Governor Mike Dunleavy and Brendan Duval, CEO and founder of Glenfarne Group LLC, talked about construction of an Alaska LNG pipeline during the Alaska Sustainable Energy Conference at the Dena’ina Center in Anchorage on Thursday, June 5, 2025. (Bill Roth / ADN)
Gov. Mike Dunleavy on Friday introduced a bill in the state Legislature that would eliminate property taxes for the Alaska LNG megaproject, but create an alternative tax that would generate a smaller amount of revenue.
Lawmakers said Friday that they were still reviewing the bill, but one said it appears to be a “massive tax cut” that could exceed $1 billion in lost potential revenue to the state.
A borough mayor also indicated that municipalities that would host project infrastructure would lose out on significant property taxes and don’t currently support the measure, though they are working with the governor’s office and project officials on options.
Dunleavy said in an interview Friday that the goal is removing a financial barrier for the project so that it can be built.
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At that point, it will provide an array of long-running benefits that the state does not currently receive from the North Slope’s vast but long-stranded natural gas, he said.
That includes a large number of jobs and affordable gas for Alaskans and businesses, including to support potential new undertakings such as data farms or fertilizer manufacturing, he said.
Also, even if his bill is passed, the project still would bring in significant royalties and production taxes, he said.
Over 30 years, the project still will generate $26 billion for state and local taxes and royalty revenue, Dunleavy said, referring to figures from the Alaska Department of Revenue. An oil and gas analyst interviewed for this article questioned those numbers.
Jeff Turner, a spokesperson for the governor, said in an email that the Department of Revenue is updating its Alaska LNG analysis “to incorporate spring modeling” and will share information on those figures next week.
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Dunleavy said that if nothing is built, the state gets nothing from the project.
Recent events involving the U.S. war on Iran, including Israel and Iran bombing major gas infrastructure, underscore the need for a project that can safely export gas to meet strong demand in Asia, he said.
“So it’s a catalyst to billions upon billions upon billions of dollars and decades of future (revenue), not to mention the thousands of jobs and the other economic benefits from that,” Dunleavy said of the project.
Awaiting a final investment decision
The state has unsuccessfully pursued a version of Alaska LNG for generations.
Government agencies, private developers and major oil companies have never been able to get it built. The huge price tag has been a key impediment.
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Under the current plan, majority owner Glenfarne is working with the Alaska Gasline Development Corp., a state agency and 25% project owner.
Alaska LNG has preliminary but nonbinding deals in hand with gas producers and buyers. Many observers say this project is farther along than past ones that failed.
Dunleavy said he recently met with the Taiwanese ambassador, Alexander Tah-Ray Yui.
“The country is very excited about moving ahead on hard agreements, especially now,” he said, following events in the Middle East.
Glenfarne has not yet made a final investment decision to build the project, a step originally expected in December.
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Phase one calls for building an 800-mile pipeline to deliver natural gas from the North Slope to Southcentral Alaska, starting in 2029.
Phase two includes construction of a plant and shipping terminal in Nikiski. At that point, vast quantities of liquefied natural gas, or LNG, can be shipped overseas to Asian companies. That would start in 2031.
Glenfarne has recently updated an old cost figure of $44 billion for the project. But the company, based in New York, has not disclosed the new estimate, as well as other financial details.
Dunleavy said it’s common for a privately led project seeking investors and customers to hold on to proprietary information.
“I think there’s going to be enough information that can be shared publicly that will give legislators enough comfort that Alaska is better off with a massive project such as this, as opposed to better off without it,” he said.
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Some Alaska lawmakers, who must decide what fiscal terms they should provide the project, if any, have said Glenfarne has not given them the financial information to judge the project’s potential benefits and risks.
A big ‘buzz cut’
The governor’s new measure proposes taxing the volume of gas flowing through the pipe, rather than taxing the assessed value of the oil and gas infrastructure, the governor’s office said in a prepared statement.
The alternative tax would be 6 cents per every thousand cubic feet of gas. That tax rate would increase 1% annually.
The alternative tax would not kick in until the project reaches an average flow of 1 billion cubic feet daily or 10 years after gas starts flowing, whichever comes first.
The project, once in full production with exports to Asia, is expected to move 3.5 billion cubic feet daily.
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The bill removes the front-end tax burden for the project, reducing risks for potential investors, the governor’s office said.
It creates a predictable revenue stream, unlike property tax assessments that can be challenged, his office said.
