Alaska Legislature recording 2026-08-10

Joining me today are Senators Giesel, Wielekowski, Tobin, and Clayman, and Gray Jackson, and myself, Stevens. I think that's it so far. Oh, here's Senator Olson as well. And so far, we have nobody online, but they may join us later. In any event, it's great to be here with you today.

We have released a position paper outlining our position, our stance on the gas pipeline issue. We wanted to make it as clear as we could, as clear as possible, so everyone has that and knows exactly what our thinking is at this point.

Certainly everyone wants a pipeline. We've always heard that everyone in the legislature wants a pipeline, just not at any cost. So we support the building of a pipeline, absolutely. And but we also want to make sure that energy security is there for Alaskans. And the legislature has, has been very supportive and reflective of that.

So over the past regular session and special sessions, The Senate has passed two versions of legislation. Both of them give Glenfarm roughly $1 billion a year in tax breaks they asked for, and both have added protections for the state we thought needed to be there, including timeline insurances, liability safeguards, and project labor and apprenticeship guarantees. Governor, as you know, has declined to support either of those bills, and that's why we're here today, why we are still here without progress that we think needs to occur. The project's estimated cost, as you know, has climbed significantly from $45 billion even to as much as $70 billion. So we don't have the information we need.

I think that's a big problem. We lack the project information we need to determine the, um, what the current terms are going to cost the state. Uh, we're being asked to commit Alaskans to a deal we cannot fully see. Let me say that again. This is so, so important.

We are being asked to commit Alaska to a deal we cannot fully see. That's a problem. We need more project details from AGDC and Glenfarm to produce the best versions for the state. We want a pipeline and we want it done right. That's the most important thing.

It has to be done right. That careful work matters enormously. Senator Giesel, along with our finance team, has been at the center of all of this. Senator Giesel, can you explain and walk us through your committee's work on the project? Explain why this process and the time it takes matter so much in getting a pipeline right.

And before I send it to you, I want to make sure everyone understands what we're doing here. I have these opening comments. I'll let any speaker, any senator speak who wants to, then we'll open it up to any questions you may have. We're here as long as you need. We want to make sure we answer all the questions you have.

So, Senator Giesel, if you could help us understand that. Thank you, Mr. President. You know, you used the word careful work. We got the bill on March 20th. Uh, my staff and I calculated the hours that have been spent in committee on this bill.

The Senate Resources Committee spent 54 committee hours on the bill. The Finance Committee, 34 hours. The Conference Committee, 11 hours in public meetings. That adds up to 99 hours on this legislation. And that does not include the work behind scenes, does not include the Department of Revenue's work, the Department of Natural Resources work.

We had Alaska Oil and Gas Conservation Committee before us. They prepared presentations to us. We have done significantly careful work.

Now things have changed.

Senator Stevens, you called out the fact that the price of the project has moved from $45 billion estimate to $70 billion. That completely changes the economics of this pipeline and the price of the gas at the other end. So what is the price of the gas now? We have to go back to the starting point. We have to have the Department of Revenue do the modeling again now at a $70 billion price.

What will the price be then for in-state gas and for export gas? You know, right now Henry Hub is selling at $2.67 to $2.73 an MCF. I don't know if a $70 billion project can meet that. But, Mr. President, the work on this bill was tax abatement. That was the whole thing that we were asked to do.

Now, we already have in law a statute that says that any gas line project is exempt from state and municipal taxes for the entire time before the first flow of gas. So they already had tax abatement during construction. We were asked to consider an alternative tax. We did consider that. It was part of the multiple bills that we've considered and worked on.

The state of Alaska, as you said, Mr. President, is giving up $1 billion a year in property tax. You know, the Mat-Su alone is giving up $116 million a year in taxes. I mean, this is hitting local communities, not just the state treasury. This idea of tax abatement. Now, in terms of the price, you know, we set a price in the Senate Resources version that the price of gas for Alaskans could not exceed $16 an MCF with a maximum inflation of 3%.

