Dunleavy pins pipeline fate on tax break he wants Alaska lawmakers to approve

On the day a special legislative session began to consider tax incentives for a long-desired pipeline to carry natural gas from the North Slope to markets, Gov. Mike Dunleavy insisted that the massive project is about to become reality.

“It’s gone from concept to discussion to, now, execution,” Dunleavy told the audience Thursday at the Alaska Sustainable Energy Conference in Anchorage.

All that it will take to start “the most transformational, generational project this part of the world has ever seen” is a shift away from the state’s petroleum property tax system, Dunleavy said.

The governor has called lawmakers into a special session to pass a bill imposing sweeping changes in the property tax system that has been the main source of revenue for several Alaska local governments. Under his proposal — which lawmakers failed to approve before the end of the just-concluded regular session — the state and local governments would eliminate 90% of the property tax that would be levied on gasline-related infrastructure in exchange for future opportunities to tax natural gas as it moves through the yet-to-be-built system.

The founder and chief executive officer of the company proposing to build the gas pipeline system urged conference attendees to lobby for the governor’s bill.

“Please talk to your mayors, your elected officials, your legislators, your community leaders, your union leaders and get them behind any rally here to call to arms. Let’s get this thing over the line,” said Brendan Duval, the CEO of the Glanfarne Group.

Action by the legislature is one of the last pieces needed to proceed to a final investment decision, Duval said.

A few blocks from the Deni’ina Civic and Convention Center, where the conference was held, energy and environmental experts detailed reasons to be wary about Glenfarne’s plan.

“I have less faith in anything regarding the pipeline than I did three days ago,” said Dan Rodgers, a board member at the Anchorage-based Chugach Electric Association, at a panel discussion organized as an alternative to the conference.

Erin McKittrick, a Homer Electric Association board member, said Glenfarne’s promises seem hollow, with important information lacking.

“We had Glenfarne here last year saying that they were going to get their (final investment decision) by the end of 2025 before the legislative session. And then now we have Glenfarne saying they are completely dependent on a tax break that the legislature passes for them,” she said.

The call for a groundswell of support for the governor’s bill is suspicious in itself, McKittrick said. “If you actually have a project, you don’t need a bunch of individual citizens to rally for your project which already has its permits. You need to go do the actual pieces of it,” she said.

Krystal Lapp of the Northern Alaska Environmental Center said she hopes lawmakers meeting in the special session will reject the governor’s plan.

“It would be crazy if I went to the legislature and said, ‘Hey, I don’t want to pay 90% of my taxes in the Fairbanks North Star Borough. Would you please have Dunleavy go over there and bully them into a special session?’” she said.

Instead of pinning hopes on a giant project that developers insist requires near-elimination of state and local property taxes, Alaska policy should focus on diversifying energy sources through more use of renewables, the panelists said.

Conference criticized

A day earlier, a group of activists had harsher criticism of Dunleavy and Glenfarne, which was a prominent sponsor of the Alaska Sustainable Energy Conference.

The use of the word “sustainable” for the conference was a sham, said the activists, who staged a protest rally Wednesday on the sidewalk across the street from the convention center. They blasted Dunleavy, featured speaker U.S. Interior Secretary Doug Burgum — who encouraged lawmakers to approve the governor’s tax bill —  conference sponsor Glenfarne and others for emphasizing fossil fuel development over renewables.

Sara Siqiñiq Thomas of Alaska Community Action on Toxics said she attended last year but was too disappointed at the content to attend this year. “We know that what’s going on in there is a lot of false solutions,” she said at the rally on the sidewalk across from the convention center.

Chris Kasanke of the Fairbanks Climate Action Coalition targeted the Glenfarne project specifically. It is no more economically viable than all the other gas pipeline plans that were proposed but failed over the past half century, he said.

“This is an extremely bad project for Alaska, and right now they are debating giving corporate subsidies to this AK LNG project,” he said. “Why do we continually subsidize dirty energy for oil executives that don’t live here, right? We don’t need that. What we need to do is start working on renewable energy, real renewable, sustainable energy.”

The conference did have some sessions on renewable energy, including one in which Dunleavy defended his record of promoting renewable energy in Alaska.

“I may be the only governor in the country that has a 50-panel array, solar array, at my residence, and I can tell you from my own experience, even in the shortest day of the year, Dec. 21, especially up here in Alaska, we generate electricity,” he said.

Long history of gas pipeline plans

The energy industry, including major international companies, has floated various North Slope gas pipeline plans over several decades. All were abandoned, despite support and authorizations for gas pipeline development from presidential administrations dating back to the 1970s, as well as enabling legislation from Congress dating back decades. Those past plans include a “bullet line” concept promoted in the early 2000s that would deliver North Slope gas to the Cook Inlet region, just as Glenfarne is planning to do with its first phase.

But Dunleavy said the Glenfarne plan, with an estimated cost ranging from $44 billion to over $65 billion, “is very different” from those past failed plans.

He listed reasons why he believes that: permits that have been granted, a war in the Middle East that has disrupted world energy markets, the emergence of artificial intelligence and need for data farms that is driving up the demand for energy, the looming scarcity of natural gas from Cook Inlet — long the source of supply for Alaska’s most populated region — and the enthusiastic support of President Donald Trump.

Throughout the conference, Dunleavy, Duval and others praised the president, citing Trump’s policies to promote fossil fuel development.

“I really do see this as the beginning of a golden age for Alaska,” Dunleavy said on Tuesday at the start of the event, echoing a phrase that Trump is fond of using. “I’ve never seen more opportunity come out of an administration that has come out of this administration, and a better partnership than what we have with the federal government.”