Legislature heads to another Alaska LNG special session after governor blasts Senate changes - EUROPE SAYS
Gov. Mike Dunleavy speaks about proposed Alaska LNG tax break legislation at a press conference Friday, June 19, the last day of a legislative special session in Juneau. He said Friday that “we are this close. . .
Gov. Mike Dunleavy speaks about proposed Alaska LNG tax break legislation at a press conference Friday, June 19, the last day of a legislative special session in Juneau. He said Friday that “we are this close to getting this right. We are this close to a massive project, we are this close to getting Alaskans gas, we are this close to just getting this project going. ” (Screengrab from Gov. Dunleavy’s Facebook livestream)Gov. Mike Dunleavy said late Friday that he won’t accept changes made by the Senate to a bill that proposes a multibillion-dollar tax break for the Alaska LNG megaproject. Shortly after his remarks, the House canceled a floor session that would have been necessary for representatives to weigh in on whether to approve the changes to the bill before the end of the special session Friday night. These events mean that lawmakers will convene on Saturday morning for a second special session on the topic in an effort to pass a law incentivizing the construction of an 800-mile gas line. Dunleavy and Alaska LNG developer Glenfarne, which owns a 75% stake in the project, have been pressing lawmakers for months to put together a steep tax cut package that they say is instrumental to the project receiving necessary financing. “We just seem to struggle with getting our act together” to support the project, Dunleavy said in a meeting with reporters. “This bill right now is not going to work,” he said. The Senate just minutes before had approved a bill, in a 12-8 vote, that would impose higher taxes on the project compared to the version that passed the House last week in a 34-5 vote. Dunleavy said that he supported the House version, as did the project developer, Glenfarne. The Senate vote came with just four hours left in the first, 30-day special session on the project’s tax break. Dunleavy said he does not support the Senate’s addition of a measure applying the state’s corporate income tax to Glenfarne, as well as to other privately held oil and gas companies in Alaska — including Hilcorp, a major producer. “We don’t know exactly what the S corp language in this bill does,” he said, referring to the term used for the tax. “It’s got to be unraveled and we’ve got to take a look at that. ”Dunleavy said the Senate added other restrictions that won’t work for Alaska LNG, including a requirement for project labor agreements with unions as part of the bill, he said. “We’re gonna come back tomorrow, and hopefully we can all sit down, and a handful of people can work out a couple details to make this bill work,” he said Friday. Lawmakers have spent the last three months studying the bill and the project to determine what level of tax break the project should receive. Advocates say Alaska LNG will bring $30 billion in revenue to the state and local communities even with the tax break, create thousands of jobs and provide a stable source of energy. But several lawmakers have expressed concerns that they lack vital information about the project, including a clear understanding of its cost. They fear a large tax break will leave the state and communities with insufficient revenue to meet increased demand on services. The project is estimated to cost up to $55 billion, though critics say that’s similar to a decade-old figure and that the total will be much higher. Senate President Gary Stevens, a Kodiak Republican, and Senate Majority Leader Cathy Giessel, an Anchorage Republican, could not immediately be reached for comment late Friday. The new special session is set to start at 10 a. m. Saturday. Senate President Gary Stevens, R-Kodiak, looks over members of the bipartisan majority caucus during an at-ease in a Senate floor session in Juneau on Friday, June 19. Senators debated amendments to legislation cutting taxes for the proposed Alaska LNG project. (Mari Kanagy / ADN) Senate substitute boosted proposed taxes on projectDunleavy introduced the tax break bill in March to support the project. Alaska LNG proposed to sell huge quantities of long-stranded natural gas on the state’s North Slope, to Alaskans starting in 2029 and for overseas exports to Asian entities starting in 2031. The governor proposed replacing property taxes with a much smaller tax on gas shipments, known as an alternative volumetric tax. The version that passed the House last week included a cap on the price of gas in Alaska to stabilize heating and electric bills, a higher alternative volumetric tax than the governor had proposed, and requirements for a spur line to Fairbanks. The Senate Finance Committee early Friday advanced its substitute bill version in a 7-0 vote. Itincluded key changes to the House measure, including a higher alternative volumetric tax on the project than the House had proposed. The Senate Finance version also called for higher annual increases on the project, at 3% to be in line with historical inflation, rather than the House’s 2%. It included a construction deadline for the pipeline, by the end of 2032 to help the state address a shortage of natural gas. The committee moved the bill despite protests from two Republican members of the Senate minority — including Minority Leader Mike Cronk, who said the construction deadline would kill the project. On the floor, the Senate also accepted proposals largely sponsored by members of the bipartisan Senate majority, including measures to prevent the state from being responsible for reimbursing the developer for project costs, if the project fails, and a requirement that lawmakers receive written notice of any relationships formed with foreign entities. Sen. Lyman Hoffman, co-chair of Senate Finance, sponsored the measure calling for the corporate income tax to be applied to privately held companies in Alaska, including Glenfarne. The proposed change to the state’s income tax structure has been a long-held goal for some members of the majorities in the House and Senate. It could raise hundreds of millions of dollars annually for the state. The measure passed 11-9. Voting against it were Republican Sens. Jesse Bjorkman, R-Nikiski, Mike Cronk, R-Tok, James Kaufman, R-Anchorage, Kelly Merrick, R-Eagle River, Robb Myers, R-North Pole, and George Rauscher, R-Sutton, Cathy Tilton, R-Wasilla, and Rob Yundt, R-Wasilla, as well as Anchorage Democratic Sen. Matt Claman. Earlier Friday, Glenfarne and three business groups — including the Alaska Oil and Gas Association — had issued public statements urging senators not to pass an amendment including the income tax provision, saying it will hurt the project’s chances of securing financing. After amending the bill on the floor with the changes to the corporate income tax language and other measures, the full Senate passed the bill in a 12-8 vote late Friday evening. Voting against it were Cronk, Kaufman, Myers, Rauscher and Tilton as well as Democrats Scott Kawasaki from Fairbanks, Donny Olson from Golovin and Löki Tobin from Anchorage. Glenfarne heavily criticized the Senate’s new version of the bill late Friday, saying it would hurt the feasibility of the project. The company said in its statement that it “stands ready to provide the legislature with the collaboration needed for an informed solution to Alaska’s uncompetitive tax structure. ”“In contrast to the workable tax reform legislative compromise that passed the House with a bipartisan, 87% vote, many of the amendments passed in the Senate bill tonight, if put into law, would have resulted in an unworkable, unfinanceable, and uncompetitive project, unable to deliver reliable and affordable energy to Alaskans. ”Dunleavy suggested that House and Senate leadership should meet to start the session Saturday and help iron out differences. House Majority Leader Chuck Kopp, an Anchorage Republican, speaks about proposed Alaska LNG tax break legislation at a press conference hosted by Gov. Mike Dunleavy on Friday, June 19, 2026, the last day of a legislative special session in Juneau. (Screengrab from Gov. Dunleavy’s Facebook livestream)House Majority Leader Chuck Kopp, an Anchorage Republican, said at the governor’s press conference that he’s discouraged but hopeful that the Legislature will pass a tax break supporting the project. “I think that the greatest mistake we can make is allowing the pursuit of maximum government revenue extraction become the reason we receive no revenue at all,” he said.