Alaska Governor Mike Dunleavy warned on Tuesday that recent amendments to his proposed liquefied natural gas (LNG) property tax bill by the Senate Resources Committee could jeopardize the state’s long-planned gas line project, putting critical infrastructure investment at risk.
The governor’s remarks came after the committee significantly revised House Bill 142, which originally aimed to establish a predictable tax framework for the Alaska LNG project—a proposed 800-mile pipeline and export facility designed to monetize the state’s vast North Slope gas reserves. Dunleavy characterized the changes as undermining the fiscal certainty developers require to move forward with the multibillion-dollar initiative.
“What came out of the committee doesn’t resemble the bill we introduced,” Dunleavy said in a statement to Alaska Public Media. “If we alter the tax structure in ways that increase uncertainty or retroactive liability, we send a signal to investors that Alaska is not a reliable partner. That puts the entire gas line at risk.”
The Senate Resources Committee approved the revised bill on Monday, April 21, 2026, following hours of debate. Key amendments included the removal of a tax stabilization clause that would have locked in rates for 20 years, the addition of a periodic review mechanism allowing legislative adjustments every five years, and a new provision requiring annual reporting on employment and local content commitments.
Senator Jesse Kiehl (D-Juneau), who co-chairs the committee, defended the changes as necessary to protect state interests. “We’re not opposing development—we’re ensuring Alaskans benefit fairly,” Kiehl said during the session. “The original bill gave away too much leverage. This version maintains incentives even as preserving legislative oversight.”
The Alaska LNG project, a collaboration between the state, ExxonMobil, BP, and ConocoPhillips, has been in various stages of planning for over a decade. Supporters argue it could generate thousands of jobs and billions in revenue, while critics cite environmental concerns and question its economic viability in a shifting global energy market.
According to the Alaska Department of Natural Resources, the project would require an estimated $38.7 billion in capital investment to construct the pipeline from Prudhoe Bay to a marine terminal in Nikiski, followed by liquefaction and export facilities. The state has already invested over $500 million in preliminary work, including permits, engineering studies, and right-of-way clearance.
Industry representatives expressed concern that the revised tax structure could deter participation. Kara Moriarty, president of the Alaska Oil and Gas Association, said the amendments introduce “unacceptable fiscal volatility” for a project requiring decades-long commitments. “Investors demand to know the rules won’t change midstream,” she stated. “This version makes that impossible to guarantee.”
Environmental groups, however, welcomed the increased scrutiny. The Alaska Center for the Environment praised the committee for adding transparency measures. “Given the project’s scale and potential impacts on coastal ecosystems and climate goals, Alaskans deserve ongoing accountability,” said spokesperson Lindsey Hajduk.
The bill now advances to the Senate Finance Committee for further review. If passed there, it would proceed to a full Senate vote before potentially reconciling with the House version. Dunleavy has not indicated whether he would veto the bill in its current form, but reiterated that the original version was carefully negotiated to balance state returns with investor confidence.
As Alaska continues to grapple with a structural budget deficit exacerbated by volatile oil prices, the outcome of this legislative battle could shape the state’s energy strategy for generations. Stakeholders on all sides agree that the LNG project remains one of the most consequential economic opportunities—and risks—facing the state today.
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