Boring

Good decision-making process is boring. It is slow. It is methodical. It does not enflame or excite. It does not get politicians elected. It does not make headlines. But it is good leadership. It results in direction that ultimately benefits the people of Alaska.

Slow growth is boring. But it is easier to manage that boom or bust cycles.

Long-term fiscal plans are boring, but future generations will thank those in leadership who had the fortitude to endure until a rational long-term fiscal plan is adopted.

A methodical approach to a large diameter pipeline is boring. Evaluating those steps the state can perform to encourage a pipeline is boring. Systematically making decisions based on a thorough analysis of the issues is boring.

Giving speeches about expediting processes to bring gas to Alaskans is not boring. Giving speeches makes headlines. Encouraging speed and quick decisions on projects as significant as a large diameter gas pipeline or an in-state gas pipeline is not boring. But it is also not good decision-making.

Good decision-making for an in-state gas pipeline requires a methodical approach. It requires the state to thoroughly evaluate all the options. It requires the state to understand the economic impact of each scenario. It requires the state to understand the risks associated with each scenario? What assumptions are being made to make each scenario a success? What options allow for phased development? What options require a substantial amount of risk? Which options require financial commitment from the state to make them successful? Options that require state participation, by definition, are not economic in and of themselves and should be understood in that context.

Sometimes the state should make a decision to support a project financially, but it should not be because of a dynamic speech, or an enflamed public. It should only be made after a boring, methodical analysis of all alternatives.

Some say we have waited too long. We need to act now. My answer to them is they are probably right. We have waited too long, but that does not mean we throw out good process. It means we put our heads down and get to work. Just because the state has waited a long time to thoroughly evaluate an issue does not provide justification for circumventing process in an effort to make a quick decision. Be leary of those who recommend speed at the risk of sacrificing process.

The in-state gas issue is an emotional one for Alaskans. Many believe that Alaskans should have had access to “Alaska’s gas” years ago. It is easy to get Alaskans emotionally excited about bringing North Slope gas to Alaska, but perhaps they would not be so excited if they understood the relative economics of that option evaluated against other options that may be equally economically viable.

The public will make their own determination of what they believe is right based on what the media and politicians feed them. Most do not have an independent source of information. It is up to the legislature and the media to provide them with good information. Good information comes from good process. Good information comes from methodical analysis. Good information comes from boring process. It is time-consuming, but the result is much better than the alternative.

An in-state gas pipeline may be the right answer, but it will only be the right answer if the proper process is followed. The public should understand an in-state gas pipeline in the context of understanding the relative economics of a large diameter pipeline. What are the chances of success of a large diameter pipeline? What is the timing of such an endeavor? If Cook Inlet needs gas before the completion of a large diameter gas pipeline, what are the option that could accommodate that need? What are the costs of importing liquefied natural gas (LNG), short-term and long-term? Without state financial support, the economics of LNG imports both short and long term may be more economic than bringing North Slope gas to Cook Inlet. What are other alternatives that may be available to span the need for short-term gas in Cook Inlet?

If an in-state gas line is built, what are the potential upside opportunities that may eventually be created because of its existence? If an in-state gas line is built, what are the ramifications on a large diameter gas line? Some believe that a large diameter gas line would then be uneconomic. A methodical, boring evaluation would shed some light on this issue.

The open seasons will shed additional light on what is necessary to bring North Slope gas to market, but in the meantime the state needs to maintain a slow and boring process that would provide them with information necessary to understand their alternatives in the event it looks like the large diameter pipeline will be delayed or perhaps never get built.

We are now entering a major election cycle - lots of speeches, lots of emotion. But it’s time to be boring. It is time to be methodical. It is time to follow rational process to get to reasoned decision-making. If someone’s speech gets you excited and makes you want to support one option over another, take a second to think about how much information was provided to get you to that conclusion. Was it based on emotion or substance. Always lean toward boring substance. It leads to better decision-making every time. In an election year it is still time to be boring.