Paving projects suffer as price of oil used in asphalt, diesel fuel climbs

CABOT, Vt. – Warning to motorists this summer: Rough road ahead.

From New England – where the punishing winters leave roads rutted, cracked and riddled with potholes in the spring – to the Deep South, repaving projects are being canceled or postponed because of the rising price of oil, which is used to make asphalt as well as diesel for dump trucks, steamrollers and other heavy equipment.

Around Cabot, a 7-mile stretch of U.S. Route 2 northeast of Montpelier, a main route across northern New England, has been dropped from the state’s list of paving projects for the year because bids have been coming in higher than budgeted.

Oil prices have climbed to about $54 a barrel, up about 75 percent from two years ago.

The full effect across the country will not be known until Congress passes a major new transportation spending bill, probably by the end of the month. Then states will know how much federal funding they will be getting.

But the industry publication Engineering News Record reported in April that the 20-city national average price for asphalt, a crude oil derivative, is up almost 13 percent from a year earlier to about $189 a ton.

Oil prices affect the cost of paving in other ways, too. Terrill Temple, county engineer for three Mississippi counties, where some projects have been delayed, said that when 20-ton dump trucks that move materials to a job site get just 5 or 6 miles per gallon, “yes, sir, it has a big impact.”

Also, contractors are paying higher prices for the No. 2 heating oil used to heat the asphalt so it can be mixed with sand or stone.

Phil Anderson of Exclusive Paving in Fairbanks, Alaska, said the state had been unusually slow to award contracts on one small job his company had bid on recently. The refinery that provides his asphalt is only five miles away, he said, but the price for asphalt had risen in the past year from $185 a ton a year ago to $305.

Illinois has cut road work, leaving contractors scrambling for work with local governments, said Kankakee County engineer Jim Piekarczyk. More contractors are bidding on fewer jobs. Normally that would cost savings for local government. But they have largely been canceled out by rising fuel costs, Piekarczyk said.

Highway engineers said they are seeing cost increases for other materials as well, including concrete, steel and the sand, stone and other aggregates that get blended with asphalt. Those increases stem mainly from the high energy costs of producing the materials.

Vermont increased its paving budget this year by about 20 percent, to $40 million. But the state will not be paving 20 percent more road.

“It’s unfortunate,” said Dawn Terrill, state transportation secretary. “We’re only going to be able to maintain the volume of work we had been doing.”