By SUZANNE DOWNING
Aug. 19, 2026 – The Alaska Legislature’s third special session on the Alaska LNG project is effectively dead, and the gasline project’s lead developer says the failure to act will delay the gas line and drive up its cost.
Glenfarne issued a statement Wednesday morning after the Democrat-led leadership of the House and Senate made clear lawmakers would not reconvene to take final action on the property tax legislation sought for the Alaska LNG pipeline.
“Glenfarne remains fully committed to Alaska LNG and to delivering the reliable, affordable energy and economic benefits Alaskans have sought from North Slope gas for decades,” the company said.
“We are disappointed the Legislature has stated they will not take final action on property tax legislation to facilitate the development of the Alaska LNG pipeline,” Glenfarne said. “This will cause schedule delay and cost increase on the gas line.”
The warning confirms what Gov. Mike Dunleavy and supporters of the legislation have said throughout months of negotiations: Every additional delay increases costs, complicates financing and pushes farther into the future the delivery of North Slope gas to Southcentral Alaska.
The legislation would have replaced the conventional property tax on the pipeline during construction with a predictable tax based on the volume of gas transported through the line. Glenfarne has said that certainty is necessary to finance a project expected to cost tens of billions of dollars.
Lawmakers have now spent two special sessions debating the proposal without passing it.
The House approved a clean version of House Bill 381 in June. The Senate then added several unrelated tax provisions, including a corporate income tax targeting privately held oil and gas company Hilcorp. The House rejected those changes, sending the legislation to a conference committee.
The conference committee produced another version, but it failed in the House on a 19-19 vote in July. The Senate had passed that version 11-8.
Dunleavy subsequently called lawmakers into another special session and proposed a compromise that lowered the proposed that S-corporate income tax to a flat 2% and delayed its implementation until Jan. 1, 2030, or until Alaska LNG began delivering commercial gas. The governor also removed a provision that could have reduced state education funding to boroughs along the pipeline route.
Even with those changes, House and Senate leaders declined to bring lawmakers back to Juneau for a final vote.
Glenfarne said the failure to act will make it harder to deliver North Slope gas before declining Cook Inlet production creates an even more serious energy shortage.
“This outcome hinders our efforts to deliver North Slope natural gas to Alaskans as quickly and affordably as possible and to offset declining production and rising costs from Cook Inlet,” the company said.
The developer stressed, however, that Alaska LNG itself is not dead.
“We are evaluating alternative paths forward while continuing to advance the commercial, engineering and financing work required to deliver the full Alaska LNG project, including the LNG export terminal,” Glenfarne said.
The company pointed to Alaska’s need for a dependable long-term gas supply, the enormous natural gas reserves on the North Slope and continued international demand for secure Pacific liquefied natural gas.
“The fundamental case for Alaska LNG remains strong: Alaska needs a long-term solution to its energy supply challenge, the North Slope has one of the largest natural gas resources in the world, global customers continue to value secure Pacific LNG supply, and the project continues to have strong support from Alaskans and the federal government,” the statement said.
Glenfarne also thanked Dunleavy and the lawmakers who worked toward an agreement.
“We appreciate Governor Dunleavy and the many legislators who worked constructively toward a solution,” the company said. “Alaska still needs a long-term solution to its energy supply challenge, and we will continue working with Alaska’s leaders and our global construction and LNG offtake partners to find the best path forward.”
The Legislature’s refusal to act does not end Alaska LNG, but it leaves Glenfarne searching for another way around a problem lawmakers had the opportunity to solve.
Meanwhile, Cook Inlet gas production continues to decline, utilities are preparing to import natural gas, and Alaska families and businesses face the prospect of paying increasingly higher energy bills.
20 thoughts on “Glenfarne warns legislative failure will delay Alaska LNG, increase costs”
You may want to stop pushing this so hard. Look the two democrats took 20% each in the top 4 primary. This Glenfarne deal is not popular with the state. We do not want to give out a handout to Glenfarne.
