How about 50m fine, any bigger might make you go out of business, like you would have without committing fraud."

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#19

Post by InclinedPlane »

rayiner wrote: post #16
exabrial wrote: post #8

Good lord... The companies here are dirty, but lets not forget the EPA for creating the problem in the first place!

Yes, let's blame the government for people abusing regulations. Except the regulations we like, of course. We'll call it "arbitrage" when we abuse regulations we don't like, and "fraud" when we abuse regulations we do like (like property).

I expect some level of proof that arbitrage is reducible to fraud in the average case. Do you have any?

Re: Why did a Train Carrying Biofuel Cross the Border 24 Times and Never Unload?

#20

Post by Mooby »

exabrial wrote: post #8

Good lord... The companies here are dirty, but lets not forget the EPA for creating the problem in the first place!

Blaming the EPA for companies abusing a bug in the way tracking numbers were managed is like blaming the victim of a home invasion for putting up a defective lock.
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