Consultants tell Alaska House committee the proposed Alaska LNG project could create multibillion-dollar revenues; lawmakers warned about taxes, tariffs and the

Gaffney & Klein consultants Nicholas Fulford and Andrew Duncan presented an interim analysis of the Alaska LNG project to the Alaska House Resources Committee on Jan. 21, stressing that the briefing is agenda-setting and that the figures they showed were illustrative rather than final.

"For the record, my name is Nicholas Fulford," Fulford said, introducing the firm and its safeguards, and he told the committee that although Baker Hughes recently announced an agreement with Glenfarn, the Gaffney Klein team preparing the report had not been involved with those corporate discussions and conducted the study independently. "We affirm that the preparation of this report has been conducted independently and without input or influence from other business units," he said.

Fulford illustrated scale by using an order-of-magnitude example: delivered gas to Asia of about 1,000,000,000 MMBtu per year. "If you use a round number of $10 an MMBtu," he said, "that gives you about $10,000,000,000 per annum revenue for the project as a whole." He repeated that the numbers were illustrative and dependent on many assumptions the committee has not yet received from the project sponsor.

A central legislative issue identified by the consultants was property tax. Using a notional $50 billion capital cost, Fulford said the initial property-tax burden could be around $1,000,000,000 in year one and that different ways of presenting depreciation and cash flows change present-value outcomes materially. He described fiscal-stability agreements or other contractual protections as common investor requests and said lenders and underwriters will be "laser focused" on fiscal stability.

Committee members asked for practical tools: Representative Prox requested an Excel model for scenario analysis; Fulford said a high-level spreadsheet could be shared quickly for internal scenario planning, though a full open-book economic model (an OBEM) would be more detailed and is typically used in joint projects.

Lawmakers also pressed on local impacts. Representatives raised questions about whether in-state gas delivered by phase 1 would be more affordable than current Cook Inlet supply and how a pipeline tariff might be set if the line served South Central and Interior customers. Fulford said those tariff and regulatory issues are complex, could require review by the Regulatory Commission of Alaska and other statutory processes, and would affect what Alaskans would ultimately pay for energy.

The consultants recommended that the legislature prepare to scrutinize capital cost estimates, EPC contract terms, transfer pricing, and the commercial framework that allocates gas between domestic and export uses. They also flagged carbon-capture and sequestration as a major capital item and noted an existing federal subsidy of about $85 per ton for CO2 — a factor that can change project economics.

No vote or formal committee action was taken. Co-chair Representative Freer closed the hearing and asked members to submit follow-up questions by email; the committee scheduled a follow-up meeting for Jan. 23 to hear production updates from the Department of Natural Resources.