That 3% inflation rate, by the way, if the bill is enacted, begins this year. So, of course, when the bill is complete, when the project is complete, it will be more than $16.

But—. Imported gas. And that study estimated that imported gas would cost about $17 an MCF. So just looking at the numbers, even right now, I was just hearing Tony Izzo, the CEO of MEA, he's saying that the price now is actually creeping towards $16 to $17 an MCF. So again, I'm hoping that if we were to build this project, we would still have economic gas for the local areas, for Alaskans.

That's the whole point. We certainly need to have secure supply. And for that reason, when the Resources Committee worked on it and the Senate Resources Committee as well, we set in deadlines. They have to reach final investment decision. That means they've got to have all the investors and they have to have secure sales agreements, not only from the producers of the gas, but the people who would buy the gas by January 1st, 2028.

So we set a deadline for Alaskans. We said that the pipeline needed to have gas by December 31st of 30— 2034. Now, that's an important date because if you listen to Mr. John Sims, the CEO of Enstar, he tells us repeatedly that the low-cost contract for Cook Inlet gas that he has right now at about $9 will go up significantly in 2033. So if this is not until the end of 2034, we have a gap. We'll be paying high prices for limited Cook Inlet supply.

Uh, commercial operation is not even required in the bill that we passed until January of 2037. So In terms of secure supply, we tried in the bill to set dates, performance dates for Glenfarm. You know, I hear a lot, Mr. President, from citizens saying, but this means Alaska jobs. That means a lot to all of us. I'm born and raised Alaskan.

I want Alaskans building this pipeline. We heard from the Commissioner of Labor last week. That she estimates anywhere from 6,000 to 8,000— more than 8,000 workforce. But we also know that at least 68% of this workforce is going to come from out of state. That was something that AGDC actually told the Federal, Federal Regulatory Commission when they first put in for an application for this project.

68% Will be out of state. Employees. So those paychecks will be auto-deposited in banks in other states. The other thing that the FERC report that AGDC submitted talked about self-contained work camps. You know, during— many of us were here during the building of the Trans-Alaska Pipeline, and the workforce, some lived in camps, some were local, lived in local communities.

These, uh, according to Glen Farn, they told us in the Resources Committee, will be self-contained work camps. So this workforce will not be purchasing things in local communities, uh, going to theaters and bars, etc. They will be self-contained. And also Glen Farn stated that most likely those families will not be coming with them. So again, I'm not sure how much of a, a local economic impact how much this will be, but certainly something we would like to see by having Alaska workforce.

We provided in it, in the bill, that prevailing wages would be an issue, that local hire. We're not interested in seeing foreign workforce into this project. All of these things were part of the Senate Resources Committee work. And part of the Senate Finance Committee work. Mr. President, we are concerned that we've run out of time as far as seriously committing to this project, this bill in any case, going forward, because our— the administration is quite short-staffed right now.

We know that the Department of Revenue has many openings They will be— they'll be hard-pressed to again provide modeling for us. Even the Rural Health Transformation Project has submitted— has released only 2% of the money that they were slated to have released by July, Mr. President. They are far behind. I know Senator Tobin is very concerned about education funding that hasn't been let out. We're concerned that our own administration will not have the capacity to continue to wrestle with this bill, at least for a while.

They, they will need to beef up and really go to work with modeling. But what's the plan going forward? There is a plan going forward, and these are the elements of it. First of all, I have spoken with the resources co-chairs on the House side, and we will be planning a joint Resources Committee meeting on August 20th here in the LIO. Uh, we are going to look at the gas supply issue.

So that will be a great in-depth meeting. Uh, both of the co-chairs were eager to have that meeting. Gas storage is everything, and anyone who's heard, again, Mr. John Sims, CEO of NSTAR, talk about that, Storage is everything. Many people are aware that the Regulatory Commission of Alaska recently declined the request by Enstar to expand their storage ability for gas. This is a huge problem.

