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Alaska House rejects Senate’s LNG gas line bill, lawmakers say negotiations will continue

By: Corinne Smith, Alaska Beacon

The Alaska House convened for a third special session and voted to reject a Senate version of a tax break bill for the proposed AK LNG gas line project on June 20, 2026. (Photo by Corinne Smith/Alaska Beacon)

The Alaska House of Representatives on Saturday rejected a Senate-drafted multibillion-dollar tax break for a proposed trans-Alaska natural gas pipeline project, as members of the House declined to abandon a different proposal they drafted.

Members of the House voted down the Senate’s revised bill 12-28, nine votes short of what was needed to adopt the Senate plan. In a separate 0-16 vote, the Senate declined to abandon its version in favor of the House’s plan. Lawmakers will now convene a conference committee with representatives from both bodies to hammer out a compromise agreement.

In an interview following the House vote, House Speaker Bryce Edgmon, I-Dillingham, said objections within the House varied, and lawmakers with the conference committee need time to evaluate the changes.

“Given the breadth and just the wide range of things that happened to House Bill 381 in the Senate last night, you know, we’re going to take that vehicle and use it as a starting point going forward, and we’re going to work very diligently and also with a strong sense of resolve to try to bring it all to an agreement,” Edgmon said. 

Lawmakers agreed to reconvene for potential final votes on July 1.

Members of the all-Republican House Minority Caucus huddle behind the Capitol ahead of a vote to reject the Senate's version of a tax break bill for the proposed AK LNG gas line project on Saturday, June 20, 2026. (Photo by Corinne Smith/Alaska Beacon)
Members of the all-Republican House Minority Caucus huddle outside the House chamber behind the Capitol ahead of a vote to reject the Senate’s version of a tax break bill for the proposed AK LNG gas line project on Saturday, June 20, 2026. (Photo by Corinne Smith/Alaska Beacon)

While conference committees typically negotiate behind closed doors, Edgmon said there will be public meetings as well. 

Lawmakers said negotiations would begin soon but there was no confirmed schedule for the conference committee. 

From the House, the conference committee will include Edgmon, Reps. Calvin Schrage, I-Anchorage, and Justin Ruffridge, R-Soldotna. From the Senate, the committee includes Sens. Lyman Hoffman, D-Bethel, Bert Stedman, R-Sitka, and Mike Cronk, R-Tok.

At issue is the size and scope of a tax break for the proposed trans-Alaska natural gas pipeline project, known as Alaska LNG.

As currently proposed, the project would include construction of a 807-mile gas line from the North Slope to Cook Inlet, in phase one. In phase two, it would include a new large gas-treatment plant on the North Slope and an export facility on the Kenai Peninsula to export gas internationally.

The House passed the bill with a larger tax break on June 12. The Senate revised the bill, reducing the size of the tax break and passed a variety of changes on Friday, with a smaller tax break on the gas tax, known as the alternative volumetric gas tax, and a plan for gradual increases in tax over time. 

Senators also included a variety of changes to the bill, including a previously contentious provision voted down by the House this spring to levy corporate income taxes on privately-owned oil and gas companies that currently do not pay them. That would apply to Hilcorp and Glenfarne, the company developing the LNG project. 

The Senate also included amendments to the bill seeking more protections for the state and Alaskans: one an amendment would limit the gas price cap for residents in Southcentral Alaska to rise with inflation and prohibiting developers from passing on cost overruns to Alaskans; a labor-related proposal would require the pipeline builders to pay prevailing wages in the state and employ Alaskans and apprentices. An amendment would require Glenfarne and developers to disclose their ties to foreign companies. Another amendment declared that if pipeline developers abandon their efforts, the project will return to the state at no cost. Currently Glenfarne owns 75% of the project while the remaining 25% is held by the state-owned Alaska Gasline Development Corp. Glenfarne could not seek a buyout from the state if it failed to move forward with the project.

The Senate imposed deadlines on the project, mandating construction of the pipeline and phase one to be completed no later than 2032, and phase two to be done no later than 2036.

The Alaska Senate convened for the third special session on June 20, 2026, voting to move a tax break bill for the proposed AK LNG gas line project to a conference committee. (Photo by Corinne Smith/Alaska Beacon)
The Alaska Senate convened for the third special session on June 20, 2026, voting to move a tax break bill for the proposed AK LNG gas line project to a conference committee. (Photo by Corinne Smith/Alaska Beacon)

Late Friday night, Gov. Mike Dunleavy voiced objections to the Senate’s version of the bill, saying there were “serious questions about all the amendments.” 

Friday was the last day of a 30-day special session devoted to the gas pipeline project. Dunleavy has proclaimed another 30-day special session, which began Saturday, and legislators spent the morning taking procedural actions that allow them to resume work without interruption.

Dunleavy urged lawmakers to work quickly, but four senators were excused absent from Saturday’s votes, and members of the House rapidly left the Capitol on Saturday afternoon in order to catch flights home from Juneau.

Edgmon said he expects negotiations with the governor’s office to continue. 

“If he’s not involved, and that’s going to make the pathway ahead problematic,” he said.

A spokesperson for Dunleavy’s office said on Saturday that the governor supports the bill moving forward to a conference committee.  

“Governor Dunleavy is encouraged by House and Senate leadership’s decision to send HB 381 to a conference committee,” said Jeff Turner, Dunleavy’s communications director, by email. “It’s an opportunity for both bodies to agree on a version of the bill that can incentivize the Alaska LNG Project while still providing steady, predictable revenue to communities along the pipeline corridor using a volumetric tax mechanism.”

The governor and members of the House were particularly opposed to the corporate income tax provision.

House Majority Leader Chuck Kopp, R-Anchorage, joined a news conference with Gov. Mike Dunleavy on June 19, 2026. (Photo by Claire Stremple/Alaska Beacon)

“It is considered economically counterproductive at the moment the state is trying to attract final investment decisions on phase one and phase two of the gas pipeline,” House Majority Leader Rep. Chuck Kopp, R-Anchorage, said on the House floor ahead of Saturday’s vote, adding that he believes the provision undercuts certainty and competitiveness of the project. 

