Alaska
Take a trip to the Asian island that could play a role in Alaska's future • Alaska Beacon
Thirteen hours after boarding a jet in Seattle recently, I stepped off onto Asian soil, breezing through customs and into an air-conditioned subway.
I was bound for a city of skyscrapers, art, soup dumplings and glorious urban hiking: Taipei.
Maybe you already know a little bit about Taiwan, the nation of some 23 million people.
Some outdoorsy Alaskans have ridden the Huandao, a network of bike paths and roads that circumnavigate the mountainous island.
Or you’ve read about Taiwan on the news — how it’s under constant threat from China, its saber-rattling neighbor across an 80-mile strait.
Allow me to take you on a quick diversion to Asia from your regular life, to explain why Taiwan, which I visited in late October, matters to Alaska — and the rest of the world.
Martial law to progressive democracy
Two years ago, I took a trip to Japan, and while I was there, I made a side visit to Taiwan.
At the time, I was contemplating the idea of working as a foreign correspondent, perhaps in Hong Kong. But a friend who’d worked in journalism in Asia suggested I check out Taiwan instead, because Hong Kong’s future appeared increasingly depressing: The Chinese government had crushed the region’s pro-democracy protests, leaving little drama or nuance to report on.
The friend was right: Last week, dozens of demonstrators were sentenced to up to a decade in prison.
Taiwan’s future, by contrast, was setting up to be a compelling drama — one that’s still playing out today.
A quick history lesson. For centuries, Taiwan’s Indigenous population has shared the island with people of mainland Chinese heritage, who migrated there in waves. One of the largest waves came in the late 1940s.
That’s when more than 1 million Chinese nationalists, led by Chiang Kai-Shek, fled to the island after losing their country’s civil war to the communists, led by Mao Zedong.
Chiang became the leader of Taiwan, but once there, his government, in hopes of retaking the mainland, continued referring to itself as the Republic of China — a name that Taiwan still uses today.
Chiang’s rule over Taiwan was authoritarian and repressive: His forces killed tens of thousands of people during an 
But in the 1980s and 1990s, something surprising happened: Taiwan evolved into a thriving, progressive democracy.
Earlier this year, the Taiwanese people elected a new president, Lai Ching-te, in free and fair elections. Taiwan was the first Asian country to legalize same-sex marriage, in 2019. It holds an enormous annual Pride celebration in Taipei — this year’s included a speech from the vice president. There are regular protests and the country’s parliament hosts robust debate — including periodic fistfights.
The presence of that kind of open, democratic society — so close to China, and with a military supported by arms from the U.S. — risks serving as an inspiration to people living under Communist Party rule on the mainland. And it’s not the type of inspiration that the Communist Party likes.
Taiwan needs allies
On my previous trip to the island, I made some new friends and picked up on some of these political themes between bike rides, pork buns, monkey viewing and a Taiwan Series baseball game.
When I got home, I stayed up on Taiwan related news and kept talking about the country with an Anchorage friend of Taiwanese heritage.
He, in turn, connected me with the Taiwanese government’s office in Seattle. Which, as it turns out, is always looking for interested journalists to invite to the island.
After a brief correspondence, I was told, in February, to block off a week in October for an official visit.
I arrived back in Taipei on a Friday afternoon — just in time for dinner with a couple of Alaska friends who had also traveled to Taiwan for a bike trip. We sat outside next to a fish market, eating skewers of grilled beef, veggies and scallops, before I rode the mile back to my hotel room on one of Taipei’s ubiquitous shared bicycles — rentable for about a dollar an hour with a smartphone.
The next day I watched the Pride parade, a raucous festival of queer culture with floats sponsored by Uber and Google.
Another bike ride took me to a train to a bus, for an overnight stay in Taiwan’s northeast corner. I spent it in Jiufen, a mountainside getaway of tea rooms and guesthouses, then hiked and explored markets and museums the next day before returning to Taipei for the start of my official visit.
