The newly signed tax, spending and immigration bill seems likely to complicate efforts to resolve the natural gas crisis in Southcentral Alaska because it quashes Biden-era tax credits that supported wind and solar projects, people familiar with the state's energy industry say.

The One Big Beautiful Bill Act also could boost oil and gas development in the state, though it will be years before those benefits could pan out, they say.

With more lease sales on federal land and eased permitting requirements, the law opens the door for potential investment from the oil and gas industry, they say.

But whether those companies move through the door is another question because of the enormous cost of development in remote areas of Alaska.

"The bill solves the access issue of oil and gas development, but the economics still remain challenged," said Brad Keithley, a former oil and gas attorney and longtime industry observer in Alaska.

He said the bill moves the needle about 3 points on future oil and gas production in Alaska, out of 10.

Sullivan: A 'giant home run'

President Donald Trump signed the bill into law on July 4, extending tax cuts implemented in 2017 and taking unprecedented steps to overhaul the federal government.

The bill, which was aggressively opposed by Democratic lawmakers, has faced sharp criticism for benefiting the wealthy while making massive cuts to social safety net programs, including Medicaid and food assistance.

Alaska-favorable provisions in the law that the state's all-Republican congressional delegation fought to include are meant to blunt those impacts in the state.

The Alaska perks also helped win a key vote from U.S. Sen. Lisa Murkowski. Murkowski was unavailable for an interview for this story. U.S. Rep. Nick Begich's office did not respond to requests for an interview.

Alaska's congressional delegation has celebrated several aspects of the bill, including that it will boost Coast Guard spending by billions of dollars for polar ships and provide $300 million to homeport an icebreaker in Juneau.

The delegation also has touted its support for resource development in Alaska.

An important Alaska-only provision in the law provides a 40% boost in the state's share of any future oil royalties from key federal lands such as the Arctic National Wildlife Refuge on the North Slope.

But the new 70-30 split favoring Alaska doesn't go into effect for eight years.

And it faces potential hurdles that could reduce its benefits, including in the Arctic refuge, where the potential for development has led to decades of controversy and where major oil and gas companies so far have shown no interest in acquiring leases.

Still, pro-development Alaskans say the new law will help the state capitalize on its oil and gas resources.

It creates more opportunities for companies to lease land in the Arctic refuge and the National Petroleum Reserve-Alaska, also on the North Slope and home to ConocoPhillips' giant Willow oil discovery.

Randy Ruaro, head of a state development agency that holds oil leases in the Arctic refuge's coastal plain, said the larger revenue split for Alaska could be worth more than $200 million annually from oil production there.

The Alaska Industrial Development and Export Authority intends to conduct seismic exploration this winter, Ruaro said. That will provide the first modern look at oil potential in the refuge, which federal geologists say contains several billion barrels of oil, based on 1980s-era seismic data.

"It's extremely helpful with developing ANWR," Ruaro said.

The new law requires oil and gas lease sales in the Arctic refuge and the National Petroleum Reserve-Alaska for several years, extending well past the current presidential administration, U.S. Sen. Dan Sullivan said in an interview Wednesday.

The law also calls for oil activity in ANWR and in the petroleum reserve to fall under rules established in the Trump administration instead of more strict guidelines established in the Biden era, he said.

Notably, it also will allow project developers to pay an "opt-in fee" to expedite environmental reviews for development, he said.

The new rules will speed up development and give companies economic and political stability that will support their investments, he said.

"This is a giant home run for us, and I think it's going to create thousands of jobs and huge additional revenues for the state of Alaska," Sullivan said.

The larger royalty share for Alaska will also apply to development in the petroleum reserve on Alaska's North Slope, a hot oil prospect, Sullivan said.

But experts including Keithley point out that under the law, royalties from the petroleum reserve are directed to a small number of North Slope communities.

"It's not going to be going to the state general fund," Keithley said.

Jenny Hyde, federal infrastructure coordinator for The Alaska Center, said that the opt-in fees that allow expedited reviews will hurt public input and, ultimately, the environment.

It comes atop other portions of the law that are meant to ease resource development, including for coal and mining, she said.

"This bill is a disaster for Alaska and the environmental community," she said.

A 'big no-show' for Cook Inlet natural gas?

The new law, with its focus on ending tax credits for solar and wind projects, adds to uncertainty about how Southcentral Alaska will solve the projected shortage of natural gas from Cook Inlet that for decades has heated and powered homes and buildings in the Anchorage region.

The law calls for at least six leases sales by 2032 in Cook Inlet's federal waters. But the area for many years has drawn little to no interest from exploration companies, leading at times to canceled sales.

Begich, in a recent opinion piece, said the new law "unlocks stranded gas in Cook Inlet."

"Hell no," Keithley said in disagreement.

