Oil prices squeeze paving budgets

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Joe Pyrah

Think coming up with another $20 to fill your tank is bad? Try scraping together a couple hundred million dollars just for the crud at the bottom of the barrel.

Skyrocketing oil prices have the Utah Department of Transportation looking at a massive cost increase this year to pave roads. Asphalt -- an oil-based derivative -- has more than doubled in price since January, putting the squeeze on road projects throughout the state. "Some of those projects could be bumped to next year," said UDOT spokesman Nile Easton.

How it works

•¬ Oil is pumped out of the ground and then shipped to refineries.

• The processing produces fuel for vehicles, plastics and more.

• What's left, says Easton, "at the bottom of the barrel" is asphalt, which is then combined with solids to create road surfaces.

The cost problem is two-fold: first is that the price of oil has reached $140 a barrel. That increases the cost of all oil-based products. Second is that refineries are working to squeeze every last drop of fluid out of those barrels, which leaves less asphalt.

In January, asphalt was selling for about $350 a ton. Today it goes for $850 a ton. UDOT planned to use 1.5 million tons of asphalt this year. While Easton doesn't have exact numbers about how much has been spent and will be spent, the additional cost to UDOT could easily be in the hundreds of millions of dollars.

"There doesn't seem to be any breaking point where the cost of oil is going down, and that's going to keep the stress on," said Darrell Cook, executive director of the Mountainland Association of Governments.

Impact

Thanks to legislative leadership centered in Utah Valley, the area has seen an increase in the number of road projects.

"We have a billion dollars worth of arterial road improvements on the agenda over the next two to three years," Cook said. "That's just in Utah County."

But now Easton says they're asking regional managers to prioritize projects once again because of the asphalt supply and cost crunch. The consequence is that some road projects could be pushed back to next year. And then there's the Interstate 15 expansion through the county -- the most expensive road project in the history of the state. Easton declined to speculate on the impact of increasing costs on the already $2.6 billion project slated to begin as soon as next summer.

Alternatives?

UDOT is taking a hard look at using concrete instead of asphalt for some projects. Though the cost of concrete has also risen in the past several years because of worldwide demand, it hasn't gone up as fast as asphalt.

While still more expensive that asphalt, it has the benefit of much greater durability. Asphalt is good for 10-15 years. Concrete can last up to 40.

There isn't much in the way of other materials for road surfaces, Cook said.

"There's always the unpaved road," he said with a chuckle.

UDOT paving projects in Utah County



• Finishing up the 800 North project in Orem



• Paving 200 South in Pleasant Grove



• US 89 from Milepost 322.28 to 323.78 and Milepost 339.79 to 340.71



• US 89 from 900 South to 340 South in Provo



• Various locations on SR 74



• 2000 West Pleasant Grove Street to Pleasant Grove Boulevard

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