More about the official part: To preserve their relations with China, all but roughly a dozen of the world’s countries decline to give Taiwan formal diplomatic recognition — meaning that its government has to get creative to forge ties with sympathetic populations.
A few times a year, the Ministry of Foreign Affairs, or MOFA, pays for an entire delegation of journalists to spend a week in the country — mostly for meetings with government officials, but also for gorging themselves on Taiwan’s delectable cuisine and viewing tourist attractions like a remarkably lifelike miniature cabbage carved from jade.
For me, this entailed criss-crossing Taipei in a curtain-festooned tour bus with a very solicitous MOFA staff member and a dozen other reporters — from Haiti, Slovakia, the Netherlands, Canada, Italy, Australia, Finland, Nigeria and South Korea.
The initiative is hosting around 100 reporters this year at a total cost of some $500,000, which largely pays for journalists’ flights and hotels, according to MOFA officials. To maintain my independence and credibility in reporting on Taiwan, I combined my trip with a vacation, paid for my own plane ticket to Taipei and found a cheap AirBnB; I did not pay for the group meals hosted by MOFA.
“We try to make friends with the rest of the world,” Catherine Hsu, a top MOFA official, told us over the fanciest lunch I’d ever eaten — seven courses dished out at a hotel restaurant inside Taipei’s main railway station.
Taiwan needs friends because without them, it stands little chance against its large, powerful neighbor across the strait.
Taiwan is an economic powerhouse: Its biggest company, Taiwan Semiconductor Manufacturing Co., is the global leader in high performance semiconductors and has been valued at more than $1 trillion; the island also is home to other semiconductor businesses and high-tech industries.
But even a country whose per-person gross domestic product is in line with Israel’s and Spain’s can’t compete with the blunt force threatened by China, which calls Taiwan a “sacred and inseparable part” of its territory and vows to reunify it.
Taiwan currently spends some $20 billion a year on national defense, and military infrastructure and bomb shelters dot the island. But China’s defense budget is roughly 10 times that, and it regularly conducts menacing military drills — in one recent case, simulating a blockade of Taiwan and in another, launching missiles that flew over the island.
As Lai, the Taiwanese president, visited Hawaii this week just after a newly approved U.S. arms sale, China’s military issued a statement saying it would “resolutely crush any ‘Taiwan independence’ separatists.”
‘We will play an important role’
Over our week in Taiwan, my group was ushered from ministry to ministry, with briefings on subjects like the nation’s network of high-tech industrial parks and its efforts to transition toward more climate-friendly energy sources.
But many of our meetings were dominated by a force that wasn’t in the room: China. We heard from criminal investigators about how Taiwan’s decades-long exclusion from the United Nations, at China’s behest, means it can’t participate in Interpol, the international policing organization. It has also been blocked from formal membership in the World Health Organization and the U.N.’s official climate talks.
Think tank officials reeled off polling data about Taiwanese citizens’ willingness to take up arms against China. And media fact-checkers told us about disinformation campaigns suspected to be seeded by China-aligned operatives.
Anchorage Democratic Sen. Bill Wielechowski also visited the country earlier this year and came away with similar impressions. 
“The whole country, their whole identity is wrapped up in this notion that, at any time, China could come in and take over,” Wielechowski told me.
Wielechowski, who traveled with another Alaska state senator, Anchorage Democrat Elvi Gray-Jackson, is the latest in a long line of Alaska politicians to establish ties with Taiwan. Republican former Gov. Frank Murkowski is also a longtime ally, having taken more than two dozen trips to the country and served as an observer at Taiwan’s presidential elections.
Wielechowski’s and Gray-Jackson’s primary interest in Taiwan was foreign trade and reviving once-robust sales of Alaska products to the country. The state formerly had a trade office in Taipei, supporting substantial exports of Alaska timber and oil, and the two are interested in reviving it.
But Taiwan’s future is also directly relevant to Alaskans because of how Chinese military action could prompt an American response.
