Alaska House Slashes Dunleavy's LNG Tax Break in Key Vote

JUNEAU — The Alaska House Resources Committee unveiled a revised draft of House Bill 381 on April 30, 2026, significantly shrinking Gov. Mike Dunleavy's tax break for the long-stalled Alaska LNG project. The governor's original proposal, introduced earlier this year as HB 381 and SB 280, sought to replace the state's 20-mill property tax on oil and gas infrastructure with a 6-cent volumetric tax per 1,000 cubic feet of gas throughput, slashing taxes by about 90% and estimated to yield $75 million annually. House lawmakers countered with a 20-cent total tax — 5 cents at the North Slope treatment plant, 5 cents along the 800-mile pipeline and 10 cents at the Kenai Peninsula liquefaction facility — split between state and local governments, cutting gas prices by roughly 20 cents per 1,000 cubic feet compared to current levies.

The House version raises far less than the Senate Resources Committee's April 22 draft, which proposes up to 55 cents per 1,000 cubic feet for export gas and a $1 million-per-mile construction fee potentially totaling $800 million for communities along the route. Dunleavy's plan projects over $26 billion in tax and royalty revenue over 30 years, with $22 billion to the state, by exempting property taxes during construction and a ramp-up period until 1 billion cubic feet per day or 10 years elapse. Critics like Glenfarne Group warn the higher taxes could delay North Slope gas delivery as Southcentral Alaska faces a looming shortage, while House conditions tie relief to a Fairbanks spur line, community benefit agreements within 50 miles of the corridor and equity options for North Slope and Kenai Peninsula boroughs.

Fairbanks lawmakers championed the spur line mandate, a longtime Interior Alaska priority to tap Nikiski-export-bound gas for local use, capped at $12 per 1,000 cubic feet pre-export terminal and $5 afterward under Senate terms. Legislative consultant Nick Fulford of GaffneyCline analyzed the impacts, noting the House tax still aids competitiveness but less aggressively than Dunleavy's 40-cent price cut. As HB 381 advances, the $44 billion project — eyed by developers like Glenfarne — teeters between fiscal prudence and energy security for Alaska's utilities and exports.