The two democrats who took 20% each are the only ones who are not smart enough to realize how much the much needed energy will cost the serfs who support their ignorance.
It is not a handout as much as it is a money grab for tax hungry Democrats who are eager to spend before it is even earned.
Andy:
Calling voters “serfs” doesn’t change the underlying issue. The Glenfarne tax structure shifts risk to the public without guaranteeing a project. That’s why people across the political spectrum are skeptical. The primary results simply reflect that this deal isn’t broadly popular.
Dana are you saying that these democrats want me to freeze this winter? Got it!
No vote for JTK and Tom Begich in November from me! (and again the considerable number of candidates and spread of votes means very little at this stage of the electoral process)
Reliable energy is important. Counting proverbial eggs before you have raised any chickens (which is what this whole squabble is all about) is simply stupid and self destructive.
It seems that you are in error assuming that this deal is not popular, considering that many labor unions and other organizations supported giving Glenfarne the fiscal certainty to secure investors, so the project can be build.
HB381 or anything the governor pushed on AKLNG would not have delivered gas this winter, so no, the two Democrats are not trying to make anyone freeze. The problem is that months were spent trying to force through a tax giveaway for Glenfarne instead of working with Cook Inlet producers on near‑term supply. If anyone contributed to winter uncertainty, it was the administration and the House minority by focusing on a handout instead of the actual supply issue.
Reliable energy is important. HB381 does not provide it. HB381 is a permanent tax structure for one developer without any guarantee of gas delivery, pricing protection, or even a requirement that the project be built. That is why people across the state oppose giving Glenfarne corporate welfare.
As for union support, this is a forced‑union state. A project with thousands of temporary construction jobs will always draw union backing because it means dues and fees. That does not mean Glenfarne received the fiscal certainty needed to secure investors, and it does not mean the deal is popular with the public. The primary results showed that voters are skeptical of giving away long‑term tax power without a complete economic model.
Sure More B.S. from State Wind bags.
No Production ????
Canadian LNG will Double ELectric Rates
Selfish Windbags
Glenfarne may be correct that delay increases costs. But that does not answer the more important question: Was the proposal before the Legislature proven to provide the maximum benefit to Alaskans?
Our Constitution does not say develop our natural resources at any cost or on a private developer’s timetable. Article VIII, Section 2 requires the Legislature to provide for development of Alaska’s resources “for the maximum benefit of its people.” Article IX, Section 1 further declares that Alaska’s taxing power “shall never be surrendered.”
That means legislators were entitled—and obligated—to ask hard questions before restructuring decades of taxation around one project.
Where is the complete public accounting of what Alaska is giving up and what Alaskans are guaranteed in return? Where are the binding producer commitments, financing commitments, affordable in-state gas guarantees, municipal revenue protections, construction milestones, overrun protections, clawbacks and remedies if the project never reaches final investment decision?
A warning that delay will cost money is evidence worth considering. It is not a substitute for those answers.
I support getting North Slope gas to Alaskans. But Alaska should build this project from a position of strength—not desperation. Build it like TAPS: those who expect to profit must put substantial capital and binding commitments on the table.
The Legislature did not necessarily “fail” by refusing to meet a private deadline. The greater failure would be rushing billions of dollars of public value and future taxing authority across the table without first proving what Alaska receives in return.
Build the gas line—but prove the maximum benefit first.
Time to think who’s to benefit we or them. Liberty Ed
“Build the gas line—but prove the maximum benefit first.”
Ed, How can anyone prove that? Gas development is not even comparable to oil development.
What benefit are you seeking besides a reliable gas supply, An $80 billion dollar investment in Alaska (equivalent to the entire value of the Permanent Fund), construction jobs, permanent jobs, tax revenue, and 25% of the ownership (profit – if any)?
Alaska has to bear some of the risk for the benefits this admittedly economically marginal project could bring.
Property tax abatement is chump change in the big picture.
