{"id":176,"date":"2026-05-22T04:10:33","date_gmt":"2026-05-22T04:10:33","guid":{"rendered":"https:\/\/movingtoalaskausa.com\/?p=176"},"modified":"2026-05-22T04:10:33","modified_gmt":"2026-05-22T04:10:33","slug":"skepticism-looms-as-an-obstacle-over-alaska-legislatures-special-gasline-session","status":"publish","type":"post","link":"https:\/\/movingtoalaskausa.com\/?p=176","title":{"rendered":"Skepticism looms as an obstacle over Alaska Legislature\u2019s special gasline session"},"content":{"rendered":"
\n

The Alaska Legislature on Thursday opened a 30-day special session on a proposal to cut taxes on the proposed trans-Alaska natural gas pipeline in order to encourage its construction.<\/span><\/p>\n

Read more Alaska lawmakers approve one-time funding for K-12 schools, plus energy relief<\/a><\/p>\n

Gov. Mike Dunleavy called the session, but one of the first challenges facing him and other tax-cut proponents is convincing skeptical legislators that a tax break is needed at all.\u00a0<\/span><\/p>\n

During the just-concluded regular session, lawmakers were unable to pass any version of a Dunleavy-backed bill.<\/span><\/p>\n

While Dunleavy and pipeline developer Glenfarne have called the tax break a critical step toward construction, senior legislators have reason for skepticism.<\/span><\/p>\n

To date, Glenfarne has not released an updated estimate for how much the pipeline will cost. The last public estimate is more than a decade old. It also has not released estimates for the price of gas to be carried by the pipeline.<\/span><\/p>\n

\u201cThere\u2019s that whole thing about buying a pig in a poke,\u201d said Senate President Gary Stevens, R-Kodiak. \u201cThat\u2019s the problem we\u2019re facing. The farmer buying a pig in a bag has never seen the pig, never known how healthy it was. And that\u2019s what we\u2019re being asked to do. We\u2019ve got to see the pig, we\u2019ve got to know the details, and that\u2019s what I think you\u2019ll be seeing in our finance committee this coming special session.\u201d
\n<\/span><\/p>\n

The pipeline project, formally called Alaska LNG or AKLNG, envisions an 800-mile pipeline from the North Slope to Cook Inlet.\u00a0<\/span><\/p>\n

At the northern end would be a gas treatment facility that collects gas from feeder pipelines connected to oil and gas wells across the North Slope.<\/span><\/p>\n

That facility would strip carbon dioxide from the raw natural gas, allowing the gas to be shipped down the pipeline. The carbon dioxide would either be released into the atmosphere or injected deep underground.<\/span><\/p>\n

At the southern end of the pipeline would be an export terminal on the Kenai Peninsula. The gas would be kept super-cooled and loaded onto tankers for shipment to Asia and other users.<\/span><\/p>\n

Glenfarne envisions construction in two phases. The pipeline and a small North Slope gas treatment plant would be built between 2027 and 2029 during the first phase. That would allow limited amounts of gas to be shipped south for in-state use.<\/span><\/p>\n

The second, more expensive, phase would involve constructing the export terminal on the Kenai Peninsula and the full-scale processing plant on the North Slope.<\/span><\/p>\n

The state-owned Alaska Gasline Development Corp., which owns 25% of the project, has previously estimated that both phases will cost a combined $46 billion, but that prediction is more than a decade old.\u00a0<\/span><\/p>\n

During the just-completed legislative session, legislators heard estimates in excess of $65 billion, and Glenfarne officials said the first phase alone will cost in the \u201cmid teens\u201d of billions of dollars.<\/span><\/p>\n

In <\/span>a presentation to the House Finance Committee<\/span> on Thursday, the Alaska Department of Revenue estimated that under the state\u2019s current petroleum property tax system, AKLNG gas would have to sell to international buyers for at least $7.63 per thousand cubic feet (mcf) in order for the project to make financial sense.<\/span><\/p>\n

Southcentral Alaskans would expect to pay at least $4.09 per mcf.\u00a0<\/span><\/p>\n

The governor has proposed cutting the property tax and partially replacing it with a tax on gas through the pipeline. That cuts expected state revenue by $7 billion through 2063. Cities and boroughs who collect the bulk of the property tax revenue would lose out on another $13 billion during that period.<\/span><\/p>\n

The Department of Revenue expects that the tax breaks would cause the break-even price for the pipeline to fall to $7.13 mcf for exports and $3.73 for Alaskans.\u00a0<\/span><\/p>\n

