Alaska News: May 16, 2026

Good evening. I'm Maggie.

And I'm Walter. This is Alaska News.

It's been a week at the legislature. A gas pipeline bill that started as a tax cut ended up as an oil tax increase — and the oil industry is calling foul. Meanwhile, state engineers are asking us to trade the most valuable substance on the North Slope for a promise. We'll have both of those.

We're also checking in on Mount Edgecumbe High School, where a quarter of students have withdrawn and the state's answers don't quite add up.

And at McNeil River, the bears are doing fine. It's the humans we need to talk about.

Let's get to it.

The Senate Resources Committee passed a gas pipeline bill this week — SB 280, Version L. It's been thirty-two hearings over the past several months. And the Alaska Oil and Gas Association says it was rushed. Steve Wackowski, AOGA's president and CEO, testified Saturday: "This legislation intended to help deliver a gas line for Alaska has now been transformed into a sweeping oil tax increase rushed through the process without meaningful economic analysis." Thirty-two hearings. Rushed.

SB 280 is the latest iteration of a gas pipeline tax structure — the thing Glenfarne needs to pencil their economics before committing to build. The bill has been through multiple versions since the start of session. Each version attempts a different balance between making the project attractive enough to proceed and keeping enough revenue for the state.

The numbers tell the story. Governor Dunleavy originally proposed a six-cent-per-thousand-cubic-feet tax rate for the pipeline — about ninety percent below the existing twenty-mill property tax. The House version sits at twenty cents. The Senate version at fifty-five. That's an order of magnitude between the governor's ask and where the legislature landed. And none of those numbers come with verified economic modeling from the developer showing which rate makes the project viable.

Senator Cathy Giessel made that point earlier in the process: "Really, if they want any kind of tax reduction, they need to help us with this bill, giving us actual numbers." The numbers never came. The legislature is negotiating in the dark.

Here's what changed in Version L. The bill now includes an oil tax floor increase — the minimum production tax goes from four percent to six percent, effective January 2027. That happens whether or not the pipeline gets built. Senator Robert Myers asked the direct question: "This is not a conditional effect, though, so the oil companies are going to get stuck with this change in the tax structure regardless of whether or not the pipeline actually moves forward."

The answer was yes. Sonya Kawasaki, the Senate Majority's legal counsel, confirmed it: "Senator Myers, the governor didn't make it conditional on a pipeline, a gas pipeline either. The governor's proposal was to increase the source of revenue for the state." And Myers pushed further. Quote: "What I'm hearing though is that the rationale for this really has mostly to do with oil taxes and oil production in general. It has very little to do with the pipeline. Is that accurate?"

Here's what the "rushed" framing misses. The oil tax floor increase exists because legislators removed a different provision at industry's request. The original approach was to separate gas lease expenditures from oil lease expenditures — so the gas project's deductions wouldn't reduce oil tax collections. Senator Forrest Dunbar explained the math: "There are significant lease expenditures associated with the gas line project... it is impossible to decouple them from the oil lease expenditures. And so the gas project directly causes us to lose revenue and go negative on our oil revenue side."

The Willow project provides the proof of concept. ConocoPhillips' North Slope development is estimated to have cost Alaska roughly five hundred million dollars this year — not in direct costs, but in lost revenue through lease expenditure deductions. The pipeline would create similar deductions, larger in scale, for decades.

So the legislature tried to separate the accounting. Industry objected at the hearings — too complicated, too unprecedented, too risky for the investment climate. The legislature removed that provision, based on that industry testimony. Then they needed an alternative revenue offset. That's the oil tax floor increase.

Industry got what it asked for — the separation provision was removed. Then industry objected to what replaced it.

That's the gap. "Rushed without meaningful economic analysis" — but the provision they're objecting to exists because they objected to the previous approach. Thirty-two hearings later.

This is a forty-year story. Alaskans have been promised a gas pipeline since the seventies. Every few years, a project gets close. Every few years, the economics don't pencil. What's different this time is the fiscal backdrop. Senator Bill Wielechowski laid it out: "We can't work with you if you don't give us ideas on how to fix the problem. We have a cash flow problem in this state. We have a two billion dollar structural deficit going forward."

Two billion. That's not a pipeline number — that's the state's operating math. The dividend, state services, everything.