Alaska military bases host dozens of U.S. fighter jets, and experts say that if there’s any kind of conflict over Taiwan, their pilots and support crews are very likely to be dispatched to the Pacific.
“Look, I’m not going into war plan stuff, because that’s all classified and everything,” GOP U.S. Sen. Dan Sullivan told me last week. But, he added, two hours before our conversation, he’d had a discussion with Admiral Samuel Paparo, the commander of some 380,000 U.S. Indo-Pacific forces and civilians.
“We will play an important role,” Sullivan said. “We have a lot of forces, who are very close to the theater — closer than Hawaii. A major conflict in the Taiwan Strait would significantly impact the active duty forces in Alaska.”
Uncertainty with a new U.S. president
Sullivan, a former U.S. Marine, was once deployed to the Taiwan Strait and has since visited the country several times as a senator.
He’s been a key Republican ally of Taiwan in the U.S. Congress, amid an increasing penchant for isolationism among members of his party.
His staff sent me a 24-page booklet — “A Test of Wills: Why Taiwan Matters” — that it had made out of a series of Sullivan’s policy speeches.
But it’s too early to say if his views will win out in the new presidential administration. A Wall Street Journal correspondent shadowed Sullivan in Asia earlier this year, with the 
“In Taipei and Singapore, Sen. Dan Sullivan looks to quell foreign leaders’ fears that the U.S. won’t stand by allies if Trump wins,” the subhed reads. The piece describes Sullivan telling Taiwan’s vice president that “you can count on the United States of America,” but added that that promise “wasn’t wholly within (Sullivan’s) power to keep.”
My visit to Taiwan was just before Donald Trump won his second term. The U.S. election came up at nearly every meeting, with my fellow journalists repeatedly pressing Taiwanese officials on how they’d deal with Trump if he took office again.
Previously, Trump has said that Taiwan should pay the U.S. for its defense and complained that the island’s semiconductor industry is stealing American jobs; a former top aide said Taiwan could be “toast” if Trump was re-elected.
Taiwanese officials largely brushed off those comments and said they could work with Trump; one jokingly told us that, as a businessman, perhaps Trump could broker a deal to sell Taiwan some state-of-the-art F-35 fighter jets.
(The very solicitous Ministry of Foreign Affairs staffer followed up the next day with a group text requesting that the comment be considered off-the-record; I politely refused, given that the relatively high-ranking official declined to walk it back himself when given the opportunity immediately after he spoke.)
In our interview, Sullivan pointed out that Republican U.S. Sen. J.D. Vance, the vice president-elect, has spoken “publicly and very strongly” of the geopolitical importance of Taiwan — even as Vance has been much more skeptical of U.S. support for Ukraine.
But there’s little doubt that the election results are injecting new uncertainty into what’s long been an important alliance between the U.S. and Taiwan — at a time when the island is under increasing pressure not just militarily but economically.
Earlier this month, Reuters reported that SpaceX — run by Trump booster Elon Musk — asked some of its Taiwanese suppliers to transfer manufacturing to other countries because of China’s military threat. The news agency also reported last year that offshore wind power developers are increasingly thinking about how to insure their projects in the Taiwan Strait against events like war.
How, exactly, the U.S. should respond to these developments isn’t a question for me — it’s a question for the American public and its elected officials. And the public just gave those officials some strong signals by electing Trump.
There are compelling reasons for America to avoid another foreign military entanglement, which, in Taiwan, would almost certainly put Alaska service members in harm’s way.
But I’ve also seen Taiwan twice now, with my own eyes, and I can attest to what’s at stake. Its mist-flanked mountains, modern skyscrapers and high-tech semiconductor foundries. Its nightclubs and queer culture. And, most importantly, a democratic society where political and cultural freedoms have flowered in the ashes of an authoritarian past.
“They say, ‘Today, Ukraine,’” one of the Taiwanese officials told us on our visit. “‘Tomorrow might be Taiwan.’”
