Oil shortage causes trouble for county’s road projects

It was the message Don Kreig didn’t want to get.

On a hot Friday morning in July — the middle of road construction and repair season — the owner of Kreig Construction in Oak Harbor got an e-mail from Tesoro Refineries of Anacortes, one of only two asphalt oil producers in Washington. Asphalt is a byproduct of gasoline refining.

“Tesoro told him that the company wasn’t going to make the oil, focusing instead on more profitable lighter oils,” said Island County Public Works Director Bill Oakes.

Last spring, the price of asphalt doubled practically overnight, so the pressure on the county’s prime contractor, Kreig Construction, was already intense.

As a result, major paving contracts have been suspended for the foreseeable future. Paving falls into two categories depending on whether the work is done on low- or high-volume roads.

“We can still get asphalt oil for chip sealing pavements that experience less traffic,” Oakes said. “The problem lies with getting the asphalt and concrete mix needed for higher volume roads.”

Despite the shortage, work continues on South Whidbey road projects, but only those related to chip sealing.

On Bailey Road, workers have put down the first layer of oil and rock and will seal that with a final oil application within a few days, or when the weather clears.

Tesoro has a total crude-oil capacity of 115,000 barrels per day at their refinery in Anacortes. The company supplies gasoline, jet fuel and diesel to markets in Washington and Oregon, and manufactures heavy fuel oils, liquefied petroleum gas and asphalt.

Or did until last month, as Kreig and the county discovered.

U.S. Oil & Refining Company in Tacoma is the other supplier of asphalt oil, but the rules of supply and demand have created a shortage. Company spokeswoman Marcia Nielsen said U.S. Oil has no plans to change their output.

“We’re making as much asphalt as possible from a barrel of crude oil and will continue,” she said.

Oakes continues to monitor the situation closely.

“To be honest, in 20 years I’ve never seen anything like this,” Oakes said. “To have 50 percent of the oil capacity disappear in the middle of paving season is tough on all of us.”

He is optimistic that things will stabilize eventually, but not in time for whatever hot weather remains, which is the prime period for paving contractors. Oakes added that oil is produced in Canada but couldn’t pinpoint the cost factors involved in bringing it south.