Southcentral Alaska has a problem that cannot be wished away. The natural gas that heats our homes, powers our businesses, and keeps the lights on is getting harder to find. Cook Inlet production is declining, but demand is not. Unless we bring new gas to market, families and businesses are going to pay more for the energy they depend on every day. That is why the Alaska LNG Project matters. It is not just another pipeline. And it’s not just revenue. It is our best opportunity to bring known reserves of trillions of cubic feet of North Slope gas to Southcentral Alaska and keep energy reliable and affordable for decades to come.

That’s what makes the Senate’s version of HB 381 so concerning. In the middle of a bill meant to move the gasline forward, senators added a new tax on certain oil and gas companies. They call it closing the “S corporation loophole.” On its face, that sounds reasonable. Nobody likes loopholes, and most Alaskans believe large companies should pay their fair share. I understand that argument. The problem is that this amendment reaches much farther than it first appears, and it could raise energy costs while making a major gasline project harder to finance.

Here is what most people are not told. Most large companies are C corporations, which pay Alaska’s corporate income tax on profits earned here. Other businesses, including S corporations and many LLCs, are pass-through entities. Their profits are not taxed at the company level. Instead, they pass through to the owners, who report that income on their personal returns. Because Alaska has no personal income tax, the state collects nothing on that income.

Hilcorp, which now produces much of Cook Inlet’s oil and gas, is structured this way. Before it acquired BP’s Alaska assets, BP paid Alaska’s corporate income tax as a C corporation. After the sale, the structure changed, and so did the tax treatment. That is the issue lawmakers are trying to address.

There is nothing unreasonable about asking whether that is fair. Alaska has schools to fund, roads to maintain, troopers to support, and a budget that is already stretched thin. Reasonable people can disagree about how pass-through companies should contribute. My concern is not the question. It is the answer that has been written into this bill.

The Senate version of HB381 creates a new state income tax on pass-through oil and gas companies, with a top rate of 9.4 percent. Most people hear that and assume it only applies to a few large operators. It does not. The language reaches into the full chain of getting natural gas to market: producing it, processing it, moving it through pipelines, and delivering it to homes and power plants.

Anyone who has ever run a business knows what happens next. When government raises the cost of producing something people need, those costs do not disappear. Somebody pays them. In energy, that somebody is the customer. That’s why the Alaska Chamber, the Alaska Oil and Gas Association, and the Alaska Support Industry Alliance have all warned this proposal could raise energy costs for families and employers. It is not opposition to taxation. It’s an understanding of how costs move through a system.

Investors understand that same reality. The Alaska LNG Project will require tens of billions of dollars in private capital. Investors do not commit money of that scale when the rules are uncertain or changing in the middle of negotiations. Stability is not a preference. It’s a requirement. Changing Alaska’s tax structure during financing discussions introduces risk that does not need to exist. The project developer has already warned this amendment could make financing more difficult.

Investors do not write billion-dollar checks when the rules keep changing.

What makes this more concerning is how quickly it appeared. The amendment was added late in the process, with limited time for review. The Department of Revenue could not clearly estimate what it would raise because key details were still unresolved. Lawmakers were being asked to vote on a tax without clear answers on how it would function or what it would generate. And vote they did.

The language itself is also inconsistent. In one section it says individuals are not taxed. In another, it includes sole proprietorships, which are individuals operating a business. That is not a minor drafting issue. It’s a sign the policy was not fully worked through before being placed into law. That matters when billions in investment and Alaska’s energy future are on the line.

And it matters to Alaskans who just want to heat their homes.

One more point is worth remembering. The Alaska Constitution does not allow one Legislature to permanently give away the state’s power to tax. If lawmakers decide later that pass-through companies should be taxed differently, they will still have that authority after the gasline is built and gas is flowing to Southcentral Alaska. Nothing about this decision is permanent.

That is why the priority should be clear. First, build the pipeline. First, make sure Alaska families have reliable, affordable natural gas for decades to come. After that, we can have a serious debate about whether the tax code should change. Waiting does not take away the state’s options. Getting this wrong could take away the project.

Supporters of the amendment say the language can be fixed and that a project this important will survive a new tax. That may be true. But when the stakes are this high, “maybe” is not enough. Before Alaska changes the rules on a project of this scale, lawmakers should be able to show that it will not raise energy costs or discourage investment. I have not seen that case made. Until I do, the wiser course is simple: build the gasline, secure Alaska’s energy future, and settle the tax debate afterward.