Everett, Wash.
Published: Monday, August 4, 2008

Asphalt shortage disrupts road projects

The loss of a supplier has already delayed projects in Island County and threatens others in the region.

By David Chircop, Herald Writer

 EVERETT -- Contractors say asphalt supplies in Western Washington are increasingly scarce following a decision by the Tesoro refinery in Anacortes to stop producing liquid asphalt.

The interruption comes during the heat of the paving season, and amid record spikes for the cost of asphalt, which has doubled this year.

It's affecting everything from small driveway projects to major highway jobs.

"I've talked with everybody and their brother and haven't found anything," said Don Kreig, vice president of Kreig Construction in Oak Harbor, about the challenges of getting liquid asphalt. "It's rather frustrating."

Several other regions are also experiencing a shortage of asphalt as refineries move away from liquid asphalt to more profitable petrol products such as gasoline and diesel fuel. Pavement is made from sand and gravel held together with a black goo called liquid asphalt. Liquid asphalt is distilled from crude oil and constitutes about 5 percent of asphalt paving.

Kreig's business, which exclusively relied on Tesoro, suspended a half-completed paving project on Highway 525 on the south end of Whidbey Island near Clinton and froze a handful of paving projects for Island County's public works department because it hasn't found another asphalt supplier.

"When the spigot gets cut off at the peak time when you need it, it makes it difficult to plan," said Bill Oakes, Island County's public works director and engineer.

Oakes said the shortage is forcing a year delay on maintenance work on Island County roads.

Snohomish County officials didn't respond immediately on whether the shortage is affecting road projects.

John McDarment, a Tesoro spokesman in Anacortes, said the refinery decided to change how it processes oil earlier this year because the cost of crude oil was rising rapidly compared with the price of liquid asphalt. They stopped selling liquid asphalt in mid-July.

"The final product may be worth less than the crude itself," McDarment said.

He said the refinery could go back to producing liquid asphalt, but for now it's focused on gasoline and diesel fuel.

Dave McCaully, construction manager with Cemex USA, a contractor and building material supplier, said he considers recent developments a crisis that could put paving companies out of business and leave public road projects unfinished.

"It's not much different than a power company saying, 'I'm not going to supply electricity today,'" he said.

McCaully said Tesoro gave his company just a day's notice before cutting off its supply. The Tesoro spokesman said its customers were warned months in advance.

He said his company's operations in Western Washington operations received most of their asphalt from the Anacortes refinery.

U.S. Oil & Refining Co. in Tacoma is the only other refinery in Western Washington that continues to produce liquid asphalt. Company officials did not immediately return phone calls Friday.

McCaully said his company has turned to U.S. Oil and other refiners in Idaho, Canada and Oregon without any luck. He said his company has about two weeks of supply remaining.

That leaves projects on several state highways, including highways 9, 522, 532, 20 and 405 (near Bothell) in limbo. It's already delayed paving on E. Marine View Drive in Everett, and he said it also could affect work on several other roads in Snohomish and King counties.

"We're watching this real close," said Todd Harrison, assistant regional administrator with the state Department of Transportation.

Harrison said the state agency is working with contractors and will try to help speed up the approval process if contractors have to switch suppliers.

Tom Gaetz, executive director of the Washington Asphalt Pavement Association, said he expects the marketplace to take care of the supply problem.

It's difficult to say when that might be, he said and "it could get worse before it gets better."
© 2009The Daily Herald Co., Everett, WA