We've experienced a paradigm shift. Concrete is now competitive with asphalt on an initial cost basis.

Producer Price IndicesIt’s no surprise that oil price fluctuations are a daily occurrence. Although there has been some easing, the general trend is towards sharp increases in oil prices. And, as go oil prices, so too do the cost of its derivatives, including gasoline, diesel fuel, industrial lubricants, and asphalt.

Conventional wisdom holds that strong worldwide demand and domestic capacity issues in North America are driving oil prices increasingly higher. There also are reports that refineries are simply getting better at the process of extracting value from a barrel of oil.

This means there are more high-grade products and less low-grade materials, such as asphalt, being extracted from a barrel of oil. This also means that higher oil prices and strong demand could foreshadow short supply of asphalt materials in the future.

Not only is the price of the base material higher (and growing) for asphalt pavements, there are also some inherent costs that few people consider. For example, asphalt has to be repaired and replaced far more frequently than concrete. With each one of these maintenance, repair, and reconstruction cycles, there are energy costs. Those energy costs include the prices of gasoline, diesel fuel, and other oil-based products required to heat the asphalt, as well as to operate construction vehicles.

Though placing concrete pavement also includes some of these costs, it does not require fossil fuel energy for heating the product, nor does it require as much energy because its durability means longer intervals between repair and reconstruction.