Special Edition Issue... Paving Costs--The Inside Story

It's Not Over Yet: Oil Prices Stabilize, But for How Long?
News and Views: How are oil prices affecting you?

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As goes the price of oil per barrel, so too goes the price of gasoline and a range of petroleum-based products, including asphalt oil used for pavement applications. It also stands to reason that energy costs will change accordingly.

Although there has been an easing in oil prices lately, there’s uncertainty about the future of oil pricing, and hence the pricing of oil-based products. There also are concerns about supply of petroleum-based products, such as asphalt.

The price of asphalt for paving has increased sharply this year. Engineering News-Record in July reported the price for PG-58 paving asphalt increased 2 percent in July after three consecutive increases in April, May, and June.

Asphalt Availability?
McGraw Hill's Engineering News-Record magazine reported recently that refiners are finding that “producing lighter-grade petroleum products is more profitable” than producing liquid asphalt.

Refiners that add catalytic cracking units have little crude left over for liquid asphalt. “With ultra-low-sulfur emission retrofits and coker installations planned for 2008-10, fewer refiners are even offering liquid asphalt,” the magazine reported.

Concerns about product availability, along with pricing volatility, underscore some inherent benefits of concrete pavements, notably relatively stable pricing and supply. Still, in direct response to rising asphalt prices, some agencies have been cutting back on projects, which has negative implications, both immediately and in the future.

Paying more money to accomplish less work is a losing strategy. Using thinner asphalt overlays and reverting to old grades of asphalt won’t sit well with taxpayers, either.

The Concrete Solution
The long-term cost benefits of concrete pavements have long been understood. A growing number of agencies are now seeing that both first costs and life-cycle costs favor concrete instead of asphalt.

For example: In Kansas, the state Department of Transportation has officially switched four projects that were initially slated as asphalt pavement to concrete pavement. The projects are on U.S. 54, U.S. 169 and K-18. The projects total $86 million, with $27.5 million of that being direct pavement surfacing costs, according to Todd M. LaTorella, P.E., Director of Engineering for the Missouri/Kansas Chapter of ACPA.

On these projects, asphalt pavement was initially 17 to 44 percent less expensive. But after re-running the costs with current day cost information, the state found that concrete pavement was 1 to 11 percent less expensive–the biggest change being a 45 percent swing. LaTorella said KDOT is also revisiting a number of other projects where asphalt pavement had originally been selected using current day cost information as well as “economizing” design changes promoted by the MO/KS Chapter, ACPA and its members.

On KDOT projects where pavement type selection is currently being conducted, concrete pavement is winning out in terms of both initial cost and the cost over the life-cycle of the pavement, LaTorella said. Traditionally, concrete pavement has always won out over the life-cycle in Kansas. But now, with concrete pavement being first-cost competitive, if not less expensive than asphalt pavement, it’s a slam dunk. On two recent large new construction projects concrete pavement was estimated (by KDOT) to be 7 percent less expensive to construct initially than asphalt pavement.

In early August, a county in Minnesota started transforming a 3.2-mile stretch of Highway 2 from asphalt to concrete. McLeod County Highway Engineer John Brunkhorst said soaring asphalt costs were a major factor in the decision. The road, about an hour west of the Twin Cities, needed work, but an asphalt fix didn’t make economic sense.

”At first cost, concrete is a little more” costly, he said. But, given the recent pricing trend, “it’s almost a wash.” Brunkhorst’s adds that the life cycle costs favor concrete. “I anticipate only one or two minor repair jobs in the next 50 years” on that stretch, he said.

In Minnesota, the state has decided to put an unbonded concrete overlay on a 13.8-mile section of westbound U.S. 10. This section of road was constructed of 8-inch JRCP in 1960 with a 6-inch bituminous overlay placed in 1988, according to Perry C. Collins, a materials engineer with the Minnesota DOT. The existing overlay is deteriorated to the point where all of it needs removal and replacement, he said, and the state had planned for a 6-inch mill and bituminous overlay.

But asphalt prices have risen approximately 40 percent in that part of the state during the past year, and the state determined that an unbonded concrete overlay is now more cost-effective on a life-cycle basis, considering the particular design parameters. Other benefits will be mitigated reflective cracking and less disruption to traffic over the design life, Collins said.

The situation also may be changing in Montana, according to Mark Wissinger the state Department of Transportation’s construction engineer. In Pennsylvania, an 8.5-mile section of Interstate 99 was let in May 2006 with concrete and asphalt pavement sections included in the bid offering. The state DOT, in cooperation with the Federal Highway Administration, agreed to use a procedure where the price offerings of the bidders (the “A” component) and the future maintenance and road user delay costs of each of the different alternates (the “C” component) were combined to determine pavement type selection.

Charleston, W.Va., used to put asphalt overlays on concrete streets that needed repair. But the city just let a $262,000 contract to replace damaged concrete with new concrete panels. The shift was inspired by a general change in approach by city officials and by the rising cost of asphalt, according to City Engineer Chris Knox. Last year, asphalt cost the city $53 per ton placed; that figure is now up to $67 a ton. Rising asphalt costs have become a major problem for a growing number of agencies, contractors, and other stakeholders.

Although no one can predict the future price or availability of crude oil or asphalt oil, it’s a certainty that the present volatility will remain a significant factor for construction seasons yet to come. (Source: Jim Ross for SURFACE TRANSPORTATION Magazine, with reports by ACPA Staff.)

The editors of CONCRETE PAVEMENT PROGRESS are interested in your views and opinions about current topics of importance to the transportation community.

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Questions? Contact Erin McKnight at 847-966-2272.

ACPA Concrete Pavement Progress is published 12 times per year and covers current practices and case histories in the concrete pavement industry. ACPA Concrete Pavement Progress is distributed free of charge to public officials, ACPA members, executive committee, board of directors, and affiliated chapter/state paving associations.

All rights reserved. Copyright 2006 by the American Concrete Pavement Association. No portion of this publication may be reproduced mechanically or electronically without the expressed written permission of the American Concrete Pavement Association.