The law doesn't change the fact that Cook Inlet exploration is challenged by huge costs needed to find the gas and relatively little payoff because the Southcentral Alaska market is so small.

"The market on the gas side is so constrained. I just don't see people jumping all over that," Keithley said.

John Hendrix, who owns Furie, a gas producer in Cook Inlet, said he likes the bill in part because it could help "open up Alaska for development in a sensible, sustainable way."

But he doesn't see those advantages for Cook Inlet gas production, he said.

"I don't think anything in the Big, bad, Beautiful Bill helps Cook Inlet," he said, adding that he was using the word "bad" in a complimentary sense.

In fact, the bill could be a drawback for the Cook Inlet region, he said.

That's because it potentially creates new federal loan support for the $44 billion Alaska LNG project that, if built, would deliver North Slope gas to Southcentral Alaska, competing with locally produced gas, Hendrix said.

That loan support would fall under the Energy Dominance Financing program created in the bill, under the Department of Energy. It would be in addition to a $28 billion federal loan guarantee that already exists for the Alaska LNG project.

"I see it as more of a threat," Hendrix said of the bill's approach to Cook Inlet gas production.

Hendrix said he hopes the state wisely uses any extra money that it gets from future development to help ensure that the gas that exists in Cook Inlet can be produced.

Larry Persily, an oil and gas analyst and former Alaska deputy commissioner of revenue, said the bill doesn't change the difficult economics of development in Cook Inlet.

"This is a big no-show on Cook Inlet," Persily said of the bill.

Hurting wind and solar, but supporting hydropower

The new law seeks to quickly eliminate tax credits for wind and solar projects that were approved in the 2022 Inflation Reduction Act passed under former President Joe Biden, without support from Republicans.

It protects the tax credits for hydropower, potentially creating new opportunities there, however.

The new limits for wind and solar could affect a variety of potential projects in Alaska, including two major wind projects that, if built, could together cut 12% of the demand for natural gas along the Railbelt.

Those projects, Shovel Creek Wind outside Fairbanks and Little Mount Susitna Wind northwest of Anchorage across Cook Inlet, remain in the works, said Matt Perkins, co-founder of Alaska Renewables, a company working on the projects.

"We are carefully evaluating the recent legislative changes and executive orders regarding renewable energy projects," he said in a prepared statement. "While these developments introduce new complexities, we remain committed to advancing energy initiatives for Alaska."

"We will provide updates as we gain more clarity on the specific implications for our projects," he said.

In the lead-up to the bill's passage, Murkowski said she negotiated for some credits not to be terminated for 12 months, potentially salvaging some Alaska solar and wind projects that faced a higher chance of elimination under an earlier House proposal.

But even then, the tax credit window shortens the original timeline for the tax credit by several years.

The shorter time frame means electric utilities in Alaska will need to quickly reach power purchase agreements with project developers, so they can meet construction-related requirements for the tax credit by next July 4, said Chris Rose, executive director of the Renewable Energy Alaska Project, which works to increase renewable energy use in Alaska.

"It definitely reduces the options that Railbelt utilities are going to have over the next several years to decrease their heavy dependence on natural gas to generate electricity," Rose said of the bill. "On the other hand, it's also now putting a very strict deadline on those utilities to make a decision."

A spokesperson with the largest electric utility in Alaska said this past week that the utility is reviewing the bill's provisions.

"Our goals for adding renewable projects to our energy mix remain the same," said Julie Hasquet, a spokesperson with Anchorage-based Chugach Electric Association.

"However, without federal support, it's likely costs will increase," Hasquet said. "But we will continue to pursue projects, evaluating the economics and the impact on rates and reliability."

Doug Tansy, business manager with the International Brotherhood of Electrical Workers Local 1547 in Alaska, called the bill "a serious threat" to the renewable energy sector and to its jobs, in a statement from unions in Alaska that called the bill "disastrous."

"These are highly skilled professions that really bring a good quality of life to our community," Tansy said in a recent interview.

Tansy said that solar and wind power provides energy diversity that's important in Alaska, especially with demand for electricity growing.

"We need an all-of-the-above solution," he said. "And now we're taking some of that away."

On the other hand, the bill could produce new jobs for electrical workers if it can lead to more oil and gas development in Alaska, he said.

The bill retains tax credits for several years for hydropower, which provides extremely low-cost power over time, said Curtis Thayer, head of the Alaska Energy Authority.

The tax credits could boost opportunities for hydropower prospects in Southcentral Alaska, he said.

Those include the Susitna-Watana Hydroelectric Project on the Susitna River, he said.

"Susitna-Watana, even though it's kind of been put on the shelf," could produce enough electricity to meet well over half of the Railbelt's electrical needs, he said.

©2025 Anchorage Daily News. Visit at adn.com. Distributed by Tribune Content Agency, LLC.