Month: March 2026

The Alaska Department of Revenue is predicting that the Iran war will cause high oil prices for most of 2026, it said in a revised forecast published Friday.

Oil is no longer the No. 1 source of general-purpose state revenue in Alaska, but the higher wartime prices are expected to bring hundreds of millions of extra dollars to the state treasury.

Last fall, the department’s forecasters predicted $6 billion in state revenue for fiscal year 2026, which ends June 30. 

Now, they’re predicting $6.5 billion, an increase almost entirely caused by the Iran war.

Much of that money has already been earmarked for spending.

Since last spring, when state legislators and Gov. Mike Dunleavy enacted the state’s fiscal year 2026 budget, the governor’s office and legislators have proposed more than $530 million in budget amendments — for disaster relief, road construction, prisons and more. 

On Thursday, the Alaska House postponed a vote on some of those amendments because many lawmakers said they wanted to see the new forecast before deciding whether or not to spend from savings to pay for those items.

On Friday, some legislators said they still support spending from savings because the forecast depends so heavily on the vagaries of war. Others said they felt their caution was vindicated.

“It’s all a gamble on the price of oil actually landing where the Department of Revenue is forecasting it could be in the future,” said Speaker of the House Bryce Edgmon, I-Dillingham.

It takes 30 votes in the state House and 15 votes in the state Senate to spend from the Constitutional Budget Reserve, the state’s principal savings account.

The House is led by a 21-person multipartisan coalition that has doubts about the forecast and wants to spend from savings to pay for more than $373 million in budget amendments, a plan already accepted by the Senate.

But because it has only 21 votes, the coalition needs the support of at least nine members of the 19-person, all-Republican House minority.

On Thursday, and again Friday, members of the minority were unwilling to offer that support.

In a series of interviews, they said they felt confident the forecast will hold, and if it doesn’t, they can approve a savings draw later.

“Having a need to see this revenue forecast was very important to us before we made any decisions,” said Rep. Justin Ruffridge, R-Soldotna. “It was about ‘how do you spend money wisely?’ And I think we’re always going to be proponents of spending money wisely. Spending money wisely is not taking money out of savings when you don’t need to.”

Alaska doesn’t have a statewide income tax or sales tax. An annual transfer from the Alaska Permanent Fund accounts for about 60% of the state’s general-purpose revenue. Oil accounts for about 25%, but that proportion can fluctuate with the price of oil.

While the new forecast doesn’t specifically predict the length of the Iran war, state forecasters appear to doubt President Donald Trump’s claims of an imminent end to the fighting.

Last fall, the department predicted that the average price of a barrel of North Slope crude oil would be $65.48 for the 12 months ending June 30.  

In February, the average price of a barrel of North Slope crude was $69.48. So far this month, it’s $88.71. On Thursday, the daily price topped $105 per barrel.

The new forecast expects prices to average $91.09 per barrel through June 30, the end of fiscal year 2026. 

“The price forecast for FY 2027 is $75.00 per barrel, which assumes that prices will begin FY 2027 over $80.00 per barrel and decline throughout the fiscal year,” forecasters wrote. 

They went on to explain that the forecast is especially volatile and unpredictable this time around.

“While the price forecast is $75.00 per barrel, there is approximately a 10% chance that oil prices could average $130.00 or higher, and a 10% chance they could average $45.00 or lower. This range reflects the genuine uncertainty present in today’s market,” they wrote.

Even as they debate supplemental spending in the current fiscal year, legislators are also at work on writing the budget for the next fiscal year.

Last fall, the Department of Revenue predicted the state would have $6.2 billion in general-purpose revenue during FY27. Now, the forecast is above $6.7 billion.

The next two months of the legislative session will decide how that money gets spent.

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After his address to the Alaska Legislature on Tuesday, Rep. Nick Begich III, R-Alaska, sat down for an interview with the Alaska Beacon. 

This transcript has been lightly edited for clarity to remove “ums,” “ahs,” and other disfluencies, including the reporter’s cellphone alarm going off in the middle of the interview.

Q: Do you have a status update on where the Department of Homeland Security shutdown is at this point? Any signs that that’s breaking?

A: You know, I haven’t seen a lot of movement, unfortunately. From the other side of the aisle on this issue, there’s been conversations regarding what’s happening inside DHS as a lever point for the Democrats to try to make changes that they think need to be made in that organization. 