In 2024, Canadian consulting firm Rystad Energy conducted <\/span> in North America. The break-even prices for Canadian projects ranged between $7.18 and $8.64 per mcf, it found.\u00a0<\/span><\/p>\n

Read more Curveball vote could snarl effort to reimpose campaign finance restrictions in Alaska<\/a><\/p>\n

While AKLNG fits in that range under Glenfarne\u2019s stated pipeline cost, it becomes more expensive if the pipeline construction is more expensive than Glenfarne has publicly stated.<\/span><\/p>\n

Demand for Cook Inlet natural gas is beginning to surpass available supply, and Southcentral Alaska could begin importing gas soon to fill the gap.<\/span><\/p>\n

Dan Stickel, chief economist for the Department of Revenue, told legislators Thursday that the department\u2019s estimate for the cost of imported gas in 2033 \u2014 AKLNG\u2019s planned completion date \u2014 \u201ccame to about $17 per thousand cubic feet price range.\u201d\u00a0<\/span><\/p>\n

He said the department based that figure on <\/span> in 2023, extrapolated to 2033.<\/span><\/p>\n

Even if the pipeline is significantly more expensive than planned, in-state gas prices would be cheaper with AKLNG than without it, those estimates show.<\/span><\/p>\n

But that\u2019s only if the pipeline project is built to completion, effectively allowing exports to subsidize the cost of in-state gas.<\/span><\/p>\n

The risk is if only Phase 1 is built. In that scenario, <\/span>the Department of Revenue estimates<\/span>, Southcentral Alaskans could end up paying more than $27 per mcf under current law and almost $23 per mcf under the governor\u2019s proposal.<\/span><\/p>\n

Last year, Mike Chenault \u2014 a former Speaker of the House and now a member of the board for AGDC \u2014 advised legislators that they should not take any action on legislation for the pipeline.<\/span><\/p>\n

Uncertainty would deter investors, he said.\u00a0<\/span><\/p>\n

\u201cI believe that if the Legislature gets involved, that this project will go away,\u201d he said. \u201cI believe that if we start changing the terms of the statutes, then that creates indecision and that will cause the project to possibly go away.\u201d<\/span><\/p>\n

In a news conference with reporters on Wednesday, Sen. Bill Wielechowski, D-Anchorage, said he recalls a Glenfarne representative saying last year that no tax breaks were needed.<\/span><\/p>\n

Wielechowski could not provide a source for that comment, nor could five other legislators who recalled a similar position.<\/span><\/p>\n

Speaking Thursday during the Alaska Sustainable Energy Conference, Glenfarne CEO Brendan Duval offered conflicting statements about the pipeline\u2019s financing.<\/span><\/p>\n

At one point, he said that he had sufficient investments to construct the first phase without any tax break.<\/span><\/p>\n

\u201cI can confirm I\u2019ve received enough proposals of private financing on terms and conditions that once we convert that into long form documentation, we can build the domestic pipeline, and that\u2019s very exciting,\u201d he said.<\/span><\/p>\n

Speaking about the project as a whole, he said that once he finishes finalizing the terms of some agreements, \u201cI can make a final investment decision here.\u201d<\/span><\/p>\n

The agreements \u201cpossibly\u201d include \u201cthis tax bill out of Juneau.\u201d<\/span><\/p>\n

Later, talking with Dunleavy, he said the tax bill is \u201ca critical condition\u201d for pipeline construction, as is a gas-purchase agreement with ENSTAR, the middleman that supplies most of Southcentral Alaska with natural gas.\u00a0<\/span><\/p>\n

\u201cPlease talk to your, your mayors, your elected officials, your legislators, your community leaders, your union leaders, and get them behind (this) to call to arms. Let\u2019s get this thing over the line, and we can get this state the gas that it needs right now,\u201d he said.\u00a0<\/span><\/p>\n

Read more Alaska Legislature adjourns regular session with special gasline session set for Thursday<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Some legislators say the pipeline proposal is already financially sound and does not need additional help from the state.<\/p>\n","protected":false},"author":1,"featured_media":175,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-176","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interesting"],"yoast_head":"\nSkepticism looms as an obstacle over Alaska Legislature\u2019s special gasline session - Moving to Alaska<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/movingtoalaskausa.com\/?p=176\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Skepticism looms as an obstacle over Alaska Legislature\u2019s special gasline session - 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