Hilcorp says opposing the tax isn't opposing the gas line

Hilcorp opposes a targeted income tax on the company, but its senior vice president told the Alaska Gas Line Caucus on Thursday that opposing the tax is not the same as opposing the North Slope pipeline it would help supply.

"Recent headlines have suggested that our position at Hilcorp, that we oppose this targeted income tax on Hilcorp, is against gas line development. And that's simply not true," Luke Sargey said. Hilcorp operates Prudhoe Bay and Point Thomson, the fields expected to feed the project, and is negotiating long-term pricing and supply with the developer, Glenfarne. The tax uncertainty, Sargey said, "makes it hard for us to get comfortable" enough to enter binding commercial agreements.

That tax has stalled the bill. The Legislature opened its third special session of the year on July 29, deadlocked over a pass-through corporate income tax that would reach privately held oil and gas companies, including Hilcorp. Gov. Mike Dunleavy has said he would veto versions carrying that expansion. The underlying bill would replace the state's 20-mill petroleum property tax on project property with a volumetric tax on gas moved through the line — a change proponents say the project needs. Matthew Kissinger of the Alaska Gasline Development Corporation said the current property tax would force the project to "kick out an extra billion dollars a year," which it can't carry, so "the pipeline just doesn't get built unless we get these barriers out of the way."

Business groups pressed the same case. The Alaska Chamber's Kari Noor urged lawmakers to "avoid adding unrelated targeted taxes or surcharges" and handle fiscal questions separately. Rebecca Logan of the Alaska Alliance said investors are telling members they will "wait and see what your legislature does," and Joe Balash of the Resource Development Council said his group opposes what he called poison pills in the bill. Glenfarne's Adam Prestidge said the property tax bill "now sits on the 1-yard line," and that the developer supports capping the price of gas sold to utilities and putting the risk of cost overruns on Glenfarne rather than ratepayers.

No panelist spoke for the tax, and two arguments common elsewhere in the debate went unheard at the session. Environmental groups, including the Sierra Club, argue that advancing LNG exports locks Alaska into long-term fossil fuel infrastructure and that property tax breaks risk leaving the state with stranded assets. Supporters of the pass-through tax frame it as fairness: Rep. Zack Fields has said it is "probably fair for Hilcorp to pay taxes," and Sen. Lyman Hoffman has said the aim is "to make sure that the state of Alaska gets its fair share of the resource that Alaskans own."