We have to remember that DHS includes the Coast Guard, it includes the TSA. It includes CISA. It includes a lot of components of our homeland security infrastructure beyond just Customs and Border Patrol. 

Customs and Border Patrol, Immigration and Customs Enforcement are funded for the next four years as part of the previous budget reconciliation bill. 

So holding up DHS funding does not directly impact the funding for that part of the Department of Homeland Security. At the end of the day, we need to make sure people are getting paid. We need to make sure that these organizations, these groups, are funded, and that’s my priority — to find a way through that. 

A lot of those conversations really are happening at the Senate, because the House has already passed funding for the DHS appropriations bills twice, and so we’re waiting for the Senate to reach an agreement with the administration. 

 

Q: Is there any chance of a partial thing that could get Coast Guard, TSA or some other aspects funded?

A: There’s always an opportunity for something like that. I’d certainly be supportive of seeing even a partial opening of those resources. But at this point it appears to be at an impasse. 

 

Q: The other big thing at DHS recently was the ouster of the secretary. What do you think about that changeup?

A: I think it’s broadly supported. There was recognition that change was necessary. 

 

Q: Do you support it? 

A: I do support Sen. Markwayne Mullen. He is an accomplished senator. He’s done a great job. He did a great job in the house. In fact, the first time I met Sen. Mullen was in Don Young’s office, and they were working together on getting a hearing for some of his constituents in the House Natural Resources Committee. And he was very amicable. He has a great relationship with Alaska. I think he’ll be a solid selection to lead the Department of Homeland Security.

 

Q: In your speech today, you talked about immigration enforcement in the context of drug trafficking here in Alaska and other places. We’ve also seen children and legal residents caught up in the immigration crackdown. Do you think Immigration and Customs Enforcement is doing a good job at this point?

A: I think Immigration and Customs Enforcement needs to ensure that it’s prioritizing deportation actions. We know that there have been quite literally hundreds of thousands of criminals that have been arrested and deported at this point by Immigration and Customs Enforcement. That’s where we should be prioritizing our efforts. 

There’s been a lot of self deportations as well, over 2 million reported self-deportations. That’s going to continue, because when folks leave the country, getting back in is going to be a lot more challenging than it has been during the previous administration. 

So I think net, the migration out among people who are not in the country legally, is actually good for us as a nation. We’re seeing this in towns that have large illegal alien populations. Rents are coming down. The hospitals are opening up. The schools have less pressure. So there’s less pressure put on those residents, especially residents at the lower end of the income curve, they’re able to afford living again. 

So I think it’s a net benefit. 

I think we need to be careful in the way in which we prioritize those actions, but I support the direction. And look, the voters in the previous election cycle made it clear that this was a top priority, and how we go about doing that matters, but it’s a top priority.

 

Q: For the case in Soldotna specifically — I assume you’re familiar with that — do you have any updates on how that’s going?

A: I don’t have any updates on that specific case. I’m familiar with it at a high level. To my knowledge, the family has not reached out to our office requesting support, but we recognize that every case is different, has its own unique set of circumstances, and sometimes those circumstances, there can be extenuating circumstances that make a particular specific case unique. And I recognize that there are specific circumstances in this case that make it a little less clear-cut than others.

 

Q: Switching gears to the gas pipeline — you talked about that a lot in your speech. There was one thing that you said a couple different times: Gas from the pipeline would lower energy costs here. Have you seen figures showing the consumer price of gas from the pipeline? I’m wondering what that idea is based on.

A: I have seen figures, and here’s what I want to communicate about this: Right now, we’re looking at importing gas for the first time in the history of Southcentral Alaska. We’ll be importing gas. The gas that’s imported is more expensive than the gas that we’re producing right now. And what an in-state gas line, Phase 1, will do is put a cap on our gas prices. So that will be the new ceiling for gas in-state. And that’s good, because we don’t want to be subject to the swings of gas production.

 

Q: That ceiling is higher than the import price, though, right?

A: Well, so as soon as that in-state gas line is completed, then the export facility goes into place, and once the export facility goes into place, the gas prices will be lower then than they are today for the consumer, so we will actually see a net decrease and a significant decrease in the cost of electricity for folks who are on the Railbelt in Alaska and the price of home heating. 

 

Q: What are you seeing that makes you think that it’ll go to a second phase? Because I think the worry is that under the worst-case scenario, the state puts in a lot of equity on that first phase, the second phase never comes about, and we’re stuck with a pipeline that is producing very expensive gas, and we’ve spent billions, hundreds of millions.