Nathaniel Herz welcomes tips at [email protected] or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.
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Alaska
LNG pipeline legislation debate divides Alaska lawmakers after consultant calls it ‘essential’
ANCHORAGE, Alaska (KTUU) – Alaska lawmakers are divided over whether new legislation is needed for a liquified natural gas pipeline, with the state’s energy consultant calling it “essential” while some legislators say existing laws are sufficient.
“A successful project will likely require suitable enabling legislation from the state legislature, among other key prerequisites,” state-contracted energy consulting firm GaffneyCline, hired by the Legislative Budget and Audit Committee for up to $200,000 in April 2024, says in a document made public for the first time Monday.
The 62-page document, presented to the Legislative Budget and Audit Committee last month, concludes that legislation is essential for the pipeline to be viable but more needs to be done to get the project across the finish line.
“A detailed economic model of the project is required before the legislature can take an informed view as to the appropriate degree of government take that the project can sustain, and how this could evolve over time,” the document states.
Alaska’s News Source reached out to Glenfarne Tuesday for comment on who presents the economic model and when that model could be presented. Spokesperson Tim Fitzpatrick referred on the report for GaffneyCline.
“We will continue to work closely with the legislature to discuss policy issues that may affect Alaska LNG and work collaboratively on solutions that enable Glenfarne to provide Alaskans with affordable energy security as rapidly as possible,” he said in a statement.
The document’s release comes amid optimism from pipeline developers and federal officials but growing skepticism from some state lawmakers.
During a November Legislative Budget and Audit Committee which discussed the same topic, House Speaker Bryce Edgmon, NA-Dillingham, left believing “the upcoming 2026 legislative session could be dominated by policy measures related to advancing the Alaska gas line project.”
“We don’t have any of this,” Edgmon said last month, relating to laws GaffneyCline says are essential.
Rep. Mia Costello, R-Anchorage, former House minority leader and co-chair of the Alaska Gasline Caucus, said she believes legislation for the pipeline is not needed, citing previous legislative involvement.
“Large scale LNG projects around the world are successfully developed through commercial agreements, private capital, and existing regulatory processes not legislative intervention,” Costello said in a statement. “Alaska already has established permitting, taxation, and regulatory framework capable of supporting energy development. Legislative involvement risks introducing political uncertainty, delaying timelines, and discouraging investors who prioritize stability and market driven decision-making.”
However, Sen. Elvi Gray-Jackson, D-Anchorage, told Alaska’s News Source the policy measures currently in place are more than a decade old, created for a different project, and don’t easily mesh with the task in front of them today.
“When project leadership … and financial models change, it’s our responsibility to revisit the policy framework that governs the state involvement, and that’s what we’re going to do as a legislature,” Gray-Jackson said.
Legislative action?
The asks pipeline developers want in those policies could be steep.
On the list of asks is a concept called “fiscal stability,” essentially a promise if Alaska changes its tax or regulatory policies later, the state would make up any financial losses to investors, according to a GaffneyCline presentation shown to lawmakers on the Legislative Budget and Audit Committee.
Those guarantees can mean a “tax freeze” — locking in the current tax system for the life of the project — potentially 20-30 years, according to GaffneyCline’s presentation to lawmakers. If Alaska later raises taxes or imposes new regulations, the presentation said the state would have to compensate investors to maintain their original profit expectations.
Another ask is the lowering of property taxes for the pipeline, something GaffneyCline’s November presentation said could cost the project $1 billion and add 9% to the cost of delivered gas.
Gov. Mike Dunleavy plans to introduce a bill to lower property taxes for the pipeline, spokesperson Jeff Turner confirmed Tuesday. No other LNG bills are planned at this time, he added.
Time crunch
Whatever the legislature decides to do, they’ll need to do it quickly. The regular session convenes Jan. 20, and for the following 120 days, the process to create a package of policies and framework addressing LNG issues will likely be front of mind.
