AIDEA sticks to low-ball Ambler road guess—$850 million

The best reporting so far on the Trump administration move to push ANWR oil development and the Ambler road project is from Lois Parshley, writing for the website Grist.

Here is her excellent account of where things stand.

Regarding the 211-mile Ambler road and how it will be paid for, all we know is that it will cost someone other than the mining promoters a great deal of money.

As Parshley writes:

AIDEA has, for example, proposed financing the private Ambler road through Gates of the Arctic National Park with bonds repaid by tolls, a plan critics call unrealistic, given the cost could hit $2 billion. “It’s hugely problematic for the state to issue bonds with no viable plan for repayment,” Bostrom said. “That’s not a good investment decision.” 

But Ruaro wrote that is only one of several options, and that he is “confident the mines . . . have billions of dollars in minerals needed by the nation.” He also said AIDEA now estimates the cost at $500 to $850 million, and said the road can be built in phases. 

Given what we have just seen with inflation pushing up the cost of the Willow project to $9 billion, AIDEA needs to revise its guesswork on how much the road would cost.

A 2024 guess from the BLM said the road could be built for $672 million, a figure that is already impractical.

ConocoPhillips says the Willow increase is “primarily due to higher general labor and equipment inflation and increased inflation on North Slope construction.”

The difference between the Ambler road guess and the Willow guess is that the latter project is under construction and about 50 percent finished, while the Ambler road is still in the talking stage.

In a third-quarter earnings call, ConocoPhillips Vice President Kirk Johnson said that some of the inflation is due to conditions in the Alaska construction business.

“And it's really been driven by the fact that we've incurred more overlap of the peak construction seasons between our project and other projects ongoing in Alaska than we had originally expected, and that's resulting in roughly a 2x increase in he regional activity there in the state. That stressed the local markets. Think labor, logistics, such as trucking marine, and then even the availability of camps for our construction work there on this road,” Johnson said of the Willow project.

Those factors and others are going to hit the Ambler road project as well. There is no financing plan for the road.

What the Dunleavy administration and AIDEA won’t push for is to have the mining companies that stand to make a killing provide some of the money upfront. The mining companies are in business to maximize profits, which means they want the state and feds to put up all the road money.

As to the vague assertions that the cost of building the road would be recovered over the decades to come via tolls charged to the mining companies, there is no reason to trust those claims.

AIDEA, which sees itself as a promoter of mining, has not provided any research to back up its pledges of what might or might not happen.

As for the ultimate cost of the road, guess again.

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