It’s no surprise that oil price fluctuations are a daily occurrence. Although there has been some easing, the general trend is towards sharp increases in oil prices. And, as go oil prices, so too do the cost of its derivatives, including gasoline, diesel fuel, industrial lubricants, and asphalt.

Conventional wisdom holds that strong worldwide demand and domestic capacity issues in North America are driving oil prices increasingly higher. There also are reports that refineries are simply getting better at the process of extracting value from a barrel of oil.

This means there are more high-grade products and less low-grade materials, such as asphalt, being extracted from a barrel of oil. This also means that higher oil prices and strong demand could foreshadow short supply of asphalt materials in the future.

Not only is the price of the base material higher (and growing) for asphalt pavements, there are also some inherent costs that few people consider.

For example, asphalt has to be repaired and replaced far more frequently than concrete. With each one of these maintenance, repair, and reconstruction cycles, there are energy costs. Those energy costs include the prices of gasoline, diesel fuel, and other oil-based products required to heat the asphalt, as well as to operate construction vehicles.

Though placing concrete pavement also includes some of these costs, it does not require fossil fuel energy for heating the product, nor does it require as much energy because its durability means longer intervals between repair and reconstruction.

This issue of CONCRETE PAVEMENT PROGRESS covers in detail some of these hidden costs associated with asphalt and reveals some of the inherent cost savings of concrete pavement.

ACPA wants to know: how have you (or your business) been affected by volatile oil prices? Click here to submit your comments.

(Editor's Note: The facts in this article are excerpted from a research article ACPA submitted to CONSTRUCTION TODAY on the economics of paving. ACPA's Robert Rodden, E.I.T., Director of Technical Services, contributed.)

Volatile oil prices extend beyond the barrel, putting financial pressure on agencies relying on asphalt for construction and maintenance needs.

Impact on Asphalt
The national average for asphalt (PG-58) is $297.25, according to ENGINEERING NEWS-RECORD (March 10), up from $285.32 in early February. Approximately three months ago, asphalt cost $281 per ton.

In stark contrast, concrete pavement prices have remained relatively flat.

The price of portland cement concrete remained stable from February to March at $101.27 per ton.

This has several risky implications for decision-makers:

• Added financial risk because they cannot predict how much more they will pay during construction than at time of bid;
• Less money available for needed roadwork if the true ownership costs for asphalt pavements are not considered; and
• Inaccurate reports of the actual cost of public projects because asphalt escalators are rarely reported publicly.

Click here to learn more in "Bottom of the Barrel," (QD013P), one of the brochures in ACPA's popular Quick & Direct literature series.

Money Pit
The costs associated with asphalt do not stop with the purchase of the materials.

Asphalt pavements require a tremendous amount of energy, or fossil fuels, to heat materials to the requisite 325°F temperatures at the production plant. Next, the asphalt is delivered to the construction site, where asphalt pavers and compaction rollers use even more fossil fuel to place the road in 12-ft. wide multiple layers (often with three or more layers for highways).

According to the Federal Highway Administration (FHWA), asphalt requires approximately 8,981 gallons of diesel fuel per mile (gpm) for production and 1,737 gpm for hauling and placement. Compare this to 548 gpm for production of concrete and 1,369 gpm for placement. So, from production to placement, asphalt requires at least 5.5 times more energy than concrete.

And that’s only the beginning. Factoring in the repeated maintenance and repair cycles, as well as the eventual reconstruction of asphalt pavements every eight to 14 years, the relative fuel consumption and costs are even more dramatic. In contrast, concrete pavements typically only require replacement every 30 to 40 years.

The effects of volatile oil prices spreading further than just the price of asphalt materials; they impact the costs of gasoline and diesel fuel. In turn, these affect the costs of construction and other energy-consuming operations.

Just recently, the price of gasoline set a record of $3.287 per gallon (April 1), according to THE ASSOCIATED PRESS.

The price was $3.167 at the same time one month ago, and $2.696 one year ago, a ccording to the American Automobile Association.

