Alaska Governor Proposes Tax Cut for LNG Pipeline Project

Lawmakers raise concerns over potential revenue loss for local governments

Mar. 22, 2026 at 1:48pm

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Alaska Governor Mike Dunleavy has introduced a bill in the state Legislature that would eliminate property taxes for the Alaska LNG megaproject, a proposed 800-mile pipeline to deliver natural gas from the North Slope to Southcentral Alaska. The bill would instead create an alternative tax that would generate a smaller amount of revenue. Lawmakers say the proposal could remove more than $1 billion in annual taxes from the state, calling it a 'massive tax cut'. However, the governor argues the tax relief is necessary to remove a financial barrier and allow the $44 billion project to move forward, which he says would provide long-term economic benefits for the state.

Why it matters

The Alaska LNG project has been pursued for generations, but high costs have been a key impediment to getting it built. The governor's tax proposal aims to make the project more financially viable, but local officials are concerned it will significantly reduce revenue for municipalities that would host the project's infrastructure. The debate highlights the balance between providing incentives for major energy projects and ensuring local governments are adequately compensated for the impacts.

The details

The governor's bill proposes taxing the volume of gas flowing through the pipeline, rather than taxing the assessed value of the oil and gas infrastructure. The alternative tax would be 6 cents per every thousand cubic feet of gas, increasing 1% annually. This 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. In comparison, the current property tax system would bring in an estimated $1 billion annually for a $50 billion project. Oil and gas analysts have questioned the governor's claim that the project would generate $26 billion in state and local taxes and royalties over 30 years.

  • The governor introduced the bill in the state Legislature on Friday, March 22, 2026.
  • The project's first phase to build an 800-mile pipeline is expected to start in 2029.
  • The second phase to construct a liquefaction plant and shipping terminal in Nikiski is expected to start in 2031.

The players

Mike Dunleavy

The Republican governor of Alaska who introduced the bill to provide tax relief for the Alaska LNG project.

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

The Republican chair of the Alaska Senate Resources Committee, which has introduced a bill proposing new guidelines for overseeing the Alaska LNG project.

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'.

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What they’re saying

“The bill today is not even a hair cut. It's like a buzz cut on property taxes. It's pretty substantial.”

— Larry Persily, Oil and gas analyst and former Alaska deputy commissioner of revenue

“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 the Fairbanks North Star Borough

What’s next

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The takeaway

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