(as appeared in Talk of the Rockies at www.colorado.construction.com)
With construction costs increasing and transportation funds in decline, news of a nationwide shortage of asphalt and its ingredients is that last thing the Colorado asphalt paving industry needed. As the price for oil continues to reach record highs, asphalt prices have skyrocketed in recent months and a shortage of liquid asphalt is aggravating the situation.
“Surging prices for diesel fuel, asphalt, steel and other materials are clobbering construction budgets,” said Ken Simonson, chief economist for the Associated General Contractors of America. “In the first two weeks of July, asphalt prices have jumped by 40% in several parts of the country.”
In Colorado, the asphalt shortage is affecting 34 Colorado Department of Transportation projects, said CDOT spokeswoman Stacey Stegman.Metro Denver alone has six projects at risk of delays, having their completion times extended or being partially paved. They include the resurfacing of Interstate 25 between Santa Fe Drive and West 6th Avenue, the repaving of Colorado Boulevard between Mexico and Alameda avenues and two major paving projects on East Colfax Avenue.
Scarcity of Ingredients
Asphalt has two ingredients—stone or gravel, and liquid asphalt, a tar-like binder made from petroleum. The binder is scraped from the bottom of the barrel after other petroleum-based products have been processed. The ingredients are mixed together to make hot-mix asphalt for paving roads.CDOT requires a chemical polymer be added to strengthen the pavement, especially in areas where traffic volumes are high.
A higher global demand for the polymer, especially from China and India, has decreased its availability, according to Oklahoma-based SemMaterials, one of the largest asphalt producers in the United States. The closing of two polymer facilities in Europe hasn’t helped the situation either.
The shortage of liquid asphalt can be attributed, in part, to oil refiners concentrating on producing more profitable finished products from crude oil, such as diesel fuel, said Tom Peterson, executive director of the Colorado Asphalt Pavement Association.
Refiners also are processing lighter crude petroleum, which produces less asphalt than heavy crude, he added.CAPA believes that supplies should begin to improve in the fall or winter. But summer paving projects may already be impacted. “(The industry) believes refiners will begin to run heavier crude streams, which will increase asphalt supply,” said Peterson. “Once the shift to heavier crude streams has been made, it will take 30 to 45 days before additional asphalt barrels reach the market.
“Supply of asphalt for the 2008 paving season is going to be short,” Peterson said.
Priorities
Currently, CDOT is considering four options for its summer paving projects: delay work until next year; extend some projects’ completion times until later this year; use a different paving material, including one without a polymer; or partially pave some roads until more asphalt can be purchased, said Stegman.
“Priority will be given to projects on more heavily traveled routes, areas with the most significant pavement damage or those in the middle of construction,” she said.The rising cost of asphalt has also forced CDOT to agree to use higher percentages of reclaimed asphalt pavement and allow its use in the top lift of paving. The joint decision was made by CDOT and the Colorado Contractors Association in a June 5 meeting. CDOT has previously allowed only 15% RAP in the top lift.“The RAP Task Force felt that there were enough controls in place, enough study data and enough experience with RAP that CDOT could increase the use to 20% in the top lift,” Stegman said.
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