The measure now heads to the Senate, as a week remains in the special legislative session.
House lawmakers, in a 34-5 vote, pass an Alaska LNG tax break bill that cuts property taxes for state and local communities by an estimated 85%, but retains production taxes, royalties and other revenue on Friday, June 12, at the Alaska State Capitol in Juneau.
The Alaska House of Representatives approved, by a large margin, a historic bill giving a huge tax break to support the Alaska LNG megaproject on Friday. The 34-5 vote comes after months of discussion in the state Legislature, and three weeks into a special session called by Gov. Mike Dunleavy after he vetoed a pension bill following lawmakers’ failure to pass an earlier version of the legislation that Dunleavy and gas line developer Glenfarne supported.
Some House members in wrap-up speeches after the vote Friday said the addition of new safeguards for Alaskans, to help ensure affordable energy and extra revenue for communities, helped win their support. The bill cuts property taxes for state and local communities by an estimated 85%, but retains production taxes, royalties and other revenue that are expected to bring in billions of dollars over 30 years.
The measure replaces those property taxes with a much smaller alternative volumetric tax that will tax gas volumes shipped through the project. Several House lawmakers emphasized that the bill gives the project a greater chance of being developed, but doesn’t mean it will guarantee construction. Alaska LNG proposed to deliver North Slope gas to Alaskans starting in 2029 and to Asian entities starting in 2031, using an 800-mile pipeline and other major facilities.
Its cost has been estimated at between $45 billion and $55 billion, though critics say it could be much more. Glenfarne still has not achieved final agreements with gas suppliers or buyers, or even committed to a final investment decision that would give the project a green light. But an official said Thursday that work to install the giant gas line is proposed to begin next year.
“This project has the potential to transform Alaska’s economy for decades,” Dunleavy said in a prepared statement. “I look forward to working with the Senate to get this important legislation across the finish line. ”“In addition to adding hundreds of millions of dollars in new state and local revenues, this bill safeguards communities during construction, expands access to natural gas in Interior Alaska, and provides borough-level opportunities to invest and share in project success,” he said.
“Alaskans have waited for decades for Alaska LNG and today’s vote brings us one step closer to delivering the benefits of this transformational project,” he said. 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.
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