Dunleavy says he is ending gas line special session, blames legislative leaders

Gov. Mike Dunleavy said Friday there is "little reason to keep the session going" for his special session on the Alaska LNG gas line, blaming legislative leaders for declining to work on the bill. He posted the statement on his official X account; the record does not show a formal proclamation or legislative journal entry 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.

His 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, 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, and the record tells a more mutual story than the governor's account of leaders who won't engage. The House deadlocked 19-19 on the conference report for HB 381, the gas line tax bill, ending its path forward. Dunleavy called a second special session over the unresolved bill, then transmitted a compromise modeled on the conference version: it would set the S corporation income tax at a flat 2 percent, delay it until Jan. 1, 2030, or first commercial gas flow, and drop a provision that would have cut state education aid to boroughs collecting gas line tax revenue. House Republicans posted an open letter Aug. 13 asking Speaker Bryce Edgmon to convene the House and take it up. What the record does not include is any account from Edgmon or other legislative leaders explaining why they have not — leaving the governor's characterization of blame unanswered.

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.

The dispute has become a campaign issue. Former Gov. Bill Walker, running against Dunleavy with Heidi Hoffbeck, argued 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 called the gasline "on the ballot" in the Aug. 18 governor's race. 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.

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 House and Senate Resources committees meet jointly Aug. 20 for a gas supply update from Enstar, the Department of Natural Resources, the Alaska Energy Authority and the Regulatory Commission of Alaska.