“These amendments were not vetted or extensively explained on the other body’s floor, and we do not yet know their full impact,” Kopp added.  

But Sen. Bert Stedman, R-Sitka, who co-chairs the Senate Finance Committee said lawmakers still need more financial information from Glenfarne to determine if that’s the case, and to determine the project’s economic viability.  

“They still haven’t clearly delineated how much benefit or burden the property tax existing structure actually is on it,” Stedman said after the Senate vote. “Even if we made no property tax on the gas line, it does not make it economic. It helps economics, it does not get it over the hurdle.” 

“We gotta protect the treasury, that’s our job,” Stedman added. “If you’re going to give concessions, they need to show us why they need them, and the impact.”

If legislators do not adjourn early, the new special session is set to end on July 19.

James Brooks contributed to this story.

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Gas pipeline deadlock continues in Alaska Senate as special session nears end

Senate Minority Leader Mike Cronk, R-Tok, listens to a speech by Rep. Will Stapp, R-Fairbanks, on Thursday, Jan. 22, 2026, during a joint session of the Alaska Legislature. (James Brooks photo/Alaska Beacon)

By: James Brooks, Alaska Beacon

Senate Minority Leader Mike Cronk, R-Tok, listens to a speech by Rep. Will Stapp, R-Fairbanks, on Thursday, Jan. 22, 2026, during a joint session of the Alaska Legislature. (James Brooks photo/Alaska Beacon)

The 14 members of Alaska’s Senate coalition majority met behind closed doors twice on Wednesday to decide the fate of a multibillion-dollar tax break for the proposed trans-Alaska natural gas pipeline.

The state House voted 34-5 on Friday to approve the break, which also has the approval of Gov. Mike Dunleavy and pipeline developer Glenfarne, but the tax break won’t become law unless it also has the approval of the Senate.

For several days, the Senate’s majority has been stymied by an internal rule that requires 11 of the majority’s 14 members to agree on a bill before it is presented to the full Senate.

As of Wednesday afternoon, there were not 11 majority votes for the bill, which would replace a 2% property tax on the project with a tax on gas pumped through the line.

Under current law, the pipeline would generate $47 billion for the state and boroughs along the route through 2062, according to figures from the Alaska Department of Revenue. 

The House-passed bill would drop that figure to about $31 billion. The $16 billion difference is the result of the switch from a property tax to a gas tax. The state would still collect production taxes, royalties and other fees.

Lawmakers are also interested in lowering natural gas costs for Alaska residents. If built as planned, the pipeline would provide in-state gas to the Railbelt at a rate cheaper than imports.

In a newsletter, Sen. Loki Tobin, D-Anchorage, became the latest lawmaker to voice opposition to the House’s version of the bill.

“A 90% tax cut for Glenfarne raises concerns that our state and local governments may not have enough funds to support essential services such as sanitation, schools, and roads, which directly impact our communities and families,” she wrote in part, referring to the property tax cut.

Glenfarne has said the bill is critical in order to obtain financing for the Alaska LNG project, which would build an 807-mile pipeline from the North Slope to Cook Inlet and major processing plants at either end of the line.

Senators are considering amendments to the House bill that could ease the bill’s passage in the Senate, but Glenfarne has warned the Senate Finance Committee against making big changes.

“We’re encouraged by the House progress and strong outcome and are optimistic the Senate will pass a bill that works for Alaska by helping enable this project,” said Tim Fitzpatrick, a spokesperson for Glenfarne.

On Wednesday, the Senate majority canceled a scheduled meeting of the full Senate and two scheduled meetings of the Senate Finance Committee, which is considering changes to the bill.

The next meeting of the full Senate is scheduled for 11 a.m. Thursday.

Lawmakers are in a 30-day special session that ends at 11:59 p.m. Friday. If they don’t pass the tax-break bill by that deadline, the bill will die. 

Dunleavy could call legislators into another special session, and while the governor’s office declined to say whether he is prepared to do so, the six members of the Senate’s all-Republican minority caucus said they have seen a draft special-session proclamation.

In separate interviews, all six said they support the House version of the bill, with only minor technical fixes needed.

Sen. Robb Myers, R-North Pole, said that while the pipeline isn’t guaranteed to happen if the bill passes, it’s guaranteed to not happen if the bill doesn’t pass.

Sen. George Rauscher, R-Sutton, offered a similar position.

“Glenfarne has to have numbers that work, or they can’t build it. We can ask for anything we want — we can demand all the taxes — but in the end, if it isn’t built, we don’t get anything,” he said.

Senate Minority Leader Mike Cronk, R-Tok, called the majority’s 11-vote rule “pathetic.”

“We should all have the ability to cast a yes or no vote on this,” he said, noting that collectively, the minority’s six members represent more than 180,000 Alaskans.

Cronk said he believes the Senate will ultimately vote on the issue.

“I’m hoping we all get our chance to say yes or no. That’s what Alaskans expect. It shouldn’t be dictated by 11 people,” he said.

Cronk and Sen. Cathy Tilton, R-Wasilla, observed that the Senate Majority already broke its 11-vote rule during the regular session by calling up a pension bill, a medical licensing bill and a bill pertaining to gambling.

Despite Wednesday’s lack of action, Sen. Robert Yundt, R-Wasilla, remained optimistic, saying he believes the Senate will ultimately bring the pipeline issue to a vote.

“A majority of the state depends on natural gas. We’re either going to be using our own or importing, and when all is said and done, I think we’re going to be using our own,” he said.

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Alaska gas pipeline developer offers concession, proposes to cap natural gas costs for Alaskans

By: James Brooks, Alaska Beacon

Members of the Senate Finance Committee convene on the first day of a special legislative session on the proposed LNG gas line project on May 27, 2026. (Photo by Corinne Smith/Alaska Beacon)

The firm developing the proposed trans-Alaska natural gas pipeline has proposed limiting the price for natural gas sold through the pipeline to Alaskans. 

