Energy firms are caught in green-credit crossfire
When individuals attempt to solve a problem and end up creating unforeseen troubles, it’s called the law of unintended consequences. When government does it, it’s called the law of the land. In its zeal for regulation, the federal leviathan has invented a market for something called renewable-fuel credits and, not surprisingly, it’s filled with fraud. Businesses are getting swindled and Uncle Sam’s unsympathetic response is “heads I win, tails you lose.”
The Energy Policy Act of 2005 mandated that the Environmental Protection Agency (EPA) implement a Renewable Fuel Standard forcing fuel refiners to dilute their petroleum products with vegetable oil, corn, algae and animal fat so companies that label themselves “green” would reap a financial windfall. Refiners who can’t make those substances on their own are allowed to buy renewable-fuel credits to meet their federal quota. Each credit carries a 38-digit renewable identification number (RIN) as proof of purchase. The credits can be traded.
As this is an entirely artificial market that serves no purpose other than to make politicians and their political donors happy, it’s rife with fraud. Since November, the EPA has claimed 140 million invalid RINs have been sold. The agency alleges 48 million bogus credits came from Absolute Fuels of Texas, netting about $62 million. Another 32 million were purportedly sold by Clean Green Fuel LLC in Maryland for $9 million, and 60 million were marketed by Green Diesel of Texas, worth $84 million.