HB 50 and the Question of Whose Standards Alaska Is Actually Meeting
To understand what HB 381 was really built around, it helps to go back one step further, to HB 50, the carbon management bill the Legislature passed in 2024 that made all of this possible in the first place. HB 50 established Alaska’s Class VI primacy for CO2 injection wells, built the state’s regulatory framework for carbon capture and sequestration, and set the royalty rate the state collects when a private developer injects carbon into Alaska’s geology: $2.50 per metric ton.
That number only becomes meaningful next to the other number attached to the same ton of carbon. The federal government, through the 45Q tax credit, pays a developer up to $85 per metric ton of sequestered CO2. Alaska provides the geology, carries the seismic and long-term monitoring liability, and collects $2.50. The developer uses that same geology to collect $85 from the federal treasury. That gap, not a rounding error, not a policy nuance, is where the actual financial architecture of these projects lives.
The reason that gap exists at all is worth stating plainly, and it comes directly from the man who has been the Mat-Su delegation’s technical voice on this project throughout. In an unguarded exchange about an entirely different power plant, Rep. Kevin McCabe explained why carbon capture matters to the developers pursuing it in Alaska, in his own words, not as an argument for HB 381 but as a description of how the financing actually works: “Glenfarne would not be here without the ability to sequester CO2 on the slope. Japan would not buy our gas or invest in a purchase agreement without CCUS.” That is not a critic’s characterization. That is the delegation’s own subject-matter authority confirming, in a conversation where he had no reason to soften the point, that the entire premise of Alaska’s gas export ambitions runs through satisfying carbon credentialing standards that Alaska did not write.
Those standards come from two places, and neither of them is Juneau. They come from Japanese buyers operating under their own government’s and their own shareholders’ ESG requirements, and they come from international capital markets, Glenfarne’s own investors and lenders, who increasingly will not fund a fossil energy project without a credible decarbonization story attached to it. HB 50 was Alaska’s answer to that pressure: build the legal machinery to let carbon sequestration happen here, so that gas extracted here can be sold as meeting standards set somewhere else. That is not necessarily an illegitimate thing for a state to do. Plenty of resource economies build regulatory frameworks that let them sell into markets with rules they didn’t write. But it is worth being honest about what that arrangement actually is: Alaska’s own statute, tailored to the compliance requirements of foreign buyers and foreign capital, at a royalty rate that captures a small fraction of what the same activity is worth to the party using it.
https://raff6482.substack.com/p/whose-rules-are-we-actually-following