If accepted by legislators, the limit would prevent the cost of gas from rising if the pipeline costs more than expected.

The new proposal from pipeline developer Glenfarne comes as the Alaska Legislature continues meeting in a 30-day special session, considering a major tax break to support the AKLNG pipeline project. That project aims to build an 807-mile pipeline to bring natural gas from the North Slope to Cook Inlet for export and in-state use.

A price cap could resolve one sticking point in negotiations over the proposed tax break, but with half of the special session gone, a variety of other issues remain unresolved.

Those include basic elements about the tax break, including its size and length, as well as how municipal governments will be compensated for the impacts of construction, which is expected to bring as many as 12,000 new workers to the state temporarily.

The House Finance Committee is expected to begin voting on possible solutions to those issues next week.

Natural gas is the primary fuel for home heating and electricity in Southcentral Alaska, but  officials estimate that by the end of the decade, local production from gas fields beneath Cook Inlet will be insufficient to meet demand.

Prices are already rising, and several gas-import projects have been proposed. The AKLNG pipeline is another possible solution, but because the pipeline and supporting infrastructure are so large, the project would need to also sell gas overseas in order to offset costs.

If the pipeline is built but no exports take place — something that could happen if the pipeline costs more to build than expected — the Alaska Department of Revenue has estimated that AKLNG gas would be much more expensive than imported gas.

In legislative hearings, that risk has caused some lawmakers to question the project.

Speaking to the Senate Finance Committee on Wednesday, Glenfarne Alaska LNG president Adam Prestidge said the company is on the verge of finalizing a firm, 30-year contract with Enstar, the largest natural gas utility in Southcentral Alaska.

That fixed-price arrangement would guarantee natural gas at no more than $16 per MMBtu, a measurement of heat capacity. 

If the pipeline costs more than expected, cost overruns would not be passed on to consumers, said John Sims, Enstar’s president, when speaking to the House Finance Committee on Monday.

“Enstar’s agreement has a fixed price, and Enstar does not care if the project goes over cost. It does not impact in any way, shape, or form the price that we would be charging customers as a fixed price,” he said.

Rep. Alyse Galvin, I-Anchorage, immediately responded to Sims’ comment.

“A lot of us are very excited to say, yes, I 1,000% support this, because I want to keep low prices,” she said.

Capped price would be cheaper than imported gas

The figure given by Prestidge is equivalent to about $16.59 per thousand cubic feet of natural gas, using a standard conversion. That is cheaper than the forecast price of imports.

Dan Stickel, chief economist for the Alaska Department of Revenue, told legislators in late May that the department’s estimate for the cost of imported gas in 2033 — AKLNG’s planned completion date — “came to about $17 per thousand cubic feet price range.” 

Sims told legislators on Monday that Enstar currently expects a “total, all-in cost between $16-22” per thousand cubic feet for imported gas. 

Enstar’s current cost of gas is $10.80 per thousand cubic feet, but that will rise in coming years as production declines in Cook Inlet. 

The $16 per MMBtu figure is a maximum, Prestidge said. If the pipeline is developed according to plan, exports would subsidize the cost of in-state gas, dropping it as low as $5 per MMBtu, he said.

Glenfarne’s $16 figure could rise with inflation, Prestidge said, but it wouldn’t be affected by cost overruns on building the pipeline.

Prestidge told the Senate Finance Committee that Glenfarne is open to applying a price cap on gas sold to other utilities and industries that might use natural gas.

“Glenfarne is supportive of language being added to any property tax bill that prohibits cost overruns on the project from being borne by either the state or the regulated ratepayers who are buying gas off the pipeline,” he said.

While a final deal between AKLNG and utilities is subject to approval by regulators, a price cap would directly address legislators’ concerns about affordability.

“I think putting that (cap) in a bill would provide a ton of reassurance, because it substantially mitigates your risk in a low-volume scenario,” said Rep. Zack Fields, D-Anchorage.

Sen. Kelly Merrick, R-Eagle River, listened in person to Prestidge on Wednesday.

“I don’t know if $16 is the perfect cap, but it’s addressing a significant concern and protecting Alaska ratepayers,” she said.

Long-awaited pipeline cost estimate met with mixed reaction 

On the same day that Prestidge discussed the price cap, he also disclosed updated cost estimates for the pipeline project, saying the first phase of the project is now expected to cost between $13.2 billion and $16.9 billion. 

Building facilities needed for gas exports would raise the cost to between $44.5 billion and $54.5 billion, Glenfarne estimates.

Legislators have previously criticized a lack of updated cost estimates, saying their absence is hampering their ability to work on a tax break.

Sen. James Kaufman, R-Anchorage, said the new data and the proposed cost cap “was kind of a tipping point” in discussions.

“I think it gives us more information to do our due diligence,” said Sen. Lyman Hoffman, D-Bethel and co-chair of the Senate Finance Committee.

Alaska currently levies a 2% tax on oil and gas property. Cities and boroughs are permitted to claim some or all of that tax on property within their boundaries. 

To incentivize AKLNG investors, Dunleavy proposed replacing the property tax with an “alternative volumetric tax” of 6 cents per thousand cubic feet of gas shipped through the pipeline. The change would effectively result in a 90% tax break, and there would be no tax during construction, because gas isn’t yet being shipped. 

The impact of the switch would be heaviest on municipalities. They would have to deal with the consequences caused by having thousands of extra people living nearby, but they would have little (or no) new tax revenue to cover the resulting costs.

The North Slope Borough funds most of its services through the petroleum property tax and has opposed Dunleavy’s proposed change.

Rep. Robyn Niayuq Frier, D-Utqiagvik, represents the North Slope. She has deep concerns about the switch to a volume-based tax and thinks Glenfarne’s new cost estimates are still too low. 

“I think there are a lot of people who are having these conversations who think that there’s no way this is actually going to happen, that this is a pipe dream,” she said of the pipeline project.

The House and Senate Finance committees are considering whether to set the natural gas tax at something like 40 cents per thousand cubic feet — or higher — and how long the switch from a property tax to a volumetric tax should last. 

