Alaska Governor Proposes Tax Changes for LNG Project

Dunleavy bill would eliminate property taxes but create alternative tax with lower revenue

Mar. 21, 2026 at 3:12am

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Governor Mike Dunleavy has introduced a bill in the Alaska state legislature that would eliminate property taxes for the Alaska LNG megaproject, but create an alternative tax that would generate a smaller amount of revenue. Lawmakers and local officials have expressed skepticism about the potential loss of over $1 billion in annual tax revenue, though the governor argues the project will still provide significant long-term benefits for the state.

Why it matters

The Alaska LNG project has been pursued for generations but has never been built due to the high costs involved. The governor's proposal aims to remove a financial barrier to get the project moving, but critics argue it represents a massive tax cut that could significantly impact state and local budgets that rely on the property tax revenue.

The details

Dunleavy's bill proposes taxing the volume of gas flowing through the pipeline, rather than the assessed value of the infrastructure. The alternative tax would start at 6 cents per thousand cubic feet of gas and increase 1% annually, but would not kick in until the project reaches an average flow of 1 billion cubic feet daily or 10 years after gas starts flowing. In comparison, the current property tax system could generate over $1 billion annually for a $50 billion project. Oil and gas analysts have questioned the governor's estimate that the project would still generate $26 billion in state and local taxes and royalties over 30 years.

  • The bill was introduced by Governor Dunleavy on Friday, March 20, 2026.
  • The alternative tax would not kick in until the project reaches an average flow of 1 billion cubic feet daily or 10 years after gas starts flowing, whichever comes first.

The players

Governor Mike Dunleavy

The governor of Alaska who introduced the bill to eliminate property taxes for the Alaska LNG project in favor of an alternative tax.

Brendan Duval

The CEO and founder of Glenfarne Group LLC, the majority owner of the Alaska LNG project.

Grier Hopkins

The mayor of the Fairbanks North Star Borough, which would host some of the project's infrastructure and opposes the terms of the governor's bill.

Cathy Giessel

A Republican state senator and chair of the Senate Resources Committee, who says lawmakers need more financial information from the project developers before supporting the bill.

Bill Wielechowski

A Democratic state senator and vice chair of the Senate Resources Committee, who says the governor's bill appears to be a "massive tax cut" that could exceed $1 billion in lost revenue.

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What they’re saying

“The burden is on him to come forward and explain to the people of Alaska why he needs to give away a billion dollars a year.”

— Bill Wielechowski, State Senator, Vice Chair of Senate Resources Committee

“Acting swiftly on this measure is the most important step the Legislature can take to ensure that Alaskans will finally benefit from bringing Alaska's North Slope natural gas to market.”

— Adam Prestidge, President of Glenfarne Alaska LNG

“The conversations have gone well, but this is not what we agree on, and I don't support this specifically for Fairbanks.”

— Grier Hopkins, Mayor of Fairbanks North Star Borough

What’s next

The Alaska state legislature will review and debate the governor's bill, with lawmakers seeking more financial details from the project developers before deciding whether to support the proposed tax changes.

The takeaway

The debate over tax policy for the Alaska LNG project highlights the tension between providing incentives to get a major infrastructure project built and preserving state and local tax revenue that funds critical public services. The outcome could have significant implications for the project's viability and the state's long-term energy and economic future.