Those benefits can help result in cheaper natural gas prices for Alaskans, the statement said.
Larry Persily, an oil and gas analyst and former Alaska deputy commissioner of revenue, said the alternative tax would provide a little over $75 million in the tax’s first year, if the project moves 3.5 billion cubic feet of gas daily.
In comparison, the property tax currently on the books would bring in $1 billion annually, for a project assessed at $50 billion.
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“The bill today is not even a hair cut,” Persily said.
“It’s like a buzz cut on property taxes. It’s pretty substantial,” he said.
About a decade ago, when Persily was chief of staff to former Kenai Peninsula Borough Mayor Mike Navarre, he worked with a group of municipalities that tried to determine a fair property tax for an earlier, failed version of the project.
The group realized property taxes needed to be reduced to help make the project economic against global competitors.
But they still believed some property taxes were needed to support services provided by the state and boroughs.
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They looked at a reduction that would still bring in about $630 million annually in property taxes, he said.
“The question is, how much of a discount should you provide and how should you structure it, to cover costs to the municipalities for all the services they will need to provide in association with the project,” he said.
Persily also said he doesn’t think the project will generate $26 billion in state and local taxes and royalties over 30 years.
He said a key source of revenue, production taxes and royalties, are based on the sale of gas as it first comes out of the ground, when its value is expected to be low compared to what it finally sells for.
“It seems a little gold-plated,” he said of the long-term revenue estimate. “Many Alaskans feel like this will be next Prudhoe Bay. But it’s not the same as oil in terms of profitability and tax revenue.”
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Sen. Bill Wielechowski, a Democrat and vice chair of Senate Resources, said early Friday that his office is still reviewing the bill.
It appears the proposal could remove more than $1 billion in annual taxes from the state, compared to current statutes, he said.
“The rough look so far is that is a massive tax cut,” he said.
Glenfarne calls for swift action
GaffneyCline, a consultant for the Alaska Legislature, has said 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.
The consultant has said property tax relief can provide critical savings early in the life of the project when costs are high.
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Adam Prestidge, president of Glenfarne Alaska LNG, said in a prepared statement Friday that the state is facing a growing energy crisis, as natural gas production from the aging Cook Inlet basin near Anchorage continues to wane.
Glenfarne has been discussing property taxes with state and local leaders with the idea of minimizing energy costs for Alaskans, Prestidge said.
“State and local policymakers including members of the legislature, independent analysts, and the legislature’s own oil and gas consultants have all recognized that reforming Alaska’s current system is a key step in advancing a North Slope natural gas project,” Prestidge said.
“Acting swiftly on this measure is the most important step the Legislature can take to ensure that Alaskans will finally benefit from bringing Alaska’s North Slope natural gas to market,” he said of the bill.
Grier Hopkins, mayor of the Fairbanks North Star Borough, said in an interview Friday that officials from his borough and others that would host some of the project’s infrastructure do not agree with the terms of the bill.
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The borough officials have been meeting regularly with officials from the governor’s office, the Alaska Gasline Development Corp. and Glenfarne, he said.
“The conversations have gone well, but this is not what we agree on, and I don’t support this specifically for Fairbanks,” he said.
Only 2 miles of the pipeline will travel through the Fairbanks borough. But the proposed bill will remove about $350,000 in annual property tax revenue, based on his own rough estimate, he said.
Other boroughs would see larger reductions, such as the North Slope and Kenai Peninsula boroughs, whose boundaries would encompass some of the project’s major facilities.
The Fairbanks borough is focused on getting affordable gas from the project, he said.
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“So we still need to keep working with the governor and the Legislature to come up with something that’s going to work for the municipalities, which all have really different needs,” he said.
Lawmakers looking for more project details
Senate Majority Leader Cathy Giessel, a Republican and chair of the Senate Resources Committee, told reporters this week that lawmakers have not received enough information from Glenfarne about the costs of the project.
That makes it hard to know what steps should be taken to support it, she said.
The Senate Resources Committee has introduced a bill that proposes new guidelines on the project, including allowing the Legislative Budget and Audit Committee to conduct annual audits of the Alaska Gasline Development Corp.
Among many other steps, it would allow legislators to sign non-disclosure agreements in order to receive critical financial information.
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Giessel said in an interview Friday that the members of the committee support Alaska LNG. They want to make sure it’s properly structured to benefit Alaskans, she said.
