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Crude oil prices, which have hovered around $70 per barrel for weeks, are pushing up not just the cost of driving, but also the cost of building and maintaining roads and parking surfaces. Nowhere is the effect greater than in the asphalt industry, which uses asphalting cement - a heavy petroleum product - as a key component in the preparation of asphalt. David Strassman, founder and vice president of DRS Ltd., an asphalt producer and paving company in Madison, said asphalting cement is the "glue" that holds together the sand, gravel and stone that give asphalt its body. He said the price of asphalting cement, which represents about 5 percent of the volume and 60 percent of the cost of asphalt, has risen from $185 per ton in December to $415 per ton. Strassman said big oil companies like BP, from which he gets asphalting cement, claim it is more profitable to refine oil into gasoline when gas nears $3 a gallon, thus creating a shortage of asphalting cement that drives up its price. But Strassman said oil companies also raise prices because they have no competition. Strassman, whose company does a lot of work for UW- Madison, said his business is down due to higher costs that force government organizations, on fixed budgets, to undertake fewer projects. Terry Wenger, president of Tri-County Paving in DeForest, said he pays about $35 to $40 per ton for asphalt compared with $23 to $25 per ton last year. He said the increase has hurt his business. "This is our 20th year and it's the first drop off I've ever seen." Wegner said his private driveway business has decreased about 60 percent since last year. He said paving jobs associated with new building construction don't seem to be affected, however, because once a project has been started it needs to be finished. Wendy Bartelt, officer manager for Bartelt Enterprises, a paving company based in Brooklyn, said this is the first year in 10 years of being in business that asphalt suppliers have been unwilling to lock in a price for the whole season. She said the company is still relatively busy, however, due to increased demand for maintenance services. Madison, with 582 miles of improved asphalt streets, is facing its own maintenance challenge. The cost of resurfacing an asphalt street, which is usually required after 25-30 years, has increased from about $8 per square yard in 1999 to about $22 this year, said Rob Phillips, deputy city engineer in the Department of Public Works. Facing this cost increase, Madison will use chip sealing, an economical way of prolonging the life of streets with asphalt emulsion, on 10 miles of streets this summer, Phillips said. The method, which costs about $1.25 per square yard, delays the need for resurfacing by about five years. Recycling is another way of combating high costs. Chris Brom, project manager at Wolf Paving in Sun Prairie, said all asphalt companies incorporate recycled asphalt recovered from roads, parking lots and driveways into their product to some degree. He said how much used asphalt is mixed with new asphalt is determined by each company. Wolf uses around 15 percent.
Pat Goss, executive vice president of the Wisconsin Asphalt Pavement Association, said the industry is also developing a method that will allow asphalt to be cooked at a lower temperature, reducing energy, emissions and cost. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research or educational purposes. |