Alaska’s Senate majority lays groundwork to sink new gasline bill — and blame Dunleavy

By SUZANNE DOWNING

Aug. 10, 2026 – Before Gov. Mike Dunleavy’s revised Alaska LNG tax bill has even been introduced, leaders of the Alaska Senate majority are already explaining why they may not have enough time, information, or administrative support to pass it.

The governor issued a statement on Facebook shortly before Senate President Gary Stevens, Senate Majority Leader Cathy Giessel, Senators Loki Tobin, Donny Olson, Elvi Gray-Jackson, Matt Claman, and Sen. Bill Wielechowski held a press conference Monday to discuss the gasline and Southcentral Alaska’s looming energy shortage.

“If we want to build the Alaska LNG project, we must pass legislation that makes the project financeable,” Dunleavy said. “I appreciate the hard work done by the Legislature on the gasline portions of the bill.”

“I’ve had productive conversations with legislators and stakeholders, and those discussions are helping shape an updated version of a bill I’ll introduce soon,” he continued. “I encourage the Legislature to reconvene on August 20th and take action that will move this project forward.”

The Legislature had been expected to convene Monday, then postponed until Tuesday. Now, the House is expected to hold only a technical session, with the Senate likely to do the same.

The special session expires Aug. 25.

At their press conference, Senate leaders repeatedly said they understood that Dunleavy would not deliver his revised bill until Aug. 20, leaving lawmakers only five days to review it, hold hearings and pass it through both chambers.

But the governor’s office says the legislation will be delivered this week, possibly as early as Wednesday — giving lawmakers considerably more time than Senate leaders acknowledged during their press availability. The governor had already relayed that timing to the Senate majority.

That was only one of several contradictions in a press conference that appeared designed less to prepare the public for a new gasline bill than to prepare an explanation for its failure.

“We are asked to commit Alaska to a deal we cannot fully see. That’s the problem. We need more project details,” Stevens said. “We want a pipeline, and we want it done right.”

Later, however, Stevens noted that the Legislature had already passed gasline legislation twice.

Both statements cannot comfortably coexist. Either lawmakers had enough information to pass their own versions of the bill, or they did not have enough information to act.

Giessel emphasized the amount of time her office has spent reviewing the legislation since the governor introduced HB 381 on March 20. She said her staff calculated 99 hours of formal work on the proposal, not counting discussions and other work behind the scenes.

Yet she also argued that lawmakers may now lack sufficient time to process a new version.

The original HB 381 was narrowly focused on replacing property taxes during Alaska LNG’s construction period with a predictable volumetric tax once gas begins flowing through the pipeline. The tax relief was intended to make the project financeable during the years when the developer would be spending billions of dollars but generating no revenue.

The House passed a relatively clean version of that legislation. The Senate, led by Giessel and Wielechowski on the Resources Committee and Rules Committee, added an unrelated S corporation income tax and a series of other provisions involving labor agreements, deadlines, state oversight, reporting requirements, heating assistance and other matters.

The corporate tax proposal was not necessary to establish the gasline’s construction-phase tax structure. It would have extended an income tax to certain pass-through oil and gas companies, with much of the burden expected to fall on Hilcorp. In essence, it was intended to soak Hilcorp.

The final conference committee version exempted Glenfarne’s Alaska LNG income from the proposed S corporation tax, but Dunleavy remained opposed to attaching the broader tax increase to the gasline bill. The measure passed the Senate 11-8 but failed in the House on a 19-19 vote.

Conference committee members in the minority said they received the final language just before they were expected to vote. Now members of the Senate majority who supported that rushed process are warning that consideration of Dunleavy’s revised bill would amount to a “rubber stamp.”

Wielechowski said lawmakers originally were told by Glenfarne and the Alaska Gasline Development Corporation that they did not need legislative assistance and that the Legislature should stay out of the project. He said he was later “taken aback” when the developer sought what he characterized as $1 billion in tax breaks.

But the need to resolve Alaska LNG’s construction-phase property tax structure has been known for years. The developer has also repeatedly told lawmakers that a predictable tax structure is essential for financing. The Department of Revenue likewise advised lawmakers that the project would not proceed without property tax relief.

Wielechowski said the proposed S corporation exemption would cost Alaska $466 million from Glenfarne alone. That framing leaves out the essential point: The exemption applies during construction, when the company would be spending money to build the project rather than earning revenue from operating it. Once gas begins moving, the project would pay the volumetric tax established under the legislation.

Senate leaders also repeated an unsupported $65 billion to $70 billion estimate for the project.

Giessel initially said the cost had increased to $70 billion. Wielechowski went further, arguing that $70 billion was “probably low” because labor, fuel, steel and other construction costs have increased.