If Enstar can't store gas now for winter, we have a problem. Well, I personally call on the governor to step in here. The RCA should reexamine the data they've been given. Reexamine the critical time that we're in and should approve that expanded gas storage. That would be huge for this coming winter.

This Senate majority is sending a letter to the RCA advocating that they reconsider that gas storage request from Enstar. Secondly, Cook Inlet gas. Again, you may have heard people say— some people say There's no more gas in Cook Inlet. Other people say, wait a minute, there still is. And I would point to Hex Energy.

They recently doubled their production. Now, it's a small amount of gas, it is true, but nevertheless they doubled it. They have a very large permit that they're working on called Kitchen Lights. The more they pursue gas in that reservoir, I predict they will find more gas. Even more importantly, further down the inlet, Blue Crest Energy has a lease called Cosmopolitan.

This lease has known gas present. I've heard up to 300 BCF. Remember, the whole rail belt uses about 70 BCF a year. If it's true that there's 300 BCF there, we need to get that gas behind pipe. So that it's going to Enstar, it's going to Chugach, MEA, and all the other utilities.

So I would call again on the governor to talk to the Department of Natural Resources and get that lease under production. That's significantly important. Other positives is Bradley Lake. We have a hydroelectric project that is expanding. It will be several years before additional gas comes— or excuse me, additional electrons come out of that hydro project.

But that's going forward, and it's diversifying our energy supply. Last week there was a meeting at which Tony Izzo, the CEO of MEA, spoke. And Tony's message, I think, that really resonated with people was, "Don't put all your eggs in one basket." We've gotta have a lot of energy opportunities. And so that's really what the Senate majority is looking at, a multitude of opportunities to fill this energy gap. Thank you, Mr. President.

Well, thank you, Senator Giesel. I truly appreciate the tremendous effort and the time that your resource committee has put into this, the hours you put into it. It's been just enormous. And I also appreciate the fact that you are meeting, a joint meeting with the House resource, House and Senate resource on the 20th of August. I will say, just so folks are aware, the governor has told me that he will be presenting us a bill on the 20th of August.

We have not seen the bill. We don't know what's in it. We're anxious to see it. Of course, the problem is that this session, special session, ends on the 25th. So getting that bill on the 20th and getting through it by the 25th is very, very difficult, mainly because, as I've said, we don't know what's in it.

And we're being asked to commit to Alaskans to a bill that we really have not seen yet. So anxious to get that bill in our hands so we can see what is actually in it. So, so much of this project comes down then to the numbers and the terms of any deal that we come up with. And getting that financial structure right is really what is going to determine whether we get the pipeline we deserve, Alaskans deserve, or if it's going to leave the state carrying too much of the risk. Senator Wielechowski, I appreciate your efforts.

You followed this probably as closely as anyone else. And can you walk us through some of the fiscal issues that you see we will face and the protections that we need to put in place and why some of those protections are really not the obstacles that some people seem to think they are. Well, thank you, Senator Stevens. So just going back historically to last year and even earlier this year, we heard from Glen Fahren and AGDC that they needed nothing from us. In fact, I think it was the vice chair of AGDC testified in front of the LB&A Committee that the legislature should just stay out of this project completely.

And so we were taken aback when midway through this session, after hearing AGDC testify, Frank Richards testify that they needed nothing, the project was economic on its own, after hearing Glenfarn come and meet with us and testify that they needed nothing, that all of a sudden they needed $1 billion in tax breaks, property tax breaks from the people of Alaska. And so when we started to dig into that, we had a lot of questions. And one of the initial questions we asked was, would you be willing to pay an S corp tax? And they said yes. They testified multiple times that they would.

And then they later changed their position on that. In fact, that would cost— between those two, $1 billion in property tax breaks, and then another $466 million the people of Alaska would be giving up via S corp just for Glenfarn alone. Now, that said, the Senate had— the Resources Committee had 36 hearings on this. The Finance Committee had another at least dozen more. We passed the tax breaks that Glen Farn asked for twice.

