Alaska Policy Commentary  ·  June 7, 2026

Sen. Myers Identified the Exact Problem With Alaska LNG — Then Drew the Wrong Conclusion

His own analysis shows a 30% cost overrun makes the project unprofitable, that Glenfarne has no balance sheet to absorb it, that Alaskan customers are contractually protected — and that the contract protecting them doesn't exist yet. Alaska already gave away its collateral. HB 381 asks it to give away the rest.

By Tom Lamb  ·  HB 381 · Special Session 2026

Sen. Robert Myers published a thoughtful piece today distinguishing Alaska LNG from the Trans-Alaska Pipeline. He is right that the comparison is misleading. He is right that Glenfarne has a different business model than an oil major. He is right that gas is a lower-value commodity than oil and that the window of opportunity, while real, is not the same as the 1970s oil emergency.

He is also right about something he apparently did not intend to prove: that the financial structure being built around Alaska LNG is far more fragile than HB 381's proponents are acknowledging — and that the protections he cites for Alaskan ratepayers do not yet exist.

"Sen. Myers built the most precise description of the project's financial vulnerability published by any Alaska legislator. He just didn't follow it to its conclusion."

The 30% Admission and What It Actually Means

Myers writes that Department of Revenue modeling shows more than a 30% cost increase will make the project unprofitable. This is the single most important number in the entire HB 381 debate — and it appeared in a pro-HB 381 article with almost no scrutiny of what it actually implies.

Run the math on Glenfarne's own figures, presented to the Senate Finance Committee on June 3:

The Profitability Cliff — By The Numbers

Glenfarne low-end estimate: $44.5 billion

30% overrun tolerance: $13.35 billion

Profitability cliff: $57.85 billion

Glenfarne high-end estimate: $54.5 billion — already 83% of the way to unprofitable on Glenfarne's own figures

Glenfarne's own uncertainty range: $10 billion — consuming 75% of the entire profitability buffer

Rapidan Energy Group independent estimate: $70+ billion — already $12+ billion past the profitability cliff Myers identified

Myers cites TAPS — originally quoted at $900 million, final cost $8 billion. He uses this to argue Glenfarne will be more cost-disciplined because it has no margin for error. That may be true. But the historical record of Arctic pipeline construction shows that cost discipline and cost reality are different things. The engineering complexity does not care about Glenfarne's business model.

If the Rapidan analysis is anywhere close to correct, the project is already past Myers' own profitability threshold — before a single shovel hits the ground. HB 381 cannot fix that. A tax concession cannot make a $70 billion project economically viable when the profitability cliff is $57.85 billion.

When Costs Overrun — Who Pays?

Myers correctly identifies that Glenfarne has no deep balance sheet. He correctly notes that infrastructure developers need to turn a profit quickly and cannot survive many up-front costs. He correctly states that oil companies had the balance sheets to absorb cost overruns because oil production was the profitable backstop.

Then he argues that costs can't be passed to Alaskan customers because of Glenfarne's contract with Enstar, and can't be passed to overseas customers because they'll find another buyer. He concludes that Glenfarne will therefore look at cost risk more carefully than TAPS builders did.

But this logic has a fatal gap. If costs can't go to Alaskan customers, can't go to overseas customers, and Glenfarne has no balance sheet to absorb them — where do cost overruns above the profitability cliff actually go?

Myers never answers this. The answer his own analysis produces is: they go to equity holders. And Alaska is an equity holder — with a 25% stake in 8 Star Alaska and an option to invest up to 25% of construction costs across all three subprojects after FID. On Glenfarne's own low-end estimate, 25% of construction costs is approximately $11 billion of state capital. At the Rapidan estimate, north of $17 billion.

Myers has described a cost overrun structure where the entity with no balance sheet builds the project, ratepayers are supposedly protected by contract, overseas customers won't absorb overruns, and the residual risk falls on equity. Alaska is the equity. Alaska has no protection in that structure that Myers does not acknowledge.

The Enstar Protection That Doesn't Exist Yet

Myers describes the Enstar contract as if it is an established protection for Alaskan ratepayers. It is not. As of today, Glenfarne and Enstar have signed a non-binding letter of intent — dependent on the negotiation of definitive agreements and approval by the Regulatory Commission of Alaska. The RCA has not approved it. The definitive agreements have not been negotiated. The protection Myers cites does not yet legally exist.

But the deeper problem is structural. Enstar is a regulated utility operating under an RCA-guaranteed 11.6% return on investment — paid by ratepayers regardless of how much Enstar pays for gas. That regulatory structure means that even if a cost-protection agreement is eventually executed, the RCA rate case process is the ultimate backstop. If Enstar's costs rise beyond what the contract anticipated, it goes back to the RCA. The RCA approves rate increases. Ratepayers pay.

This is not hypothetical. Enstar filed a rate case in May 2025 requesting a 5.77% increase — approximately $8.95 more per month per residential customer — citing rising costs. Enstar has already sued Hilcorp over a supply contract dispute, warning of a potential catastrophic gas shortage, with storage at half its target level heading into winter. This is a utility already under financial and operational strain, before Alaska LNG exists, before any cost overruns occur.

