Fairbanks spur line language added to Alaska LNG tax bill

Fairbanks North Star Borough secured language in Alaska's LNG tax bill Wednesday that requires the developer to build a spur line serving the Interior city before claiming the tax break.

The provision appeared in **Senate Bill 2001** during Senate Finance Committee deliberations. It creates a trigger: the developer cannot claim the alternative volumetric tax break without permitting and constructing the spur line in parallel with the main line, operational within two years after main-line completion.

Without the spur, Fairbanks gets no gas from a pipeline routed 30 miles outside city limits.

The bill also includes postage-stamp tariff language aimed at spreading the $180-245 million spur cost across all Railbelt users rather than Fairbanks ratepayers alone. Mayor Grier Hopkins said a consultant estimated spreading the spur tariff across the entire line would add roughly **two cents per MCF**.

"If the 3,500 ratepayers here in the Interior Gas Utility in the Fairbanks North Star Borough were paying for the spur line alone, it would become unaffordable and we'd be seeing more expensive gas off of that line than we would be seeing today," Hopkins said.

Fairbanks currently pays **$24-26 per thousand cubic feet** for natural gas trucked from the North Slope to a local liquefaction plant. The borough's **3,500** Interior Gas Utility ratepayers have tripled over the past decade, but expansion has stalled because conversion costs and gas prices remain prohibitive.

The Senate Finance Committee continues deliberations this afternoon with testimony from Kenai Peninsula Borough and a Legislative Finance presentation. The bill still requires full Senate passage, House concurrence, and the governor's signature.