The session ends around May twentieth. Senate President Gary Stevens has already said publicly he doesn't see a conclusion coming in the remaining days. If the gas pipeline tax bill doesn't pass, the question is whether the governor calls a special session — and what concessions either side is willing to make to get there. We'll keep watching.

The gas pipeline is the future. But Point Thomson is the present — and the state is being asked to make a trade. Walter, from the Slope.

Thanks, Maggie.

Point Thomson sits at the edge of the Arctic coastal plain — a natural gas field that Exxon drilled back in 1977. For decades, the gas sat there, too expensive to move. The wells were capped. The pipeline was always "coming." In 2015, the state finally forced the question. The Alaska Oil and Gas Conservation Commission issued a gas offtake order: start producing, or lose the lease. Hilcorp took over operations in 2022. They've been cycling gas — injecting it back into the reservoir — and extracting condensate along the way. That condensate is what Senator Bill Wielechowski called, quote, "probably the most valuable substance on the North Slope. It is extraordinarily valuable."

Now the state is weighing whether to let the operator switch from gas cycling to what's called blowdown — essentially depressurizing the reservoir to extract the gas directly.

The problem is physics. Blowdown means losing the remaining condensate. Dave Robie, a petroleum engineer with AOGCC, explained the energy math: "The amount of fuel usage necessary for the gas cycling project to process and recompress the gas so you can re-inject it will actually take more resource on a BOE equivalent out of the reservoir than you would be losing in the condensate from a gas sales project." In plain English: if you count everything in barrels-of-oil-equivalent, blowdown looks better on paper.

But that math assumes the gas goes somewhere. The gas would supply the proposed Alaska LNG pipeline — if it gets built. If the pipeline doesn't happen, the gas just sits in Alaska with no market while the condensate is gone.

And the estimates keep changing. Exxon's original numbers for Point Thomson were eight trillion cubic feet. The current estimate is six trillion — down twenty-five percent. Reservoir compaction has been worse than expected. The condensate yield has been leaner than projected. Point Thomson's condensate reserves are roughly sixty-five million barrels. That's known value, extractable now, with existing infrastructure and markets. The gas pipeline economics are projected value — based on estimates that have moved in one direction: down.

Here's where it gets interesting. Commissioner Greg Wilson admitted something on the record: "We do not have economists or anyone on staff to evaluate that sort of thing. That would be with other agencies." The agency advising on extraction strategy can't evaluate what the extraction is worth.

And the numbers from different consultants aren't matching. Senator Wielechowski, reviewing the PetroTel study alongside AOGCC figures, said directly: "Those numbers are wildly different than your numbers."

PetroTel is the consultant the state hired to evaluate the economics. AOGCC is the agency managing the reservoir. They're coming up with different answers to the same question.

The commission's job is reservoir management — porosity, pressure, deliverability. The physics. Commissioner Wilson explained: "If you start to drop the pressure in that reservoir, you are going to see compaction within the reservoir, and so your porosity is going to be reduced, and that will adversely affect the deliverability."

That's technical. What it means is: once you start blowdown, you can't reverse it. The reservoir changes permanently. The condensate window closes.

This connects directly to the gas pipeline debate we just covered. If SB 280 passes and the tax structure makes the pipeline viable, Point Thomson gas becomes part of the supply. The blowdown trade-off makes sense. If the pipeline doesn't happen — if the economics still don't pencil after forty years of trying — Alaska traded sixty-five million barrels of "the most valuable substance on the North Slope" for gas with nowhere to go.

And we won't know which scenario plays out for years. The pipeline decision is 2027 at the earliest. The Point Thomson decision is now.

Glenfarne, the current pipeline developer, is targeting first gas in 2029. That's three years out. The Point Thomson decision can't wait that long. The legislature is being asked to set tax policy for a project that depends on resource decisions that depend on economic analysis that the relevant agency says it can't provide. And the consultants they did hire are giving them different numbers. Maggie.

While we're talking about state agencies and what they can and can't tell us — Mount Edgecumbe. Alaska's only public boarding school, in Sitka. It's been there since 1947 — a former naval air station converted into a high school for rural Alaska students. Many come from villages without high schools of their own. For decades, Mt. Edgecumbe was the path: a place where students from Bethel and Barrow and Kotzebue could get a high school education, live with peers from across the state, and go on to college or careers. The school is run directly by the Alaska Department of Education and Early Development. Not a local district. The state.

