JUNEAU, Alaska (KTUU) – After the Senate Resources Committee overhauled much of the governor’s liquefied natural gas line property tax bill Monday, a spokesperson for Gov. Mike Dunleavy, R-Alaska, said their actions could jeopardize the decades-long pipe dream.
“The Senate Resources version puts the entire project at risk by dramatically increasing the cost of the project,” Dunleavy spokesperson Jeff Turner told Alaska’s News Source in a Tuesday statement.
“The reality is simple. Without meaningful tax restructuring, this project will not move forward,” Turner added.
The proposed 800-mile pipeline would carry North Slope natural gas to Cook Inlet and, eventually, to export markets in Asia. The project is estimated to cost $46.2 billion.
With less than one month left in the session, the decision appears to deepen a months-long impasse between the Senate majority caucus and developers.
“If adopted, these changes will ultimately raise the cost of energy for Alaskans and could indefinitely delay the delivery of North Slope gas at a time when Alaska is facing a major energy shortage without a viable plan B,” Glenfarne spokesperson Tim Fitzpatrick said in a statement.
Glenfarne has maintained current property taxes could kill the project and has warned that any tax increase gets passed directly to consumers.
Earlier this session, Glenfarne Alaska LNG President Adam Prestidge told the House Resources Committee in March that the original property tax proposal “will lower energy bills for Alaskan families, for governments, and for government entities.”
Sen. Robert Myers, R-North Pole and one of two minority members on the Senate Resources Committee, concurred with Dunleavy and Glenfarne’s sentiments.
“The current [committee substitute] is going to jeopardize the bill,” he said. “Our consultants have told us very clearly that when large LNG projects like this get built around the world, almost always they include a tax cut of some kind … and instead, we’re adding taxes on.
“We’re changing the structure slightly, but we’re adding more taxes at a time when we should be talking about reducing the taxes to make it work. Otherwise, you’re just going to pass the cost on to somebody and just make it less economical in the end.”
The majority caucus and local mayors say the company needs to pay its fair share in the project. Sen. Bill Wielechowski, D-Anchorage, told Alaska’s News Source the bill would not jeopardize the gas line “at all.”
“We’ve been told by Glenfarne well before this session even started that they needed nothing,” Wielechowski said Tuesday. “They needed no tax breaks, they did nothing. They can go ahead and build the gas pipeline right now, if they wanted to. There’s nothing stopping them from doing that.”
When asked about the price shifting over to the consumer, he said that’s not what they’ve promised.
“What we’ve been told by Glenfarne was that they would not shift any cost overruns onto Alaskans,” he said.
Alaska’s News Source reached out to Senate Resources Committee Chair Cathy Giessel, R-Anchorage, for comment Tuesday. As of publication, comment has not been returned.
The Senate’s rewrite landed the same day President Trump invoked emergency powers to expand U.S. natural gas and LNG capacity — though his order did not directly mention the Alaska pipeline.
U.S. Energy Sec. Chris Wright told Alaska Sen. Lisa Murkowski Tuesday Alaska’s LNG pipeline is the “number one” priority of the administration when it comes to energy infrastructure.
What do the changes do?
The changes come in the form of a committee substitute, a proposed version of a bill that replaces the one previously introduced, according to the state legislature’s website. The altered version makes steep changes from what the administration initially presented.
The committee substitute version of SB 280 changes several key items, including:
Stops the ramp-up period which provided the gas line upwards of a 10-year abatement from property taxes. The change, according to a presentation by the Senate Resources Committee, means “taxes take effect when each major project component becomes commercially operational, respectively.” Increases the alternative volumetric tax — a tax based on the quantity of gas output — from $0.06 per thousand cubic feet to $0.15, rising to $0.25 at the LNG Export Facility.Mandates the Alaska Gasline Development Corporation to “pursue a spur line” for the Fairbanks North Star Borough.Splits revenue from the gas line 50-50 between municipalities/boroughs and the state.Includes transparency aspects outlined in the “Alaska Gasline Transparency and Accountability Act.”Requires pipeline construction by Jan. 1, 2028, or reverts to original property taxes. Glenfarne has previously stated plans to begin construction by the end of 2026.
Under current property taxes, the state was projected to receive $8.4 billion in taxes from the pipeline by 2042. Under the governor’s proposal, that figure fell to $829 million. Local governments would see their share fall from $5.7 billion to $728 million over the same period, according to the Department of Revenue.
What happens next?
The committee substitute now would need to head to the full Senate for a vote to replace the bill, but the bill must first clear the Finance Committee, with the session ending May 20.
The Senate Resources Committee began three full weeks scrutinizing the bill before introducing the substitute Monday. As of Tuesday, they are in their second week.
“Governor Dunleavy urges the Senate to work with his administration to return this bill to a form that keeps Alaska competitive, protects our future, and ensures this critical project becomes a reality,” the governor’s spokesperson said.
Absence from Juneau
Despite the governor’s pleas to work with him, lawmakers have questioned — and even criticized — his absence from the state capitol.
“Maybe, just maybe the governor should come talk to legislators about the project himself,” Rep. Sarah Vance, R-Homer, wrote on her personal Facebook page. “You know, walk the halls and promote his [LNG property tax] bill. Just a thought.”
Wielechowski described the dialogue between his office and the governor’s as “nonexistent.”
“I haven’t heard a word from the governor all session,” he said. “I haven’t heard a word from anyone in his office all session. I haven’t heard a word from any of his commissioners, his deputy commissioners, his tax directors all session long.”
Dunleavy last addressed the legislature in person during final State of the State address in January.
In an interview with Alaska’s News Source last week, Dunleavy didn’t deny that he’s been absent from Juneau but said he has still been a part of the conversation in the legislature.
“There’s some people that want me there so they can talk to me on a regular basis, but the governor also has to run a state. And it’s a big state,” Dunleavy said. “I’m back and forth. My phone is open to everybody, my staff is down there working on this bill, I’m working with legislators, I think we’re fully engaged in this process.”
When asked if there would be a special session, the governor’s response was brief.
“I hope not.”
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