That comes after Glenfarne Alaska LNG set expectations in October that construction for the pipeline will begin in late 2026 and be operational by mid-2029.
“What Alaskans should take away from the report is that we need to hope for the best, but prepare for the situation not moving as fast as Glenfarne and the other players are thinking,” Gray-Jackson said.
Lawmakers have signaled a mixture of optimism for what the pipeline could create, but it comes with skepticism, too. Gray-Jackson said she was “cautiously optimistic.”
“Frankly, I don’t know where we’re at as far as the legislature is concerned because we haven’t gotten any real answers from Glenfarne,” Gray-Jackson said.
A Glenfarne spokesperson said last month they are active in providing information to the state legislature.
“Glenfarne is making rapid progress on Alaska LNG and regularly meets with legislators to provide updates and discuss important state and local policy considerations,” Glenfarne communications director Tim Fitzpatrick said. “We appreciate the legislature’s continued engagement to help make Alaska LNG a success for the state.”
“I understand the potential, huge, multi-generational impact of the state, as well as being very positive,” Sen. Bert Stedman, R-Sitka, told Alaska’s News Source following the Legislative Budget and Audit Committee meeting in November.
“Concentrating on the benefit of the project that we know, if it’s successful, it’s going to be very beneficial, and if it’s unsuccessful, it could be detrimental for generations.”
“Will the project even come unless we present the right scenario?” House Majority Leader Chuck Kopp, R-Anchorage, asked Nick Fulford, GaffneyCline senior director and global head of gas and LNG.
“You mentioned the buyers want 20–30 years of stability … our fiscal framework might be a little bit out of alignment, if I’m hearing you correctly,” Kopp said.
“If those things are all true, our needs, our situation, us being out of alignment, we’re going to have to look at possibly a reality that this line doesn’t even get [built],” the representative added.
Federal permits completed
The project completed 20 federal permits and environmental reviews last week, according to the Permitting Council, clearing what the governor called “the last major regulatory hurdle.”
“Alaska LNG received the major federal permits needed to proceed in 2020,” Fitzpatrick said. “Some of these permits have a five-year renewal cycle, which was completed last week and all of Alaska LNG’s major permits are current and in effect. Glenfarne has an ongoing process to maintain permits and authorizations for Alaska LNG.”
With the permits cleared, the pipeline inches toward a final investment decision (FID). Natural Gas Intelligence, a natural gas news provider, described an FID as “the last step of determining whether to move forward with the sanctioning and construction of an infrastructure project.”
A source familiar with the pipeline developments previously told Alaska’s News Source to expect an FID early next year.
“Alaska LNG will strengthen our economy, create long-term jobs, and provide reliable energy to Alaskans and our global partners for generations to come,” Dunleavy said.
“I am thrilled to see the Alaska LNG project finish federal permitting actions ahead of schedule,” said Permitting Council Executive Director Emily Domenech in the press release.
“This combined effort reflects our commitment to the State of Alaska and to achieving President Trump’s energy dominance agenda.”
Domenech visited the state alongside the congressional Natural Resources Committee in August, when Dunleavy signed a deal with the Trump administration aimed at bringing more resource development investment will come to Alaska.
LNG, however, was not heavily discussed at the meeting.
“Completing federal permitting for Alaska LNG ahead of schedule shows how the Trump administration is restoring America’s Energy Dominance by cutting unnecessary delays and unleashing our abundant resources,” Interior Secretary Doug Burgum said in the release. “This project strengthens U.S. energy security, creates jobs for Alaskans, and reinforces our commitment to a permitting system that works at the speed of American innovation.”
National momentum
The federal push comes as as GaffneyCline’s presentation said both LNG supply and demand are expected to boom globally. Liquefaction, or the process of turning gas into liquid, is expected to increase by 42% by 2030, reaching about 594 million tons per year.
This summer, Dunleavy vetoed several bills and cut more than $100 million from the state budget, largely due to reduced state revenues from oil price declines.
