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

Lot of assumptions on this thread. The company involved here is claiming that hasn't committed a crime, which isn't a very interesting claim. The agency that's launched and investigation hasn't gotten a chance to, you know, conduct that investigation yet. There's also a possibility that this was all a mistake that just needs sorted out. So before we all jump on the incentives-gone-wrong and government-is-inefficient trains, maybe give the government a chance?<p>But if we are going to speculate--and let's face it, we are--let's at least have a gander at the relevant regulations. IANAL, etc, but from my reading Title 40 Part 80 Subpart M [1] it seems <i>really unlikely</i> that assigning the same volume of fuel different RINs is legal. There's a bunch there about assigning specific numbers to specific volumes of fuel, but there's also the super specific:<p>&#62; (5) Importers shall not generate RINs for renewable fuel that has already been assigned RINs by a registered foreign producer.[2]<p>Sounds pretty clear.<p>[1] <a href="http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&#38;SID=27e92597791f3c5cb9d729f136e9782d&#38;rgn=div6&#38;view=text&#38;node=40:17.0.1.1.9.13" rel="nofollow">http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&#38;SID=27e92597...</a><p>[2] <a href="http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&#38;SID=27e92597791f3c5cb9d729f136e9782d&#38;rgn=div6&#38;view=text&#38;node=40:17.0.1.1.9.13&#38;idno=40#40:17.0.1.1.9.13.93.16" rel="nofollow">http://www.ecfr.gov/cgi-bin/text-idx?c=ecfr&#38;SID=27e92597...</a>

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

As much as I dislike the idea of new government departments, it sounds like they do need some kind of 'evil' department who's only job is to think up ways to abuse proposed new laws and regulations before they go into effect.<p>Similar to how generals have the intelligence section of their staff put on only the enemy hat and poke holes in their plans.

A fun sci-fi read would be about a futuristic government that "subsidizes" an Industry for much-debated, but ultimately politically driven reasons.<p>Rather than simply making cash-handouts, however, the Government &#38; the Industry conspire to hide these handouts by creating new by-products for sale to consumers.<p>The Industry grows and rejoices, extending its products into as far ranging lines as sweeteners, fuels, and plastics.<p>To drive adoption they interrupt the free market through price manipulation and straight forward mandate from their "Environmental" agency.<p>Despite overwhelming evidence that consumers are being harmed by these by-products - record obesity, less efficient engines, and environmental damage - the subsidies only grow.<p>I'd like to see how the protagonist would drive change as presently my best solution is to rage via comment board into the echo chamber.

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

CBC article: <a href="http://www.cbc.ca/news/canada/story/2012/12/19/mystery-biodiesel-train-credits.html" rel="nofollow">http://www.cbc.ca/news/canada/story/2012/12/19/mystery-biodi...</a>

This is a typical case of how incentives have a tendency to go wrong. I recommend you to listen to this Freakonomics Radio podcast which tells a series of stories about incentive failure, for example an indian town which started farming cobras when a ruler started giving out money for each cobra head after an infestation.<p><a href="http://www.freakonomics.com/2012/10/11/the-cobra-effect-a-new-freakonomics-radio-podcast/" rel="nofollow">http://www.freakonomics.com/2012/10/11/the-cobra-effect-a-ne...</a>

<a href="http://www.mnn.com/green-tech/transportation/stories/solved-the-mystery-of-the-biofuel-filled-train-that-kept-crossing\" rel="nofollow">http://www.mnn.com/green-tech/transportation/stories/solved-...</a><p><i>The companies maintain that this practice was legal. Another company, Northern Biodiesel, appears to have been put out of business by the practice.<p>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 RIN credits.</i><p>So yeah, keep telling yourself that this is another case of the dum dum gubmint who needs to stay out of our way and how no one ever goes bankrupt after defrauding the gubmint because I mean, it all sounded great when Rush said it right?

&#62; The RINs were supposed to be retired each time the shipment passed the border, but due to a glitch not all of them were.<p>Inside job? Sounds like the type of "glitch" that was in Office Space.<p>But probably not (Hanlon)

TL;DR: export fraud.

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.

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.

Sometimes I am dazzled, again, by what total dicks some people are.

Seems like a classic case of the law of unintended consequences at work.

And no-one will serve a day in prison because it's white-collar crime.

... to get to the other side... waw-waw-waaaaah....

Nice arbitrage!