That would reduce the size of the break that Dunleavy requested and increase the amount the state and boroughs would collect in revenue.

Dunleavy has suggested that the new tax should last the life of the project. Other legislators, including Frier and Sen. Bert Stedman, R-Sitka, are suggesting shorter terms. 

Lawmakers are also debating the size of a proposed “impact fund” that Glenfarne would provide to cover the costs that cities and boroughs would incur as thousands of workers gather to build the pipeline.

Legislators also haven’t decided what communities would be eligible for the fund or how the money would be distributed.

The House Finance Committee is scheduled to begin debating the unresolved issues on Monday and could advance a bill to the House floor as soon as the second half of next week. 

The Senate could take up that measure on the week of the 15th, but with the special session ending on June 19, there’s a real risk that legislators will run out of time before they decide the multibillion-dollar issues at stake.

“We have to find a product that meets the polar opposite forces that are out there,” said Speaker of the House Bryce Edgmon, I-Dillingham.

“The needle’s not been threaded yet, and if we don’t get the needle threaded … I think ultimately, then the 30 day special session is — I don’t know what’s going to happen. I just, quite frankly, don’t know.”

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Lawmakers press for details on Governor’s tax cut plan for pipeline project

The Alaska State Capitol in downtown Juneau. (Photo by Greg Knight/News of the North)
The Alaska State Capitol in downtown Juneau. (Photo by Greg Knight/News of the North)
The Alaska State Capitol in downtown Juneau. (Photo by Greg Knight/News of the North)
The Alaska State Capitol in downtown Juneau.
(Photo by Greg Knight/News of the North)

NOTN- Alaska lawmakers are in a 30-day special session to weigh a sweeping tax break for the proposed North Slope natural gas pipeline.

Juneau Sen. Jesse Kiehl, said the governor’s bill would shift the project away from the current 20-mill petroleum property tax structure and toward a volume-based tax on gas flowing through the line. He said the proposal amounts to roughly a 90% tax cut that would last as long as the pipeline operates.

“That’s one of the things we’re working on.” He said, “The governor’s proposal is about a 90% tax cut, and the governor’s proposal lasts as long as the pipeline lasts. They will not need that, right? They will not need that, past, heaven knows, past year 20 when you got almost all your debt paid off.”

Kiehl said some early tax relief is reasonable for a multibillion-dollar project that will not generate revenue immediately, but he questioned the size and duration of the proposed break.

“During the regular session, we couldn’t seem to get as many numbers, real numbers, as we needed, so we’re working on that.” He said, “A big gas line could be a huge project for the state, big for the state’s economy, a lot of jobs when it gets built. The other thing we have to make sure of is that we also protect the treasury, because the risk with these things is cost overruns, right? The oil pipeline cost could be more than double what they planned on.”

Lawmakers are seeking more complete data from project backers to determine how large a tax incentive is necessary and how long it should last.

While the gas line would not deliver gas to Southeast Alaska, Kiehl said the region’s benefit would come from new state revenues that fund public services, including schools and state troopers.

“The benefit we get from Alaska gas going to market is some money in the treasury to pay for public services, all the things we need. So, we’ve got to make sure that we watch those risks.” He said.

Kiehl also added that if the state grants a substantial property tax break, it will also need to ensure money flows to local governments along the route, such as Anchorage, Kenai and Fairbanks. Those communities would face increased demand for schools, law enforcement, road work and other services during construction.

The governor’s bill was introduced midway through the regular session and has already been vetted by House and Senate resources committees. The measure is now before the finance committees, which Kiehl said will use the full 30 day special session to scrutinize the fiscal impacts and negotiate possible changes.

If project backers do not provide the information lawmakers are seeking, he said, the Legislature could choose to “cut our losses and expenses and gavel out,” ending the special session without approving the package.

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Proposed Alaska gas pipeline has a narrow window of viability, estimates suggest

By: James Brooks, Alaska Beacon

Rep. Nellie Unangiq Jimmie, D-Toksook Bay, Rep. Neal Foster, D-Nome, Rep. Andy Josephson, D-Anchorage, and Rep. Calvin Schrage, I-Anchorage, listen to Nick Fulford, senior director for gas, LNG and energy transition at GaffneyCline Energy Advisory, at a May 26, 2026, House Finanance Committee hearing in Anchorage. (Photo by Yereth Rosen/Alaska Beacon)

The proposed trans-Alaska natural gas line faces a narrow road to profitability, even with Gov. Mike Dunleavy’s proposed multibillion-dollar tax break, according to estimates presented to state legislators.

The more the pipeline costs, the more its builders will need to charge for gas shipped through it in order to make money. But if the cost of Alaska gas is too high, it isn’t competitive with gas from other sources around the world. 

On Tuesday, members of the House Finance Committee met for the second time in a 30-day special session devoted to discussing the tax break.

Nick Fulford of GaffneyCline, the Legislature’s hired analyst for the pipeline project, said previously published financial modeling by the Alaska Department of Revenue remains the best public look at whether the project pencils out financially.

“The main question really is: How much bigger and how much more capital cost can the project support before it becomes uneconomic,” he said. 

Nick Fulford, senior director for gas, LNG and energy transition at GaffneyCline Energy Advisory, speaks to the House Finance Committee at a May 26, 2026, hearing in Anchorage. (Photo by Yereth Rosen/Alaska Beacon)

In 2018, officials with the Alaska Gasline Development Corp. suggested that building a pipeline from the North Slope to Cook Inlet — plus large industrial processing plants on either end — would cost roughly $43.4 billion, including money earmarked for possible cost overruns.

Since then, the official cost has risen only slightly, to $46.2 billion, but many state lawmakers have said they are skeptical of that figure, because it does not seem to account for inflation.

Glenfarne, a multinational corporation that now owns 75% of the pipeline project, has not disclosed an updated figure.

Rep. Alyse Galvin, I-Anchorage, said that when she uses the Consumer Price Index to judge how much the cost has grown, it’s significant.

