The Alaska Senate Resources Committee heard sharply divided testimony Tuesday on a proposed tax structure for the Alaska LNG project that could determine whether the state collects $1 billion annually in property taxes or grants massive tax breaks to advance the $46 billion pipeline.

The committee substitute proposes a volumetric tax structure with three components: 15 cents per thousand cubic feet on the pipeline, 15 cents on the gas treatment plant, and 25 cents on the LNG facility, totaling 55 cents per MCF. That stands in stark contrast to Governor Mike Dunleavy's original 6-cent proposal, which he raised to 10 cents during a Monday press conference.

Adam Prestidge, president of Glenfarne Alaska LNG, told the committee the 55-cent combined tax would be "very burdensome for the project and potentially prohibitively so" for reaching a final investment decision this year. The tax would require "real reconsideration at the drawing board of how the project is structured and taken forward," he said.

But Senator Bill Wielechowski pushed back hard on the project developers' refusal to disclose updated cost estimates. "I'm not going to vote on a bill that's going to take away $1 billion in potential future taxes and revenue from communities across Alaska without having firm numbers," Wielechowski said.

The Anchorage Democrat calculated that under the governor's plan, the state and municipalities would lose roughly $1 billion per year in property taxes if the project costs $57 billion. In exchange, the average Anchorage household would save about $55 annually on natural gas bills, a 43-cent per MCF reduction applied to typical consumption of 128 MCF per year, according to figures Wielechowski obtained from Enstar.

"The average family of four is giving up $2,000 of state money, just state money, to get $55 in cost savings," Wielechowski said. "That's not a good deal."

Prestidge defended the confidentiality around project costs. Glenfarne is in late-stage negotiations with contractors, gas suppliers, and LNG buyers, he said. "Disclosing our cost estimates puts the project at a competitive disadvantage in each of those negotiations." The company has offered to share numbers in executive session under nondisclosure agreements, but lawmakers rejected that approach as preventing them from explaining their votes to constituents.

Frank Richards, president of the Alaska Gas Line Development Corporation, confirmed the project's three main components cost roughly $10 to $11 billion for the gas treatment plant, $16 billion for the pipeline, and $20 billion for the LNG facility, totaling about $46 billion before recent inflation adjustments. But he deferred to Glenfarne on updated figures from a December engineering study.