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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 la
by rgbrenner 14y ago
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.
- polyfractal 14y agoErr...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.
- rgbrenner 14y ago>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.
- ams6110 14y agoWell 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.
- msbarnett 14y agoHis 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.
- yew 14y agoNoting that people will break a law is a vacuous criticism of said law. Noting that a law will make it easier for people to break the law (or take advantage of it) is certainly not. Indeed, I'd argue that any analysis of the utility of a new law that doesn't take added opportunities for fraud into account (alongside the other negative effects of adding complexity) is simply worthless.
- fleitz 14y agoThe 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.
- ams6110 14y agoIf 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.
- 001sky 14y agoDid 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.
- rgbrenner 14y agoFair 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.