The mayors said they support the project and generally recognize it needs some level of local tax relief, but they’re concerned about increased costs to services if the project is built.
Then-Senate President Peter Micciche, R-Soldotna, now Kenai Peninsula Borough mayor, on March 15, 2022 at the Alaska State Capitol in Juneau. Mayors of five Alaska boroughs who would see a portion of the Alaska LNG megaproject built in their backyards said they do not support the governor’sThe mayors — of the North Slope, Denali, Fairbanks North Star, Matanuska-Susitna and Kenai Peninsula boroughs — told the Senate Resources Committee on Friday that they support the project and generally recognize it needs some level of local tax relief.
They said they will keep working with the governor’s office and the project to find the right solution. But overall, they said the measure currently cuts too deeply into the income their communities would need to handle the increased stress on housing, water and wastewater, roads and emergency services from an influx of thousands of workers. Officials with the project and governor’s office also told the Senate Resources Committee on Monday that they continue to work with the borough mayors and expect to soon resolve differences. Peter Micciche, Kenai Peninsula Borough mayor, told the committee last week that he supports the project and would like to see it move forward. The pipeline would ultimately end in that borough, which also includes the shipping terminal and plant to make liquefied natural gas, or LNG.Micciche said the bill acts as a 90% cut to the existing property tax rate for oil and gas properties. That raises concerns about how municipalities that rely on that tax will be able to pay for the extra burden on local services. “My focus now is to make sure that retirees and working families on the Kenai Peninsula Borough are not subsidizing a very, very large project,” he said.the bill to the Legislature on March 20 to support the project by eliminating potential property taxes against it and replacing them with a much smaller tax based on gas-flow volumes.The “alternative volumetric tax” would not kick in until the project reaches an average flow of 1 billion cubic feet daily or 10 years after gas starts flowing, whichever comes first. The boroughs stand to collectively lose $13 billion over about 30 years if the Legislature passes the bill, according to a Department of Revenuethat tax relief is necessary for the long-sought project to move forward, while Glenfarne, the project’s private developer, has encouraged the Legislature to act swiftly on the bill to support the project. GaffneyCline, a consultant for the Alaska Legislature, hasAlaska LNG proposes to deliver natural gas from the North Slope in an 800-mile pipeline to Nikiski, making the gas available to Alaskans starting in 2029 and to Asian countries starting in 2031. Without a project, Dunleavy has said the state will lose the opportunity to take in $22 billion in production taxes, royalties and other revenues over 30 years after the project is built, citing the revenue department projections. Also, municipalities over 30 years would lose the opportunity to receive $4 billion through revenues such as the alternative tax, he has said.Josiah Patkotak, mayor of the North Slope Borough where the pipeline would start and the gas-treatment plant would be built, said his borough has considered investing in the project. But his borough, and the other boroughs, need a better understanding of the project’s potential value to know what sort of property tax may be acceptable, he said. Glenfarne has declined to release an updated cost for the project, previously estimated at $44 billion for many years. It has said lenders and investors will be able to access the information they need. The Department of Revenue, adding inflation to the old figure, now estimates the project will cost $46 billion. Skeptics say it could be much higher.“I think that’s one of the things we’re struggling with is trying to assess the actual value of the project, to know what value we’re potentially trading away for something else,” Patkotak said. North Slope Borough Mayor Josiah Patkotak, then Utqiagvik’s state representative, talks with a reporter in the Arctic Slope Regional Corporation boardroom on Nov. 2, 2021 in Utqiagvik. As it stands now, the North Slope Borough estimates that it could see $12 billion less in revenue over 30 years, if the bill passes, Patkotak said. Patkotak and Micciche also expressed concern that a deal for Alaska LNG could set a precedent for future oil and gas projects that want significant property tax relief before investing. “If I was a private sector oil company, I definitely would be watching what’s happening with this proposed legislation and getting my proposed legislation ready to reduce the mill rate for making my project more economical,” Patkotak said. Alaska LNG is moving forward on a rapid timeline proposed by Glenfarne, the majority owner alongside the state’s