Passed it twice. And now here we are in the third special session. The price has gone from initially $44, $45 billion to $55 billion to now the governor over the weekend said It could be as high as $65 to $70 billion. And so as those prices go up, of course, the tariffs to the people of Alaska go up. The tariffs for shipping outside go up.

We've all known this is, this is an expensive project, but the cost keeps going up and that has an impact on the economics of the project. Here we are halfway through the third special session. We still don't have a bill. We have no idea what's in the bill. I don't have any idea what's in the bill.

I've not heard anything from the governor. I've not heard anything from his DNR department, from his revenue department, from anybody affiliated with the governor. But I look forward to it. I look forward to seeing what is being proposed. But if the plan is to get us a bill and then just expect us to rubber stamp it, that's not going to happen in the Senate.

We're not going to rubber stamp a bill that we've never seen, that we've never evaluated and have no idea what's in it at this point.

So, but the real critical thing that needs to happen, and that is this winter, and we've heard a lot of concerns about that. I think, you know, some people are trying to conflate this, the gas line bill or the gas line tax break bill with what's happening this winter in Cook Inlet. Even if the governor had signed off even if the governor hadn't rejected the bill that we passed twice, the earliest that Glenfarn would be getting this pipeline built is realistically probably 5 years out. In fact, we put— we tried to put in provisions saying that construction had to be completed by December 2033. We tried even earlier than that, or December 2032, and the governor objected to that.

Glenfarn objected to that. AGC objected to that. So when they say you need to get this gas line so that we can solve the problem for this winter. They've objected to every provision that we've tried to put it in that would speed up gas. They have objected to every single one of those provisions.

When it comes to ensuring Alaskan hire and apprenticeship hire, they've objected to the provisions that we tried to put in regarding, regarding Alaska hire, regarding apprenticeship hire. They've objected to those things in favor of unenforceable and milquetoast labor language. So we have— we don't have the bill. The thing that we need to focus on right now is, is the crisis of this winter. And I know Senator Giesel is—.

Is—. I'm glad to hear we've talked about this, having some hearings on this in the next, in next week or so. And what really need— what we really need to focus on is exactly what Senator Giesel mentioned, which is The fact that BlueCrest has what we believe to be several, probably a couple hundred billion cubic feet of gas, and that's very recoverable. And we need to hear from the Department of Natural Resources as to why they have let BlueCrest sit on those leases for a decade and not enforce the leases. We need to hear from DNR about the progress on the kitchen lights.

And how we could get more gas out of kitchen lights. We need to hear from the RCA and the governor's office about the storage issues. If we take care of those things, we can get gas, we can easily fix this problem. We're going to get through this winter. It's just a matter of the cost.

And if DNR and the governor's office are allowing BlueCrest to sit on what we believe to be 300 billion cubic feet of gas, that is only hurting our situation this winter. If they're allowing— if they're blocking storage issues for this winter or not moving forward and helping storage issues, that is only going to make this situation worse. So the focus needs to be on how are we going to get through this crisis of this winter. That needs to be the focus. I'm glad to hear Senator Giesel focusing on that, and I look forward to those hearings.

Thank you. Thank you, Senator Wielechowski, always for your comments. At this point, I'd ask anyone at the table who would care to speak. Senator Gray Jackson. Thank you, Mr. President.

As we all know, we've received many, many emails from constituents and organizations throughout the months. And I want to take a moment to thank you for writing to us and expressing your perspective on this issue. But we must have a bill, and I'm hopeful that we will have a bill that is in the best interest of the state, our communities, and future generations. Thank you, Mr. President. Thank you, Senator Gray Jackson.

If there are no further comments, let me just say that we— I think this caucus is united in wanting to support a gas line. We want that to happen. We want it to be built for Alaskans by Alaskans. We want to get it done right. And the decision of what we're going to do really rests on those numbers.

The legislature still does not have them. The responsibility, I think, now is on Glenfarm and also the administration to bring us those numbers this year so we can work forward on it. A project of this magnitude, of this substance, and this financial risk must be done right. And so with that, I'd be glad to open up for questions anyone may have. Please remember to state your name and affiliation, and we'll make every attempt to answer them.

