December 19, 2012

An odd little scandal

From the Canadian Broadcasting Company:
Biofuel credits behind mystery cross-border train shipments
The mystery of the trainload of biodiesel that crossed back and forth across the Sarnia-Port Huron border without ever unloading its cargo, as reported by CBC News, has been solved.

CBC News received several tips after a recent story about a company shipping the same load of biodiesel back and forth by CN Rail at a cost of $2.6 million in the summer of 2010. It turns out the shipments were part of a deal by a Toronto-based company, which made several million dollars importing and exporting the fuel to exploit a loophole in a U.S. green energy program.

The entire U.S. biodiesel market has been the centre of controversy and even legislative hearings this summer over problems with the regulatory program administered by the U.S. Environmental Protection Agency (EPA). The fallout and distrust of a market-based biodiesel credit system has had several repercussions for the industry, particularly for fledgling biodiesel companies trying to produce environmentally friendly fuel. The recent CBC reports on that train to nowhere have prompted an investigation by the Canada Border Services Agency (CBSA), as well as a further investigation by the EPA.

The company that organized the train shipment was Bioversel Trading Inc. of Toronto. Its principal, Arie Mazur, gave CBC a detailed explanation this week explaining that the trip was all about RINs � renewable identification numbers � the credits set up by the EPA to promote and track production and importation of renewable fuels such as ethanol and biodiesel.

The complicated deal unfolded in the final two weeks of June 2010.
Lots more at the site. It would be a clever business hack if these RINs were not coming straight out of our pockets. They are paid for by our tax dollars. The same company is being investigated by some other agencies in the EU. The article also names some other RIN scammers including this guy from Texas:
Last week, Jeffrey Gunselman, head of Absolute Fuels, pleaded guilty to the sale of more than $40 million worth of invalid credits, the profits of which he�d spent on real estate, cars, a demilitarized tank and a personal jet.
Emphasis mine -- I like his style but he is paying the price:
Gunselman faces a maximum sentence of up to 1,268 years in prison and a fine of nearly $20 million.
Holy crap -- a murderer can be locked up for 10 years and this guy gets an effective life imprisonment -- this is not justice. And yes, that number is correct. Posted by DaveH at December 19, 2012 9:22 AM