“When I look at cost adjustment, just using CPI, just a straight cut through, that brings us to $57 (billion) to $60 billion,” she said during Tuesday’s hearing.

“I would say it seems highly likely that it would be more than $46 billion given the general inflation that we’ve seen,” Fulford said.

Rep. Alyse Galvin, I-Anchorage, poses a question to Nick Fulford, senior director for gas, LNG and energy transition at GaffneyCline Energy Advisory, at a May 26, 2026, House Finanance Committee hearing in Anchorage. Next to her is Rep. Frank Tomaszewski, R-Fairbanks. Photo by Yereth Rosen/Alaska Beacon)

Publicly available estimates suggest gas could be bought from North Slope producers between $1 and $2 per thousand cubic feet. That’s what’s technically known as the “upstream price.”

In a scenario where the pipeline costs Galvin’s suggested figure, the state’s tax laws don’t change to help the project and the upstream price is $1.50 per thousand cubic feet of gas, the Department of Revenue estimates that an end buyer in Japan could expect to pay more than $11 per thousand cubic feet.

That’s likely a problem for the pipeline project, because according to GaffneyCline’s estimates, the average contract price in Japan over the past 10 years has been $10.41 per thousand cubic feet — less than what the Alaska project would have to charge to earn its expected profit target.

Under a tax change proposed by the governor, the end buyer’s price would drop to about $10.40, using Galvin’s cost estimate and the $1.50 upstream price.

But if the cost of upstream gas rises, or if the cost of the pipeline rises, even the governor’s proposed tax break isn’t enough to keep the project economically competitive.

Fulford, speaking to the House Finance Committee, said he thinks Asian LNG prices will rise in the coming years, possibly offsetting any rising costs and keeping the project viable.

But he also acknowledged that with so many unknowns, it’s not clear where the project becomes uneconomic.

“The question is … if the price of LNG goes up and if the capital cost goes up, then where’s that sort of tipping point where the project can still go ahead, even if it’s a much higher capital cost?” he said.

Under Dunleavy’s proposal, the state’s existing petroleum property tax would be largely replaced by a tax on gas that moves through the pipeline. 

Speaking last week in Anchorage, Glenfarne CEO Brendan Duval said the governor’s proposed change is necessary for Glenfarne to get financing for the project.

“It won’t be financeable in the form that we’re trying to do it without the tax stabilization law,” he told the Anchorage Daily News.

Legislators appear favorable to the general idea, but they don’t know what tax rate to use for the “alternative volumetric tax,” as it is formally known.

Dunleavy has proposed 6 cents per thousand cubic feet of gas. House and Senate lawmakers are each considering different, higher rates.

They’re also considering mandatory impact payments to compensate cities and boroughs that collectively would lose out on $14 billion in property taxes through 2063 if the governor’s plan is adopted. A mandatory natural gas spur line to Fairbanks is also being discussed. As currently planned, the pipeline runs to the west of Fairbanks.

Rep. Calvin Schrage, speaking Tuesday, said legislators are working with a large amount of uncertainty, and that is slowing their work.

“If we could eliminate some of these variables and have it known, it would really help us in figuring out where this might be going, but we don’t have that right now,” he said. “What this is ultimately showing is that under our current tax structure, there’s a very small window of break-even profitability for a developer.”

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Special session on Gov. gasline bill takes place in both Anchorage and Juneau

Alaska Gov. Mike Dunleavy speaks during a news conference on Friday, March 15, 2024. (Photo by James Brooks/Alaska Beacon)
Alaska Gov. Mike Dunleavy speaks during a news conference on Friday, March 15, 2024. (Photo by James Brooks/Alaska Beacon)
Alaska Gov. Mike Dunleavy speaks during a news conference on Friday, March 15, 2024. (Photo by James Brooks/Alaska Beacon)
Alaska Gov. Mike Dunleavy speaks during a news conference on Friday, March 15, 2024. (Photo by James Brooks/Alaska Beacon)

NOTN- Alaska lawmakers will continue holding hearings this week during a 30 day special session on Senate Bill 2001, and separately House Bill 381, the governor-backed gas pipeline tax proposal tied to the proposed Alaska LNG project.

The Alaska State Senate Finance Committee is scheduled to meet today, Thursday and Friday at 9 a.m. in Juneau to hear presentations and discussion on the bill.

Today and Thursday’s hearings will include presentations from consulting firm GaffneyCline. Friday’s meeting is also focused on continued review of the legislation.

The House met yesterday, and will continue work this week in Anchorage.

Governor Mike Dunleavy called the special session after lawmakers failed to pass a gasline bill during the regular session, lawmakers received the governor’s proposal on day 80 of 120.

The governor is pushing for larger tax breaks and incentives for the project’s developers.

According to reporting from the Alaska Beacon following an Energy Conference in Anchorage, state and local governments would eliminate 90% of the property tax that would be levied on gasline-related infrastructure in exchange for future opportunities to tax natural gas as it moves through the yet-to-be-built system.

Though legislators are currently sitting on both sides of the fence, some argue the proposal would reduce future revenue for both the state and local governments along the pipeline route.


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Pipeline-for-pension deal falls apart as the Alaska Legislature’s regular session nears end

At left, House Majority Leader Chuck Kopp, R-Anchorage, talks with experts on the proposed trans-Alaska natural gas pipeline during a break in debates Monday, May 18, 2026. To Kopp's immediate right is Joelle Hall of the Alaska AFL-CIO. At center, gesturing, is former U.S. Sen. Mark Begich, now an adviser to Gov. Mike Dunleavy. (James Brooks photo/Alaska Beacon)

By: James Brooks, Alaska Beacon

At left, House Majority Leader Chuck Kopp, R-Anchorage, talks with experts on the proposed trans-Alaska natural gas pipeline during a break in debates Monday, May 18, 2026. To Kopp’s immediate right is Joelle Hall of the Alaska AFL-CIO. At center, gesturing, is former U.S. Sen. Mark Begich, now an adviser to Gov. Mike Dunleavy. (James Brooks photo/Alaska Beacon)

A high-stakes quid pro quo deal fell apart in the Alaska Capitol on Monday as legislators failed to approve a tax break for the proposed trans-Alaska natural gas pipeline and Gov. Mike Dunleavy vetoed a bill that would have restored public pensions in the state.

