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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?

#41

Post by ianstallings »

ryguytilidie wrote: post #18
dsr_ wrote: post #6

Earlier quoted context omitted.

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."

Well, maybe. Uncle Sam tends to look the other way when it's not him being fleeced. But when it is him, holy crap watch out. He'll break you up and sell you for pieces.

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

#42

Post by rgbrenner »

recursive wrote: post #29
rgbrenner wrote: post #15

Earlier quoted context omitted.

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 credi…

In order to be fraud, doesn't there need to be some form of misrepresentation or deceit?

They claimed to be importing fuel into the US that was actually produced in the US.

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

#43

Post by ianstallings »

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).

They made a gigantic mistake and we shouldn't blame them? I disagree completely. They should be blamed for this asinine regulation yes. Because it really is their fault. Good intentions don't cut it when it comes to fiscal accountability.

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

#44

Post by fleitz »

polyfractal wrote: post #11
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.

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? Ye…

The hilarious thing is that upon this they will require that the fuel be loaded/unloaded at which point they will pay someone to unload it into a common pool and then reload 'different' biofuel from that common pool.

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

#45

Post by [deleted] »

lhnn wrote: post #28
SideburnsOfDoom wrote: post #13

Earlier quoted context omitted.

> 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!

The government is quick to enforce "spirit of the law" or "letter of the law" when it's most convenient for them.

[deleted]

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

#46

Post by rayiner »

ianstallings wrote: post #43
rayiner wrote: post #16

Earlier quoted context omitted.

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).

They made a gigantic mistake and we shouldn't blame them? I disagree completely. They should be blamed for this asinine regulation yes. Because it really is their fault. Good intentions don't cut it when it comes to fiscal accountability.

I find it deeply amusing that tech people are always so forgiving of bugs in software, but seem to go out of their way to blame the government for bugs in regulation just because it's the government. Newsflash: everything is imperfect, and the operation of this whole complex world we live in requires a certain amount of good faith on the part of everyone.

I agree the regulation is asinine, but for reasons completely unrelated to the incident. From the article: "Each time the loaded train crossed the border the cargo earned its owner a certain amount of Renewable Identification Numbers (RINs), which were awarded by the US EPA to “promote and track production and importation of renewable fuels such as ethanol and biodiesel.” The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were."

The mechanism in question was reasonable, and it looks like there was a bug in the implementation. While that's definitely a mistake, I don't think it rises to the level of "asinine" and I don't think that gets the importer off the hook any more than it gets a cracker off the hook when he exploits an OS bug to steal credit card numbers.

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

#47

Post by rprasad »

lostlogin wrote: post #31
aresant wrote: post #21

A fun sci-fi read would be about a futuristic government that "subsidizes" an Industry for much-debated, but ultimately politically driven reasons. Rather than simply making cash-handouts, however, the Government & the Industry conspire to hide these handouts by creating new by-products for sale to consumers. The Industry grows and rejoices, extending its products into as far ranging lines as sweeteners, fuels, and p…

Am i missing the joke? Whats sci-fi about this? And how many industries are like this? Meat, diary, cars, arms, power, oil, medical, prisons. And these are just the ones that come to read from stories I have read recently.

It is sci-fi in the sense that it involves speculation as to future interefence in various scientific endeavors on a industry-wide scale (i.e., soft sci-fi) by extending numerous historical examples of such practices. Also...it takes place in the future.

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

#48

Post by anigbrowl »

recursive wrote: post #29
rgbrenner wrote: post #15

Earlier quoted context omitted.

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 credi…

In order to be fraud, doesn't there need to be some form of misrepresentation or deceit?

Well, bringing the same fuel load across the border over and over again but claiming a credit for it each time as if it were a different load would be misrepresentation.

Update from the CBC story: Once "imported" to a company capable of generating RINs, ownership of the biodiesel was transferred to Bioversel's American partner company, Verdeo, and then exported back to Canada. RINs must be "retired" once the fuel is exported from the U.S., but Bioversel says Verdeo retired ethanol RINs, worth pennies, instead of the more valuable biodiesel RINs. Bioversel claims this was all perfectly legal.

So basically Verdeo was lying to the EPA by claiming it was exporting ethanol rather than biodiesel. I would not like to be the person trying to explain to a court why that should be considered legal.

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

#49

Post by rprasad »

recursive wrote: post #29
rgbrenner wrote: post #15

Earlier quoted context omitted.

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 credi…

In order to be fraud, doesn't there need to be some form of misrepresentation or deceit?

The company is "importing" and re-"exporting" the same fuel over and over again, collecting a credit each time.

The credit is only intended for fuel that is imported into the US. Under international laws, import has a very specific meaning which the company does not appear to even come close to meeting (if the fuel never left the train). Thus, the fraud is that the company is repeatedly claiming the import credit for fuel it has never actually imported.

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

#50

Post by Steko »

SoftwareMaven wrote: post #39
Steko wrote: post #32

http://www.mnn.com/green-tech/transportation/stories/solved-... The companies maintain that this practice was legal. Another company, Northern Biodiesel, appears to have been put out of business by the practice. The EPA has investigated several other cases of RIN fraud, including one against Jeffrey David Gunselman, the CEO of Absolute Fuels who was arrested in July, accused of selling more than $50 million in fake R…

I don't understand what you are saying (aside from trolling, which is heavily frowned upon). It reads to me like the government is either creating perverse incentives, failing to implement correctly or failing to monitor. If it is the first, we'd be better off without the interference. If it is the second, what is wrong with the government that it can't implement it's policies correctly (perhaps too complex)? If it i…

"I don't understand what you are saying "

The assumption that this is a legal loophole is mistaken.

"It reads to me like the government is either creating perverse incentives, failing to implement correctly or failing to monitor"

Because someone committed fraud and they're now being investigated for fraud by the government?

"If it is the first, we'd be better off without the interference"

If only we were omniscient and knew which incentives were perverse.

"If it is the second, what is wrong with the government that it can't implement it's policies correctly (perhaps too complex)?"

If only the government could always put it's policies into effect perfectly like the free market. Wait, what?

"If it is the last, then why is the government not policing the policies better?"

Because justice isn't instant? Because 30+ years of one party pushing deregulation takes it's toll? It sounds like your solution to the latter is more deregulation.

"And finally, do RIN credits provide better incentives than no credits? That is the real question that should be asked with regard to the government being involved."

If only there were some way for the public to comment on future government rules.

"The government's track-record isn't great."

The track record for successful modern societies without pesky governments is stunningly less great.

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