Thank you. Uh, Jeff Landfield. I wanted to ask about Cook Inlet. You both, Senator Giesel and Wolkowski, addressed that. First of all, in the storage, uh, NStar blew through 8 BCF of gas last year.

There's only about 6 now, which means they put in 2. So there's not even really any gas to store right now. And you mentioned Blue Crest and Hex. Uh, Blue Crest hasn't produced any gas for a long time. In fact, NStar shut their gas off last year because they were using gas in the system to power their oil production, which is very little.

Hex Hendrix has been getting 75% royalty reductions. I mean, these people have been around for a long time, and they're getting loans from ADA, and they're asking for loans, and they're asking the state for $100 million. Neither one have a rig. Hillcorp has demonstrated they've spent $1.5 billion in the inlet. They've spent billions on the North Slope.

They haven't asked for any kind of royalty reductions. They can produce They're drilling, I think, 29 wells this year. They can drill in the Cook Inlet. They've proven they can get gas out of the Cook Inlet since 2012. Why do— why does the state keep stringing along Hex, John Hendricks, and BlueCrest when they haven't produced— BlueCrest, no gas.

Hendricks, almost no gas. And we're paying him a lot of money, $5 million a year royalty reductions. Why is Hilcorp not being asked to help us with this problem when they're the ones who have demonstrated they can solve this problem, they can address the problem in Cook Inlet? Thank you, Jeff. Any response to that?

Senator Giesel?

I'm not exactly sure what the question was, but I will point out first of all that actually Hilcorp has been getting significant state support in that we have not required them to pay a corporate income tax as the other major producers in our state are required to do. They control the North Slope. They have the vast majority of leases in Cook Inlet, and yet they've had a tax break from the corporate income tax for all these years. It is true that Mr. Hendricks, Hex Energy, has a royalty reduction, and he's been using that to move forward. He's doing the work.

There's only one drill rig in the inlet. It has to be shared between Hilcorp, who owns it, and Hex. You've heard Senator Wielekowski and I already talk about Bluecrest. We are very concerned that that lease has not been developed. That gas is sitting there.

It is known to be there. My understanding— I've heard from several people that multiple offers have been made to assist in the development of that gas by other companies, and they've been declined. Again, I call on the governor and the Department of Natural Resources to take the steps necessary to get that gas behind pipe for consumers. Thank you, Senator Gissler. Senator Wolkowski.

You know, years ago, during the, um, during the royalty fights the state had with the oil industry, uh, and I know this because Senator Stevens gave a very eloquent speech on this many years ago, the, um, A judge found that the state— what was happening was the oil industry was turning over the royalty information, paying the royalties, and the state wasn't— was just trusting them. And later the state found out that they weren't getting what they should have. And a judge said the state was guilty of inexcusable trustfulness. And I would say that the Dunleavy approach in Cook Inlet, a laissez-faire approach of just let industry do whatever they want with no oversight— I mean, BlueCrest is— and you raise a good example, Jeff. BlueCrest, that lease should have been taken away, in my opinion.

It should have been taken away. HEX, it was unbelievably unfortunate that the state got leveraged, the state got put in a position where because HEX had overriding royalty interests of 12.5%, it made the projects undevelopable, Kitchen Lights undevelopable. And so the state agreed to massively cut our royalty share with really no protections for providing that to Alaskan consumers or anything else. So I would say really colossal mismanagement by the administration. And the utilities actually pointed this out several years ago when they sent a letter— a number of the utilities in Southcentral sent a letter to the governor, to the attorney general, saying, We don't think Hilcorp, quite frankly, is living up to the duties of their lease obligations.

There was a consent decree that actually required Hilcorp to not only develop but explore for new gas. They control 90% of the leases. And I agree, Hilcorp, very capable. They're very able to do this. But the state, the DNR, has mismanaged the leases in Cook Inlet.