A: In conversations that I’ve had with investors in the Lower 48 and with folks who are interested in investing who reside outside the United States, I’ve received significant assurances that, once the gas line is constructed, the financing of an export facility will be far easier. And I think most of the investment community, based on my conversations, has assigned the greatest amount of risk to Phase 1.

 

Q: Why is that? 

A: I think it’s because of the perception of permitting challenges in the United States that don’t exist in other jurisdictions around the world.

 

Q: The idea being that it’s tougher to build an 800-mile-long pipeline than it is to build liquefaction and decarbonization facilities?

A: Liquefaction facilities are boilerplate. They’re very straightforward. The plans exist. They’re known quantities in terms of the budget and time required to implement one. They’ve been built all over the world, and so there’s very little variance that an investor can expect from that particular investment. 

I think there’s a greater degree of uncertainty centered on the perception of permitting issues in the United States. And so thankfully in our case — and we’ve communicated this, and continue to communicate — we have all the permits that we need, and we have proven that we can not only build but also operate a long-haul pipeline in the state over a long period of time. 

We have a strong track record for the trans-Alaska oil pipeline, and the gas line is a lot less complex than operating, maintaining the trans-Alaska oil pipeline. 

So I believe we have a strong case to be made. If we weren’t being successful at making that case, we wouldn’t see all of these entities coming to the table signing intent agreements with Glenfarne around purchasing supply.

 

Q: How likely is it — or have you seen any signs of movement on a federal loan for the project, a federal grant for the project?

A: I’m encouraged about the federal loan program. We’ve had many conversations behind the scenes to support the advancement of that loan guarantee between Glenfarne and the Department of Energy, the funds are available. The program exists. I think we’re getting closer and closer every day to getting that commitment.

 

Q: Do you have any sense on when there’ll be a decision on the first phase of the pipeline? Because I’ve seen that timeline kind of slip from the end of last year to February and now to some indeterminate date.

A: Yes, so to reach the final investment decision, it’s always required three key components. One is making sure you have customers. Two, making sure that you have producers willing to sell. Three, making sure you have a pool of investors that you believe when you press the button, they’re ready to invest.

We certainly have the producers ready to sell. We certainly have the commitments needed. And I think there might only be just a few more commitments on the edge before we hit that magical threshold that we’ve heard about 16 million tons per year of committed natural gas for sale.

Once those two things click in, the rest is really an exercise in understanding the financial structure of the total deal. And Juneau has a lot to do with that. This was something that I discussed in my remarks today, thinking about ways that we can support a large investment into Alaska. It’s critical that we think through these issues in a really constructive way. The goal of Alaska shouldn’t necessarily be to squeeze every single last drop of value out of the gas line.

 

Q: Why not? 

A: Because the exercise of doing that itself can kill the ability to get the project off the ground, and then you get nothing. And so it’s important to do our best, but it’s also important that we provide a set of rules and a tax structure that’s attractive to get that investment into the state. We’re not talking about a small number here. We’re talking about $40-50-60 billion — it’s going to be a big number, and for us to attract that level of investment in Alaska, it’s got to look good to an investor. And so my edification to the Legislature today was: study the project, model the project, make sure that it’s good and right for Alaska. But at the end of the day, we need to have an environment here where we’re speaking with one voice, and that’s attractive to investors who have other choices around the world. They can choose to deploy their capital in any number of places. We need them to decide to deploy their capital here.

 

Q: When I heard your remarks, I immediately thought of Sen. Giessel’s bill. Was that your intention to be speaking about that?

A: It was not my direct intention. No, I think it’s always worth having the conversation about the tax structure, about the incentive structure, though that’s an ongoing discussion that happens at the state legislature in Alaska. I think it’s important that when we have those conversations, they’re done in a way that is going to encourage, rather than discourage, industry from coming in and saying, ‘Yes, this is a good place for us to invest in.’

And we have to remember, it’s not just the investors in a gas line, it’s also producers. We have some big activity on the horizon on Alaska’s North Slope, significant lease sale opportunities later this month. And we want that investment climate to be positive for producers as well, because it creates a lot of jobs. It creates an opportunity to unlock revenue streams that we don’t currently have coming into the state with the 50-50 split that moves to 70-30 on new NPRA and 1002 area leases. So there’s a lot of reasons, not just the gas line, that we want to make sure that we have clarity, simplicity and stability in our tax code.

