Standardize Costs for Geographic Location and Time

Two of the inherent difficulties in estimating pavement construction costs are the geographic variability of these costs throughout Alaska coupled with variability over time. To effectively use the unit cost data derived from the 55 reviewed construction project records, we standardized unit costs to the 2023 cost of construction in Anchorage by the following method.

To standardize costs for geography, we elected to create an index based on heating fuel as a proxy. The benefits of this method are as follows. First, the State of Alaska monitors and publishes the average cost of heating fuel in 100 communities throughout the state, so a ready source of data if available. Second, heating fuel is essentially the same as diesel fuel. Third, the price of diesel fuel is a major cost driver for construction projects.

Heating fuel costs are conducted and published by the Division of Community and Regional Affairs (DCRA) at https://gis.data.alaska.gov/search?tags=heating%2520fuel%2520prices. As discussed on the DCRA website, heating fuel is shipped throughout the state by truck, barge and even by air, depending on access to each community, and the price of heating fuel is highly dependent upon the cost of transporting the fuel to each community.

DCRA classifies fuel prices by region, listed as follows and shown in Figure 4:

• Southeast (SE)
• Southwest (SW)
• Gulf Coast (GC)
• Interior (INT)
• Western (W)
• Northwest (NW)
• Northern Slope (NS)
• South Central (SC)

Figure 4—DCRA Regions

Note: Because national fuel surveys in 2005 included Southcentral Alaska only, the DCRA fuel survey was intentionally designed to report on fuel prices in unreported regions of Alaska. For this reason, the DCRA survey does not report on prices in the Anchorage/Mat-Su region (South Central).

DCRA also tracks the price of gasoline and publishes a comparison of the average prices of a gallon of regular gasoline in Anchorage along with the national average price in the US.

From these two sources of information, we computed the average heating fuel price for each of the seven DCRA regions during the period 2005 to 2025 as shown in Table 4.

The regional heating fuel costs presented in Table 4 were used to standardize pavement costs for any project in Alaska during the period 2005 to 2025 to the cost of a current pavement treatment in Anchorage.

Modified Fuel Factors

We observed several outlier airports when comparing the heating fuel price for individual airport locations in the seven DCRA regional groups. For example, Fairbanks and McGrath are both within the DCRA Interior Region, but the per gallon fuel price in 2025 are $4.32 in Fairbanks and $8.21 in McGrath (nearly double). Based on this observation, we modified the regional groupings slightly to better account for these outliers.

The area-weighted combined fuel factor was calculated by dividing the area-weighted average heating fuel cost for a group by the Anchorage heating fuel cost. The modified fuel factors shown in Table 9 and Figure 5.

Table 10 shows the fuel price and modified fuel factor for each airport relative to its assigned modified fuel factor group.