And that's what we need to have hearings on, quite frankly, is ensuring that we have immediate action taken to, uh, and if it's Hilcorp taking over that lease, uh, I don't care who takes it over at this point. Somebody's got to take it over. But for, for DNR to sit there and the governor to, to dis— to do nothing while Blue Crest, which is, we believe, very productive field, large quantities of gas, is, uh, has really placed us in this unfortunate situation.

Thank you. Senator Lukowski. Uh, yes, sir. Hi, thanks, Alex. DeMar Bond with the Anchorage Daily News.

So I'm curious what has to be in this bill or not be in this bill in order for it to pass in 5 days or less. Is there any way that can happen? Otherwise, I'm not hearing a lot of optimism. Well, I think you are seeing not a lot of optimism here. The problem is the governor said he will deliver us the bill on the 20th and this special session is over on the 25th.

So these are enormous issues. That have to be addressed. That's, to me, the biggest problem right now is the time to get it done. I honestly don't believe in 5 days we can do it. You know, we need to have, need to know what the consequences are.

So that's what we're saying. Now, what happens next? Does the governor call us into another special session, should he choose? I mean, that's entirely possible. We'll see where that goes.

Any other comments on the question we just heard? Well, Mr. President, logistically, certainly Senator Wielechowski as the Rules Chair can speak to this, but I don't believe even according to our rules and the standards we have to have for public hearings we can even get it done in 5 days. I believe Senator Wielechowski can speak to that more in depth. Just procedurally and constitutionally, a bill has to have 3 readings. And so the first reading is when the bill is read.

We don't have the bill yet. So that's one day. The bill has to, under our uniform rules, get one do pass. So it's got to have a committee hearing, at least one. And that's assuming that we're all just going to go in and rubber stamp the bill.

And then you go to second reading. And constitutionally, you can go second or third reading on the same day. It requires three-quarter vote. And just looking at how this bill has the way these bills have progressed, I think that's probably a challenge. So you're looking at at least 3, probably 4 days on a— if we wanted to rubber stamp a bill.

It's unprecedented. I mean, we've all been through a number of special sessions over the years. I can't ever remember a special session where we didn't have a bill on the first day. And so it's— this is unprecedented, I would say. But to your initial question about what are we looking for, we voted on a bill twice.

We passed the bill. In fact, the last bill we passed We were all told by at least one member of the conference committee that Glenfarm had agreed to it. And that they were going to put out a press release saying they supported it. And then at the last minute, they changed their position on it. So, you know, this is unfortunately what we're dealing with is the governor and these companies who are at a whim changing their positions on major, major things.

Saying that we don't need anything, we don't need any property tax breaks, to we need a billion dollars in property tax breaks. Saying that yes, we're willing to pay our share of corporate income taxes, to which would be $466 million, to we don't want to pay a penny of corporate income taxes even if we're making $5 billion in profits. To yes, we'll support solid project labor language, to basically completely eviscerating the project labor language, to testifying in front of the legislature that they can't envision a scenario where the state would have— would owe Glenfarn money, to us finding out that there are actually provisions in the contract where the state could owe them hundreds of millions of dollars if Glenfarn abandons the project or if they miss milestones, and we want to get the project back, which of course we would want to. We've got a billion dollars invested in it. So, uh, Yeah, we're not going to rubber stamp it.

Anything that's put before us, we're going to evaluate because look at the history of what's happened, what's transpired up to this point. Thank you. Senator Alcácer. Yeah, please go ahead. Thanks.

I'm just curious what you think this indicates, this unprecedented situation that there's not even a bill here. What's going on?

I, I mean, I'll take that, Mr. President. Please go ahead, Senator. You know, it's a, it's a, it's a good question. I, I've never operated with a governor who operates like this, um, who, who just doesn't talk to people, doesn't, doesn't work with them. You know, we've compromised tremendously on this bill.

To say that we haven't compromised, uh, you know, from, from where this bill came out of the Senate Resources Committee to where it is now This is a, you know, we've compromised tremendously. And so this is about finding compromise. And we thought we did find a compromise with the last version that we passed and that he threatened to veto, even though Glen Farn originally said they supported it. There's been tremendous compromise. And, and I, you know, if the governor is going out and saying he's talking to people and trying to find a compromise, he's not talked to me.

