Friday, July 07, 2006
Blacktop and red ink
High fuel costs make asphalt more costly, affecting pavers' profits and slowing road repairs.
Those pestering potholes on Southwest Virginia roadways could get larger thanks to skyrocketing oil prices.
The mounting costs are slowing paving projects that depend on asphalt, which is made from that sticky, viscous substance left at the bottom of crude oil barrels. The expenses are pinching local contractors and making it harder for transportation officials to stretch money to keep up Roanoke-area roads.
"The average cost of asphalt is up $15 a ton from last year," said David Dooley, street maintenance supervisor for Roanoke. "We will pave less lane miles, for sure."
In Virginia, oil, fuel and asphalt costs are up 13 percent to 34 percent from this time last year. Related paving products -- cement, sand, stone, concrete -- are up 7 percent to 9 percent, according to Laura Bullock, spokeswoman for the Virginia Department of Transportation in Salem.
"Uncertainty in the marketplace is one of the big factors right now," added Margaret Cervarich, spokeswoman for the Asphalt Institute, based in Kentucky. "Things just changed dramatically in the last few months."
It's still unclear how much paving will be done, because the favorable season, which runs from April to December, is still in its early stages, Bullock said.
But it is certain that some of the hoped-for 1,800 miles won't be resurfaced in the 12 counties of VDOT's Salem District.
"Because of the volatility of asphalt and other products that are used in paving, we probably are not going to get 1,845 miles," Bullock said.
The surge in asphalt prices, which started this spring, is also making for some uneven rides and bumps in the road for paving companies.
Last year, it cost approximately $61,000 to pave one mile of average road; this year the cost is a whopping $82,000, according to Rick James, vice president of Adams Construction.
And to pave 60 feet of driveway? That's up $200 over this time last year, James said.
"Everyone's just trying to find their footing," Cervarich added.
For Roanoke-area pavers, that means fewer contract opportunities with VDOT and not as much green, or black.
"Our business is off significantly," James said.
The Virginia firm, established in 1946, has laid off more than 5 percent of its 400-person work force because of the squeeze on energy costs, and more layoffs are possible, James said.
"What we're seeing in the commercial market is there is less capital investment by commercial clients," he said.
Red White & Blue Paving in Salem has lost somewhere between 15 percent and 20 percent of its profit and has cut down on paving projects, according to owner Larry McDaniel.
"We're doing some maintenance and just kind of not working the hours or the overtime we usually get," he said.
Paving funds come from state and federal fuel taxes, which have not gone up since 1986 and 1996 respectively, Bullock added.
Fixed funding resources make it difficult for transportation officials to adjust for inflation.
This year, VDOT had roughly $31 million to spend.
"The state budget doesn't increase just because the price of the product increases," said John Kirk, president of Associated Asphalt in Roanoke, which sells the liquid asphalt component.
But even worse will be dwindling paving miles for the 2007 season, which will suffer drastically from rising maintenance costs. "We believe that based on the price we're seeing now and working those into the schedule for next year, it could be a greatly reduced schedule," Bullock said.
But asphalt producers are looking to new technology to bring relief to contractors and motorists, Cervarich said.
In addition to pressing the use of recycled asphalt -- it is already the most recycled material in America, according to Cervarich -- engineers are working on methods to reduce fuel costs during mixing.
Right now, most companies heat liquid asphalt and aggregate components (stone, sand) at high temperatures to wick away moisture and make the asphalt more gooey.
But a new "warm-mix" method is in the works, and the technology could reduce mixing temperatures anywhere from 50 to 100 degrees Fahrenheit, Cervarich said.
"It's something we're looking at. We think it will be a good long-term solution, but we don't really have a timetable for implementing it," she said.




