On May 14, while most of the national media was focused on Beijing and the Trump-Xi summit, something happened in Vancouver that should have every Alaskan paying attention. The Premier of British Columbia and the Canadian Energy Minister stood together and announced LNG Canada Phase 2 in Kitimat is moving toward a final investment decision by the end of 2026. Two levels of government lined up behind a major energy project, with a deadline, a financing path, and a clear signal that Canada intends to compete aggressively for Pacific LNG demand.
That same week, the Alaska Legislature was still debating whether we are willing to fix the tax structure standing between us and our own gasline project. Their target is the end of 2026. Ours is the end of 2026. The difference is that Canada is moving, and Alaska is still arguing over whether we are prepared to act and what is in it for each borough.
I have been in Juneau long enough to recognize this pattern. North Slope gas has been discussed for more than forty years. Governors from both parties have supported getting it to market. Presidents from both parties have called Alaska LNG strategically important. Yet here we are again, watching the market move while we debate mill rates.
Meanwhile, the project itself keeps moving. Glenfarne has signed preliminary long-term offtake agreements with TotalEnergies, JERA, Tokyo Gas, CPC Taiwan, PTT Thailand, and POSCO Korea, representing roughly 13 million tonnes per year toward the 16 million needed for FID. Baker Hughes is a strategic partner. Worley is advancing engineering. ConocoPhillips is committed as a gas supplier. Procurement is underway and construction planning is advancing.
The reality is straightforward. If the project never gets built, there is no tax base to protect.
Those same Asian buyers are exactly who LNG Canada Phase 2 is competing for out of Kitimat. There are not unlimited buyers waiting forever for Alaska to make up its fickle mind. These are long-term contracts that shape export markets for decades. Once signed elsewhere, they are gone for a generation. Canada may be our ally, but on LNG Canada is our direct competitor, and right now, they are moving with far more clarity and speed than we are.
The core issue is not complicated. Alaska imposes a 20 mill statewide property tax on oil and gas infrastructure. Glenfarne and AGDC have testified that this sits well above what comparable LNG projects face elsewhere in the world. Whether legislators like hearing it or not, lenders pay attention to those costs. Projects do not get financed when the underlying economics are out of alignment with competing jurisdictions. That is not ideology. That is how project finance works.
The Department of Revenue’s own analysis showed that moving to a throughput-based structure would lower delivered gas costs to Alaskans, improve export competitiveness, and still generate more than $26 billion in combined state and local revenue over the life of the project. More than $22 billion to the state, nearly $4 billion to municipalities. Those are not developer talking points. Those are Alaska’s own numbers.
The reality is straightforward. If the project never gets built, there is no tax base to protect. We can insist on a tax structure that makes financing impossible and collect twenty mills on infrastructure that never exists, or we can structure the project to actually move North Slope gas to market before the opportunity disappears.
At some point, this stops being bad luck or bad timing and becomes a decision we made to destroy ourselves.
Meanwhile Cook Inlet keeps declining, ENSTAR is preparing for imports, and Southcentral families already see the consequences in their winter heating bills. This debate is not abstract to the people paying those bills. The same pipeline that supplies export markets also supplies Alaskan communities facing long-term energy insecurity if we keep delaying.
The legislation includes a sunset. If commercial operations are not underway by January 1, 2040, the structure reverts to the current system. Alaska is not permanently surrendering anything. We are creating a financing structure designed to get a project built while the market still exists.
The North Slope Borough has raised legitimate concerns because the gas treatment plant sits in their jurisdiction. That issue deserves a serious solution through the community impact mechanism. Legislators are also justified in requesting updated cost information from Glenfarne. Lenders will require it anyway. None of those concerns are unreasonable. But there is a difference between addressing legitimate concerns and using them as justification for endless delay.
This project still carries risk. So did TAPS.
In 1972, the Seventh Alaska Legislature passed the Right-of-Way Leasing Act, the Alaska Pipeline Commission Act, and established the Department of Environmental Conservation, all in a single session, because lawmakers understood the scale of what was at stake. In 1973, after the oil embargo, the Eighth Alaska Legislature returned in special session and passed additional measures to move the pipeline forward as quickly as possible. Two legislatures, back-to-back, reshaped Alaska’s regulatory structure because they believed the long-term future of the state depended on it.