The Enstar Protection — What Myers Says vs. What the Record Shows

Myers says: Glenfarne has a contract with Enstar preventing cost increases from being passed to Alaskan customers.

Record shows: Glenfarne and Enstar have a non-binding letter of intent. No definitive agreement. No RCA approval. No legal protection in place.

Myers says: Costs can't be passed to Alaskan customers.

Record shows: Enstar operates under an RCA-guaranteed 11.6% return paid by ratepayers regardless of gas cost. It is already raising rates and suing suppliers. The RCA rate case process is the ultimate cost pass-through mechanism — and it has never failed to allow Enstar to recover its costs from ratepayers eventually.

Alaska Already Gave Away Its Collateral

Myers correctly identifies the core problem with Glenfarne versus oil majors: oil majors have assets — leases, ownership stakes — that can be used as collateral. Developers don't have assets until the pipeline is built.

What Myers does not address is that Alaska already solved Glenfarne's collateral problem — by giving Glenfarne the assets.

In March 2025, AGDC transferred 75% of 8 Star Alaska to Glenfarne. That transfer included every permit, right-of-way, engineering study, and planning document accumulated through nearly $1 billion in public investment since 2014. It included the sole federally permitted LNG export facility on the U.S. Pacific Coast — a permit that took a decade to obtain and cannot be replicated. It included access to $30 billion in potential DOE federal loan guarantees that attach to the project.

In exchange, Glenfarne committed to spend approximately $150 million on pre-FID development costs. On a project valued at $44.5–$54.5 billion by Glenfarne's own estimates, $150 million is three-tenths of one percent of the low-end cost.

Alaska gave Glenfarne the collateral it needed. The assets that oil majors bring to the table — the leases, the ownership stakes, the balance sheet backing — were substituted by Alaska's own publicly funded project assets, transferred to a private New York company for a development commitment worth 0.3% of project cost.

"Myers says developers don't have assets until the pipeline is built. Alaska solved that problem by giving Glenfarne the assets. The collateral is gone. HB 381 asks Alaska to give up the tax revenue too."

And the operating agreements governing what Glenfarne can do with those assets — including whether it can pledge its 75% interest as collateral for third-party financing — are contained in a secret agreement the Legislature cannot see. Senator Giessel demanded disclosure. AGDC cited confidentiality requiring Glenfarne's approval. The Legislature voting on HB 381 does not know whether the collateral Alaska provided has already been pledged to outside lenders.

HB 381 Is the Last Concession in a Series Alaska Has Already Made

Myers frames HB 381 as a necessary tax adjustment for a new type of project with a different business model. That framing misses where Alaska actually stands in the sequence of concessions it has already made.

The Concession Sequence — What Alaska Has Already Given

Concession 1: 75% of all project assets — permits, rights-of-way, engineering, a decade of public investment — transferred for $150 million in development spending. Collateral provided.

Concession 2: 25% equity stake in a Delaware LLC whose governance the Legislature cannot see, with no disclosed operating agreements.

Concession 3: Option to invest up to 25% of construction costs after FID — potentially $11–17 billion of state capital against unvalidated costs.

Concession 4 (proposed — HB 381): Permanent elimination of property tax authority. Fixed volumetric rate set before costs are known. No recapture. No clawback. No exit.

Proposed addition (GaffneyCline recommendation): Stabilization clause — if future tax increases or regulatory changes hurt investor profits, taxpayers cover the losses. Open-ended. No ceiling.

Each individual concession seems manageable in isolation. Together they represent an uncapped, unvalidated, permanently committed exposure of public resources to a private project whose costs sit within striking distance of Myers' own profitability cliff — and whose developer has a corporate equity base of $48.5 million against a project it values at $44.5 billion.

What Myers Gets Right — And What Follows From It

Sen. Myers is correct that Alaska faces a genuine energy crisis. Southcentral's Cook Inlet gas supply is declining. Enstar is already suing suppliers and warning of catastrophic shortages. The urgency of Phase 1 — the pipeline to deliver North Slope gas to Alaskans — is real and serious.

But the energy security argument for Phase 1 does not require — and does not justify — permanently eliminating property tax authority on the export terminal that serves Asian markets. HB 381 treats all three subprojects identically. The local energy crisis is an argument for building the pipeline. It is not an argument for a blank check on the export terminal whose economics Myers' own analysis shows are already dangerously close to the profitability cliff.

Myers ends with a warning about generals fighting the last war. It is a fair warning — but it applies to both sides of this debate. Alaska should not reflexively apply TAPS standards to a different project. It also should not reflexively surrender its tax authority and its assets to any developer who arrives with a promising slide deck, simply because previous gas line efforts failed.

The right lesson from the last war is not to give away everything Alaska has before the new one starts. It is to negotiate from the strength of what Alaska actually holds — the only federally permitted Pacific Coast LNG export facility in existence, in a world where Asian buyers are desperate for non-Russian supply — rather than from the weakness of decades of failed attempts that no longer define Alaska's negotiating position.

Alaska gave away its collateral. HB 381 asks it to give away its tax revenue too. At some point, a senator who correctly identifies the financial fragility of this project needs to ask: what exactly does Alaska get to keep?

Tom Lamb  ·  June 7, 2026  ·  Alaska Policy Commentary