The North Slope gasline concept has persisted for over 60 years, attracting bottomless support and confidence from Alaskans – and apparently bottomless public financing from our elected leaders – in spite of producing absolutely no material progress. The gasline may be a bad project, but it’s a powerful meme.
Alaska’s history of failed North Slope gasline proposals goes back to 1960, according to Capitol Crude: The Impact of Oil on Alaskan Politics by Lisa Weissler. Some were started, then dropped, by private industry. Others were state initiatives. Most, Weissler notes, “had no clear ending — interest either faded or the proposal evolved to meet changing economic or political conditions.” Old Alaska gasline projects never die. They just evolve into the next scam.
The latest acronyms in this roll call of would-of-beens are AGDC – the state-owned Alaska Gasline Development Corporation – and its project AKLNG, which entails building an 800-mile gas pipeline from the North Slope to a new liquefaction and export terminal in Nikiski. Since the legislature created AGDC in 2010, it’s sucked up about $600 million in state money, according to Sen. Bert Stedman of the Senate Finance Committee. With spending on other gasline projects since the late 2000s, Alaska has so far sunk around $1.1 billion into the effort, he estimated.
There are many billions still to burn for whoever truly commits to AKLNG. The project’s freshest cost estimate puts its price tag at $44 billion, without accounting for recent inflation, potential steel tariffs that could raise material costs by 25%, or requirements of a federal loan guarantee that may raise the price by even more. The gasline’s owners would recover their colossal investment, of course, by selling gas. There truly is a lot of gas on the North Slope. But there’s also a lot of gas elsewhere in the world that doesn’t need $44 billion to get to market, which explains why so many private partners have dropped the gasline over the years, and why the state has never signed on a committed gas buyer or real investor.
Why do gasline boosters think now is different? AIDEA, trying to convince legislators that now is in fact different, doesn’t bother sugarcoating it (slide 25): “We are now in a completely “transactional” trade world” where President Trump’s protection racket strategy of extorting American allies like Japan into bad investments like AKLNG is sure to succeed. AKLNG is drawing interest – at least in the reality-TV world of Trumpdom. Potential Asian buyers have dropped strategic statements about the gas line in press conferences and interviews. These have even less substance than the nonbinding letters of interest and memorandums of understanding that AGDC has been collecting from a similar set of “interested” partners for years. None of it indicates a real deal.
As legislators wrestle with a $171 million deficit (and a proposed next year’s budget with a $1.5 billion deficit) they must also decide whether public dollars should continue feeding this white elephant, whose expenses include the state’s highest-paid public employee, AGDC president Frank Richards. Richards made $488,000 in 2024 and about the same in 2023. To be fair, he gives excellent PowerPoint presentations.
The Senate Finance Committee will be taking public testimony on Wednesday and Thursday on whether to give AGDC roughly $60 million – consisting of an operating budget request for $5.7 million, a capital request for $4.2 million, and a shameless request for $50 million to pay Glenfarne, a would-be developer that AGDC calls a “partner” in AKLNG, but which doesn’t want to put any of its own money into it.
This year and last, legislators have finally started looking on AKLNG with well-earned skepticism. In last year’s state budget they trimmed 24% from AGDC’s operating budget and declined a $4.5 million capital request. Language in the passed budget bill also called for an independent review of the project to show it would have “a positive economic value to the state.” Seeking support for their budget request from then-Senator Click Bishop, AGDC’s governor-appointed board made a show of holding themselves accountable. If, they wrote in a letter to Bishop, by the end of 2024 “AGDC fails to secure funding for the entire project or for the initial pipeline phase of the project… we have instructed AGDC staff to initiate the work required to shut down and either sell Alaska LNG project assets or put them into storage if there is insufficient value realized for the State of Alaska.”
Now in late February 2025, neither of these things have happened — AGDC did not get the project funded, and the board has not started shutting it down. What they’ve produced instead are two new attempts at the illusion of progress: the Legislature’s requested independent review and a relationship with a developer called Glenfarne.
“Positive economic value”
The consultancy Wood Mackenzie wrote the economic review that the Legislature asked for. They showed that piped North Slope gas could cost Alaskans a smidge less than imported LNG, but plugged some obvious absurdities into their price model to get this conclusion. For instance, that 100% of Cook Inlet gas demand would be displaced by North Slope gas. And that the opportunity to buy $9-$13 North Slope gas would draw new industries such as data centers to Alaska – when those data centers could here buying Cook Inlet gas today for $8. Or that these prices could resurrect the former Agrium fertilizer plant in Nikiski, which shut down because of high prices when Cook Inlet gas cost $6-7. If Agrium could operate with $9-$13 gas, it would never have closed
Glenfarne
AGDC has recruited the developer Glenfarne for further engineering and cost analysis of the project. Glenfarne has two LNG export projects under development in Texas and Louisiana, neither of which has reached a final investment decision. AGDC has portrayed the Glenfarne agreement as a success in their elusive goal of bringing on a private partner and investor – but the reality is more like they’re paying Glenfarne $50 million to play the role of “private partner” on TV. AGDC made a deal to reimburse Glenfarne’s expenses up to $50 million if they decide not to invest in AKLNG. In December, the Alaska Industrial Development and Export Authority (AIDEA) voted to “backstop” AGDC’s $50 million guarantee with their own guarantee of the funds.
AIDEA has about $145 million in uncommitted cash, and their board chose unanimously to dedicate $50 million to AGDC’s backstop. Yet Gov. Mike Dunleavy introduced a supplemental budget bill to put the money back into AIDEA’s pocket from the state’s. AIDEA has since told Senate Finance that they’ll be withdrawing the fund request and using another mechanism for the backstop. As of publication on Feb. 26, no amendment to do so has been introduced.
An upside-down political calculation
Even as essential questions to AGDC go unanswered and plans get shakier, the Legislature at large has judged there to be less political risk in tossing the gasline a few million a year than in cutting off a project that many constituents still believe in. AGDC has always told them that a major turning point is just ahead. And its expenses aren’t that high, in the context of the overall state budget. Why shouldn’t legislators hedge their bets, even if they personally believe AKLNG is just as futile as ever?
Because not enough of their clear-eyed constituents have spoken up. Our elected officials have, as a body, formed the upside-down perception that continuing to fund a fraud project with Alaskans’ public money is the decision Alaskans want. Those of us who disagree haven’t said so in great enough numbers. We need to turn this political calculation the right way around.
Otherwise, the gasline zombie shambles on — too dumb to live, too hungry to die. Alaskans feed the zombie their brains, and our elected officials feed it our money. But they don’t have to. Let it finally end.