Glenfarn warns House committee version T of gas‑line tax would ‘stack’ levies, threaten project timing

The House Finance Committee on May 13 heard extended testimony on House Bill 381 — the oil and gas property and municipal tax package tied to the proposed Alaska LNG pipeline — and the committee spent most of the afternoon on competing technical and drafting questions about how the project would be taxed.

Adam Prestige, president of Glenfarn Alaska LNG, told the committee the company supports many features added by the House Resources Committee but raised “two or three” fundamental objections to version T of the committee substitute. The most consequential, he said, was a drafting arrangement in Section 16 that, in practice, could apply an alternative volumetric tax (AVT) across the project while also allowing boroughs to negotiate separate volumetric arrangements — “it stacks the tax on top of each other 3 times,” Prestige said, warning that the result would be economically unworkable.

Prestige contrasted that outcome with the governor’s earlier proposal, which he said envisioned a single AVT equivalent of roughly 6¢ per MMCF of throughput. “This more than doubles the tax burden,” he said of the 15¢ figure in version T, and he told the committee that higher AVT assumptions would make the project harder to finance and could delay the project’s final investment decision.

Committee staff (Calvin Zullo) and legislative counsel (Emily Nauman, Legislative Legal Services) discussed intent and drafting. Nauman said she read the bill as referring to one spur line but applying two different requirements to it — one as part of eligibility for AVT and another in a contingency section tied to AVT taking effect — and suggested the commissioner of revenue would have contract‑style authority to determine whether a spur line had been committed to.

Prestige also flagged other drafting details the company asked the committee to fix: (1) allow a force‑majeure extension for the construction‑commencement deadline in Section 16, (2) clarify municipal election and equity‑for‑tax provisions so they do not create multiple competing tax regimes, (3) consolidate duplicate Fairbanks spur‑line language into one clear statutory requirement, (4) clarify that the community impact fund is a single fund (not one $40 million deposit obligation per equity investor), and (5) extend a statutory sunset tied to the project from 2056 to 2060 to match the project’s anticipated contract and financing timelines.

Members asked for written clarification from House Resources staff about drafting intent and asked legislative legal to confirm statutory readings. Calvin Zullo, staff to the House Resources Committee, said those drafting choices flowed from task‑force work and recommended the committee seek a written statement of intent; Nauman’s on‑the‑record explanation was used to clarify at least one spur‑line concern.

Prestige said Glenfarn still intends to pursue the project and that a workable tax arrangement is a necessary condition for timely FID. The committee deferred the Department of Revenue’s longer technical presentation to a later meeting to allow further time for gas‑line discussion; members scheduled continued hearings and public testimony during the next days of the session.