The report says refineries set up mainly to produce gasoline have little flexibility to increase diesel supplies. To increase capacity, refineries would have to invest heavily in new equipment, according to energy analysts.

Meanwhile, recent diesel prices reached $3.99 per gallon, according to the Energy Information Administration (EIA).

The EIA also projects that diesel prices will average $3.45 per gallon this year, or 57¢ above the 2007 average price, according to PURCHASING.COM magazine.

The WALL STREET JOURNAL attributed price jumps in diesel fuel to limitations at U.S. refineries.

Impact on Construction
Construction, as well as maintenance costs, are directly impacted by increases in gasoline and diesel fuel costs.

As a general rule, placing asphalt pavements requires about 2.90 gallons of diesel fuel per ton, in contrast to 0.50 gallons per ton for concrete pavement.

Based on a conservative assumption that equivalent asphalt and concrete pavements have the same thickness, and that a typical asphalt density is 140 pounds per cubic yard, the amount of diesel fuel required to place one lane-mile of 10 in.-thick asphalt pavement is 10,718 gallons.

The amount of diesel fuel consumed during the placement of one lane-mile of 10 in.-thick concrete pavement is 1,916 gallons, or less than one-fifth the amount of fuel required to place the similar asphalt pavement.

The Federal Highway Administration estimates that roughly 500,000,000 tons of asphalt are placed each year. If agencies used concrete pavement instead, they could save more than 1.2 billion gallons of diesel fuel each year.

Compounding these costs is the frequency that asphalt requires repair and maintenance operations (see related article, "Calculate Total Costs Using Life Cycle Cost Analysis").

For more information on reduced energy consumption in construction, click here to read "Conserving Fuel in the Road," (QD023P) the latest in the Quick & Direct literature series. For more information on the environmental implications of this, click here to visit ACPA's online bookstore and request "SR385P: Green Highways - Environmentally and Economically Sustainable Concrete Pavements."

For more information, contact Leif Wathne at 202-638-2272.

Though the long-term cost benefits of concrete pavements have long been understood, agencies are realizing it as a more viable option at first cost, instead of asphalt. Life cycle cost analysis (LCCA), an economic engineering tool, is used by pavement designers to determine these costs by comparing equivalent designs for specific traffic loadings and performance lives.

Life cycle cost analysis allows officials to consider the total cost—initial cost, maintenance, and rehabilitation—of one pavement versus another. (Image: FHWA)

Register now for ACPA's updated Airfield Pavement Design Seminar for hands-on training in the efficient design and construction of quality concrete pavements.

The Association invites federal and state agency officials;airport owners; contractors; airport consultants; and other stakeholders to participate in the seminar, scheduled April 15 to 17 at the Embassy Suites Hotel Dulles—North in Ashton, Va. Click here to register online and for more event details.

The updated training program will include:

• The latest information on Federal Aviation Administration rigid pavement design procedures and specifications;
• Updates on Alkali-Silica Reactivity;
• New information on the design and construction of stabilized and drainable bases; and
• Methods for joint and crack sealing and repair.

The course also will feature a tour of the reconstruction project at Washington Dulles International Airport, located just minutes away from the site of the training.

The GOMACO C-750 can finish concrete up to 156 ft.-wide in a single pass, designed for bridge decks, flat slabs, and slope finishing projects. The machine includes automatic self-widening and proximity switches to eliminate time and manpower.

It includes an externally vibrated undercarriage that allows vibration to be applied closer to the finishing cylinders for a smooth finish to the surface, especially with low-slump concrete mix designs.

The Federal Highway Administration is seeking qualified candidates to serve as Materials Research Engineers on the agency's Pavement Materials and Construction Team at the Turner-Fairbank Highway Research Center. According to the announcement, the successful candidate "will play a leading role in advancing engineering and technology for concrete materials used in highway infrastructure. In this position, he/she will plan, conduct, manage, and review research and development concerned with Portland (hydraulic) cement concrete, its constituent materials and related materials." Click here to read the full description. For more information, contact Cheryl Richter, P.E., Ph.D. at 202-493-3070.