honoluluadvertiser.com

Sponsored by:

Comment, blog & share photos

Log in | Become a member
The Honolulu Advertiser
Posted on: Tuesday, June 20, 2006

Oil prices to blame for lousy roads, too

By Barbara Hagenbaugh
USA Today

WASHINGTON — Hawai'i isn't the only state where motorists are feeling the impact of an asphalt shortage.

Asphalt prices are skyrocketing as costs for oil, a key component of the paving material, are near records. Both price and availability problems are forcing local governments across the United States to scale back or cancel road projects this summer, the main paving season in much of the country.

For drivers, that means roads likely will be worse than they otherwise would be later this year and beyond.

"Some roads are going to continue to get worse and worse, and eventually some will be converted to gravel whether we like it or not," says Dirk Rogers, highway superintendent in Brown County, S.D.

Brown County pavers will hit only about 60 percent as many roads as last year. Prices have doubled in just two years, while the county budget has barely budged.

Construction companies have been laying off workers in Hawai'i because of asphalt shortages caused, in part, by the closing of Chevron Hawaii's asphalt plant. That left Tesoro Hawaii as the only liquid asphalt producer in the state.

Tesoro was unable to produce liquid asphalt for about three weeks in May because it had run out of a type of crude oil used in the production of liquid asphalt. Last week, just four days after resuming liquid asphalt production, Tesoro was forced to halt operations again because of smoldering in an asphalt storage tank.

In most parts of the country, however, the bigger issue is price.

Nationwide, asphalt prices are up 42 percent in the second quarter from the same time a year ago, according to the Engineering News-Record news service.

U.S. asphalt production was down more than 5 percent from January through March compared with a year ago, the Energy Department says.

A number of issues are to blame, including refinery outages caused by last year's hurricanes. At the same time, road construction is booming because of a strong economy and the need for post-hurricane rebuilding. The tight supply-demand balance is boosting prices.