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> "In return for the hollow credits, ConocoPhillips paid Green Diesel $18 million, according to court documents. Shell got stung for $14.4 million, BP for $13.6
by kelson 10y ago
> "In return for the hollow credits, ConocoPhillips paid Green Diesel $18 million, according to court documents. Shell got stung for $14.4 million, BP for $13.6 million, Marathon Oil for $12.4 million, Exxon $1.2 million. All these companies also were forced to buy new RINs to replace Rivkin’s phony ones."
> Federal agents were watching, as was Houston attorney David Fettner. He’d been appointed by a court to find and seize Rivkin’s property on behalf of commodities trader VicNRG, which had sued Green Diesel and other Rivkin companies for selling it $3.8 million in bogus RINs. “Rivkin left a trail of unhappy people behind him,” he says.
Doesn't seem like everyone else was happy
> Well, given that the buyers bought just the numbers and not did not go to the authorities immediately it would seem that everybody in the deal was happy except for the EPA.
You'd be happy buying $1000 from someone for only $100, until you discovered the money was essentially worthless (counterfeit)
- jacquesm 10y agoThey should have bought FUEL, not RINs.
- cgriswald 10y agoThat's a bit like saying a ripped-off investor should have bought stock, not mutual funds. These companies needed the RINs, not the fuel. If they had bought the fuel with the RINs they could have been assured the RINs were legitimate, sure. But that has all kinds of associated costs (quality control, finding buyers, the cost of the fuel itself, etc.). A legitimate biodiesel producer is probably better positioned to deal with those costs, so it makes sense for him to keep the fuel and sell the RINs to companies that need them.
- jacquesm 10y agoAnd that's precisely the problem. As soon as you start selling something totally abstract in lieu of something that was presumably produced all control mechanisms fail. Which is why I'm not a fan of these constructs. Even a legitimate biofuel producer will see better margins on the RINs than on the fuel...
- blaisio 10y agoI think you just don't understand how a cap and trade system works. You should try doing a google search to read up on it. It's confusing at first, but there's nothing inherently uncontrollable about it. The only reason these scams are allowed to happen is the EPA doesn't have enough manpower to constantly watch over every facility to make sure fuel is actually being produced.
- jacquesm 10y agoI think I understand it just fine, thank you. > The only reason these scams are allowed to happen is the EPA doesn't have enough manpower to constantly watch over every facility to make sure fuel is actually being produced. So, if you don't have that manpower don't set up a scheme like that. Trust but verify, remember?
- blaisio 10y agoI mean, in the end it's impossible to completely prevent any scams from occurring. Even if we used a tax based system people could still lie, and we will wouldn't be able to see if they're telling the truth. It's not feasible to constantly check up on everyone. They did verify that the RINs were being produced properly, which is what led to the guy being caught. So I'm not sure what your argument is here. If you understand cap and trade systems, then you know that they aren't inherently gameable (which you just admitted). So are you saying that you think the EPA needs more funding?
- jacquesm 10y ago> So are you saying that you think the EPA needs more funding? They should have at least enough funding that they can catch scammers like this before they cause 10's of millions of $ of damage.
- lmm 10y agoHow does producing a bunch of biofuel achieve anything? Why is that something we want to incentivize? If this was about credits for sequestering x tonnes of carbon from the atmosphere then I can see how that should be worth a credit, but I don't see how it makes sense to single out biofuel any more than anything else those crops could have been used for.