ALASKA WATCHMAN DIRECT TO YOUR INBOX
Every major road, every school, every Permanent Fund dividend, and much of the modern Alaska economy traces back to those decisions. The legislators who made them did not have perfect certainty. They had judgment, they had urgency, and they understood that waiting indefinitely carried its own risk.
That is the same choice Alaska faces now.
If we keep delaying, the outcome is predictable. FID slips. Buyers move to Canada. Kitimat secures the long-term contracts. Alaska’s agreements stay conditional. North Slope gas stays stranded. Cook Inlet keeps declining. And Alaska once again explains why a project everybody claimed to support somehow never got across the finish line.
At some point, this stops being bad luck or bad timing and becomes a decision we made to destroy ourselves. No amount of retirement program will then be viable.
The biggest obstacle to Alaska LNG is not Washington, D.C., environmental litigation, or foreign competition. No, the biggest obstacle is the Alaska Legislature and whether they are willing to act before somebody else captures the market we spent decades assuming would still be there waiting for us.
The views expressed here are those of the author.
13 Comments
Mr maccabe!!! Hey you Mr maccabe!!! Can you hear me!!! Get that ear trumpet and insert it into your good ear!! We don’t have a gas line because DeLena Johnson was enthralled with her cabbage!!! Stop the stupid AI games , generating way more details than are necessary to come to a conclusion! This one is simple!!! CABBAGE!!! Say hi to your buddy Dana Roffenellio!! His article about you is incredibly informative!!!
McCabe’s looking for another free lunch if one of the bankrupt idiots from Hillcorp and Glenfarne would fork over the lunch. It must be hard to understand for McCabe to understand that most of the state residents don’t want the sick plan That Dunleavy has put out and the making the legislative groups return in a special session is not going to do what he threatens. McCabe, has been running around with the wrong crowd. You should listen to the residents of the people in communities in the state. They don’t want the planned pipe that Dunleavy and his buddies shove down everyone’s throat. Dunleavy needs to be gone and the state is going to be better off for it. Everything about the screwed up Crime Boss Dunleavy is bad news and when I watch the very employees that testify, and they are as sick of the lies and his LaLa Land attitude for a tax that is going to be worthless in a year or less, its time to stop and work with a new governor that can actually get things accomplished with and for the residents of the state.
Explain to me why in 2025 Gov. Mike Dunleavy, Glenfarne, the leaders of the Alaska Gas Development Corporation and other Republican politicians claimed a year ago that the Alaska LNG project needed no state property tax cut. The Legislature should keep out of the way and allow Glenfarne to work its magic, they said. Nothing has changed since 2025 except Dunleavy/Glenfarne now saying we can’t/won’t build the Alaska LNG project without a 90% reduction in property taxes for many years? I call the Bravo Sierra flag on the change in tune in 2026!
“………Canada is moving, and Alaska is still arguing over whether we are prepared to act and what is in it for each borough………..”
Alaska My Ass! It’s Canada’s Gas!
Ours will be staying in the ground. Our chance has passed.
North Slope gas development is worth fighting for. The question being asked here is whether Alaska is fighting for it on terms that actually benefit Alaskans.
When someone tells you the window is closing, one should ask which window is closing.
The urgency argument is compelling on its face. LNG Canada Phase 2 is moving toward a final investment decision by end of 2026. Alaska is in special session. The market will not wait forever. Act now or lose the opportunity to a competitor who is already moving.
But which window is actually closing here? Is it the LNG market window? Or is it something else entirely, with a different deadline, serving a different set of interests?
Read the bill introduced Thursday. Section 43.59.050 of HB 2001 terminates the alternative volumetric tax structure if construction of the first 730 miles of pipeline has not begun by January 1, 2032. One year before the federal 45Q carbon capture tax credit construction deadline of January 1, 2033. The urgency clock built into the special session bill does not align with the LNG market. It aligns with the window for collecting $85 per ton in federal tax credits on Alaska’s geology.