All that said – exporting gas to compete in a world awash in gas available at tidewater seems impossible. What is the “maximum benefit” of no project? PS I would rather focus more on in-state uses for the gas. How about a gigantic power plant on the North Slope, injecting the CO2 into depleted oil reservoirs, transmitting the power to the railbelt grid via HVDC which in turn reduces the amount of gas required to generate power at Beluga? The resulting surplus gas in Cook Inlet could then be allocated to our heating needs.
Chris, thank you. I think you and I may actually be closer on this than my comment suggested.
When I say “prove the maximum benefit,” I do not mean anyone can guarantee in advance that an $80 billion project will succeed or calculate the future to the penny. Resource development always involves risk, and I agree Alaska cannot expect private investors to shoulder every bit of it while the State takes none.
What I mean is that Alaska should establish, as well as reasonably possible, that the deal itself protects Alaskans before we make long-term concessions.
You identify substantial potential benefits: reliable gas, enormous private investment, construction and permanent employment, tax revenue, and an ownership interest. Those are real benefits if the project reaches construction and performs as intended. My concern is making sure we put those benefits on one side of the ledger and clearly identify what Alaska is contributing, surrendering or risking on the other.
That is how I read the constitutional concept of maximum benefit. It isn’t a promise that every development will succeed. It is a duty to make an informed public-interest decision rather than simply concluding that any project is better than no project.
And I agree with another important point you make: in-state use deserves much more attention.
Your North Slope generation/HVDC concept is exactly the kind of alternative that ought to be seriously compared. If North Slope gas could generate electricity, sequester CO2 through appropriate reservoir injection, reduce Railbelt dependence on Cook Inlet gas, and preserve more Cook Inlet supply for home heating, then Alaskans deserve to know how that option pencils out alongside LNG export.
Maybe the answer is LNG exports. Maybe it is primarily supplying Alaska. Maybe the strongest project ultimately does both.
So I would slightly restate my earlier conclusion:
Build the gas project if the numbers work—but first demonstrate that the structure chosen gives Alaskans the best reasonable combination of reliable energy, economic return and protection from unacceptable public risk.
And Chris, I agree with you on this much without reservation: the maximum benefit of doing nothing while Southcentral Alaska faces an energy problem is not much of a benefit at all. What do you know of the Susitna Basin Play potential?
“What do you know of the Susitna Basin Play potential?”
Thanks Ed. I am not sure what that you are referring to.
Susitna Hydro? Coal-fired power plant?
Christopher, the Legislature cannot take “prove the maximum benefit” on faith. Article VIII and Article IX require a public record showing what Alaska gives up and what Alaska receives in return. That is the constitutional standard. It is not optional.
You ask how anyone can prove maximum benefit. The answer is simple. You prove it the same way TAPS was proven. You require binding producer commitments, binding financing commitments, enforceable in-state gas terms, municipal revenue protections, construction milestones, overrun protections, clawbacks, and remedies if the project fails. None of that was provided for HB381.
The list you cite is not guaranteed. It is hypothetical. An $80 billion investment is not on the table. Permanent jobs are not on the table. Tax revenue is not on the table. Even the 25 percent ownership interest is not protected without enforceable terms. HB381 gives Glenfarne certainty. It does not give Alaskans certainty.
Property tax abatement is not chump change. It is a permanent restructuring of Alaska’s taxing power for one developer. Article IX says that taxing power shall never be surrendered. That is why legislators were obligated to ask hard questions.
The maximum benefit of no project is not the issue. The issue is whether the proposed structure met the constitutional requirement. The Legislature asked for the full economic model, the full hydrogen plan, the full credit strategy, and the full risk allocation. Those materials were not provided.
Ed is correct. You build the gas line, but you prove the maximum benefit first. That is the Legislature’s job. It is not desperation. It is constitutional duty.
“You prove it the same way TAPS was proven. You require binding producer commitments, binding financing commitments, enforceable in-state gas terms, municipal revenue protections, construction milestones, overrun protections, clawbacks, and remedies if the project fails. None of that was provided for HB381.”