I know he has not talked to most people that are sitting up here.

And so I don't know, maybe he is talking and getting votes somewhere, but that is not the indication that I have. Yeah, and we just add on to that, we really truly do not know what is in that bill, but we have heard various rumors and some of those would lead us to have to take more time to analyze it. For example, I understand that some of the safeguards that the Resource Committee put that were put in there for the state have been taken out. That's very important. We don't want the state to get stuck.

We don't want the citizens of Alaska to get stuck having to pay hundreds of millions of dollars or more if Glenfarm has to abandon the project. I understand also that the governor has said to me that he might be interested in a 2% tax on Hilcorp. That's not very much. So we're not sure what that is. So we need to do a careful analysis of that.

I think the— The intention of the Senate was a higher tax than that. 2% Might not be enough to really make a difference. So we don't really know what's in that bill. We're anxious to see it. The governor has been very clear to me that he will present to us on the 20th.

And again, 5 days is virtually impossible for us to get through all of the steps, as Senator Velikovsky made it clear, that we have to get through to get to the final analysis and final vote. So, and to say nothing of the Senate, of the House. The House will then have to deal with it in the same way the Senate it is dealing with it. And often discussion, debate takes a lot longer on the House side even than it does on the Senate side. We're going to go online with James Brooks with the Alaska Beacon.

Hi, James. Please go ahead. Hello. Thanks for answering questions. I'm curious.

This is the first special session that I know of that has overlapped with an election. How has that affected things on both the election side and the special session side? Well, it's made it very difficult for those of us who have elections, who are out there attempting to get reelected, and the time it takes, it's been very difficult. So when we call people into a special session, even into a committee meeting of the resources, it's going to take many of them away from their current elections that they're involved in. So it's added another hardship to everything, and you're right, I don't recall another election where we've been so involved in areas, issues beyond the election itself.

Next for the questions, James? Next we'll go to Mark Sabatini with the Juneau Independent. Mark. Mark Sabatini. Hi.

Quick question on the cost estimate, about $65 to $70 million. I published that in an article and I took some heat from the Governor's office for that because I was told very clearly that that was a misstatement by the governor. He wasn't expressing some secret cost that hasn't been made public. Both he and Glenn Palmer are saying, look, our $45 to $55 billion estimate, that's the real one. And what was stated 2 months ago at a press conference was just— that was wrong.

So I'm wondering what your figure is from. Is it from the governor's statement, or do you have some other basis for that? No, I think it's from the governor's statement. He may have misspoken, but for a governor to misspeak creates real enormous problems for us. So we don't know what the truth is.

Senator Giesel. You know, Mark, I would let you know that there have been a lot of these air quote "misstatements." We in the Senate Resources Committee were functioning under that $45 billion, $46 to $45 billion estimate. Estimate, and then the lobbyist for the governor spoke at a public meeting and said $55 billion. Now, after the Finance Committee pressed Glen Farn to update their numbers, it now has become $55 billion. So you see the money— excuse me, the price of this project has moved so many times.

Again, more confusion, certainly for the legislature, and difficulty in making final decisions about a bill.

Senator Wolkowski. Just, just on Mark, it is from the governor's statement, and, and perhaps it was a misstatement, but I'll just say this. I don't think anybody in the legislature thinks this is a $55 billion project. The numbers that they're, that they're basing this on are 10 years old. And if somehow they have figured out a way to avoid inflation, which we know has impacted every single thing in the supply chain, and if somehow they think they can build this without— and the price of labor, the price of steel, the price of fuel has not significantly impacted or increased in the last decade.

That's magical. Like, that's— I don't know how that's even possible. So I think just basic common sense dictates that of course the price has risen in the last 10 years. And it's probably risen pretty significantly. The $65, $70 billion number, quite frankly, is probably even low.