That is not a coincidence. That is the design.
The 45Q carbon capture tax credit is a federal program with a documented record worth examining before Alaska builds its energy future around it. Between 2010 and 2019, the IRS found that roughly 99 percent of total credits claimed did not comply with EPA verification requirements. Of the $1 billion in credits claimed during that period, $531 million were disallowed after audit. The primary oversight mechanism that was supposed to catch that noncompliance is now proposed for elimination.
Congress has continued expanding the program anyway. The Inflation Reduction Act extended the construction deadline to January 1, 2033 and allows companies to receive 45Q credits as direct cash payments regardless of tax liability. The Treasury Department estimated the cost of the credit at $30.3 billion in 2022, not including the IRA expansion. At a moment when federal debt exceeds 100 percent of GDP, that is a significant public commitment to a program whose environmental benefit has not been independently verified at scale.
Alaska is being asked to restructure its property tax base, reduce injection royalties on state geology to $2.50 per ton, and embed a long-term carbon storage liability into state statute in order to position a private developer to collect those federal dollars. The Gas Treatment Plant at full operations is projected to generate approximately $595 million annually in 45Q credits to the operator. Alaska collects $2.50 per ton on the same geological activity. Less than three cents on every dollar of federal credit value generated using Alaska’s geology.
That arithmetic did not appear by accident. It was negotiated. The injection royalty in the enrolled HB 50 statute was amended on the Senate floor from $10 per ton down to $2.50 per ton. The enrolled bill reflects the lower rate. Alaska’s cut of a federal program generating hundreds of millions annually was cut by 75 percent during floor consideration, and the change received no sustained public attention.
The urgency framing borrows heavily from Alaska’s history with TAPS, and that history deserves an honest accounting before it gets used as a closing argument.
The 1972 and 1973 Alaska Legislatures did something specific and worth honoring. They passed the Right-of-Way Leasing Act, the Pipeline Commission Act, and stood up the Department of Environmental Conservation. They created the regulatory and legal framework that allowed a major energy project to move forward. That is exactly what a legislature is supposed to do.
What they did not do is restructure Alaska’s tax base to make the project financeable. They did not reduce royalty rates on state geology to benefit a private developer’s credit collection window. They did not embed a permanent underground storage liability into state statute with no hard cost cap and no private party contractually responsible after the operator’s financial obligation ended.
TAPS was built with private capital at private risk. The oil industry bore the construction cost. Alaska collected royalties on its own resource at rates the state controlled. The liability closed when the oil was delivered. Nothing went underground indefinitely. No trust fund stopped being funded after a fixed number of years while a post-injection waiting period of decades began.
TAPS worked because the terms were right for Alaska. That is the standard worth applying here. Not the emotional weight of the comparison, but the actual structure of the deal. Private capital, private risk, full royalty value to the state, liability that closes. If this project can meet that standard, it deserves the same legislative support. The question is whether it does.
The legislature is being asked to move quickly. Preliminary offtake agreements are being presented as commercial momentum. A decade-old cost estimate the developer declines to update for public review is being used to justify restructuring Alaska’s property tax regime. An analysis produced by a firm owned by the project’s own strategic partner was presented to legislators as independent advice, without that relationship being disclosed.
None of that is a reason to oppose North Slope gas development. It is a reason to ask specific questions before the votes are cast.
Why does the operator collect approximately $85 per ton in federal tax credits generated using Alaska’s geology while Alaska collects $2.50? If construction has not begun by January 1, 2032 the tax structure reverts, meaning the urgency clock in HB 2001 runs to the 45Q federal deadline, not to any LNG market window. If the project stands on its own merits as an LNG export play, why does the financing structure require a federal credit program with a 99 percent noncompliance history to function?
Those are not anti-development questions. They are the questions a fiscally conservative legislature is supposed to ask before committing Alaska’s geology, Alaska’s tax structure, and Alaska’s long-term liability to terms negotiated around someone else’s credit collection window.
TAPS was worth fighting for on the terms Alaska got. North Slope gas is worth fighting for too. The fight worth having right now is over whether the terms being offered are terms Alaska should accept.
