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Four counties cut paving due to asphalt shortage
Story Published: Jul 29, 2008 By Associated Press
SEATTLE (AP) – A change in the type of oil processed at the Tesoro refinery in Anacortes has led to a liquid asphalt shortage for at least four counties in Washington, affecting miles of road maintenance.Similar changes at refineries around the country are affecting asphalt supplies elsewhere.
Vancouver-based Albina Asphalt Products, which supplies asphalt to counties, reported in July that its suppliers, including Tesoro, have cut back production, meaning the company’s supplies of asphalt plummeted.
“Our suppliers cut us off on it,” said Erwin Winter, Albina’s operations manager. “This is a global event. There’s already been curtailment in Wyoming and Utah.”
On Tuesday, Pierce County announced that it will be able to seal only 22 lane miles of roadway this summer, instead of the planned 70, because of the shortage. Jefferson, Lewis and Clallam counties are also among those affected, along with 18 projects planned by the state Department of Transportation.
Keith Muggoch, a senior engineer for Lewis County, said 50 miles of road maintenance will be postponed.
Lloyd Brown, a spokesman for the state Department of Transportation, said the state will evaluate each project that had listed Tesoro as a supplier of asphalt, and either increase the time frames or seek other solutions. Brown said the state contracts out to different road construction companies and it’s up to those companies to find remedies for unexpected changes.
Brown said the agency did not expect an increase in cost at this time.
The woes in Washington state are the latest in a growing challenge for counties, cities and states, as the rising price of oil prompts refineries to switch to oil that does not produce asphalt. New York, Colorado, and Oklahoma are other states that have reported delays in road projects.
Sarah Simpson, a Tesoro spokeswoman, said the company notified its customers earlier this year it would stop asphalt production at Anacortes. “The crude oils that we are now running at Anacortes are not conducive to producing paving-grade asphalt,” Simpson said.Simpson said refiners that do not own oil, such as Tesoro, have been hard-hit by rising crude oil prices, prompting them to focus on a type of oil that produces higher-value products such as gasoline and diesel fuel.
(story @ http://www.komonews.com/news/local/26066164.html )
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Here is another news article on Refinery crude slate change impacting state / regional asphalt supplies. The large number of states with few refineries – a great deal of them smaller & less complex types that make asphalt will continue to be a problem for the transportation industry used to cheap over-supplied asphalt. The Washington area could be impacted even more if both COP & Tesoro revive their past coking projects that have been cancled or put on hold.
Tesoro’s crude slate at Anacortes had been primarily composed of sweet Canadian by Pipeline, Alaskan crude by US ships and remainder from foreign imports. Tesoro began rolling off existing crude contracts in 1Q2008, moving away from the more expensive Canadian sweet and ANS benchmark crude’s towards more foreign imports. <Similar slate changes happened also at Golden Eagle (new coker project completed) and Hawaii (shift away Premium Asian sweet crude’s).
Originally both Tesoro & ConocoPhillips had new coker addition projects for their Anacortes Refineries but were canceled or delayed during 2006 because of cost increase (~doubled) and need to move timing forward on other coker projects (G. Eagle & Borger/Woodriver). Both had planned to use more Canadian Bitumen heavy crude’s with the new Anacortes coking units.
Although Tesoro Anacortes coker project was delayed their were two Sulfur handling projects that did go in 3Q07 and facilitated the use (& flexibility) of more discounted Canadian heavy sour crude.
As this article mentions the continued shift in US refineries to more heavy sour crudes (as most available domestic & import sweet crude’s become physically or economically unavailable) will impact all by-product qualities & quantities (asphalt / lube/petcokes/ sulfur, ect). The most dramatic shift is already occurring at this early juncture with Asphalt, but will soon be followed by anode grade green petcoke, and later heavy fuel oil products.
Regards
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