Senate Finance demands Phase 1 pipeline math before Alaska LNG tax vote

Senator Bert Stedman pressed the Department of Revenue on Monday to show its work — specifically, the standalone economics of the Alaska LNG pipeline — before the Senate Finance Committee signs off on a property tax break worth as much as $750 million a year to the project's developer.

The break, part of Gov. Dunleavy's framework now before a four-day special session, would spare Glenfarne the standard 20-mill property tax during construction and replace it, after a five-year abatement, with a far lighter 2-mill-equivalent volumetric tax. In exchange, the developer must put $40 million into a municipal impact fund, commit to a project labor agreement and a Fairbanks spur line, and move toward a final investment decision.

Stedman's objection is that the department keeps presenting blended, whole-project numbers that fold in Phase 2 — the LNG export terminal that may never get built — and so obscure the only question that matters right now: how much of a tax concession does the standalone Phase 1 pipeline actually need to pencil out? "Maybe it's zero tax, for all I know," he said, asking for cash-flow analysis at varying debt levels and interest costs, "just like we do when we get into the oil stuff." His sharper worry was that a break given "with our left hand" could be quietly clawed back "with some mechanism on the right hand."

Glenfarne President Adam Prestidge defended the 2-mill figure as load-bearing, not arbitrary — the assumption, he said, that made the company's $16 gas price cap possible in the first place: "I don't see that there was a commitment to $16 at any time before we had an assumption that was based on 2 mils."

Chief Economist Dan Stickel said the department had run a Phase 1 analysis and would supply it for the House-passed version, but that the compressed session left its baseline assumptions unchanged. Each additional mill, he noted, equates to about 5 cents of volumetric tax revenue on the full project.