By THE ALASKA STORY
June 24, 2026 – The Alaska Legislature’s handling of a key energy tax bill is drawing attention far beyond Juneau, with a prominent national economist warning that the Alaska Senate’s changes to House Bill 381 could undermine investment in the state’s oil and gas industry and raise energy costs for Alaskans.
In a column published Wednesday by the Daily Signal, economist EJ Antoni of the Heritage Foundation criticized the Senate’s decision to add a new tax on certain privately held energy companies to legislation originally designed to improve the economics of the Alaska LNG project. Antoni serves as chief economist at the Heritage Foundation’s Thomas A. Roe Institute for Economic Policy Studies and is a Richard F. Aster Fellow.
The article, titled “Alaska’s Senate Wants to Raise Your Cost of Energy—Again,” argues that the Senate transformed what had been a broadly supported tax reform measure into a tax increase that could discourage investment at a time when Alaska is attempting to attract tens of billions of dollars in energy infrastructure spending.
Antoni noted that HB 381 originally passed the Alaska House on June 12 with strong bipartisan support. The measure would replace portions of the existing property tax structure for natural gas pipeline infrastructure with a volumetric tax based on gas throughput, a change supporters say would improve the financial viability of the Alaska LNG project.
But after the bill reached the Senate, lawmakers added a proposal to impose an entity-level tax on certain S corporations involved in the oil and gas industry. Antoni argued that the change creates uncertainty for investors and sends a troubling signal to companies considering large-scale investments in Alaska.
“The Alaska Oil and Gas Association called it what it is: a discriminatory tax on a narrow group of producers that was never adequately vetted or modeled,” Antoni wrote. “When the people who actually produce Alaska’s energy tell you a tax will chase away investment, that’s not noise. That’s the market talking.”
The economist also highlighted Alaska’s growing concerns about natural gas supplies in Cook Inlet, noting that utilities have warned of looming shortages and increasing costs. He argued that imposing additional taxes on companies producing natural gas could worsen those challenges.
One of Antoni’s chief concerns is the unprecedented nature of the proposal. He wrote that no state currently imposes a comparable entity-level income tax specifically targeting S corporations within a single industry, raising the prospect of years of litigation and regulatory uncertainty.
The debate comes as lawmakers continue negotiations over HB 381 after the Alaska House rejected the Senate’s revised version and sent the legislation to a conference committee. Gov. Mike Dunleavy and several House members have expressed concerns about the Senate’s additions, particularly the new tax provisions.
Antoni concluded by urging lawmakers to remove the tax increase and return the bill to its original purpose of encouraging energy development.
“The Alaska Legislature and the governor should focus on increasing energy production and lowering costs for Alaskans,” he wrote. “When the conference committee reconvenes, it will have the opportunity to strip out this proposed tax hike and get back to real tax reform that the Alaskan economy needs.”
The fact that a nationally known economist from one of the country’s most influential public policy organizations has weighed in on an Alaska tax bill underscores the growing national interest in the state’s energy future. With the proposed Alaska LNG project carrying an estimated price tag of up to $54.5 billion, decisions made in Juneau are increasingly attracting scrutiny from investors, economists, and policy analysts across the country.
Readers can find Antoni’s full commentary at the Daily Signal.
