Sen. Wielechowski argues for the ‘no gasline’ option

By SUZANNE DOWNING

June 4, 2026 – As Alaska lawmakers continue debating legislation tied to the proposed Alaska LNG project, Sen. Bill Wielechowski has emerged as one of the most vocal critics of the tax provisions sought by project developer Glenfarne and supported by Gov. Mike Dunleavy.

In a lengthy social media post, the Anchorage Democrat argued that the Alaska natural gas pipeline can already be built under existing law and does not require legislative action. He pointed to existing federal permits, financing mechanisms, and prior testimony from Alaska Gasline Development Corporation officials who indicated the project was economically viable under current statutes.

“The reality is that no legislation is needed to build the Alaska Natural Gas Pipeline,” Wielechowski wrote. “They can build it right now.”

Wielechowski characterized the special session as another example of outside developers seeking major tax concessions from Alaska in exchange for promises of future economic development.

Drawing parallels to past controversies involving the Alaska Gasline Inducement Act, the Amerada Hess royalty litigation, and the passage of SB 21 in 2013, Wielechowski argued that Alaska has repeatedly been asked to provide incentives based on promises that later failed to materialize.

He also criticized Glenfarne’s requests for changes to Alaska’s property tax structure and corporate tax treatment, arguing the proposals could deprive the state and local governments of billions of dollars over the life of the project.

But the debate centers on a fundamental question: whether Alaska should collect a smaller share of revenue from a gasline that gets built or continue collecting nothing from a project that never advances. Zero percent of zero is still zero.

While permits and federal approvals are indeed in place, financing a project estimated to cost at least $44 billion remains the central challenge.

Alaska’s current oil and gas property tax structure imposes unusually high costs on large infrastructure projects during construction and early operations, creating hurdles for lenders and investors evaluating whether the project can compete against LNG projects elsewhere in the world. It’s not done like this in other oil-rich regions.

Gov. Mike Dunleavy’s proposal would replace much of the traditional property tax burden with a volume-based tax tied to actual gas throughput, aligning tax collections with revenue generation rather than assessed asset values that take years to build. Supporters contend the proposed changes are not a tax elimination but a restructuring designed to improve the project’s ability to attract financing.

Supporters of the gasline legislation also reject Wielechowski’s characterization of Senate Bill 21 as a failed policy. They point to Alaska’s experience under the previous ACES tax regime as a cautionary tale about what happens when the state pushes taxes beyond what investors consider competitive.

By the early 2010s, throughput in the Trans Alaska Pipeline System had fallen dramatically from its peak of more than 2 million barrels per day. Concerns about declining production became so severe under the ACES tax frame that the federal Energy Information Administration warned in 2012 that continued declines could eventually threaten the operational viability of TAPS by the year 2026. This year. The ACES tax structure discouraged investment in new fields and sent capital to competing oil provinces around the world.

SB 21 helped reverse that trajectory by encouraging new investment and attracting new entrants to Alaska. Projects such as Pikka, which is expected to add significant new production to the pipeline and generate royalties, production taxes, property taxes, corporate taxes, and Permanent Fund deposits for decades to come, would not have been build under ACES. Many of the newer developments also carry royalty rates that return a substantial share of over 16% of production value directly to the state.

To gasline historians, the lesson from the ACES-versus-SB 21 debate is directly applicable to today’s pipeline discussion. Alaska must decide whether it wants to maximize taxes on paper or maximize the likelihood that a project actually gets built. A tax structure that prevents investment ultimately produces nothing: No jobs, no gas, no royalties, and no revenue.

That argument is at the heart of the current choice facing lawmakers — a gasline with tax adjustments or no gasline at all.

There is irony in the debate: Glenfarne ultimately needs North Slope producers and investors to commit billions of dollars to the project. Those same companies are being asked to shoulder higher tax burdens at the very moment Alaska is seeking their participation. In an increasingly competitive global LNG market,Alaska cannot simultaneously court investment and make itself less attractive than competing jurisdictions.

Wielechowski also raised concerns about projected consumer gas prices, citing estimates presented during legislative hearings that suggested delivered gas costs could exceed current prices during the project’s initial phase.

He criticized what he described as Glenfarne’s efforts to remove legislative provisions that would have protected consumers from cost overruns and capped future gas prices. He also questioned why the company objected to proposals that would have required it to pay corporate income taxes or accept limits on passing construction costs on to consumers.

However, the price estimates cited during legislative hearings depend heavily on assumptions about financing costs, construction expenses, and market conditions years into the future. Without the gasline, Southcentral Alaska could face an even less desirable future marked by imported LNG, supply shortages, and higher energy costs.

Also, a lower tax burden directly reduces transportation tariffs and therefore improves the economics of delivering gas to Alaska consumers. Rigid statutory price caps or guarantees may sound attractive politically but could make financing impossible by shifting excessive risk onto investors.

Wielechowski’s broader argument is that lawmakers have a responsibility to protect Alaska’s treasury, schools, infrastructure, and Permanent Fund Dividend from what he sees as another costly giveaway.

But fiduciary responsibility includes evaluating the cost of doing nothing. Failure to commercialize North Slope gas would leave trillions of cubic feet of stranded resources in the ground while Alaska faces declining Cook Inlet supplies and rising energy uncertainty.

With lawmakers continuing negotiations during the special session, the outcome may determine whether Alaska finally commercializes its vast North Slope gas reserves, or if this is another chapter to the state’s long history of gasline proposals that never reach construction.

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