The federal government owns massive areas of land and water rights. Much of this territory contains oil and gas, which the government sells the rights to. However, some oil and gas companies have cheated taxpayers out of government royalties for decades by:
- Concealing the actual volume of oil extracted
- Falsifying the selling price of the extracted oil
- Creating shell companies to buy the oil at below market price
Sometimes this deceit can have severe consequences for years to come as the BP Gulf oil well explosion illustrates. In 2016, the government alleged that BP Exploration and Production (BP) provided false reports about its “safe drilling margin” that concealed the company’s improper drilling practices in the Gulf of Mexico. This left the oil well in that area in a fragile state and resulted in the catastrophic 2010 Gulf oil well explosion. That explosion impacted natural and economic environments for many years. For their “misconduct,” BP was required to pay $82.6 million.