Les Gara, Alaska Gas Pipeline, Stay the Course, Photo Copyright by Dave Harbour 2013SUBSCRIBE TO PETROLEUM NEWS.  Gara: AKLNG needs to stay the course.  House Rep. Les Gara  (NGP Photo) has been around for several plans to advance a natural gas pipeline and believes the state is on the right track, but adds there are unknown variables that could still derail future progress. The Anchorage Democrat who serves on the House Finance Committee says the state made the….

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Our Commentary.  We have a hunch that as time marches on, more and more legislators will conclude that purchasing equity in an Alaska gas pipeline/LNG project is not justified at this time, if ever.  The state is in a fiscal crisis and every dollar spent on non essential costs drags the state closer to insolvency.  

In all fairness, we don't know what motivates any particular politician on a particular issue.

We would note, however, that legislators favoring socialism and Davis Bacon income streams for organized labor will be likely to continue supporting public ownership of energy projects for reasons having little to do with the actual merits of ownership.

Q.  Why is equity ownership in http://ak-lng.com/ a non essential government function?  

A.  Because it is gambling, plain and simple.  It puts the public treasury at risk and in the hands of both unelected bureaucrats and part-time, elected officials motivated by reelection more than due diligence management of a complex, technical project.  Furthermore, even if the equity position were to, by chance, produce more wealth than without the equity, the project could not be completed before 2025 and the odds are against even that optimistic timing.

But there is more:

  • If the project moves forward, but is not feasible, all public money invested to that point could be lost.
  • Alaska has painfully proven to itself on multiple occasions that state ownership of free enterprise projects is foolish, and not a proper role for government.
  • Even if the project is built after 2025, the state would already have become insolvent at the current rate of subsidies required to fund government operations. 

Any way we look at it, government ownership of private projects is wasteful, risky and endangers the very enterprises it hopes to exploit.

As longtime observers of Alaska politics, we believe the only reason Alaskan politicians have strayed down the pathway of socialized, energy industry ownership is a shared motivation of greed, not need — rationalized by public declarations of good intent.

Public policy based on greed can only prosper in the absence of wise leadership.