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Profile: The Rising Costs of the Ambler Road

A proposed road through the Interior ending at a potential mining district near the community of Ambler is heading towards the preliminary step of an environmental impact statement. But already the program has cost the state tens of millions of dollars in preliminary work.

Costs for the state’s proposed road to the Ambler mining district will be ten times the original estimates, say critics. This summer the project is moving closer to an environmental impact statement, or EIS. But the cost of simply investigating the road’s feasibility continues to swell, even as basic questions about financing, community approval, and potential conflicts of interest remain unanswered.

The Alaska Industrial Development and Export Authority, or AIDEA, is spearheading the Ambler Road project for the state. Many of the more direct logistics are being handled by Dowl HKM, a company contracted with AIDEA to manage the project. At a meeting on Monday in Kobuk, Dowl facilitated discussions between leaders from the three upper Kobuk Valley communities of Shungnak, Ambler, and Kobuk before making a presentation to residents on the road project’s status.

“Back in 2010, when the Alaska [Department of Transportation] started this project, they proposed that the entire preliminary portion of the project—to get all the way through permitting—would cost $4 million,” said Jilly Yordy, who studies mines and waterways for the Northern Center, an environmental research group in Fairbanks that’s following the Ambler Road project closely.

That’s incorrect, says Dowl HKM vice president Steve Noble. He says the $4 million originally given to the Alaska DoT was to investigate different road and rail alternatives to the mining district–not carry the project all the way through permitting. In a phased approach like this, Noble explained, “It’s always been assumed we’ll be going back to the legislature.”

Yordy says that based on allocations for the road project in capital budget line-items, “Right now we are in the neighborhood of $25 million, and it’s expected to top $40 million before permitting is done.”

Noble said that while he didn’t have exact figures available, $25 million sounded high, but possible.

The Northern Center claims that AIDEA took control of the project from DOT in 2013, the annual budget has more than doubled.

A graph of funding designated for the road to the Ambler Mining District, including projected costs for preliminary work. Courtesy of Jill Yordy, the Northern Center.

A graph of funding designated for the road to the Ambler Mining District, including projected costs for preliminary work. Image: Jill Yordy, the Northern Center.

In April, AIDEA put out its request for proposals to conduct the Environmental Impact Study required by Federal Standards, and specified that cost is not a criteria for considering bids.

The roughly 200 mile road would go through lands owned and managed by federal, state, and tribal entities, and has complicated permitting requirements. AIDEA will only have a year to coordinate with other agencies compiling the necessary data to complete the EIS.

It’s an extremely ambitious timeline, given the scale of the proposed road. Yordy is concerned that the state is pouring money into a project that doesn’t yet have basic certainties established, and downplaying the scope of scientific research still needed.

“The biggest pause for me is the timing,” Yordy said.

“I don’t think that there’s nearly enough time allowed for adequate scientific studies of everything they need to take into consideration. This road … would definitely be the first of its kind, it would be the first major east-to-west road in Alaska this far north. There are a lot of variables here we don’t know anything about.”

AIDEA and others supporting the EIS process like NANA Regional Corporation, argue that the EIS process itself is the tool for establishing those impacts. The native village of Shungnak recently passed a resolution that agrees, supporting the use of the EIS to gather data first, and deciding afterwards if the benefits outweigh potential impacts to the environment and subsistence.

Fred Sun is from Shungnak and serves on NANA’s board of directors. At the meeting on Kobuk, he told an assembled crowd that scientific data from the EIS should be seen as a complement, not a competitor, to traditional knowledge of the region’s ecology.

“Whether or not your decision is to support this road or go against it, I think it’s just as important you support the EIS process. I understand how important…traditional knowledge is to us, but we also need to hear professional knowledge,” Sun explained.

But many of the questions raised at Monday’s meetings are unlikely to be answered from data gathered on wildlife and habitat. There are no hard numbers on how many construction or mining jobs residents could expect; or what, if any, limitations would be placed on who could use the road; or what would happen to the road once the proposed mines in the Ambler district eventually cease operations.

“You claim that this road will be an industrial road only and that it will be put to bed when the mining is done. That’s a fallacious claim, it’s misleading, it’s a ploy to reduce the opposition to the road,” said Ron Yarnell during a Wednesday conference call with AIDEA board members in Anchorage. Yarnell owns a wilderness tour company based in Fairbanks, and he claimed his business would be affected if the road is built.

“We all know that when hundreds of millions of dollars are spent on massive bridges and all this infrastructure, they will not be removed,” Yarnell continued. “This road will open up the Central Brooks Range and Western Brooks Range permanently. It won’t be removed.”

Yarnell was one of several members of the public that called in the board meeting with concerns about the Ambler project. He and others say the state is ignoring clear opposition from stakeholders in the Interior for the benefit of NANA and NovaCoppeer.

