It is becoming more and more evident that Alaska's gubernatorial election in 2010 will represent a watershed event for the state's economic future.

Alaska's current economic realities are clear.

The trans Alaska oil pipeline -- which has powered Alaska's economy for decades, paid handsomely for state government, and allowed residents to live in the most tax-friendly state in America -- is in decline due in part because Alaska has become the least tax friendly state in America.

Two years ago when then-Gov. Sarah Palin, with an assist from then-Lt. Gov. Sean Parnell, jacked up taxes on the oil and gas industry, she promised it wouldn't hurt investment. While Palin never knew what the hell she was saying when she was saying anything at all, Parnell kept dithering on about how having stability with the new higher tax structure was important.

The higher oil production taxes passed two years ago are beginning to have their delayed effect as more and more oil companies are shifting investment dollars to other global opportunities because of Alaska's high cost.

The proposed natural gas pipeline, Alaska's next big economic boom, has been hijacked by dramatically changing market conditions and a state government that refuses to accept its limitations in trying to dictate the economic terms of the riskiest and most expensive oil and gas project in the world.

After the last three years of telling Alaskans that competition was the best way to get a natural gas pipeline built, we are locked in a contract with a company (TransCanada Corp.) that doesn't possess the competitive assets to build the pipeline, although we're throwing $500 million at them.

But above all, the biggest economic reality is that the current administration, Gov. Sean Parnell's, with their collection of gas line "experts," have been breathing natural gas fumes before charting Alaska's economic future.

Three years ago, Tom Irwin, Department of Revenue commissioner, promised that the Alaska Gasline Inducement Act would force a successful open season because it would leverage public, political and oil company shareholder pressure to get BP, Conoco & Exxon to play ball.

AGIA will provide for an economical project, he and others said. AGIA will attract oil and gas companies to commit their gas, because if they don't we will sue them to take back their leases, AGIA backers warned.

Yes, it sounded as far-fetched and asinine in 2007 as it does in 2009.

But here we are, six months from the promised land of the AGIA open season, but now these same people are telling us not to put too much emphasis on an open season.

Excuse me?

Most of us from day one predicted that AGIA's open season would fail. So with the July 2010 open season date closing rapidly, the Parnell administration is desperately trying to downplay the significance of a failed open season by now calling open season a "nebulous black box."

The harsh reality is that a failed open season will prove once and for all that this entire AGIA goose chase has been a complete waste of three years and that Alaskans have been misled by people who thought they could prop up a straw man and bluff three of the largest companies in the world into building the most expensive oil and gas project in the world.

Meanwhile, one man who seemed to have a realistic grasp about in-state gas projects, Harry Noah, was reportedly drummed out because he got tired of dealing with over sized ego's that were threatened by his work.

It was Noah who once told me in one of our first meetings this past summer that Irwin and his Deputy Commissioner Marty Rutherford were more interested in the chess game of AGIA than facing reality that it was sure to fail.

Unfortunately for Alaska, Noah is headed back to his cherry orchards while Gov. Parnell leaves Irwin in left field, digging Alaska into a larger economic hole with AGIA.

Since his sudden ascension into the governor's seat in July, I have spoken privately and publicly that I believed Parnell would change directions by the end of the year. I assured friends and colleagues that Parnell simply needed to get his feet on the ground before he started making changes.

I was wrong. I was dead wrong.

Over the last few months it is become very clear that Parnell lacks the sense of urgency and the independence to fix what is clearly broken.