The failure leaves public employees with a 401(k)-like retirement system and legislators likely to head into a special session for further work on a gas pipeline bill.

Rep. Chuck Kopp, R-Anchorage and the Legislature’s lead negotiator on the planned deal, said on Monday night that “the pension was a good vehicle to help get people there and be more conciliatory towards this gasline legislation than they otherwise would have been. Now that the governor has vetoed the pension, I expect the conciliatory attitudes will suffer.”

Monday was the deadline for Dunleavy to enact or veto House Bill 78, which would have created a new pension plan for Alaska’s public employees. Alaska has not offered a pension since 2006, when lawmakers closed the pension plan to new employees after an actuarial error led to significant underfunding. 

Days ahead of Monday’s veto deadline, Dunleavy offered a deal to legislators — pass a tax break for the proposed gas pipeline, and he would allow the pension bill to become law.

“We said we wanted the gasline bill passed in an acceptable form to the governor’s desk before the deadline on the (defined benefit) bill,” said Jeff Turner, the governor’s communications director. “At that point, he could allow a (defined benefit) bill to go into law.”

Dunleavy told reporters at a news conference earlier this month that the gas pipeline bill should be the Legislature’s top priority.

In March, he introduced two identical bills, one in the House and one in the Senate, with his ideas. Legislators have since held dozens of hearings on those ideas.

If enacted, the governor’s proposal would largely exempt the gas pipeline and supporting infrastructure from state and local property taxes levied on petroleum property. In place of the property tax, the state would levy a tax on gas transported by the pipeline.

The pipeline’s lead developer, multinational firm Glenfarne, has said the change is necessary for it to successfully obtain financing needed to build the pipeline project.

Alaska LNG, as it is known, would ship gas through an 800-mile pipeline, from the North Slope to Southcentral Alaska. As currently planned, the first phase of the project would deliver gas to Alaskans in 2029 and the second phase would allow foreign exports by 2031.

While state legislators generally support the idea of a pipeline, they have balked at the governor’s planned tax breaks, particularly because Glenfarne has thus far declined to provide new estimates for the cost of construction or its expected cost of gas when the pipeline is complete.

That has made it impossible for them to determine whether the proposed tax break is too large, too small, or just right. 

Rep. Chuck Kopp, R-Anchorage, speaks Monday, May 18, 2026, on the floor of the Alaska House of Representatives. (James Brooks photo/Alaska Beacon)

House and Senate each took the governor’s ideas and amended them. Both increased the proposed gas tax — formally known as an “alternative volumetric tax” — mandated construction of a spur line to Fairbanks and required Glenfarne provide early payments to communities affected by pipeline construction.

Senators went further, proposing price controls on gas shipped through the pipeline to Alaskans, an end to a tax exemption that would benefit Glenfarne, and small increases to the state’s oil taxes.

With both bills far from completion, Kopp began negotiating with the governor’s office on a possible compromise.

Kopp has been supporting a pension revival for a decade, and sought a deal that would accomplish two personal goals that also are among the legislative majorities’ top priorities.

On Monday, after days of work, he introduced a compromise gas pipeline proposal as an amendment to Senate Bill 180. That bill was originally written as a one-sentence change to state law pertaining to liquefied natural gas import terminals.

Kopp’s amendment, 22 pages long, was adopted, and House lawmakers began debating, one after another, hours of amendments to Kopp’s amendment. 

In the back of the House chambers, advisers to the governor — who have been working closely with Glenfarne — provided feedback on whether each amendment was acceptable. 

From left to right, Reps. Jeremy Bynum, R-Ketchikan, Neal Foster, D-Nome, and Robyn Niayuq Frier, D-Utqiagvik, talk about an amendment to the gas pipeline bill on Monday, May 18, 2026. (James Brooks photo/Alaska Beacon)

One amendment from Rep. Robyn Niayuq Frier, D-Utqiagvik, derailed that process. Adopted on a 21-19 vote by the House, it would allow the North Slope Borough to negotiate directly with Glenfarne on taxes.

Frier represents the North Slope Borough, and because the project’s large gas treatment plant would be located there, the borough would lose a disproportionate amount of tax revenue with a switch from property taxes to the alternative volumetric tax.

“The amendment was completely necessary,” Frier said afterward, explaining that the borough had been asking for it.

The Kenai Peninsula Borough, planned site of the export terminal, accepted the alternative tax, and lawmakers from that region did not propose amendments similar to Frier’s.

Frier said North Slope officials talked with all of the stakeholders, with the governor’s office and Glenfarne.

“We always knew this was going to be an issue, and I don’t understand why this is such a big deal. They could have been negotiating. They should have been negotiating,” she said. 

Frier said that rather than try to push through a major bill in a single day, she would like to see lawmakers focus on House Bill 381, the House’s gasline bill, in a 30-day special session.

“We need to do the proper vetting, we need the modeling, we need it to go through the Department of Revenue. … We need people to weigh in, not trying to shove this in at the last minute. This is not good process,” she said.

Lawmakers in favor of Kopp’s compromise were unable to quickly reverse Frier’s amendment, and the Senate adjourned shortly after 10 p.m., leaving no avenue for Kopp’s amendment to pass through the Capitol on Monday.

Kopp said afterward that he had negotiated a deal to sidestep Frier’s amendment, but with the Senate adjourned until after the window to veto the pension bill, he said the governor was uninterested. 

“He feels like the outcome has to be 100% controlled. … The House was in position to send over a good gasline bill. The governor simply did not care, because he had to have it in the bag. To me, that’s disappointing, and to me that was very shortsighted,” Kopp said.

With the deal dead, the House adjourned for the day just after 10:30 p.m. The governor’s veto message arrived in the House clerk’s office shortly afterward, at 10:39 p.m.

