Sunday, June 28, 2009

Fiscal Certainty - It's what Projects Crave is carrying this op-ed piece by Andrew Halcro (LINK). As always Andrew hits the nail on the head and takes the Alaskan lawmakers to task for inaction on tackling the biggest obstacle to building the Alaska gas pipeline - Fiscal Certainty.

In a nut shell: You can't invest $40 Billion in a long term project with variable or random taxes.

From the article:

Since 2006, Gov. Sarah Palin and others like DNR Commissioner Tom Irwin have been critical of former Gov. Frank Murkowski's proposed gas line deal which included offering the producers 35 years of fiscal certainty. Critics claimed extended fiscal certainty gave away state sovereignty and thus was the primary reason why AGIA was created.

So after years of promoting AGIA as the only way to get around having to offer Murkowski-esq terms to secure commitments from the producers to build the Alaska gas pipeline, has the gas-line paradigm been changed by AGIA?
The answer is NO! the paradigm has not changed. Since Andrew's article did not offer a pop culture reference to make the point I'll offer one:

Idiocracy - We live and work in a democracy where one man has one vote regardless of mathematically impairment or financial illiteracy. I think that's clear when you meet average folks with massive student loans, A.R.M. mortgages, zero percent balloon payment mortgages, and high interest HELOCs.

From what I've seen it might be easier to teach French to arctic squirrels than to explain cash flow and net present value concepts to lawmakers.

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