She plans to soon call on the borough mayors to appear before the committee to provide input on the bill.
She’ll also be looking to hear from GaffneyCline and other experts about their views on the bill, she said.
“It’s great that the public can now see what the governor is proposing,” she said. “These are local taxes that are being curtailed.”
“This affects their revenue to manage a large increase in their population and a huge increase in their property use” that will come with the project, she said.
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Wielechowski, the Senate Resources vice chair, said the Dunleavy administration also needs to provide details to lawmakers about the project and the bill.
“The burden is on him to come forward and explain to the people of Alaska why he needs to give away a billion dollars a year,” he said.
The Alaska Senate Finance committee advanced a draft capital budget on Tuesday that would put nearly $250 million toward state facilities and maintenance projects next year.
The draft budget adds $88 million to Gov. Mike Dunleavy’s proposed capital budget of $159 million, with the largest additions going toward K-12 schools and university facilities maintenance.
That was a focused effort by the finance committee, said co-chair Sen. Bert Stedman, R-Sitka, who called funding for education facilities maintenance a “heavy concentration” on Wednesday.
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Earlier this year, students and school officials testified to lawmakers that decades of deferred maintenance has reached crisis levels — with many rural school districts in particular grappling with deteriorating facilities, failing water and sewer systems — which they say is degrading student and staff morale. Lawmakers have expressed support and increased funding in recent years, but point to Gov. Mike Dunleavy’s history of vetoes as a roadblock for funding education.
The Senate draft includes $57.8 million in additional funding toward K-12 school maintenance through the Alaska Department of Education and Early Development and $17 million toward the University of Alaska. It also includes $5.7 million for the Alaska Court System’s facilities and $8 million for community infrastructure and workforce development programs through the Alaska Department of Commerce, Community, and Economic Development.
The Legislature relies on state ranked lists to prioritize where to direct funding to capital projects for K-12 schools, the university system and the court system.
For K-12 schools, the state’s current major maintenance list totals over $400 million needed for 103 school projects and repairs. Stedman said he recognized this year’s capital budget will only fund a fraction of those.
“Hopefully we get a quarter of it done, or something like that, but it’d be nice to retire the entire list,” Stedman said.
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The draft budget would fund the top 15 school projects on the list, plus funds for three other schools in need of emergency fuel tank repairs. The top projects range from roof and boiler replacements to septic systems, fire suppression and safety upgrades in schools from Fairbanks to the Aleutian Islands.
In order to distribute funds more widely, members of the finance committee reduced funding for one project in Galena, in the Western Interior of Alaska, from roughly $35 million to $5 million for renovations to the Sydney C. Huntington Elementary and High Schools. They also allocated $17 million towards rebuilding the school in Stebbins in Western Alaska, after it burned down in 2024.
The Senate draft also adds nearly $14 million in funding for the state-run Mt. Edgecumbe High School, which has been the focus of public attention and concern after a quarter of students disenrolled this year. The additional facilities dollars include $10 million to remodel the dining hall, $3.1 million to replace dorm windows, $460,000 to replace dorm furniture, $50,000 to replace mattresses and $125,000 to replace aging laundry machines.
Finance members added $17 million to fund the top nine projects across the University of Alaska system — three projects each within the three major campuses.
Sen. Jesse Kiehl, D-Juneau, serves on the finance committee and his district includes University of Alaska Southeast. He described the proposed funds as a “nickel” compared to the “colossal” deferred maintenance needs of the university system.
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“That’s been built by Legislatures and Boards of Regents for 40 years,” he said on Wednesday, adding that it is a shared responsibility to put funding towards repairs and upgrades.
“The Constitution makes them a separate body within the executive branch that puts a lot of responsibility on them, too, more than the general state government,” he said “So university major maintenance is its own huge problem.”
The draft budget also includes $5.7 million for upgrades to state court facilities, mostly targeted to Anchorage and Sitka. It contains nearly $10 million for workforce development programs geared at the construction and oil and gas sectors, including for the Fairbanks Pipeline Training Center and Alaska Vocational Technical Center in Seward.
An amendment to add $25 million to the draft budget for the Port of Anchorage, sponsored by Sen. Kelly Merrick, R-Eagle River, was voted down on Tuesday by a 5 to 2 vote.
Before voting against the proposal, finance co-chair Sen. Lyman Hoffman, D-Bethel, said during committee deliberations the priority this year is to fund as many school maintenance projects on the list as possible, saying “schools are falling apart” and must be maintained to prevent further deterioration.
