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.

A donation fund has distributed over $3.3 million to communities impacted by Typhoon Halong.

The Western Alaska Disaster Relief Fund quickly formed in the days after the storm struck Yukon-Kuskokwim Delta communities. It destroyed homes and property, and displaced hundreds of people from their home villages.

The fund is facilitated by the Alaska Community Foundation (ACF) and has continued to collect donations to support disaster relief. It also has over a dozen partner organizations, including the Yukon Kuskokwim Health Corporation, Bethel Community Services Foundation, and the Association of Village Council Presidents.

In an announcement this week (Dec. 8), the foundation reported that $2.9 million has gone directly to tribal councils, city governments, and other regional organizations in Kipnuk, Kwigillingok, Chefornak, Napakiak, Napaskiak, Nightmute, Quinhagak, Bethel, and Tuntituliak. The money is intended to support temporary housing and home repairs as well as essential supplies and emergency assistance.

Some funding Over $225,000 of the fund has been used to purchase ATVs, snowmachines, and other winter supplies to aid in clean up and travel between villages.

Other money $130,000 has gone towards replenishing subsistence food stores. These funds were doled out with support from Bethel Food Bank, SeaShare, and the Kuskokwim River Inter-Tribal Fish Commission which are facilitating a traditional foods drive out of Bethel through the end of this week (Dec. 10).

Donations have also supported programs for mental health and violence prevention facilitated by the Teens Acting Against Violence Program under the Tundra Women’s Coalition.

They’ve also supported displaced students in the Lower Kuskokwim School District through school supplies and clothing.

KYUK also received support through the fund for its reporting and facilitation of community communication.

The Western Alaska Disaster Relief Fund will continue to accept donations. To make a contribution, visit their website at alaskacf.org/westernalaska.