 

Q: Talking about the new leases — we didn’t see any interest in Cook Inlet. That’s not a big surprise. That’s been the pattern for a long time. The NPRA one on the 18th is going to be really interesting. What do you think is going to happen on that?

A: I’m encouraged, but I hate to make predictions before the big game. But there’s been a lot of interest. I can tell you that interest from people throughout industry, people who have never been operating in Alaska, and we’ll see what happens. But I think what’s really appealing, not only have we reversed some of the previous regulatory structures that were going to inhibit future development of that area, but we’re issuing a large enough land package that a company can look at this and say, I can invest here, not just for one project, but for an entire corporate platform, where they can come to Alaska and say, ‘This is something I can see us investing in for 20, 30, 40 years.’

 

Q: Are you thinking of Santos or Oil Search, that kind of approach to it, like what they’ve done on the North Slope?

A: Or even what has happened before when ARCO was here. BP came in later. I mean, these are huge platform components of an entire energy company. I think with the lands package magnitude that’s being advanced right now, it raises Alaska to that level where large players in the energy space can look at Alaska and honestly say this could be somewhere they could invest for decades.

 

Q: The 70-30 split won’t apply to these leases, right? It’ll just be the ones after the switchover date. Or does it apply?

A: It applies to these leases, and once they’re leased for the first roughly nine years, we’re at a 50-50 split following that, it’s 70-30 for as long as the lease exists. And this is really interesting, because most of these projects will take a while to spin up, right? 

 

Q: We’ve seen that with Willow, where it’s taken 20 years.

A: That’s right. So nearly all of the revenue that will be generated from this set of lease sales, which runs over 10 years, will be at that 70-30 threshold. The initial lease payment will be at the 50-50 but once production starts, essentially we’re going to be at the 70-30 for the life of these fields.

 

Q: To switch subjects again — the big thing right now is the Iran war. You’ve talked about it, talked about your support with it. Are you satisfied with how the war is being fought at this point to accomplish the goals that you’ve laid out? 

A: I am. I’ve been impressed with the precision of our war fighters. I’ve been impressed with —

 

Q: Despite the bombing of the school? 

A: Well, that’s still under investigation, and I don’t think that we have gotten root cause, full root cause analysis on that.

Note: Hours after this interview, a preliminary investigation concluded that the United States did destroy the school, killing students and teachers.

 

Q: But it was an American Tomahawk that destroyed that?

A: My understanding is that is still under investigation, and I’m still waiting for final information on that. But nevertheless, we have decimated their navy. We have destroyed their offensive capabilities with respect to ballistic missiles. We have severely degraded their nuclear program. And I think the message is abundantly clear, the United States is not going to tolerate a nuclear Iran, not today, not ever. 

We’re not going to tolerate an Iran that seeks a nuclear weapon. We are not going to tolerate an Iran that chants “Death to America” in their official places of legislative business. 

This is not something that the United States can take lightly. And when we think about the tens of thousands of people that the regime murdered, protesters murdered in the streets, this is a regime that is, quite frankly, very evil. 

It’s not just us that they’re a danger to. They’re a danger to citizens in the region. They’re a danger to their own citizens. And at the end of the day, the United States has a responsibility to America. We have a responsibility to our allies. 

I receive confidential, classified intelligence briefings, as do other members of Congress. And I walked into the first Iran briefing thinking that this was the right decision. I left that briefing knowing that it was.

 

Q: The President has talked about the ultimate goal being unconditional surrender. Is that your understanding as well, and what does that look like to you?

A: We need leadership in Iran that is ready to abandon their nuclear ambitions. To me, that’s what success looks like when we achieve that agreement. That is a mission objective that has been checked off the list. We’ve been trying to do this for decades. We’ve been trying to back Iran off the plate with respect to their nuclear ambitions for quite some time. They have negotiated with us in bad faith. They have used stall tactics, lies, deception, to continue to pursue their nuclear ambitions. And we have to remember this is a theocratic regime that is hell-bent on the destruction of the United States, among others, and because that ideology is held at the level of religious fanaticism, it’s very difficult to negotiate in a productive way with these people. So we need leadership in Iran that we can trust is going to abandon these ambitions.

 

Q: One of the side effects of the war has been the spike in fuel prices recently. Do you think there’s something Congress should do on that, and if so, what is it?