Alaska Gov. Mike Dunleavy’s legislative director, Jordan Shilling (left) and his deputy legislative director, Forrest Wolfe, watch as assistant legislative director Victoria Schoenheit delivers the veto message for House Bill 78 to the House clerk on Monday, May 18, 2026. (James Brooks photo/Alaska Beacon)

“I share the Legislature’s goal of strengthening recruitment and retention for Alaska’s public workforce,” the governor said in his veto message. “However, House Bill 78 contains unresolved legal, tax, administrative, and fiscal issues that create uncertainty for the State, employers, employees, and the retirement systems themselves.”

Kopp, visibly frustrated, sat in his office after the House’s adjournment.

“He has no allies in the Senate that can help him on the gasline. I was his No. 1 ally in the entire Legislature,” Kopp said, “and he killed the pension bill that I carried. That was his thank you to me. So, I’ll remember that.”

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In Alaska Legislature’s last days, a key question: How much to subsidize the gas pipeline?

By: James Brooks, Alaska Beacon

Gov. Mike Dunleavy speaks about at a May 4, 2026, news conference about his property tax bill intended to help draw investment in a massive natural gas pipeline. The news conference was held in his Anchorage office. (Photo by Yereth Rosen/Alaska Beacon)

Alaska Gov. Mike Dunleavy is urging state lawmakers to act on his proposal to cut state taxes by $7.2 billion over the next 36 years to subsidize construction of the proposed trans-Alaska natural gas pipeline.

Failing to act, he said, could keep the pipeline from being built at all. 

“This bill is too important. This concept is too important,” Dunleavy said. “This is not setting up a tax for the lemonade stand down here in the corner by the hot dog stand. This is the biggest (natural gas) project on the planet.”

But some state lawmakers are skeptical about the size of the governor’s proposed subsidy. Two alternatives — one in the House and the other in the Senate — are advancing through committees in the final weeks of the session.

Other legislators believe the pipeline already makes financial sense and no change is needed.

As a result, four different paths await state legislators in their last weeks, and it isn’t clear which one they’ll take — or whether the governor will call legislators into special session on the issue.

There’s also been no agreement with cities and boroughs affected by the proposed tax cut. There’s also no public agreement with North Slope gas producers or the state’s labor unions.

At the core of the problem facing lawmakers is how much — if any — subsidy is needed in order to attract investors who would pay for building the pipeline project in two stages. 

The first stage would involve a pipeline from the North Slope to Cook Inlet for in-state use. The second stage would construct processing plants at the north and south ends of the pipeline, allowing larger volumes of gas to be exported overseas.

If both phases of the project are built, Department of Revenue economist Dan Stickel told legislators on Tuesday, the result would be cheaper natural gas than currently available from Cook Inlet.

“If the full project goes forward, it’s a significant reduction in cost to Alaskans,” he said.

Rep. Zack Fields, D-Anchorage, noted that Alaskans could be locked into high natural gas prices if the second phase is never built or if both phases are built but no exports take place.

For a hearing last week, the Department of Revenue estimated that under that scenario, prices in Anchorage would exceed $27 per thousand cubic feet by 2033, more than double current prices.

It’s unclear how likely that worst-case scenario is.

The larger the subsidy, the greater the chance that the project is built in full and the lower the price of gas for Alaskans, project proponents say.

“Our objective is to have the lowest cost gas for Alaskans and have certainty on the project,” said Adam Prestidge, president of Glenfarne Alaska, the project’s developer.  

A problem, some legislators say, is that they’re working without information. Glenfarne, an international firm that last year bought 75% of the project and became its developer, has not shared its latest estimate for how much the pipeline will cost.

“I think it’s important for us to have starting points on what the actual numbers are, because if it needs tax relief, let’s figure out what the relief is,” said Sen. Bill Wielechowski, D-Anchorage.

Legislators also don’t know how much North Slope gas producers will charge for the gas, or what international buyers will pay for it. 

Some of that information is impossible to know — legislators are trying to anticipate the price of natural gas in 2033 and beyond, once the pipeline is up and running. 

Other information is being kept confidential until a final investment decision or when proposed prices are submitted to state regulators, something that’s months away at the earliest.

Legislators are being asked to take action within weeks.

“We’re not really competitive in the global market if the (cost) overrun is 40%,” said Rep. Julie Coulombe, R-Anchorage, on Tuesday.

The gas pipeline’s publicly stated cost on Tuesday was $46 billion, but most legislators believe the true figure is higher.

“I think it’s really $57 billion … if not higher,” said Sen. Bill Wielechowski, D-Anchorage, relying on a prior statement from former U.S. Sen. Mark Begich.

Begich, a Democrat, lost to Gov. Mike Dunleavy in the 2018 governor’s election. Now, Begich is a paid adviser, hired by Dunleavy’s administration on a $100,000 contract.

In a Tuesday hearing, Begich said lower taxes would not increase profits for investors or developers and would simply lower the end cost of gas for consumers.

“If you lower the tax, it does not go to the return or the profit or anything of this project,” he said. 

“I am just telling you right now, every dollar you save consumers is a dollar in their pocket in an economy that is struggling,” Begich said.

Under his calculations, Wielechowski said, the average Southcentral Alaska family would save $55 per year if the pipeline is built and produces gas according to the latest available cost analysis from the Department of Revenue. 

The subsidy needed to create that savings amounts to a loss of $500 per Alaskan per year, he said, money that could be used for the Permanent Fund dividend or state services.

“That’s not a good deal,” he said of the exchange.

The latest available version of the Senate proposal shows an increase in revenue to the state, rather than a subsidy. Instead of earning $27.9 billion through 2062, the state would earn $42.1 billion.

“I would describe that as very burdensome for the project and potentially prohibitively so,” Prestidge said. 

“I will characterize that tax at that level as something that would require some real reconsideration of the drawing board of how the project is structured and taken forward,” he said.

In the House, discussions have been less acrimonious. The House Resources Committee on Tuesday morning discussed a proposed a subsidy of less than $5.9 billion, smaller than the governor’s concept but similar in other regards. 

