Alaska has been chasing a natural gas pipeline for half a century. After decades of false starts, political promises, and failed deals, the massive project that would deliver North Slope natural gas both to Alaskans and global markets is finally within reach.
That’s why everyone needs to pay attention when Senator Bill Wielechowski (D – Anchorage) insists the Senate’s gasline tax bill won’t jeopardize the project, even as the only company looking to invest tens of billions in building the pipeline says otherwise. According to Glenfarne, “many of the amendments passed in the Senate bill…if put into law, would have resulted in an unworkable, unfinanceable, and uncompetitive project.”
One of them explains what it takes to finance a pipeline. It isn’t the politician.
Watching state and federal lawmakers dress up bad tax policy as fairness is nothing new, however, this one is a standout. The original bill was a focused piece of legislation with one purpose: to get the 800-mile pipeline built. The Senate has now turned it into a tax bill with a gasline attached. Using it as a vehicle for all of their tax policy fights, they added a new income tax on “pass-through” businesses: the S corporations, LLCs, and partnerships that, by design, pay tax through their owners, not at the company level.
A pass-through has no company-level income for the state to reach. To tax it anyway, the state must invent income that the business never reports. Never one to pass up an opportunity to drive away investment, Wielechowski plainly stated he would tax S corps “as regular C corporations,” the very thing they are not.
Wielechowski has long prioritized extracting more from industry, continuously trying to change the rules and move the goalposts. His approach repeatedly sends the same message to investors pouring billions into Alaska: the rules can change at any time.
This time, provisions were written on the Senate floor in the session’s closing hours, without the hearings a new tax deserves. And as drafted, the S corp amendment extends beyond the majors to sole proprietors and family partnerships. Anyone who invests in Alaska and creates jobs, opportunity, and energy, whether a corporation or an individual, should be valued, not punished.
Which brings us to the Senator’s central claim: that Glenfarne can build the pipeline anyway, tax and all, because it already holds its permits. A permit is not financing. A company can have every approval on the wall and still walk when the math doesn’t add up, even after the money is committed.
Glenfarne says the bill with this tax can’t be financed; the governor’s office says it will hurt the project’s ability to secure financing. When the company that would build it and the administration that wants it built both say the provision breaks the deal, one senator insisting otherwise isn’t reassurance. It’s a gamble Alaska can’t afford to lose.
Senator Wielechowski warns that Alaska can’t keep giving revenue away. But Alaska won’t close a $2 billion deficit by taxing away the one project big enough to help close it. His headline number, $466 million a year, assumes a finished, fully loaded pipeline earning $5 billion a year. But he is missing a key point: you can’t tax what doesn’t get built.
Senator Wielechowski has made this tax his own. He is its leading champion, and he’s said the bill needs it to clear the Senate. So, he owns what comes next. If his poison pill kills the pipeline, if Southcentral runs short of gas and Alaska walks away from its best shot in 50 years, Bill Wielechowski’s legacy will be that of the senator who taxed the gasline to death.
And while the project is important for Alaska, it’s more than just a pipeline. It’s a test of whether America still has the will to build. A country that lets an energy project die over an unworkable tax forfeits energy, jobs, confidence, and another generation of opportunity. Alaska is finally standing at the threshold. Let’s get it done.
This piece was originally published in The Alaska Landmine and can be viewed in full here.