Asphalt supply cutoff halts road projects
Jobs are jeopardized as Tesoro shuts down production for a month
Tesoro Hawaii is closing down production of liquid asphalt for about a month, leaving dozens of workers without jobs, potholes unfilled and halting or delaying road construction projects.
Tesoro's oil refinery is the state's only supplier of liquid asphalt. Contractor Grace Pacific Corp. said it has only a two- or three-day supply of the product, which is essential to make asphalt to pave roads, and there is no way to get it from other sources.
"We can't pave if we can't get any asphalt," said Larry Leopardi, the city's Road Maintenance Division chief.
He said the city was scheduled to work on Aala Street next week. Crews that are normally sent out daily to fix potholes will do other things.
State Department of Transportation spokesman Scott Ishikawa said several projects also will be affected, but the shortage should not affect the completion of the H-1 widening project.
This is the second major shutdown in the last three months, said Bob Wilkinson, president and chief executive officer of Grace Pacific Corp., which has contracts for several major road construction projects. Grace Pacific also is the major supplier of road asphalt, which is made from liquid asphalt and other materials.
Tesoro officials were not available yesterday for comment on why it was temporarily stopping the manufacture of liquid asphalt. Tesoro also stopped production for three weeks earlier this year so it could fix the refinery, Wilkinson said.
Wilkinson will be holding an emergency meeting with 70 to 80 employees on Monday to discuss what the company will do next.
"I'm really worried about them," Wilkinson said, noting that the shutdown will have a ripple effect on other smaller construction companies.
Wayne Matsunaga, executive vice president of Ron's Construction Co., said five of his employees will be affected. He might be able to shift some of them to another job, but he is not sure how long that will last.
Matsunaga said he had to lay off workers during the last asphalt shortage and in February and March during the heavy rain.
"The men are kind of disheartened. We can't pave in the rain so they can't work, and now we have this. It's not helping them at all," Matsunaga said. "It cannot keep happening like that. We're going to have to solve this problem."
Calls to Tesoro Hawaii were referred to a corporate spokeswoman in Texas, who was unavailable yesterday.
Wilkinson said Chevron stopped refining asphalt about a year ago.
He said there is a shortage of asphalt nationwide because refineries prefer to use higher-grade crude oil rather than heavy crude for environmental reasons. Liquid asphalt is made from the tar and heavier products left after the refining process, he explained, and oil companies are processing even heavy crude to get more fuel and less asphalt.
The price of asphalt has tripled in the last year, Wilkinson said, and that increase is reflected in the cost to taxpayers of building new roads. It is a cost that is likely to rise even further, he noted.
Grace Pacific has explored bringing in liquid asphalt from the mainland or other countries to deal with inconsistent supply here. But Wilkinson said, "It is not an easy thing to make a change right away."
The company would have to build tanks to store a month's supply of asphalt and get environmental approvals in addition to contracting for a steady source of supply.
The state's construction industry uses about 1 million to 1.2 million tons of finished asphalt each year, enough to pave about 1,000 to 1,200 miles of road, Wilkinson estimated.
About 60,000 to 70,000 tons of liquid asphalt is needed to make that much product.