“It would be a tax reduction but a smaller tax reduction than proposed by the governor,” Stickel said of the House proposal.

On Tuesday afternoon, the committee worked methodically through a long series of amendments to its plan, frequently consulting Prestidge and Begich about how each might affect financial negotiations.

The House and Senate bills are each in an early stage of development. If passed by the resources committees, each would have to pass through their respective finance committee before advancing to a floor vote and on to the other half of the Legislature.

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Trump administration set to take bids in federal oil and gas lease sale in Alaska’s Cook Inlet

By: Yereth Rosen, Alaska Beacon

Augustine Volcano looms on Oct. 22, 2025, behind mist hanging over Lower Cook Inlet. The U.S. Bureau of Ocean Energy Management is soliciting bids for exploration rights in federal waters of Cook Inlet in the first of six scheduled federal lease sales to be held through 2032. (Photo by Yereth Rosen/Alaska Beacon)

The Trump administration is soliciting bids for what it intends to be the first in an annual series of oil and gas lease sales in federal waters of Southcentral Alaska’s Cook Inlet.

The upcoming sale will offer about 1 million acres in Cook Inlet, with bids to be opened on March 4, the U.S. Bureau of Ocean Energy Management said on Friday.

The auction has been named the “One Big Beautiful Bill Act Lease Sale 1” because it is the first of six lease sales mandated under the sweeping tax and budget bill passed by Congress and signed by President Donald Trump last summer. The six sales are to be held by 2032, under the bill.

“Regular and predictable federal leasing is the minimum standard for maintaining domestic energy production,” BOEM Acting Director Matt Giacona said in a statement. “Energy security is national security, and this sale reflects a clear, congressionally mandated path forward for Cook Inlet leasing. By offering predictable terms and a transparent process, we are supporting Alaska’s role in meeting America’s energy needs, strengthening national readiness and creating opportunities for investment and jobs.”

Environmentalists criticized the planned sales.

“The relentless push for more oil drilling in Cook Inlet won’t solve Alaska’s energy problems but it will bring a massive risk to this already stressed and polluted waterway,” Cooper Freeman, Alaska director at the Center for Biological Diversity, said in a statement. “The federal government is required to protect our oceans and the fish and wildlife that call them home, but Trump is ignoring that responsibility. From critically endangered Cook Inlet belugas to salmon and razor clams, this sale puts so many species in the crosshairs of a devastating oil spill,” the statement said.

The federal lease sale coincides with the Alaska Division of Oil and Gas’ scheduled annual lease sale for state territory in the Cook Inlet basin. Results of the state lease sale, which is offering 2.9 million offshore and onshore acres, will also be released on March 4.

The planned “One Big Beautiful Bill Act” Cook Inlet lease sales are in addition to several sales that the administration has proposed for nearly all areas of federal waters off Alaska, from the High Arctic to the Gulf of Alaska waters south of the Kodiak Archipelago and the Aleutian chain. The proposed lease sales are listed in a new five-year draft plan released by BOEM in November.

Cook Inlet oil and gas lease sales, whether conducted by the state or federal government, have drawn little interest in recent years. The state’s 2025 lease sale drew five bids, and the most recent federal sale, held at the end of 2022, drew only one bid.

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Alaska revenue forecast predicts more oil, but its importance to the state budget is declining

By: James Brooks, Alaska Beacon

The trans-Alaska pipeline, seen on Oct. 8, 2008, threads over snow-covered terrain in the Brook Range foothills. A gryfalcon is perched on one of the pipeline’s thermosphyons in the lower center of the photo. (Photo by Craig McCaa/U.S. Bureau of Land Management)

Though the state of Alaska is anticipating more oil production in the fiscal year that starts July 1, money from oil continues to make up a dwindling share of general-purpose state revenue, according to a forecast published Wednesday by the Alaska Department of Revenue.

The projection, one of two per year published by the department, was released in conjunction with Gov. Mike Dunleavy’s draft budget for fiscal year 2027. 

Altogether, the state expects to earn $6.2 billion in general-purpose dollars between July 1, 2026 and June 30, 2027, the next fiscal year. Officially known as “unrestricted general fund revenue,” it’s the section of the budget where lawmakers and governors focus most of their attention. 

Federal money and money designated for specific programs can sometimes be shifted around to different priorities, but not easily. General-fund dollars can (and are) assigned to different priorities each year. 

The forecast for next year’s unrestricted general fund revenue is higher by almost $260 million than the current year’s expectation, but most of that increase isn’t coming from oil.

Since 2018, an annual transfer from the Alaska Permanent Fund to the state treasury has been the No. 1 source of general-purpose dollars for services and the Permanent Fund dividend. 

That’s more true than ever, according to the state forecast. 

In the next fiscal year, just 23% of the state’s general-purpose revenue is expected to come from petroleum revenue — royalties, property taxes and production taxes.

The Permanent Fund transfer would account for almost 66% of the general-purpose money. 

That difference comes despite an expectation that oil production will rise significantly between this fiscal year and next — from an average of 457,000 barrels of oil per day to 517,800 per day on average.

According to the Alaska Department of Natural Resources, that’s due to the startup of production in the Pikka oil field and other new production on the North Slope.

Despite that new production, oil revenue is expected to rise only slightly — from $1.43 billion to $1.44 billion.

That’s because the state is expecting North Slope oil prices to average just $62 per barrel during the next fiscal year, down from $65.48 in the current fiscal year.

At the same time, the Permanent Fund transfer is rising by almost $200 million, causing oil to become a still-smaller share of state revenue.

Even though revenue is expected to rise between the current fiscal year and the next one, the projected deficit in Dunleavy’s proposed spending plan stands at more than $1.8 billion.

If oil revenue alone were needed to fill that deficit, average North Slope prices would have to be near $100 per barrel, or the state would have to produce more than 1.2 million barrels of oil per day during the next fiscal year, an amount that is geologically, economically and mechanically unfeasible. The state hasn’t posted an annual average of over 1 million barrels of North Slope oil per day since the turn of the century.

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