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“Students that are trying to learn deserve better,” Hoffman said. “And if we are not able to provide this major maintenance, we are going to see these schools continue to crumble, and the financial burden to the state of Alaska will be hundreds of millions of dollars to rebuild schools.”
More funding for school maintenance and other capital projects could be added by the Alaska House of Representatives, who will take up the draft budget bill after it’s approved by the Senate in the coming weeks.
Two US soldiers were wounded by a brown bear during a training exercise in Alaska on Thursday, the US Army stated.
Anchorage Daily News reported that the soldiers were from the 11th Airborne Division, and that the exercise had been a “land navigation training event” near Joint Base Elmendorf-Richardson.
State wildlife officials said that the bear attack seemed to be a defensive one, from a bear which had recently emerged from its den. Staff members from the Alaska Department of Fish and Game collected evidence at the scene in an attempt to learn more about the bear, such as its species and gender.
“The incident is currently under investigation, and we are working closely with installation authorities and local wildlife officials to gather all relevant information and ensure the safety of all personnel in the area,” the 11th Airborne Division said in a statement, reported ABC News.
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ABC News also cited an 11th Airborne Division spokesperson, Lt.-Col. Jo Nederhoed, who said that the two soldiers had been seriously wounded, but were receiving care at a hospital in Anchorage, and had shown improvement by Saturday morning.
“We hope both individuals have a full and quick recovery, and our thoughts are with them during this time,” Fish and Game Regional Supervisor Cyndi Wardlow said in a statement reported by Anchorage Daily News. “In this case, having bear spray with them in the field may have saved their lives.”
Both of the soldiers reportedly had and used bear spray during the attack.
The bear’s condition and whereabouts are currently unknown.
Up, up and away … that’s where most travel prices are going.
It’s true. Not only are our nation’s geopolitical thrusts in the Mideast affecting the cost of your fill-ups, every component of your trip from airfares to car rentals and hotel stays are subject to price hikes.
Imagine filling up a jetliner with jet fuel that’s doubled in price. It’s enough to melt your credit card, regardless of the number of points you get for every dollar spent!
Because the price of oil affects everything, higher prices are eating away at your travel budget in many ways.
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Bag fees
There’s lots of press on this. All airlines are increasing their checked-bag fees because of the jump in fuel prices.
Back in 2009, Alaska Airlines instituted a $15 fee for the first checked bag and $25 for the second bag. At the time, there was no charge for the first bag and a second bag was $25.
Last week, Alaska Airlines, along with other major airlines, increased its fees to $45 for the first checked bag and $55 for the second bag. Delta Air Lines charges the same.
Even if the cost of oil comes down, I don’t expect bag fees will ever be reduced.
Travelers who live in Alaska are somewhat insulated from the new hikes because both Delta and Alaska Airlines offer two free checked bags, with conditions:
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1. Alaska offers two free checked bags for travelers flying to or from Alaska who are enrolled in Club 49. This does not affect other flights on Alaska. Separately, ATMOS credit card holders can get a free checked bag. Also, elite members of the ATMOS scheme get one or two free checked bags systemwide.
2. Delta offers two free checked bags for travelers flying to or from Alaska who are SkyMiles members who live in Alaska. Again, this does not apply to other Delta flights. Separately, Delta American Express cardholders can get a free checked bag.
3. Elite-level travelers with the oneworld airline cartel, including Alaska Airlines, can get one or two checked bags on American, British Airways, Japan Airlines, Qantas or other oneworld carriers.
[Anchorage’s international airport rolls out self-driving wheelchairs]
Main Cabin vs. Basic Economy
The spread between the lowest available price, Basic Economy, and a more flexible ticket, Main Cabin, has increased. While the difference used to be $20-$30 each way when the Basic Economy scheme was introduced in 2018, the round-trip upcharge now can exceed $100.
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For example, the lowest Basic fare to Portland is $337 round-trip on Alaska Airlines. The upcharge to Main Cabin, with full loyalty points, pre-assigned seats and more flexibility on changes and cancellations, is $447, a 33% upcharge.
This trend is not specifically attributable to the new Iran War. It’s just a cost that continues to rise.
