[polyfractal]

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? 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]

>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]

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.

[msbarnett]

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.

[yew]

Noting 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.

[ams6110]

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.

[fleitz]

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.