Alaska Gasline Development Corp. But it has not made a final investment decision to begin construction. Also, it has not finalized deals with gas sellers and buyers needed to support financing. Grier Hopkins, mayor of Fairbanks North Star, which would see only 2 miles of the pipeline, said the municipalities have had good discussions over the last two months with the governor’s team and project developers.If the bill passed, he estimates the borough would receive $50,000 annually from the alternative tax, a roughly $350,000 reduction if the project was built under current law. “It’s not where we as mayors feel it needs to be to support our communities, to support the impacts that we’re going to see,” he said. “Or provide us with the benefits either economically or tax-wise that can set our communities up for a long time.”“I’m not looking at trying to make a ton of money for this community, and every single one of us has said we’re not looking at getting rich off of this line,” he said. “We’re looking at getting what’s fair, maintaining our autonomy and our ability to negotiate or get a fair deal and make sure that the project benefits our community, not just financially.” Edna DeVries, Matanuska-Susitna Borough mayor who is also running for governor, told lawmakers that her borough supports the overall structure of the governor’s bill.Mat-Su Borough mayor Edna DeVries listens during testimony at an assembly meeting on Dec. 19, 2023 in Palmer. That’s a little more than the amount of gas consumed from Homer to Fairbanks now. “We are open to discussion on this based on other municipality input for the threshold, but believe the 1 billion threshold is far too high,” she said. Former Democratic U.S. Sen. Mark Begich, who has been hired by the governor’s office to promote the project, told the Senate Resources Committee on Monday that project officials expect to resolve some of the issues the borough mayors raised in the next couple of weeks.But all parties support the project, he said. “So those conversations with the local communities are happening and will continue to happen until we resolve some of their issues,” he said. Adam Prestidge, president of Glenfarne, told the committee on Monday that the project recognizes it will have impacts on communities. It’s open to finding ways to address borough’s concerns. He said the project will have many of its own services, including for transportation and emergency medical services with doctors in construction camps.Damage to roads and other infrastructure will be repaired and restored under the project’s cost, he said. “So a lot of those impacts are already going to be mitigated just by the design of the project itself,” Prestidge said. Glenfarne Alaska LNG president Adam Prestidge gave an Alaska LNG update during the Legislative Budget and Audit Committee meeting at the Anchorage LIO on Wednesday, Nov. 19, 2025. Chris Noel, mayor of the Denali Borough, said the primary concern with the bill is that it will bind future residents of the borough with untaxable pipeline property that could have a $1.5 billion value. “We know that the project would lead to real benefits,” but they would be limited for the borough, given the lack of plans to deliver the natural gas there, he said. Another concern of the Denali Borough is the assumption that the project needs state and local subsidies to be viable, he said. Micciche, mayor of the Kenai Peninsula Borough, called the bill a starting point. He said the state needs the commerce the project could provide, in part to counteract more than a decade of outmigration.Communities are already dealing with increased costs, as state support has fallen over the years, he said. “This is a 30-year, your children and grandchildren impact,” he said “It’s imperative that we take the time to get it right.” The governor, in an interview on March 20 when he introduced his bill, said at the time that there would be more discussion with municipalities to address their concerns. “This is one of those things that has to work for all parties,” he said, especially the investors that are taking risk to create the project. He said Alaska has to have a tax structure that makes the project competitive with others around the world. If not, the state faces the risk of importing natural gas at high prices, he said, and losing a project that could significantly lower gas prices. “The greatest and most debilitating risk is it could be very difficult to attract business up here,” he said. “If we can get gas for industrial use in a 4, 5 or 6 cent range, that’s a real game-changer in discussions I’ve been having with investors and businesses all over the country, all over the world.”Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.The Rewind: Anchorage Wolverines clinch playoff spot; West boys soccer opens title defense with stalematePolitical group attacks South Anchorage Assembly candidate from both left and right with contradictory mailers
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