Glenfarne's pipeline emissions

There’s another way of interpreting the gas pipeline presentation to legislators last month by GaffneyCline, the consulting company owned by a firm that is now working with Glenfarne on the pipeline project.

The GaffneyCline research is not at all favorable to Glenfarne’s pipeline plans.

I wrote here recently about the inherent GaffneyCline conflict of interest that should have been acknowledged in public by GaffneyCline and Glenfarne. The consulting company is owned by Baker Hughes, which is now working with Glenfarne.

But in giving this more thought, I must say there is real instructional value in the GaffneyCline research, regardless of the conflict of interest.

I say this because GaffneyCline did not paint a pretty picture for Glenfarne.

Taken in total, the GaffneyCline information provided to the Legislature presents a damming portrait of claims by Glenfarne and Alaska politicians that a final investment decision will be made any day. There are so many unknowns that no one can predict what the cost of the gas will be for investors.

Sen. Dan Sullivan claimed to Fox News on April 10 that “We’re talking about laying pipe as early as the end of this year, the beginning of next year.”

That same week Gov. Mike Dunleavy claimed to Fox Business that “we’ll be making some final decision investments, at least Glenfarne will, which is the outfit that is the private investor and lead in the project. Probably by August, September at the very latest, but it’s looking really good.”

Dunleavy is now saying the big day will arrive in January.

“The next step in January is a final investment decision on the pipe, and at that point they will order pipe, and that the pipe should be in Alaska by next August, which begins the actual construction of the project,” Dunleavy told a Korean news outlet.

All of this seems to depend on the assumption by Alaska political leaders that Donald Trump will be able to order the Koreans, Japanese and others to put up tens of billions for the pipeline without knowing the cost of the gas. Trump and his cabinet continue to claim that Asian nations will give hundreds of billions to Trump, who will decide what he wants to do with it.

Until the tens of billions change hands, this is nothing but a fairy tale promoted by the Trump cult.

Trump is the biggest obstacle to “fiscal certainty,” the elusive dream that investors say will be needed for the giant project. The Koreans and Japanese want to keep on his good side, but they are savvy investors.

Meanwhile, a genuine investment decision to build or not build the pipeline can’t happen until Dunleavy and the Legislature settle some major issues, such as whether a tax freeze that would last for decades is warranted and whether it is allowed under the Alaska Constitution.

The legislative hearing November 19 was noteworthy in part because the consultants touched on items that have yet to be dealt with by the governor and Legislature.

Two of the biggest issues are how the state property tax will be dealt with and what arrangements will be made to offer fiscal certainty for the pipeline investors for decades. A long-term tax freeze would be likely to face a court challenge on the grounds that one Legislature cannot dictate terms to another.

The state property tax and a tax freeze are under state control. Whatever is decided will have a major bearing on the ultimate cost of the gas from the pipeline. Investors will not risk tens of billions without knowing these details.

The distribution of the state property tax is a complicated question because as it stands now, Kenai and the North Slope would be big winners, while the rest of the state would see little direct revenue, if any.

Dunleavy should have had specific proposals out for public review long before now and been out trying to build a consensus about what must take place. A good governor is first and foremost a good salesman. Dunleavy is no salesman.

With a leadership vacuum in the executive branch, the Legislature may need a couple of years and a new governor to sort it all out.

With Dunleavy doing nothing to create consensus, leading legislators are left having to ask Glenfarne if the Legislature will need to do something about the pipeline in 2026.

Yes, according to Adam Prestidge, the president of Glenfarne Alaska.

“I know that AGDC is working with the governor on a task force with various borough mayors to address property tax solutions that may be needed here on this project,” Prestidge said. “And so I do anticipate that on property tax in particular there will be further engagement with the Legislature.”

If Glenfarne and Dunleavy tell the Legislature next year that it must act immediately or else, there will be plenty of resistance, and rightly so, to acting in haste on policies that could last for decades.

Glenfarne is downplaying the political battle about property taxes and freezing taxes for decades. These are old issues that have never been resolved and the company doesn’t know much about Alaska politics.

House Speaker Bryce Edgmon, who understands the complexity, predicted that the 2026 legislative session will be dominated by gas pipeline issues.

The lack of leadership from Dunleavy increases the chances that nothing will happen quickly, postponing any real decisions on building the pipeline, perhaps for years.

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