Borough to Discuss Pipeline and Potential Revenue

Alaska’s proposed 806-mile natural gas pipeline will follow the Parks Highway for a large portion of its run. With 180 miles traversing through the Mat-Su Borough, the pipeline will stay on the west side of the Parks Highway and end at Beluga Point. There are five jurisdictions along the pipeline corridor and the Borough Assembly is now considering what they’ll ask for in terms of revenue.

According to Borough Manager Mike Brown, the State’s current tax rate would make the project economically unfeasible at about $28 million just for the Borough annually. He says the proposed payment in lieu of tax, or PILT, would drop that to $3 to $4 million annually for the Borough. Though no revenue structure has been established yet, a proposed resolution uses the PILT as the starting point for Assembly discussions.

Phase 1 of the pipeline project would be completed in 2028 and would provide gas for Alaska’s use. Phase 2 will ramp up production for export. Expectations are that the costs for that gas to Alaskans will drop significantly when Phase 2 begins.

The approved pipeline route avoids most population centers in the Borough, except for Trapper Creek. According to the map, the pipeline would cross Petersville Road near its junction with Parks Highway, potentially impacting residents on both sides of the road during construction. Most of the pipeline will be buried, except where it crosses a fault line, according to Brown. The pipeline could potentially impact the Trapper Creek Road Service Area.

The Borough Assembly is expected to discuss the proposed resolution at their February 17 meeting.