“The oil situation has deteriorated,” Dunleavy said in a video statement before his budget was revealed. “The price of oil has gone down; therefore, our revenue is going down.
“Basically, we don’t have enough money to pay for all of our obligations. So, as a result of that, you’re going to see some reductions in this year’s budget.”
The pipeline project has support from both the state and federal levels. President Donald Trump has pledged to ensure an LNG project gets built “to provide affordable energy to Alaska and allies all over the world.”
On Jan. 20, Trump signed the “Unleashing Alaska’s Extraordinary Resource Potential” executive order, which the administration says prioritizes “the development of Alaska’s liquefied natural gas (LNG) potential, including the sale and transportation of Alaskan LNG to other regions of the United States and allied nations within the Pacific region.”
Despite the optimistic timeline, Alaska has seen multiple LNG pipeline proposals fail over the past two decades due to financing challenges, regulatory delays and market conditions.
Environmental groups and some Alaska Native groups have also raised concerns about the pipeline’s potential impact on wildlife and traditional lands.
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Gov. Mike Dunleavy plans to introduce a bill that would establish a low property tax for the giant Alaska LNG project, a move that would help support its development.
The bill, to be introduced at the start of the session, proposes a rate of 2 mills on the assessed value of the project, Dunleavy said in an interview Friday. That’s one-tenth of the 20 mills, or 2%, that the state levies on oil and gas infrastructure, a portion or all of which can go to local governments with such infrastructure, depending on their rates.
The governor said his bill would cover the length of the project’s lifetime, which has been estimated at 30 years or more.
The governor said his administration is also employing a third-party consultant to study potential sources of additional revenue from the project that could be available to the state and local governments.
Two borough mayors reached for this article raised concerns about the proposed tax rate, including whether local revenue from it would be offset by other benefits, and why the Dunleavy administration has chosen it as a starting point for legislative discussions without their input.
Peter Micciche, mayor of the Kenai Peninsula Borough, said he didn’t think the rate is high enough to win support from local governments that would host project infrastructure.
“We’re all supportive of the AKLNG project,” he said. “But it can’t solely be on the backs of our local taxpayers. I think there’s a fair deal to be had, but a deal that has to be born from facts, real math and local impact data.”
“It has to be transparently and fairly negotiated between the involved parties in good faith, and we’re standing by ready to engage in that process and move Alaska and that project forward,” he said. “But I can’t imagine that a 90% reduction in local revenues associated with oil and gas properties has any chance of moving forward.”
The bill also comes as Alaska legislative leaders have expressed concern about how quickly they can thoroughly consider a long-term plan providing fiscal support for the project, an effort that will include considering potential benefits and risks to the state and other complex questions.
The bill comes after a consultant for the Legislature, GaffneyCline, told the Legislative Budget and Audit Committee last month that legislative action will likely be needed on issues such as property taxes and “fiscal stability,” before the project developer can make a final decision on investment.
Lawmakers say they also plan to weigh whether GaffneyCline faces a conflict of interest, given that its parent company, Baker Hughes, has said it plans to provide key equipment and make a “strategic investment” in the project.
Dunleavy said lawmakers will “need to roll up (their) sleeves, get serious” and pass legislation involving the project.
Alaska LNG, among the largest U.S. infrastructure project proposals in modern history, also faces unanswered questions likely to complicate any efforts by the Legislature, including if the longtime current cost, estimated at $44 billion, is accurate.
The project’s developer, Glenfarne, has said an updated cost estimate will be completed this month. Worley, a global engineering firm, is doing the work.
The estimate won’t be released publicly, but it will be available to the state, Glenfarne said Friday.
“Worley’s work evaluating potential cost increases or reductions, for both pipeline and initial LNG export components, is on track to be completed by year-end as scheduled,” said Tim Fitzpatrick, a spokesperson for Glenfarne, in a prepared statement. “As a private developer, Glenfarne does not publish competitive cost information. We’re in commercial negotiations with contractors, suppliers, and LNG buyers, and cost information will remain confidential. Lenders and investors will be provided necessary and customary information.”
