49.4 F
Fort Worth
Sunday, November 29, 2020
Government Trump plans road building as nation's biggest asphalt plant shuts

Trump plans road building as nation’s biggest asphalt plant shuts

Other News

Exxon’s oil slick

Exxon Mobil is slashing its capital spending budget for 2020 by 30% due to weak demand caused by the COVID-19 pandemic and a market...

Folk music’s Mark Twain: 7 Essential tracks from John Prine,

NEW YORK (AP) — Some people, the songs just come out of them. For nearly half a century, they tumbled out of John Prine...

Tarrant County records another COVID-19 death

Tarrant County Public Health (TCPH) on Wednesday, April 8 reported that a resident of Euless has died as the result of the COVID-19 virus....

Tradition stymied: A year unlike any since WWII for Augusta

The Masters is so intertwined with Augusta, they added an extra day to spring break.You see, the first full week of April isn't just...

Axeon Specialty Products is shuttering the U.S. largest asphalt refinery when the country might need it the most.

The Stamford, Connecticut-based company announced last month it plans to close its Paulsboro, New Jersey, refinery, and convert it into a terminal. The planned shutdown comes as President Donald Trump has pledged to build new roads, highways and bridges across the country. The U.S. would need 63 percent more asphalt than its consumes now just to pave roads at the rate it reached a decade ago, Energy Information Administration data show.

Any new road building runs up against the question of funding and a simple pledge isn’t enough to keep Axeon’s plant running, Gurpal Dosanjh, Bloomberg Intelligence analyst, said in a phone call from New York.

“It’s very difficult for any company to base it’s future on a one sentence policy,” he said. “I don’t think its too surprising it closed.”

U.S. consumption of the road sealant, measured in product supplied, fell to 335,000 barrels a day last year from 343,000 in 2015, Energy Information Administration data show. Demand has fallen since reaching 546,000 in 2005, the second biggest year on record after 1999. U.S. refiners have also been producing less, with domestic output dropping a yearly 2.1 percent to 333,000 in the first 11 months of last year.

Asphalt is a mix of crushed rocks and viscous oil, typically produced from heavy crude at refineries. As much as 30 percent of asphalt produced is recycled.

Axeon’s New Jersey refinery can produce 49,000 barrels a day of the road sealant, more than any other plant in the U.S. including Flint Hills Resources LLC Minnesota plant, Energy Department data show. Dave Kirshner, Axeon’s chief executive officer, declined to comment on the plant when contacted by phone.

While Trump pledged to invest as much as a $1 trillion in infrastructure during his campaign, refiners have reason to be skeptical that an infrastructure expenditure will lead to a rise in demand, Dosanjh said.

Asphalt use has failed to pick up since Congress passed, and former President Barack Obama signed, the Fixing America’s Surface Transportation Act, called FAST, in 2015. The bill provided $305 billion between 2016 and 2020 to fix the country’s road and transport network. Prices for the material have also lagged.

Unlike crude oil, which fell to a 12-year low of about $26 a barrel in February 2016 only to rebound above $50 , asphalt in New York has fallen to $380 a metric ton this month, the lowest in at least four years and down from $453 a year earlier, according to prices posted on the state’s Department of Transportation.

“A lot of states and especially those with rural areas have been challenged, from a budget perspective,” to keep up with road paving, Liisa Ecola, senior policy analyst, at the Rand Corp. in Arlington, Virginia, said in a phone interview. In two-thirds of states, motor fuel tax revenue, the prime funding source for road work, failed to keep pace with inflation for two decades, according to a 2015 analysis by Governing magazine.

The Axeon plant in New Jersey lacks direct access to the heavy Canadian oil sands crude that is commonly used to make asphalt. Crude production from Venezuela, a waterborne heavy oil suppliers, is declining, Dosanjh said.

“I don’t think there is enough demand on the East Coast around where Axiom is located,” he said. “Even if there is an increase in demand, they will just have to accept imports rather than produce asphalt.”

Not everybody sees the situation as dire. Alon USA Energy Inc., a $733 million refiner, derived about 7 percent of its revenue from asphalt last year, data compiled by Bloomberg show. The company’s Big Spring, Texas, refinery produces 2,000 barrels a day of asphalt and uses heavy Canadian oil as its primary source of crude, Scott Rowe, senior vice president of the company’s asphalt business, said in a Dec. 6 e-mail.

Proposed infrastructure spending is rising faster than what the FAST act funded, with demand for construction materials in Texas rising 30 to 40 percent, Rowe said.

“We expect our operating income and profits to continue to increase,” he said.


close






Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

JRB Fort Worth chosen for main operating base for C-130J aircraft

Naval Air Station Joint Reserve Base Fort Worth has been selected as a main operating base for eight C-130J aircraft at the 136th Airlift...

Tarrant County DA’s office changing how it handles misdemeanor marijuna cases

The Tarrant County Criminal District Attorney’s Office is changing how it handles misdemeanor marijuana cases. The Tarrant County  Criminal District Attorney’s Office on Monday, Nov....

Arlington selects new police chief from Baltimore department

Col. Al Jones, a 25-year veteran of the Baltimore County Police Department, has been appointed the new police chief of the the City of...

GM to recall 7M vehicles globally to replace Takata air bags

DETROIT (AP) — General Motors will recall about 7 million big pickup trucks and SUVs worldwide to replace potentially dangerous Takata air bag inflators. The...

GM flips to California’s side in pollution fight with Trump

DETROIT (AP) — General Motors says it will no longer support the Trump administration in legal efforts to end California’s right to set its...