A: Unfortunately, the Strategic Petroleum Reserve was drained significantly under the previous administration prior to the midterms. We did not have a true energy emergency at that time, but we have the potential to have one now. I think that use of the SBR should be considered. But what we’ve also seen is oil prices spike to around $120 a barrel and back off down to the high $80s. And that has happened just in the last 12 hours or so. We’re seeing that the Strait of Hormuz is opening back up already, and if that continues, I believe that we will have more normalized prices at the pump as a result of oil dropping into a $70 to $90 range. We’ll see what the capabilities of the Iranians are and their commitment to attempting to disrupt oil flows actually is over the next week. But if we use the missile launches from Iran in the region as a proxy for their capabilities, they’ve been severely degraded. And so I would expect that we’ll see the strait continue to normalize over the coming weeks, and that should result in more stability at the pump.

 

Q: So not necessarily any congressional action needed immediately on this?

A: Not necessarily. We’ll have to watch and see whether oil prices sustainably rise over $100 a barrel. I think once we get into the $120 to $150 range, that gets a little more concerning, of course. But as long as we can keep those prices under $90 a barrel, the end consumer is not going to see a significant long term structural price increase in gas. It will be temporary.

 

Q: In your speech, you had talked about workforce development as part of your call to action. Was there legislation or a specific bill or a specific act you were thinking of?

A: Well, this is where the state legislature really has the opportunity to excel. At the federal level, we’re obviously very supportive of vo-tech programs. We want to see people have pathways for careers that aren’t necessarily a traditional four-year university track, and we need the university and their partners to ensure that they are doing everything they can do to prepare the Alaskan workforce for this opportunity around the corner. 

I want to see as many Alaskans get jobs as possible in this pro-development environment, whether that’s directly on the gas line or in new mines that are spinning up or additional activity in traditional oil development on the slope. We want to make sure the next generation of Alaskans is prepared. I think the university is doing a great job. I think AVTEC is doing a great job, but we want to make sure that they have the resources from the state prioritized so that they can continue to prepare our workforce for what’s to come. 

Anyone who wants a job should be able to get one when the gas line turns on.

 

Q: And it wasn’t a reference to the governor’s veto of a funding avenue for vo-tech, I’m assuming?

A: It was not a reference to any particular or specific legislative action. This is just encouraging everyone to make sure we have a workforce that’s ready for what’s to come.

 

Q: Is there anything else we haven’t covered that you think I should know about or you think I should pay attention to?

A: I think one of the things that that I’m particularly proud of is that we’ve been able to move legislation through the House, through the Senate, to the President’s desk on behalf of Alaska in a time when we have the slimmest majority in U.S. House history and have had the longest government shutdown in history, and that’s due in no small part to my team in Washington, my team in Alaska, and our commitment to bipartisanship. 

We’re looking for ways to move the ball down the field for the state of Alaska, and the best way to do that is to find bipartisan areas of agreement where bills can move. And I believe we’ve done that, and we’ve done it very well in the first year, plus, I would expect there will continue to be strong opportunities to advance bipartisan, common sense legislation for Alaska, and we are going to continue to pursue it.

 

Q: The tax-free dividend thing. Do you see that as part of — manufacturing runs, grinding out the yards, whatever sports analogy you want to use — or do you see that as more of a home run hit? How big a lift is that?

A: It’s going to be a lift. OK. It’s going to be a lift. But the nice thing is that it only applies to Alaska right now, because other states don’t have direct payments from their sovereign wealth funds, where sovereign wealth funds exist in other states. You have to have these bills in existence in order for them to have an opportunity to pass. And sometimes a must-pass piece of legislation will show up, and you’ll have an opportunity to attach a priority for your district. In our case, Alaska, we wanted to make sure that we had this in the clip ready to go. 

When that opportunity arrives, sometimes it happens faster than you think it will. 

Sometimes it takes a while, but you have to have the legislative text ready to go for the moment that arrives, and that’s what we’re doing on that bill. And I’ve always thought how strange it is that we receive a payment from the state of Alaska and then turn around and take a portion of that payment and give it to the federal government. 

They already take a cut of the corporate income taxes for corporations that operate here, they take a cut of any of the federal revenues that are generated on federal lands, and quite frankly, quite higher than was ever anticipated. We were supposed to get 90% of federal royalties and revenues for oil and gas and minerals, and instead, we’ve gotten 50-50 since statehood, until my bill that just passed in the budget reconciliation process. 

So there’s always an opportunity. I think the federal government owes us, and if we can get that over the line, I think it’ll be a big win for Alaskans.

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