New fees
I’m impressed at the creativity of airline people who dream up new fees. Here are some of my favorites from Alaska Airlines:
1. Phone reservations: $15
2. Partner award booking fee: $12.50
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3. Pet travel fee: $100 in the cabin, $200 in the baggage compartment with a kennel
4. Left on board item return fee: $20
On Condor Airlines, operating the only nonstop service from Anchorage to Europe, travelers can choose from four different bundles in economy class. The least-expensive, Economy Zero, from $840 round-trip, features fees for travelers:
1. Carry-on bag fee, up to 8kg: $35; a small bag like a purse always is included for free
2. Checked bag: $75
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3. Airport check-in: $30
All three of these fees are included in the next-highest fare bucket, Economy Classic, from $900 round-trip. It’s cheaper to buy the bundle than it is to buy the components a la carte. Seat assignments are additional, from $25 for economy.
Airfares on the rise
There are a few good deals available for travel to select West Coast/Intermountain destinations in May, including:
1. Anchorage-San Francisco on Alaska Airlines, from $307 round-trip. Fly May 15-28 only. Add $90 round-trip for Main cabin.
2. Anchorage-Los Angeles on Alaska Airlines, from $317 round-trip. May 15-25 only. Add $90 round-trip for Main.
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3. Anchorage-Phoenix on United, Delta or Alaska, from $267-$287 round-trip. Fly May 8-June 9 only. Add $90-$100 for Main.
4. Anchorage-Denver $357 round-trip on Delta. Fly May 8-June 9 only. Add $90 round-trip for Main.
For travel to other destinations, or later in the summer, be prepared to pay more.
Flying to Hawaii? Alaska Air’s nonstop prices out at $706 round-trip between May 30 and June 6. Add $110 round-trip for Main.
Nonstop flights from Anchorage to Salt Lake City start at $669 round-trip with Delta on May 17. That’s $100 more than the cost for the same flights last month. Add $90 more for Main.
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Hotel costs continue to rise, accompanied by pesky resort fees.
The Outrigger on the Beach in Waikiki is a very nice beachfront hotel. It’s not plush, or the nicest property. But it’s solid. The cost is $334 per night.
But there’s more: a $50 per night resort fee, plus a variety of taxes and charges, totaling $112.55 per night.
Down in Seattle, the Sound Hotel in the Belltown neighborhood is marketed by Hilton. The discounted rate for “Honors” members — it’s free to join — is $313.34 per night for a king room in late May. Taxes and fees add an extra $56.40 per night.
There’s no appreciable bump yet for hotel rates as a result of the oil price surge. Yet. But if these hotel rates seem high, they’re in line with hotel rates in Anchorage this summer. At the Sheraton in Anchorage in June, it’s $450 per night, plus $54 in taxes and fees, when booked at Expedia.
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Car rentals are not cheap
My go-to site for car rentals is the Costco site, which compares major brands and automatically includes Costco discounts.
In Las Vegas, for a one-day rental in May, Budget charges $67 per day, which includes taxes and fees of $22.77. In Anchorage, the same kind of car, medium SUV, costs $92.97 with Alamo.
The biggest differences so far in car rental rates seems to be the bill you’ll pay when you fill up the tank before returning. There’s no appreciable jump in prices because of the new war.
When it comes to making travel arrangements for the spring and summer, it’s more risky making completely non-refundable arrangements.
I made the decision to purchase most of my summer travel plans in advance, but only after determining I would not need to change the dates. Particularly with airline tickets, it’s expensive to change your dates.
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There’s lots of uncertainty regarding travel arrangements, particularly international travel. As fuel prices go up due to oil shortages, travel companies will look for ways to recoup the increased costs. In most cases, those higher costs will be borne by travelers.
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/T4D3KOYHQNFWPEOJZIRG5OTW6Q.jpg?w=400&resize=400,240&ssl=1 "Opinion: Here are my priorities for Alaska in the proposed state budget")
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/T4D3KOYHQNFWPEOJZIRG5OTW6Q.jpg?w=80&resize=80,80&ssl=1 "Opinion: Here are my priorities for Alaska in the proposed state budget")
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/EKP5Z5LH4VCKXDOBO4BFYJ2N44.jpg?w=400&resize=400,240&ssl=1 "For Alaska politicians, embracing renewable energy is about the economy — not the environment")
:quality(70)/cloudfront-us-east-1.images.arcpublishing.com/adn/EKP5Z5LH4VCKXDOBO4BFYJ2N44.jpg?w=80&resize=80,80&ssl=1 "For Alaska politicians, embracing renewable energy is about the economy — not the environment")
