Alaska’s grand energy ambitions are stuck in legislative limbo thanks to the Democrat-controlled Legislature and a handful of GOP lawmakers who joined them.
A high-stakes push to overhaul taxes for the state’s massive North Slope natural gas and LNG project imploded on the House floor on May 18. With the legislative session having ending on May 20, the collapse leaves a signature piece of energy legislation completely stranded.
To address this issue, Gov. Mike Dunleavy immediately called lawmakers back into a special session, which began May 21, the day after the regular session ended.
Dunleavy and his conservative allies have aggressively campaigned to rewrite the financial playbook for the estimated $46 billion venture. Their core objective: scrap the state’s existing 2% property tax on oil and gas infrastructure – replacing it with a volumetric tax pinned directly to the physical flow of gas through the pipeline, treatment facilities, and export terminals. Proponents insist this is the only way to enhance the project’s economics to reassure international investors and secure massive financing to move the effort forward. Dunleavy has argued that the reform is a non-negotiable lifeline required to pump affordable energy into Alaskans’ homes, jumpstart regional jobs, flood state coffers with fresh revenue and fortify domestic energy independence by shipping North Slope gas down to Southcentral communities and global markets.
All of that was derailed when House Majority Leader Chuck Kopp rolled out a massive compromise amendment tacked onto an otherwise routine LNG bill. Kopp’s counter-proposal increased the volumetric tax rate higher than the governor wanted, while adding local revenue-sharing brackets, a dedicated Fairbanks spur line, project labor agreements, community impact funds, and strict “use-it-or-lose-it” construction deadlines.
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Democrat Rep. Robyn Niayuq Frier also successfully pushed a narrowly-passed amendment that handed local boroughs significantly more leeway to claw back their own taxing authority. That single modification triggered quick chain reaction. Supporters of the original bill claimed the eleventh-hour shift destroyed the bill, fracturing the delicate deal struck between the Dunleavy administration and commercial developers. The House abruptly adjourned without taking a final vote on the bill.
The pipeline tax framework had become explicitly tethered to a highly controversial public employee pension bill supported by Democrat lawmakers. The moment the gas line talks froze, Dunleavy instantly vetoed the pension bill.
With the special session now underway, it remains unclear whether Alaska can actually capitalize on its enormous northern gas reserves and avoid having the mega-project collapse at the hands of a Democrat-controlled Legislature.
9 Comments
Thanks to the baffoon dun leave already!
Call the legislatures back as many times as legally permissible, maybe if they have to give up their summer-time lifestyle they’ll start doing their job. Bring the bill up for a vote, up or down… but do your job!
All these legislators, who want to stop this gas pipeline. Needs to go live in a cave, no eclectic or natural GAS to heat there caves,
Better yet, they should move to California.
getting frosty, maybe the real intent is to create an uninhabited state. a wonderful place for animals to live and the rich to explore.
we can not live without oil and gas its as simple as that.
we also cant support the government we have with income tax or state sales tax without oil, congress new that when the alaska puchase was made.
thats why we are a second class state.
Simple solution, don’t vote for Democrats or any politician that would put their political bias above the welfare of the state of Alaska and it’s people!
Alaska Legislators ask not, “What can my state can do for me, but what can I do for Alaska.” Adding a Pension Bill to the LNG Bill is greediness form the Legislators not the Governor, he is vetoing his own pension. The LNG bill makes lights & heat more affordable for all Alaskans and creates more jobs. It will help Alaska to replace Honey-buckets with flushing bathrooms for better health. If you keep cutting meat from the bone at a B-B-Que all you will have is B-B-Que bones, the dogs are happy but the people are gone.
As long as people keep voting democrat, this will continue on.
Who is in opposition to the bill: who broght up the idea to leave w/out an up or down vote & who 2nd it? We can’t know who not to vote for if the info is incomplete!