ANCHORAGE, Alaska (KTUU) – The Alaska House Majority Coalition declared Wednesday that Gov. Mike Dunleavy’s gas line legislation does not have the votes to pass, effectively collapsing a third consecutive special session on the Alaska LNG project and triggering a sharp rebuke from the governor who called the legislature’s failure to act “deeply disappointing.”
In a statement issued Wednesday, House Majority leadership said “intractable differences” over a property tax relief provision in the proposed HB 4001 had fractured support across party lines, with opposition coming from both majority and minority members.
“The proposed HB 4001 does not appear to have the support needed to pass the Alaska House, with opposition being expressed by both Majority and Minority members,” the coalition said.
The announcement came hours after Dunleavy formally introduced the bill Wednesday morning, a compromise measure that included a 2% S-Corporation income tax on privately held oil and gas companies, a concession the governor had resisted for months before relenting.
By Wednesday night, Dunleavy issued a statement on social media making clear he viewed the legislature’s inaction as a consequential failure.
“The Legislature’s decision to not return to Juneau to take action on the proposed property tax change needed to advance the Alaska natural gas pipeline project is deeply disappointing and has consequences that extend well beyond this session,” Dunleavy wrote. “Alaska is running out of affordable, reliable natural gas. This is a long-standing issue that has grown more urgent over decades of inaction. Delaying action only increases risk, raises costs, and limits future options.”
The governor warned the delay would reverberate across the state’s economy and infrastructure.
“The impacts will be felt across the state—by families, military installations, schools, hospitals, universities, and businesses. Reliable, affordable energy is essential to Alaska’s economic stability and quality of life.”
The collapse marks the third time in as many special sessions that the legislature has failed to advance the gas line’s foundational tax framework, a property tax relief structure that Dunleavy and Glenfarne, the project’s primary developer, have argued is essential to securing financing for what is projected to be a $44.5 billion to $54.5 billion infrastructure undertaking.
Dunleavy introduced HB 4001 Wednesday morning after signaling earlier this week he would accept the S-Corp provision, a corporate income tax that would extend Alaska’s existing corporate income tax to privately held oil and gas companies like Glenfarne and Hilcorp, which are not currently subject to it.
The governor set the rate at 2%, well below the 5% to 9.4% range the Conference Committee had previously sought, and delayed its effective date to Jan. 1, 2030.
“I have never been in favor of new taxes on Alaska’s producers, and I still am not,” Dunleavy said in a press release accompanying the bill’s introduction. “This bill is a compromise that removes a significant barrier to moving the gas line forward.”
The bill also stripped a provision that would have reduced state education funding to boroughs along the pipeline route, including the North Slope Borough, the Kenai Peninsula Borough, and the Fairbanks North Star Borough, that would have received pipeline throughput tax revenue.
Dunleavy had urged lawmakers to reconvene in Juneau on Aug. 20 to act on the legislation, saying the bill’s introduction gave the legislature “ample time to review the changes.”
But Senate Majority Leader Cathy Giessel, R-Anchorage, had already cast doubt on that timeline.
“We would have a challenge just getting 11 members in the Senate and 21 members in the House to convene in Juneau right now, or even in the coming months,” Giessel said Monday.
‘Intractable Differences’
The House Majority Coalition’s statement Wednesday did not identify which specific members opposed the bill or detail the precise nature of the property tax dispute but characterized the breakdown as the product of months of failed negotiations.
“The differences have been narrowed down to fundamental disagreements on principally one measure, underscored by a breakdown in negotiations amidst many conversations held over the past several months,” the coalition said.
Despite declaring the bill effectively dead, the coalition was careful to separate opposition to HB 4001 from opposition to the broader AKLNG project itself.
“What wewant to make clear to Alaskans, to theproject developer Glenfarne, and to all those watching from afar is that support for theAKLNG project as a whole is not in question,” the statement read. “The Legislature and the Governor have repeatedly expressed their strong support for the gas line, which has not wavered.”
The coalition invoked both the global energy landscape and constituent pressure in pledging to continue pursuing a path forward.
“The world truly needs Alaska’s natural gas, which can be delivered reliably and free of geopolitical risks well into the future. We hear loud and clear from Alaskans that they want this project,” the statement said. “Alaskans deserve a long-term, stable, and secure energy source that AKLNG can provide. Our commitment is to work in a manner that supports theproject and makes it a reality. Alaskans expect us to get this right, and we intend to do exactly that.”
The decision not to reconvene comes as Southcentral Alaska’s gas supply crisis deepens, ENSTAR Natural Gas Company has entered emergency arbitration with Cook Inlet producer HEX Operating LLC over an abrupt cutoff of discretionary gas deliveries that the utility warns could leave the region with insufficient storage heading into winter. Senate Majority spokesperson Noah Hanson said the Senate does not intend to convene Aug. 20, but a joint Senate and House Resources Committee meeting is planned that day in Anchorage to gather information on immediate Cook Inlet needs.
A session built on uncertainty
The third special session had been marked by uncertainty from the start. When Dunleavy called lawmakers back to Juneau on July 27, he announced two bills but declined to introduce either, saying his administration needed more time to negotiate.
“Before reintroducing the legislation, my administration is going to continue meeting with all parties to determine the best path forward to an agreement,” Dunleavy said on social media at the time.
As recently as Aug. 7, House Speaker Bryce Edgmon, NA-Dillingham, Senate Majority Leader Giessel, and Senate President Gary Stevens, R-Kodiak, all confirmed to Alaska’s News Source they had not seen a bill from the administration. Dunleavy’s spokesperson, Jeff Turner, said at the time that no details would be provided until the bill was ready.
Glenfarne Alaska LNG President Adam Prestidge had projected optimism as recently as last week.
“I think that the property tax bill now sits on the one-yard line, the last mile, the final push up the mountain,” Prestidge said.
That optimism proved short-lived.
The S-Corp provision had been a fault line throughout all three sessions. Majority members argued it closed a longstanding loophole for oil and gas companies; minority members called it an unrelated tax hike. Dunleavy and Republican allies had previously labeled it a “poison pill.”
Giessel, who voted for an earlier version of the gas line bill in a prior session, had expressed broader concerns about transparency and the project’s ballooning cost estimates. She noted that Dunleavy had publicly cited a project cost of north of $65 billion to $70 billion, significantly above Glenfarne’s own projections, before his office said he misspoke.
“This is the chief executive of our state. He’s talking about a project that he has called the most important project before us and he’s misquoting the cost of the project,” Giessel said. “This concerns me that numbers are being thrown around without substantiation and then being denied that they were misquoted.”
What Comes Next
With the third special session now effectively over without a vote, the question of whether the Alaska LNG project can advance before a new governor and legislature take office looms large.
Senate President Stevens, a retiring legislator, had previously suggested the issue might be better left to his successors.
“I think we’re slowly reaching the point where it might be best for a new Governor and a new legislature to delve into this,” Stevens said.
Dunleavy, in his Wednesday statement, gave no indication he intends to cede the effort.
“We will continue to pursue all viable options to advance the Alaska natural gas pipeline project,” he wrote. “Ensuring reliable and affordable energy for Alaskans is both an economic necessity and a responsibility to current and future generations. The challenge remains, and we will continue working to address it.”
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