When reporter Mark Sabbatini pointed out that the governor’s office had acknowledged Dunleavy misspoke when he recently cited the $70 billion figure, Giessel responded that there have been too many different estimates and called the project cost a moving target. But earlier, the lawmakers had cited the $70 billion as fact.

Glenfarne’s publicly stated estimate remains between $44.5 billion and $54.5 billion. Giessel herself used that range in a June newsletter describing information given to the Senate by the developer. No new $70 billion estimate from Glenfarne was identified during Monday’s press conference.

Giessel and Wielechowski nevertheless parroted the erroneous number to question the project’s economics, with Giessel declaring that Alaska LNG does not pencil out as an export project.

Giessel also returned to her warnings about the workforce needed to build the pipeline. She said Labor Commissioner Catherine Muñoz had estimated a workforce of about 6,000, with 68% coming from outside Alaska.

That figure reflects a reality the state has known for decades: Alaska does not currently have enough qualified workers in every necessary trade to construct an 800-mile pipeline, gas treatment plant and LNG export terminal without bringing in skilled workers from elsewhere.

Giessel complained that workers would be housed in self-contained camps and therefore might not spend enough money in nearby communities. She also warned that workers’ families would not accompany them and called for local-hire provisions, prevailing wages and restrictions against a foreign workforce.

It follows her January warning that a major influx of pipeline workers could contribute to prostitution and other social problems in Anchorage.

At almost every turn, a benefit of the project , whether it was the thousands of construction jobs, billions of dollars in investment and a new source of natural gas, was converted into another reason for doubt by the Senate Majority.

The Senate leaders also blurred two separate issues: the immediate need to secure Southcentral Alaska’s gas supply and the longer-term Alaska LNG project.

No one claims that passing the tax legislation will put North Slope gas into Anchorage homes this winter. Even under an aggressive schedule, the pipeline is years away.

But utilities have repeatedly warned that Cook Inlet production is declining and that Alaska needs a long-term replacement supply. At a recent gasline presentation in Anchorage, ENSTAR President John Sims and other energy leaders described the approaching shortage and the need to move Alaska LNG forward.

Giessel instead focused on gas storage, Bradley Lake hydroelectric expansion and the possibility of extracting additional Cook Inlet gas from hex/Furie Operating Alaska and BlueCrest Energy.

Giessel said Hex/Furie has doubled its production and holds the Kitchen Lights Unit, while BlueCrest’s Cosmopolitan field may contain hundreds of billions of cubic feet of gas. She called on the governor to take action to force additional gas into the utility system.

Wielechowski accused the Dunleavy administration of “colossal mismanagement” and suggested Hilcorp should take over BlueCrest’s field.

If large quantities of commercially recoverable Cook Inlet gas can be produced and delivered at a competitive price, utilities would have every reason to purchase it. The problem is that the people responsible for supplying Southcentral Alaska have consistently warned that enough dependable gas is not currently available under contract.

Giessel called on the Regulatory Commission of Alaska to reconsider its decision concerning ENSTAR’s request for expanded gas storage. She said the Senate majority will send the RCA a letter asking it to reexamine the issue.

Expanded storage may help manage winter demand, but storage cannot solve a shortage unless producers have enough gas to put into it. Bradley Lake expansion may add electricity to the Railbelt several years from now, but it does not eliminate the need for natural gas used for heat and power generation.

Those measures should be pursued, but they are not substitutes for a long-term gas supply.

The Senate majority’s position Monday boiled down to the same message: Everyone wants a gasline, but there is always another reason this gasline isn’t ready for prime time now: The project will lead to prostitution. The project costs too much. There is not enough information. There are too many workers from outside Alaska. Worker camps will not help local businesses. The administration is understaffed. The Department of Revenue may not have time to model the bill. The Legislature needs more hearings. Five days would be impossible. The project does not pencil out for export. Cook Inlet may have plenty of gas after all.

Meanwhile, the Legislature spent weeks processing HB 381, wrote extensive amendments, attached an unrelated corporate tax and voted on conference committee language that even some committee members said they had not been given adequate time to review.

Dunleavy says his new proposal was shaped by “productive conversations” with legislators and stakeholders. Wielechowski said the governor has not talked with him or the Senate majority. Stevens acknowledged that he has discussed at least part of the proposal with the governor, including a possible tax affecting Hilcorp.

By the end of the press conference, the contours of the Senate majority’s strategy were clear: Define the governor’s new bill as late, incomplete and impossible before lawmakers have even read it. If it fails, blame Dunleavy, Glenfarne, state staffing levels, legislative rules or the calendar.

The Legislature can extend the session. The governor can call another one. Time is not the immovable obstacle Senate leaders portrayed it as Monday.

The real question is whether the Senate majority wants to pass a financeable gasline bill without using it as a vehicle for a separate corporate tax and a long list of demands.

So far, majority leaders appear to be setting the bill up to fail, and setting the stage to blame the governor when it does.