That is fraud.
This “group expected that, if it was the winning bidder, it would pay about $12,000 for the lease (based on its $18 per acre bid) out of its own budget.”
In this situation the conservation group was fully prepared to make good on their bid.
If someone "buys the oil rights" and doesn't sell any oil, they're cheating the state.
Source? (Not challenging you.)
> If someone "buys the oil rights" and doesn't sell any oil, they're cheating the state
I’d argue a better solution than thinning the buyer pool is setting a high minimum rebate, possibly one that only kicks in if the plot isn’t exploited.
Would also note that Wyoming’s revenue is from sales tax, mining tax and ticketing tourists. (Property tax is mostly minerals [1].)
Hypothetical taxes on unrealized (and possibly zero) profits are not in any way part of the transaction, and it's just bizarre to think of them that way.
There's no guarantee of royalties over and above the lease. You just dreamed that up to support your weird asspulled idea that there's some kind of fraud here. If they wanted guaranteed royalties, they could have written that in.
Furthermore, the state even had the advantage of writing the contract. If the state wants a condition on a lease, the state is perfectly capable of putting it in there (as it is now doing).
A sophisticated party (which a state is supposed to be), with experience in the business, made a public offer. Somebody took that offer with no modification, with every intention of performing on the contract, and with absolutely no attempt at falsification or even concealment of anything at all. The idea that that's somehow "fraud" is insane. Not only is it not legally fraud, but it's not colloquially fraud, either. It's nothing like fraud.
Which is probably why nobody actually involved was crazy enough to suggest that it was fraud.
If you make a deal you discover you don't like, that doesn't make it fraud.
[Edited to fix a false statement about royalties... I pasted in the wrong draft].