“The state of Alaska will have an investment opportunity and will have access to all necessary information,” Fitzpatrick said.
A 2-mill property tax
Project plans call for construction of an 800-mile pipeline delivering natural gas from the North Slope to Alaskans by 2029, an estimated $11 billion first phase.
In the second and more expensive phase, an export and gas-liquefaction facility would be built in Nikiski to ship much larger quantities of the gas overseas for use in Asian countries. The project has called for gas exports to begin in 2031.
[Previous coverage: Alaska LNG has caught a wave of high-level attention. Is it winning over its skeptics?]
Several similar projects to tap Alaska’s North Slope gas and send it to buyers have failed to be built over the decades.
But Alaska LNG stands out for making progress that others haven’t.
It recently completed the federal permitting process necessary for the project’s construction.
Large gas consumers in Asia, such as Tokyo Gas in Japan and POSCO International Corp. in South Korea, have signed preliminary gas-offtake agreements for more than half of Alaska LNG’s available gas volumes. Those are not binding commitments to buy the gas, though they could lead to final agreements.
“Glenfarne is rapidly progressing toward a final investment decision, as seen through our progress with numerous Asian commercial announcements and strategic partner agreements,” Fitzpatrick said. “We expect additional announcements in the next several weeks. Our overall project schedule, including completing the pipeline in 2028 and delivering first gas to Alaskans in 2029 has not changed.”
Dunleavy on Friday said his property tax bill will not be lengthy.
It’s the only bill he plans to introduce dealing with Alaska LNG, given that early legislation involving the project a decade ago established a strong foundation, he said.
“I’m going to introduce one bill on the gas line, because that’s really the only thing that’s really something worth putting in,” Dunleavy said. “Meaning the bills that enable the gas line that were passed in ’14 and ’15 had everything in there.”
A 2-mill rate would generate $100 million in the project’s first year, if it’s assessed at $50 billion, and lesser amounts as the project’s value depreciates over time.
That is below the $1 billion the project would generate at that value under the state’s 20-mill, or 2%, property tax rate.
At 2 mills, the income represents more income than the “zero” the state will get if the project is not built, Dunleavy said.
“We will still get royalty, we will still get severance taxes,” he said, referring to taxes and royalties from gas production.
Alaska LNG would also create thousands of jobs and lead to lower energy costs, he said.
The administration also plans to hire a “third party to examine any and all methods by which the municipalities and the state could capture revenue, meaning other types of taxes, PILTs, fractional ownership, other types of co-ownership in the pipeline,” he said, using PILT to refer to payments in lieu of taxes.
That co-ownership, 25% of which was reserved by the state’s gas line corporation, could potentially include municipalities, the state, corporations or individuals, he said.
“There are no other bills that we are contemplating, because the structure was put together really well by the Legislature back when the (original) bills were passed,” he said.
‘A jaw-dropping reduction’
The property tax at its current rate could add 9% to the project’s cost to deliver gas, GaffneyCline told the Legislative Budget and Audit Committee last month.
Fitzpatrick, with Glenfarne, said GaffneyCline and other experts have “identified Alaska’s high oil and gas property tax as an impediment to project development for more than a decade.”
“Glenfarne is already moving this project forward in advance of a formal FID (final investment decision) and will continue to work with the Legislature as we approach FID,” Fitzpatrick said in the prepared statement. “A final resolution to this longstanding problem will help Alaskans get lower cost energy as quickly as possible.”
The governor outlined his plans for the proposal in a private meeting with legislative leaders Thursday, the same day he presented his budget draft that called for spending more than $1.8 billion from savings to cover costs in the current and coming fiscal years.
Senate Majority Leader Cathy Giessel, R-Anchorage, said in an interview that the property tax proposal will be very contentious because it will have a significant impact on the state and local communities.