That is ridiculous. Why would a developer risk $80 Billion while we gild your golden cage?
You apparently don’t realize that gas projects are very different from oil so your comparison to TAPS is quite erroneous if not fractured history.
I say give Glenfarne what they are asking for and see where it goes from there. They have a long way to go not the least is convincing investors that the project is worth their risk.
And too bad this debate is already buried by succeeding Alaska Story stories!
The fundamental flaw in this is that an insistence on “a good deal” or “the best deal” ignores the fact that the only other deal is….nothing. To Geisel, Schrage, and their supporters, thanks for ensuring high prices to the natural gas consumers for years to come,
“zero of zero is nothing” is not how the Constitution works. Article VIII requires the Legislature to prove maximum benefit before restructuring taxation for a single project. Article IX says Alaska’s taxing power shall never be surrendered. Those standards do not disappear just because a developer says the alternative is nothing.
The Legislature asked for the full economic model, the full hydrogen plan, the credit strategy, the binding commitments, the municipal revenue protections, and the remedies if the project fails. None of that was provided. Without that information, there is no way to demonstrate maximum benefit, and the Constitution does not allow the Legislature to guess.
Delay may increase costs. That does not answer the central question: what does Alaska receive in return for giving Glenfarne a permanent tax structure. Until that is proven, “nothing” is not the only alternative. The alternative is a better, fully disclosed, enforceable deal that meets the constitutional standard.
If either part of Congress, or both, flips at the end of the remaining weeks until the election then the gas line is dead for at least another generation of Alaskans, and it should be defunded ASAP. State agencies keep spending money until there is a formal closure so the Legislature must bring the curtain down. How many years did the Knik Arm and Toll Authority persist, with staff, annual CPA audits, travel to seminars and conventions, reports to the Legislature, press releases, etc. etc. long after the toll bridge concept was widely agreed to be delusional? I very much hoped to see this LNG project financed and constructed but the politics failed and the window may close come November.
We’ll be importing LNG from the Canucks. That will most likely // most assuredly drive-up monthly Electric and Natural Gas bills, passing onward the pain to customers. It’ll be a cascading effect whereby higher utility costs will drive up the costs of goods and services. Once those prices increase, even if the Gas Line is potentially built in the future, the utility costs will never be reduced.
Import LNG, folks. It’s the only way now.
Get approval to set the cost of the gas delivered on the kenai at a market rate that includes the 2% property tax that the builders will incur and it will get built and the people using the gas will pay for it and the state will get a lot more money off property tax and the state can reimburse the people for high gas bills.
A taxpayer.
HB381 or the Govs actions on the AKLNG pipeline would not have bought you any gas this winter anyway, so no the two democrats do not want you to freeze this winter. The Gov and house minority by wasting so much time on this handout and giveaway to Glenfarne, could have spent their valuable time helping the cook inlet producers. So they are more to blame if you freeze this winter. I hope during the general election neither one of these two democrat teams do well, But RCV being what it is. I think most of us can see how this is going to play out. Hopefully the GOP realizes that they need to support both Wilson and Bronson and flood the ads supporting them. Reliable energy is important, shame the Gov and house minority had other ideas. I am not in error that people oppose giving Glenfarne corporate welfare. No labor union or other Alaska orginization gave glenfarne the fiscal certainity needed to secure investors. As for unions on the pipeline, being this is a forced union state, that was a given, so nothing unique about the unions supporting this, they will get to collect dues and fees from 12,000 temporary workers.
so if we look at taxing s corps who really pays?
well corporations pay taxes, not really they just add it to the cost of products they sell or produce.
so we pay.
changing the structure of the property tax to a in kind share of the production tax shared with the municipalities when production begins.
taxing export, and maybe no tax on in state use as a benefit to the owners of the gas. that being alaska residents.
so profits on export, and cost only for in state use. sounds like max benefits to we Alaskans