Final Ambler road review out; AIDEA adds $35M for project

  • The Alaska Industrial Development and Export Authority received the final environmental impact statement that selects the agency’s preferred 211-mile route (seen in yellow) for an industrial road to access the Ambler mining district. (Map/Courtesy/Alaska Industrial Development and Export Authority)

Bureau of Land Management officials maintained their support for the most direct proposed road route to Interior mining prospects in their final environmental review of the plan published March 27, the same day leaders of the state-owned development bank moved $35 million for future work on the project amid sharp public criticism.

The 211-mile industrial road concept preferred by BLM Alaska officials to reach the Ambler mining district is what the Alaska Industrial Development and Export Authority proposed in early 2017 when officials there submitted federal permit applications for the project.

AIDEA is advancing the long-sought link to the remote Ambler mining district in an attempt to spur development of a suite of metal prospects in the area.

Estimated in 2017 to cost between $280 million and $380 million for basic gravel construction, the final environmental impact statement, or EIS, for the road now pegs the total construction cost at approximatley $520 million.

BLM Alaska Director Chad Padgett said in a March 26 statement preceding the release of the final Ambler road EIS that the roughly 430-page document incorporates information gathered over three years of community and Tribal consultation meetings.

“My staff traveled to more than 20 communities in the project area to solicit input and gather traditional knowledge,” Padgett said. “Those efforts contributed to this comprehensive analysis that will help pave the way for Alaska to responsibly develop its natural resources and create jobs.”

BLM led the EIS because the agency is responsible for issuing road right-of-way permits to AIDEA if the project is ultimately approved.

Agency officials cannot reach a record of decision on the project until at least 30 days after the final EIS is published and it’s unclear exactly when that will happen.

The 211-mile industrial-use road would run west along the southern flank of the Brooks Range from the Dalton highway at milepost 161. It would pass near the villages of Bettles and Evansville near its eastern end and terminate among several mining prospects just north of the Kobuk River villages of Ambler, Shungnak and Kobuk.

Agency officials dismissed an alternate route starting at mile 60 of the Dalton that would snake 332 miles northwest to the district because although it would avoid Gates of the Arctic National Park and Preserve; its added length would inherently mean more environmental impacts and costs compared to AIDEA’s proposal, the EIS states.

Critics have pointed to the cost of the project, and the fact that there is no guaranteed repayment method, as reasons to scrap the plan.

The Wilderness Society contends the current estimate for the road does not consider some of the costs inherent to building in remote northern Alaska, such as constructing a road over permafrost. The group suggests the road could end up costing $1 billion or more as a result.

The proposed mines have also drawn scrutiny for potential impacts to salmon and whitefish runs in the Kobuk River drainage and many residents of the area villages are concerned about impacts to caribou in the region that are an important subsistence food source.

Numerous village and Tribal governments in the area of the proposed road have issued formal statements of opposition to the project.

AIDEA officials insist access to the road will be restricted to mining activity because it would ultimately be paid for through tolls under the plan; there would be no public access to currently isolated hunting areas, which has been another concern of area residents worried about increased activity.

Currently, Vancouver-based Trilogy Metals Inc. is the only company with advanced prospects in the Ambler area. The company holds two main prospects, Arctic and Bornite, which contain high-grade copper along with cobalt, zinc, lead and precious metals.

Trilogy leaders have said the Arctic prospect contains copper at grades up to 10 times greater than many other modern mines and the only thing holding back development is cost-effective access.

Interim Trilogy CEO Jim Gowans said in a company statement that the final EIS marks a critical milestone for the road project that will “unlock the incredible mineral potential” of the region.

“Trilogy, through its joint venture company, Ambler Metals LLC, is already discussing the next steps for the financing and development of the road with the Alaska Industrial Development and Export Authority,” Gowans said.

AIDEA moves $35M for road

Also on March 27 the AIDEA board of directors approved a transfer of $35 million from the authority’s Revolving Fund to its Arctic Infrastructure Development Fund to eventually support development of the Ambler road.

The resolution directing the funding shift notes that further board action is required to spend the money, but a slew of public commenters made it known they were not happy that AIDEA officials took up the resolution at a short-notice emergency meeting that otherwise dealt with loan and regulatory issues related to the COVID-19 pandemic.

Many commenters simply stated their strong overall objection to the road project and the mines it is intended to support, while others questioned whether the authority had violated open meetings laws with its second emergency meeting in as many days.

Anchorage Democrat Rep. Andy Josephson testified that he shared in the concerns of others regarding the timing of the meetings and the funding transfer resolution.

“I’m concerned that the optics of what you’re doing is so poor given what people are dealing with,” Josephson said to the AIDEA board members, adding that the Legislature’s decision to not capitalize the Arctic Infrastructure Development Fund exemplifies divisions among lawmakers over the Ambler road project.

AIDEA’s Revolving Fund held approximately $1.3 billion at the end of the 2019 fiscal year last June 30, according to the authority’s annual financial report, but the vast majority of that money was committed to loans or other investments. The Revolving Fund held approximately $33.2 million in unrestricted cash at the time as well.

Attorneys for the Anchorage-based environmental nonprofit law firm Trustees for Alaska also questioned the legality of the $35 million transfer in a memo sent to state lawmakers March 25.

The memo asserts than an initial version of the resolution describes that the money would fund “expert engineering, attorney, advisor, and other professional fees to work on permitting, road and bridge design, acquisition of rights-of-way, public outreach, cultural resources evaluations, and other tasks necessary or convenient to reaching a decision point on whether to proceed with construction of the project.”

Trustees attorney Bridget Psarianos said in an interview just prior to the March 27 meeting that much of the work outlined in the original resolution should have already been done so it could be included in the EIS for the road.

That language was removed from a revised version of the resolution, which states that the authority has the ability to transfer the money so it can continue to advance Arctic infrastructure developments and “pursuing (the Ambler road) through the Arctic Infrastructure Development Fund is in furtherance of the authority’s mission to promote economic development and to create employment opportunities in Alaska.”

Trustees argues the transfer is “directly contrary” to both the Alaska Constitution and the Executive Budget Act, which outline the appropriations process through the state Legislature and the governor.

“The Ambler road project is a capital appropriation item, and AIDEA cannot increase funding for this project without approval, regardless of the source of that funding. Funds for the project are subject to appropriation by the Legislature, not AIDEA,” the Trustees memo states. “Because AIDEA has been unable to secure additional funding for the Ambler road through the Legislature and the capital budget process, it is now attempting to make an end-run around the authority of the Legislature by unilaterally appropriating money from its Revolving Fund to this project.”

AIDEA spokesman Karsten Rodvik wrote via email that “When used for capital expense, money in AIDEA’s Revolving Fund is not subject to the Executive Budget Act. Also, the board has the authority to move money between funds.”

The Legislature created the Arctic Infrastructure Fund in 2014 but it had not been capitalized until the $35 million was moved into it.

Psarianos wrote in an email after the meeting that the firm has serious questions about the legality of the authority’s actions and “we are considering a variety of options to attempt to right this wrong.”

Gov. Mike Dunleavy’s 2020 fiscal year budget plan originally proposed to transfer $84 million from the Revolving Fund to an oil and gas tax credit fund outside of the authority, but the move was not included in the Legislature’s final budget.

(Editor's note: This story has been updated to reflect the latest available cost estimates for the road project.)

Elwood Brehmer can be reached at [email protected].

Updated: 
04/07/2020 - 2:09pm