Dunleavy ends special session, blames legislators for not taking up gas line bill

Gov. Mike Dunleavy said Friday there is "little reason to keep the session going" for his special session on the Alaska LNG gas line. He blamed legislative leaders for declining to work on the bill. Dunleavy posted the statement on his official account on X. The reviewed record does not include a proclamation or legislative journal entry formally ending the session.

"I will not continue to watch public dollars spent for a special session when legislative leaders decline to work on my bill, any bill, to finally bring more affordable energy to Alaskans," Dunleavy wrote.

Dunleavy's statement comes as Southcentral Alaska faces a projected winter gas shortfall. Enstar President John Sims told the Alaska Gas Line Caucus the utility could be 3 billion cubic feet short this winter. That is the equivalent of 18 midwinter days serving no customers. Even under normal weather and on-time deliveries, the gap does not close. "Now, if deliveries come as expected from the Cook Inlet for the remainder of the year, we will be 1 BCF short, which means I'll need 6 days of gas in the middle of winter for folks," Sims said.

The standoff has run through multiple sessions. The Alaska State House deadlocked 19-19 on the conference committee report for HB 381, the gas line tax bill, ending its path forward. Dunleavy called a second special session over the unresolved tax bill. He later transmitted a compromise bill modeled on the conference version of HB 381. It would set the S corporation income tax at a flat 2 percent, delay that tax until Jan. 1, 2030, or first commercial gas flow, and remove a provision that would have cut state education aid to boroughs collecting gas line tax revenue. Alaska House Republicans posted an open letter Aug. 13 asking Speaker Bryce Edgmon to convene the House and take up the bill.

The financing picture has shifted this year. The Alaska Gasline Development Corporation transferred 75 percent of the Alaska LNG project to private developer Glenfarne in March, keeping a 25 percent state stake. The state is not obligated to invest further, but could be asked to contribute up to $800 million, a potential 7.5 percent equity stake, toward the initial "Phase 1" in-state pipeline. Proponents have cited a $44 billion price tag for the full project, but independent analysts estimate total costs could exceed $60 billion. Glenfarne has indicated it does not intend to make its definitive cost estimate public, according to Inletkeeper.

The reviewed source material contains no response from legislative leadership to Dunleavy's account. Environmental groups, including the Sierra Club and the Center for Biological Diversity, argue federal approvals for Alaska LNG did not fully assess its greenhouse gas emissions and climate impacts.

The dispute has become a campaign issue. Former Gov. Bill Walker, running with Heidi Hoffbeck, wrote on X that with Southcentral projected to be 18 days short of gas, "the gasline has gone from a "wish list" to a "must do" imperative," and said the gasline was "on the ballot" in the Aug. 18 vote for governor, a reference to the governor's race rather than a ballot measure. Another gubernatorial campaign posted that on its first day it would bring producers, legislators, municipalities, labor and Alaska Native corporations to the table.

Anchorage Mayor Suzanne LaFrance, at a press conference with Mat-Su and utility officials, framed the cost in household terms. "Energy costs hit every single household budget in our community, and families who are already struggling with the cost of living, higher heating and electric bills can be the last straw," she said.

The Alaska State House and Senate Resources committees were scheduled to meet jointly Aug. 20 at 2 p.m. in the Denali Room of the Anchorage Legislative Information Office for a gas supply update from Enstar, the Department of Natural Resources, the Alaska Energy Authority and the Regulatory Commission of Alaska. The reviewed record does not show whether the meeting was held.