Thank you, Senator. Jeff Landfield again. I just want to ask, in the statement you say we will not commit Alaska to a deal we cannot fully see. The responsibility now is on Glenfarn and the administration to use the rest of this year to bring the legislature to the detailed numbers the decision demands. So is the S corp— is that the line in the sand?

And if the House were to pass the bill you guys passed last time that they rejected, is that a good bill, or have things changed again? Any comments? Senator Giesel. Mr. President, we've had— I just went through the elements in this bill that we worked on. The S corp is only one of them.

The workforce issue, the cost to the state for this tax abatement, the question of the cost of gas for Alaskans. You know, when I look at the in-state break-even price for gas, if the project itself was buying the gas at $1.50, it's $18.60 in MCF for in-state. If we even go to the LNG, the price is still It's $9.07 on the world market. Mr. President, Henry Hub is much lower than that, $2.70. I'm not convinced that this project pencils out for export even.

So I would push back on that being the one thing. There are multiple aspects of this bill that need attention. Thank you, Senator Giesel. Senator Wilkerson. Yeah, thank you.

I know the governor wrote an editorial where he drew a line in the sand and said taxing an outside Texas billionaire was his line in the sand. We're not crossing it. And maybe he is crossing it now. But it's not just S corp. It's a number of things.

I mean, the S corp is important. And the reason the S corp is important is because we've got to balance our treasury. We've got to balance our revenue. And what we heard over and over again was As this project progresses forward and the producers start exploring and developing gas, it will cost the state of Alaska money. It will cost us hundreds of millions of dollars in lost revenue directly out of our treasury up until the gas line is built.

And so we talked with Department of Revenue and we talked among ourselves and we talked with the public. We had conversations with AOGA as they testified in trying to figure out, okay, how do we balance that? Because we don't want to cut We don't want to see more cuts. We have a $2 billion deficit going forward. And if you're going to layer on hundreds of millions of dollars more in shortfalls, that makes it that much harder to pay a PFD.

It makes it that much harder to pay for education, for all the things that Alaskans expect and deserve. And so, so the S-Corp was one. We had other provisions in there. We had a Dalton Highway surcharge, which Governor Dunleavy proposed, and now he objects, objects to. We had a provision increasing the minimum floor on oil taxes.

From 4 to 6%, which the governor proposed and now he objects to. So we had a number of different ways that we tried to balance the books so that the building of this project— we're giving up a billion dollars a year in property taxes— that we would be able to balance that out so that the Alaska Treasury stays at least somewhat in equilibrium. So, but it's not just the S corp, it's timelines, as we mentioned. You know, why are they fighting against stricter timelines? We have a gas crisis, and they talk about the gas crisis whenever they speak and say we've got to get this gas line built because we're running out of gas.

And then they oppose the timelines to get the gas line built. So timelines are critical. We've got Alaska jobs. They say, yes, we want Alaska jobs. And then they oppose the provisions that would require Alaska jobs and Alaska apprenticeship programs.

The spur line for Fairbanks, that's a critical provision that wasn't included in the governor's original bill. Liability to the state. Glenn Farnan, AGDC, testified we can't imagine a scenario where the state would have to pay Glenfarm money. And then we find out, well, actually we could, and it's at a price set by Glenfarm. And so there's all these things in there.

It's not just one thing. I mean, it's, it's a series of things. And if the governor starts pulling things out that put the state's jobs at risk, that puts the state's future gas at risk, that puts the state's treasury at risk, yes, that's going to create problems.

Okay, well, thanks very much. I appreciate all of you being here. I guess I'd have to say that in the end, uh, This is such a big-scale project that it's going to outlast, outlast everyone in this room. It's going to be here for generations, and it deserves to be made with great care and not in haste. So we're ready.

The Senate majority is ready to evaluate the project further once we learn more from the producer, Glen Farn, and from the administration. They need to bring us the numbers this year. These are our resources. These are Alaskans' resources. And they must work first and foremost for Alaskans.

Thank you all for being here. Thank you.