Historic vote: House sends Alaska LNG tax reform bill to Senate

By SUZANNE DOWNING

June 12, 2026 – The Alaska House of Representatives on Friday approved legislation designed to remove a major tax obstacle to the long-discussed Alaska LNG Project, passing House Bill 381 by a 34-5 vote and sending the measure to the Senate for consideration.

The bill would replace the traditional property tax structure on the proposed Alaska LNG pipeline during construction with a volumetric, throughput-based tax system, a change supporters argue is essential to improving the project’s economics and attracting investment. The tax would be based on the volume of gas produced.

Five Democrats voted against the measure: Reps. Neal Foster of Nome, Robyn Frier of Utqiagvik, Sara Hannan of Juneau, Andy Josephson of Anchorage, and Genevieve Mina of Anchorage. Rep. Donna Mears, also a Democrat, was excused from the vote.

The legislation emerged from the House Finance Committee earlier after lawmakers rejected efforts to attach an S-corporation tax provision that would immediately increase costs for Cook Inlet natural gas producers and ultimately raise energy prices for Alaskans. As previously reported by The Alaska Story, House Finance advanced a clean version of the bill focused solely on establishing a predictable tax framework for the gasline project.

The vote comes during a special session called by Gov. Mike Dunleavy to address tax certainty for the Alaska LNG Project, now being developed by Glenfarne Alaska LNG in partnership with the Alaska Gasline Development Corporation.

Following the House vote, Glenfarne Alaska LNG President Adam Prestidge praised lawmakers for advancing the measure.

“The overwhelming, bipartisan vote in the House is a vote for reliable, affordable energy, job creation and economic growth, and a brighter future for Alaska,” Prestidge said in a statement. “This bill fixes a longstanding tax barrier and provides the Senate with a straightforward solution backed by widespread support.”

Prestidge said swift Senate passage would help address concerns about future energy shortages in Alaska and move the project closer to construction.

He said the legislation could ultimately generate hundreds of millions of dollars in new state and local revenue, expand natural gas availability in Interior Alaska, and create investment opportunities for local governments along the pipeline corridor.

Gov. Dunleavy also applauded the House vote, calling it a major step toward advancing what he described as one of the largest economic development opportunities in Alaska history.

“This is an important victory for Alaska’s future,” Dunleavy said. “I want to thank the members of the House who recognized the importance of creating a stable, competitive fiscal framework that will help move the Alaska LNG Project closer to reality.”

The governor said the project has the potential to unlock North Slope natural gas reserves that have remained stranded for decades while creating thousands of construction jobs, generating billions of dollars in private investment, and strengthening energy security across Alaska.

The Alaska LNG Project envisions an 807-mile, 42-inch pipeline carrying North Slope natural gas to Alaskans and to a liquefied natural gas export facility in Southcentral Alaska. Glenfarne is pursuing the project in two phases, with the first phase focused on delivering natural gas to Alaskan communities and the second phase adding LNG export infrastructure capable of producing 20 million metric tons of LNG annually.

Glenfarne currently owns a 75% interest in the project, while the Alaska Gasline Development Corporation retains a 25% ownership stake on behalf of the state.

The bill now moves to the Alaska Senate, where lawmakers have been debating their own version of LNG tax legislation. With only a few days remaining in the legislative session, attention now shifts to whether senators will approve the House approach or attempt further amendments before sending a final measure to the governor’s desk. There have been numerous indications that some leaders in the Senate, such as Sen. Cathy Giessel and Sen. Bill Wielechowski, would like to kill the bill altogether as a way to foil the governor.