Listening to the Senate  debate about how to improve Alaska’s economy with a gas pipeline—the only major economic development project actually on the table right now—you might think our state has stumbled onto a brand-new renewable resource: misinformation. It appears to be available in unlimited quantities, requires no permits, and regenerates faster than anyone can fact-check it. By the time one incorrect claim is corrected, three more have already come online and reached full production. If misinformation were an export commodity, some Alaska Senators would be setting production records.

A big shout out to Representative Kevin McCabe for providing the following context to some of the misinformation from last Friday’s Senate floor session: 

Why the “$5 Billion Profit” Claim is Misleading

• The $5 billion figure is not developer profit.
  • The number comes from the Alaska Department of Revenue model and represents projected cash flow from the entire pipeline system, not profit earned by a private company.
• Alaska owns 25% of the project.
  • Through the Alaska Gasline Development Corporation (AGDC), Alaska holds a 25% ownership stake.
  • Approximately one-quarter of any project returns flow directly to Alaska.
  • Money earned by Alaska as an owner is not money being “taken from Alaskans.”
• The claim ignores the enormous investment required.
  • The Alaska LNG project is estimated to cost roughly $46 billion.
  • Investors must commit capital for years before seeing returns.
  • The state’s model assumes about a 10% return on investment—an expected return for a project of this size and risk, not an excessive windfall.
• Without investors, there is no pipeline.
  • If investors cannot earn a reasonable return, the project will not be built.
  • Without the project, North Slope gas remains stranded and generates no economic value.
• The numbers are long-term projections, not annual cash payments today.
  • The Department of Revenue model extends through 2062.
  • The largest projected revenues occur decades into the future after the project reaches full operation.
  • Future-dollar projections can sound much larger when inflation and timing are ignored.
• The claim overlooks what Alaska receives.
  • State analysis projects approximately $22 billion to $30 billion in revenue to Alaska over the life of the project.
  • Additional revenues are projected for local governments.
  • Alaska also benefits through ownership returns, royalties, production taxes, and economic activity.
• The analysis ignores energy benefits for Alaskans.
  • The project would provide long-term access to Alaska gas for Alaska consumers.
  • Increased gas supply is expected to improve energy security and affordability.
• The claim ignores jobs and economic growth.
  • Construction and operation of the project would create thousands of jobs.
  • The project would generate economic activity across multiple sectors and communities.
• Higher pipeline taxes ultimately affect consumers.
  • Pipeline property taxes become part of the cost of delivering gas.
  • Those costs are generally reflected in the price consumers pay.
  • State analysis suggests proposed tax changes could reduce in-state gas costs by roughly 9%.
• The slogan focuses on one revenue stream while ignoring the full picture.
  • Property taxes are only one component of Alaska’s overall benefits.
  • The project’s economic value includes ownership returns, taxes, royalties, jobs, lower energy costs, and broader economic activity.

Bottom Line

• The “$5 billion profit” talking point confuses total project cash flow with private profit.
• It ignores Alaska’s 25% ownership stake.
• It overlooks billions in projected state and local revenues.
• It disregards lower energy costs, jobs, and economic benefits.
• Most importantly, none of these benefits exist unless the project is built.