“That is a jaw-dropping reduction in a property tax,” Giessel said. “I know that it will affect the state, but it certainly will affect the municipalities and boroughs that the pipeline will go through. That’s a huge give on the part of the state to make this otherwise astronomical gas pipeline affordable and economic to even do.”
Giessel also said major questions need to be answered by the project developer and lawmakers.
For example, she asked, if North Slope oil producers provide gas for the project, will they be able to deduct expenses associated with that effort from the oil production taxes they pay the state?
“We need to refine the gas lease expenditure deductions and how that impacts oil,” she said.
Other concerns include preventing large cost overruns such as those experienced for the 800-mile trans-Alaska pipeline that began moving North Slope oil to market in 1977, she said.
The Legislature will be hard-pressed to make all the necessary changes this session, in part because Dunleavy provided a budget that will take up much of the discussion, she said.
“The timeline for any deliberation over our oil and gas tax structure typically has taken several years of work,” Giessel said Friday. “We’re now in the second session of a Legislature in an election year, and we have been now handed, yesterday, an incredibly irresponsible budget. We’re going to have to, frankly, put it to the side and write a budget, because this governor did not put the work in to actually do that. I don’t see how we possibly get any kind of tax structure on gas resolved before the middle of May.”
House Speaker Bryce Edgmon, an independent from Dillingham, said the House will look at the issues closely and will need to hire its own third-party consultants.
Setting a long-term property tax rate for the project is “inherently a challenging issue,” he said.
“But we will certainly do our part in terms of considering it,” he said. “Whether it can be prosecuted in a single session, that’s a whole different matter.”
Sen. Elvi Gray-Jackson, D-Anchorage, the chair of the Legislative Budget and Audit Committee, said she’s “looking forward” to seeing the governor’s bill.
“We’ll just take one step at a time,” she said. “Glenfarne claims they’re going to have a final investment decision in early 2026. We’ll see.”
Gray-Jackson said in a recent opinion article that she directed GaffneyCline to provide a report on key issues involving the Alaska LNG project. The report was pubicly released Monday.
Dunleavy said lawmakers can find the time to properly deal with the issue during a 120-day session and reach agreement on a complicated subject, like lawmakers do in other states.
The governor said that if the Legislature focuses on this bill over trivial bills, “such as recognition of tall people’s week or, you know, some of the bills that we do down there, we’ll get some substantial things done just like they do in other states in much less time.”
“We may have grown accustomed over the years, in Alaska in the Legislature, that just about everything is a hard, almost impossible lift,” he said. “But when we look at what they’re doing across the country, we should not be fretting over anything. We should be eager to get to work, roll up our sleeves and get some fantastic legislation done that will be (a) game changer for the state of Alaska.”
Borough mayors raise concerns
Mayors with two boroughs that would encompass Alaska LNG infrastructure, if the project is built, said they were concerned that the governor has moved forward with a specific idea for the property tax without input from the boroughs.
The governor met with those affected boroughs in October, but did not provide specific details of any proposed strategies regarding Alaska LNG, such as the 2-mill property tax, they said.
Micciche, mayor of the Kenai Peninsula Borough where the gas-liquefaction and export facility would be built, said the borough wants to see the gas line project built.
But the borough wants to make sure it can break even under a project that could create additional requirements in the borough for housing, roads, emergency services and other costs, he said.
“I look forward to those discussions so that we can lay out what the actual impact will be and discuss how our costs will be covered,” Micciche said.
Grier Hopkins, mayor of the Fairbanks North Star Borough, said one of the borough’s top priorities is seeing the gas line built.
But the borough needs to make sure the gas it provides is affordable to support the local economy, and it needs time to study the issue.
“I’d be happy to work with the governor and the other municipalities to find an agreement, but he needs to sit down and work with us,” he said. “I hope we can work together and something is not unilaterally moved forward before they can talk to us.”
Josiah Patkotak, mayor of the North Slope Borough where the project would start, declined to comment at this time, a spokesperson said.
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