Do you ever write anythign without AI? Do you ever write anything less than 2500 words? If you cannot say it in 3 minutes then best to be silent. Almost no one reads anything you write because it takes too long.
Kevin, you’re pretty frustrating. You’re our representative, not Glenfarme’s lobbyist, act accordingly.
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Glenfarme’s too cheap to hire lobbyists like everybody else, so they just call Cheerleaders R Us and you come running?
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You do remember the TransCanada debacle?
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You do recall China Bill Walker’s heroic effort to suck us into a Chinese Belt and Road debt trap?
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What’s different this time?
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If you can’t, or won’t, answer simple questions that anyone pimping a project this big should know already, what good are you?
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Questions like the ones we asked yet again at “Secretary of Interior Burgum calls out the Legislature” …did you or your fellow cheerleaders even ask?
(https://thealaskastory.com/secretary-of-interior-burgum-calls-out-the-legislature/)
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You could be a hero, you could ask these questions on the legislative floor, get them, -and the company’s non-answers-, on the record. You could get the news out there so we can figure out whether it’s really the Greatest Thing Ever or just another s***storm headed our way.
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But you’re not doing that, remind again why?
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And how about a word on why Alaska should do the Tar Baby Dance with a company that operates as described in: “A quick tour around the network of Glenfarne, the company agreeing to build Alaska LNG project”.
(https://mustreadalaska.com/a-quick-tour-around-the-network-of-glenfarne-the-company-agreeing-to-build-alaska-lng-project/).
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That piece came out a year ago, Kevin. Remind again what you said about Glenfarme after reading it back then? Oh, nothing? But now you’re Glenfarme’s cheerleader? Bad optics, son.
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We’re not pro or anti- gas line, Kevin. We’re anti-BS and vexed by yet another dose of your pipeline BS, especially today, from someone we (formerly) trusted to tell us what the hell’s happening in our corporate-government kleptocracy..
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You got nothing else worth saying on Memorial Day, Kevin?
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If credibility still means something to you, get answers for our questions. Help us figure out what’s going on so we can either get on side or help tear down what’s looking like the Mother of All Permanent Fund Feeding Frenzies.
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Now, how about asking those questions on the House floor, Kevin?
YOu should email him dirrectly. TransCanada and the Walker-era Sinopec deal are fair things to raise, and they deserve a real answer rather than a comment-thread argument.. The hard questions you want asked on the floor deserve a direct email not a comment on a thread he probably does not read (mostly, I would bet, due to the abuse from Dave Maxwell).
Dave Maxwell the “ abuser” here! Wow I’m moving up in this state! Whistle blower to abuser! Janet , or should I say KAREN , thanks for the upgrade!
Enjoying your $1000 a year dividend. If this gas line doesn’t go Alaskas future is questionable. Every home and businesses goes to heating oil again at 5x the price of gas. 2 big mining projects don’t go so exclude 2500 jobs there. Fertilizer plant in Kenia doesn’t go – another 800 jobs and all the kids leave because they can’t afford to live in this ice berg and people like you are worried about how much tax you can grab.
Just get it done, Built the pipeline. Remember it’s Alaskas Natural Gas, not some loser legislators in Juneau.
Alaskan’s need the LNG Pipeline for jobs for our children, lower heating & electric cost for our homes, and more Small Business’s in Alaska. Our Crude Oil Pipeline was great for Alaska. The thing that hurt Alaska was we could not sale our refined petroleum out of state.This keep our price at the pump in Alaska higher than if we could sale our excess refined petroleum out of state [more volume, less cost]. We were forced to send our Crude to Washington and California so they could sale Alaska Refined Petroleum outside of Alaska.
Alaskan’s need the LNG Pipeline for jobs for our children, lower heating & electric cost for our homes, and more Small Business’s in Alaska. Our Crude Oil Pipeline was great for Alaska. The thing that hurt Alaska was we could not sale our refined petroleum out of state.This keep our price at the pump in Alaska higher than if we could sale our excess refined petroleum out of state [more volume, less cost]. We were forced to send our Crude to Washington and California so they could sale Alaska Refined Petroleum outside of Alaska.