John Gaedake, another business owner in the Brooks Range, questioned the state’s priorities.

“The state appears to be ignoring public opposition—certainly to the east, to put forth this project. And the mining company itself is a new company, but the management personnel in place are responsible for failed mines already in Alaska, as well as huge environmental damages and fines in Alaska, and previous class-action lawsuits in both Canada and the United States,” Gaedeke said by phone.

One of the mines Gaedeke is referring to is the Rock Creek Mine just outside of Nome, which was spearheaded by current NovaCopper CEO Rick Van Nieuwenhuyse through a company called NovaGold. On Thursday NovaCopper’s vice president of corporate communications, Pat Donnelly, said there has been some overlap between NovaGold and NovaCopper, but added that “the technical people who were directly involved in constructing the Rock Creek Mine … are gone,” and that the people at NovaCopper today “were not involved in Rock Creek.”

Donnelly added that the the company had spent $30 million in remediating Rock Creek Mine. The mine was shuttered shortly after opening in 2008. NovaGold agreed to pay more than $1 million in several settlements related to Clean Water Act violations that EPA said occurred in 2009, 2010 and 2011. The mine was sold to the to the Bering Straits Native Corporation in 2012.

Whether or not the damage was deemed “significant,” NovaGold paid more than a million dollars in fines to the EPA between 2009 and 2012 for violations of the Clean Water Act. And in spite of remediation efforts, BSNC was charged $72,000 in fines this April for waste violations they say took place under previous ownership of the mine.

Also addressing the board during the Wednesday meeting was Nancy Wainwright, an Anchorage attorney working with Trustees for Alaska, a nonprofit public interest environmental law firm. Wainwright spoke on behalf of the village of Ambler and asked the board to investigate possible violations of federal standards for conflicts of interest.

The problem, Wainwright said, lies with AIDEA’s work with Dowl HKM.

“Dowl HKM is also a consultant for NovaCopper. We would like full disclosure before any further actions on the EIS process. If Dowl HKM is working with NovaCopper and working with AIDEA, that does appear to be a conflict of interest and would ask that AIDEA look into that matter,” Wainwright said.

In the fall of 2011, Dowl prepared several reports for the Department of Transportation on access to the Ambler mining district. That same fall they were listed as a contractor doing environmental baseline studies for NovaCopper. At that point, a majority of shares in Dowl were owned by the NANA Development Corporation, though a spokesperson for NANA says those were sold off by September of 2012.

Dowl’s Noble said that at the time the company was doing work in 2011 both NovaCopper and the Alaska DoT were aware of the relationship. And that that neither Dowl or the DoT found any conflict of interest.

Noble explained that while Dowl is precluded from bidding on the EIS application, “Our relationship will continue with AIDEA assisting with logistics, meeting coordination, and data collection.”

The high cost of abiding by state and federal development standards in communities as remote as Kobuk is another factor. In coordinating logistics for this meeting, Lesley Lepley, a public involvement planner with Dowl, said the company put up the money for everyone’s transportation to Kobuk.

“We had charter flights arranged to bring people from Ambler, and unfortunately both runways got shut down in Ambler and our Caravans couldn’t land, so we had to rely on people boating. And then we’re going to reimburse the city for that fuel. Some people came as individuals, and I also have fuel vouchers for them,” Lepley said after Monday’s meeting.

Miles Cleaveland, an Ambler resident, said gas is more than $10 a gallon.

The state has held 29 community meetings since it began working on the road project. That dialogue is required under Federal law, but it is considerably more expensive in the Northwest Arctic Borough than comparable projects in the Lower 48 or on the road system within Alaska. Planes were chartered, and even refreshments were no easy task.

Lepley said they brought 55 pizzas to Kobuk for the meeting. Flying in all those pizzas plus cans of pop from Kotzebue cost more than $1,500.

Editor’s note: a version of this story appeared online that mistakenly referred to NANA Development Corporation. The above corrected text reflects changes that refer to NANA Regional Corporation. Additionally, Fred Sun is a board member for NANA Regional Corporation and not NANA Development Corporation. This version also reflect changes since it’s original publication based on subsequent clarifications from Dowl HKM on budget items.


  1. Ronald Yarnell on June 5, 2014 at 3:01 pm

    The state of Alaska paid millions of dollars to construct the road to the failed, private, Rock Creek Mine. This time around they are paying tens of millions of dollars for the studies and permitting for another private road to another set of private mines owned by NANA & NovaCopper. It is interesting that AIDEA is dealing with the same set of developers for these mines that the state dealt with for the failed Rock Creek Mine. Yes, maybe the contractors that built the Rock Creek Mine are gone, but the same decision makers are running the show. When is the state going to quite wasting our money on these private schemes?

  2. Margaret Schaeffer on June 6, 2014 at 11:22 am

    Same failed management on the mining side and NANA, both. Stay away from this type, is the rule in business.