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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?

#61

Post by ams6110 »

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…

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

Yep. Writing regulations is like writing code. In anything nontrivial, there are a lot of nonobvious edge cases that never occur to the writer until they bite him in the rear. And just like code, some of these sneak through even rigorous review and testing.

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

#62

Post by rgbrenner »

001sky wrote: post #51
rgbrenner wrote: post #42

Earlier quoted context omitted.

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

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. This enabled Bioversal to accumu…

That's a good point. If it was merely a mistake, then I'm sure the company would not mind the EPA adjusting the credit balance. After all, they did not intend benefit from the error.. they just wanted to ship their goods back and forth for some other reason.

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

#63

Post by ams6110 »

rgbrenner wrote: post #40
polyfractal wrote: post #11

Earlier quoted context omitted.

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…

>If anything, it speaks to the danger of hidden incentives in otherwise innocent-looking regulations. That's like saying, there should be no lower tax brackets than 39% because I can lie and say I made less money than I actually did... speaks to the danger of hidden incentives in the tax code.

Well it does. The more complex the code the more ways there are to legally avoid its intent. Extreme example: if we had one tax bracket and no exemptions or deductions, there would be little anyone could do to avoid taxes other than literally earn less money.

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

#64

Post by vinhboy »

tantalor wrote: post #30
vinhboy wrote: post #14

Earlier quoted context omitted.

that never happens.

But it's not a real profit, i.e., they weren't selling anything. The money (in the form of RINs) was stolen from the EPA. You better believe the government will be recouping it.

Nope. Still not happening. http://www.washingtonpost.com/wp-srv/nation/interactives/far...

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

#65

Post by [deleted] »

anigbrowl wrote: post #54
ianstallings wrote: post #43

Earlier quoted context omitted.

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.

What is the gigantic mistake here? Per the story: The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were. Really, we have no idea whether this glitch was legislative, administrative, or database-related. Update from the CBC story linked downthread: Once "imported" to a company capable of generating RINs, ownership of the biodiesel was transferred to Bio…

[deleted]

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

#66

Post by msbarnett »

ams6110 wrote: post #63
rgbrenner wrote: post #40

Earlier quoted context omitted.

>If anything, it speaks to the danger of hidden incentives in otherwise innocent-looking regulations. That's like saying, there should be no lower tax brackets than 39% because I can lie and say I made less money than I actually did... speaks to the danger of hidden incentives in the tax code.

Well it does. The more complex the code the more ways there are to legally avoid its intent. Extreme example: if we had one tax bracket and no exemptions or deductions, there would be little anyone could do to avoid taxes other than literally earn less money.

His point was that objecting to a piece of legislation on the basis that some people will break the law is a pretty vacuous objection. Given one tax bracket or 200, people can lie to reduce their taxes.

This, of course, is not an interesting or useful critique of tax policy, just as what this company did in this case (fraudulently manipulate RIN credit retirements such that the train load was simultaneously classed as containing credit-valuable biodeasel and credit-worthless ethanol depending on whether or not the train was pointing North) is a vacuous critique of the EPA.

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

#68

Post by bdunbar »

EwanToo wrote: post #5

To me this reads like pretty standard fraud, along the lines of carousel fraud[1] which was very common a few years ago. If nobody is arrested or punished for it, then that's more like weak enforcement than clever use of the system. http://en.wikipedia.org/wiki/Missing_trader_fraud#Carousel_f...

> To me this reads like pretty standard fraud

I assume the companies ran this by legal before going forward with the plan. Loopholes aren't illegal, they're just exploits.

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

#69

Post by anigbrowl »

vinhboy wrote: post #64
tantalor wrote: post #30

Earlier quoted context omitted.

But it's not a real profit, i.e., they weren't selling anything. The money (in the form of RINs) was stolen from the EPA. You better believe the government will be recouping it.

Nope. Still not happening. http://www.washingtonpost.com/wp-srv/nation/interactives/far...

Not even remotely relevant. Please stop confusing the issue with irrelevant arguments.

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

#70

Post by rhizome »

rayiner wrote: post #46
ianstallings wrote: post #43

Earlier quoted context omitted.

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…

Implementation bugs are design flaws are tax loopholes are human failings that the technocrat decries as solvable even though it's people originating all of it.
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