Alaska Governor Proposes Tax Cut for Major LNG Project

Lawmakers raise concerns over potential $1 billion in lost revenue from property tax relief

Mar. 23, 2026 at 1:54am

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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 $44 billion natural gas pipeline and export facility. The bill would instead create an alternative tax on the volume of gas flowing through the pipeline. Lawmakers and local officials have raised concerns that the measure could result in over $1 billion in lost annual revenue for the state and municipalities that would host the project's infrastructure.

Why it matters

The Alaska LNG project has been pursued for generations but has never been able to get built due to the high costs involved. The governor's proposed tax relief aims to remove a financial barrier to the project's development, which he says could bring billions in long-term revenue, thousands of jobs, and affordable gas for Alaskans. However, critics argue the tax cut is too generous and could significantly impact state and local budgets.

The details

The governor's bill proposes a 6-cent-per-thousand-cubic-feet tax on the gas flowing through the pipeline, which would increase 1% annually. This 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 project is expected to move 3.5 billion cubic feet of gas daily at full production. In comparison, the current property tax system could bring in $1 billion annually for a $50 billion project assessment, while the alternative tax would only provide around $75 million in its first year.

  • The governor introduced the bill in the state Legislature on Friday, March 23, 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 export terminal in Nikiski is expected to start in 2031.

The players

Mike Dunleavy

The 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

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 governor's 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 potential revenue.

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What they’re saying

“The country is very excited about moving ahead on hard agreements, especially now.”

— Mike Dunleavy, Governor of Alaska

“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

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The takeaway

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