This year, more than a hundred students have withdrawn. Enrollment dropped from around four hundred to three hundred eleven — a quarter of the student body. The administration's position, from Superintendent David Langford: "So far, all the data of all the 100 students that have left this year, we can't find any trends." One hundred students. No trends.

Senators on a site visit found some trends. They documented rats in the dorms. Leaking roofs. Deteriorating facilities. Senator Lyman Hoffman — who represents the Y-K Delta, who knows these communities — said on the record: "I could say that if I were a parent, I wouldn't let my child go to school there." Senator Bert Stedman, whose district includes Sitka, put it more directly: "The goal here is to improve Mt. Edgecumbe High School, and we can't do that without accurate information."

A healthcare provider testified to Senate Finance that eight students were hospitalized for suicidal ideation in a three-week window last November — November twelfth through November twenty-eighth. Eight students. Three weeks. At a school with three hundred students.

Commissioner Deena Bishop, to her credit, was direct when asked: "Is Mount Edgecumbe where we want it to be? Absolutely not." But she said that while the superintendent was saying there were no trends. Two officials in the same department, opposite messages.

Governor Dunleavy has vetoed more than twenty-two million dollars in Mount Edgecumbe funding since 2019. That includes two point seven million specifically for roof and window repairs. The roofs still leak.

The state runs this school. The state funds this school. The state is responsible for these students — students who left their home communities to be here. One of those students, a sophomore named Kadyn Cross, testified: "MEHS isn't just a school, it's a place that grows people who go back to their communities and strengthen them." That's the mission. That's what the state is responsible for delivering. This is the same gap we're seeing in the pipeline debate: institutions that can describe what they're doing, but can't tell us — or won't tell us — whether it's working. "No trends" when the senators are documenting the trends. "No economists on staff" when the question is whether sixty-five million barrels is worth trading. The information to evaluate performance exists. The agencies just don't have it, or won't surface it.

Something lighter before we close. Or lighter-adjacent. McNeil River State Game Sanctuary — about a hundred air miles southwest of Homer, accessible only by floatplane. It's the oldest bear-viewing sanctuary in Alaska, established in 1967. The state manages a permit lottery each year. If you're lucky enough to draw one, you fly in, stay at a camp, and watch brown bears fish for salmon at the falls. It's one of the great wildlife experiences in the world.

The statute is explicit about priorities. Bears come first. Human access is secondary. That's not interpretation — it's the law.

The Alaska Department of Fish and Game is now considering whether to allow wheeled airplane landings on the beach and gravel spit. That's the area where sows raise their cubs.

Currently, floatplanes land on the water. That keeps planes away from the bears' primary habitat. Wheeled planes would land on the beach itself.

Conservation groups, including the Alaska Wildlife Alliance, say the change would, quote, "contravene the governing statute." The statute that says bears come first.

Director Ryan Scott's position: "McNeil is a world-renowned bear viewing program, and preserving the unique experience that McNeil provides is paramount. We are working to strike a balance between this and our responsibility to ensure that the public can safely participate."

So preservation is paramount. But they're considering a change that opponents say would fundamentally alter the sanctuary.

This is not a new tension. Back in 2015, ADF&G proposed something similar for the Chugach area. That plan died over the same concerns — access versus conservation, convenience versus the thing that makes the place worth visiting.

The department surveyed seven hundred forty-one people about the McNeil proposal. They haven't released what those people said.

The survey closed in January. It's May. The results are still "being reviewed."

The bears, as always, have no comment. They're busy eating salmon.

The 2026 viewing season will proceed unchanged — floatplanes only. The department says it's still, quote, "working to strike a balance."

Balance. That word keeps coming up. Balance between the pipeline and oil taxes. Balance between blowdown and condensate. Balance between what the state promises and what the state delivers. Sometimes balance just means nobody's happy. And sometimes it means the thing that made something valuable gets balanced away.

That's the week. Gas pipeline math that doesn't add up. A condensate trade-off that depends on analysis the state can't do. A boarding school where the state can't find any trends in a hundred students leaving. And a bear sanctuary where preservation is paramount — except when it isn't. Good night, Maggie.

Good night, Walter. And from Alaska News — good night.