Future of Petroleum Asphalt Binder Supply
BY Chait Bhat, Ph.D. LCACP
The future of asphalt binder supply starts with crude oil demand
Doubts around the future availability of petroleum-based asphalt binder (we will refer to this as liquid AC from here onwards) have been cast over multiple decades. The reasoning has varied widely: non-renewable nature of the source material (crude oil), fluctuations in the pricing (e.g., price hike during the 1970 oil embargo) and recent policies around decarbonization.
The Asphalt Institute, founded in 1919, is the sole trade association representing more than 90% of liquid AC manufacturers across North America. Hence, in 2024, its 501(c)3, Asphalt Institute Foundation, sponsored a strategic cornerstone project with Wood Mackenzie to assess future availability of liquid AC in a data-driven manner.
Under this scenario, global petroleum products demand was still around 85-90 million barrels per day, and this steady decline did not decrease liquid AC production.
Production Influences Availability, Research
To assess the potential availability of liquid AC, we need to understand how it is produced.
The first steps in the production of liquid AC are exploration, extraction and production of crude oil. Per the “Annual Statistical Bulletin” published by the Organization of the Petroleum Exporting Countries (OPEC) in 2025, world crude reserves are about 1566.87 billion barrels.
Now, not all crude oil may be suitable for producing liquid AC. While the high density, high sulfur nature of heavy sour crudes offers the resins and asphaltenes required for liquid AC production, higher amounts of heavy sour crude may be mixed with lighter amounts of light sweet crude for production.
High-sulfur bitumen is typically found in Canadian Oil Sands. The United States, Venezuela, Saudi Arabia, Russia and others have abundant reserves of heavy sour crudes. For example, Venezuela has around 303 billion barrels of predominantly heavy crude and Canadian Oil Sands have around 161 billion barrels of recoverable reserves.
The next step after crude oil extraction and production would be to transport it to various refineries that distill crude to produce various energy sources such as gasoline, diesel, aviation fuel and others. Globally, in 2024, the total refinery throughput was around 103.8 million barrels per day, according to the same OPEC resource. Liquid AC contributed around 2% of the total refinery throughput.
As mentioned above, in 2024, the global demand of around 103.8 million barrels per day for various oil products was primarily driven by energy demand, and while asphalt binder is used for construction, its production process from heavier crudes is tied to energy demand. Approximately 70% of United States refineries rely on heavy crude imported from countries like Canada and liquid AC is produced as the heavy residue during the distillation of these crudes. Hence, to assess the potential availability of liquid AC across North America, it is imperative to do it in conjunction with the projections for future energy demand. This reasoning paved the way for selection of Wood Mackenzie given their expertise in energy system modeling and understanding of pragmatic supply and demand.
Energy Demand Matters
A June 2024 article on UNDP’s Data Futures Exchange website stated that the global population is 7.6 billion and around 1.18 billion are facing energy poverty because of accessibility, affordability and reliability issues. The United Nations’ Department of Social and Economic Affairs projects the population to grow to 9.8 billion by 2050 and 11.2 billion by 2100, predominantly in developing countries. Rising populations and increased energy poverty point to obvious increases in energy demand.
Another sector that has drastically increased energy demand is the use of large language models (LLMs) under the broader umbrella of Artificial Intelligence (AI) and Machine Learning (ML). According to the “2024 Report on U.S. Data Center Energy Use” from the U.S. Department of Energy, the total data center energy use is estimated to be as high as 580 TWh in 2028 as compared to 60 TWh in 2016, accounting for 12% of total U.S. electricity consumption from the enhanced computation requirements to run AI/ML models.
While various sources of energy may be used to meet this demand, the AIF’s project with Wood Mackenzie correlated this energy demand to potential availability of liquid AC within the North American market.
Using third-party and publicly available energy projections from entities such as the International Energy Agency, Wood Mackenzie updates their energy outlook on an annual basis. The outlook considers supply chain interactions between 100+ sectors. At the time of AIF’s research project, Wood Mackenzie projected three potential scenarios for energy supply and demand that correlate to different degrees of temperature increase globally.
- Base Case Scenario: The most pragmatic scenario projected in 2024 and correlated to 2.5°C rise in temperature. Attainment of this scenario requires around $55 trillion investment from all countries cumulatively between 2024 and 2050. This funding would grow renewable energy generation by 82% and levies $84 for every ton of carbon emitted.
- Country Pledges Scenario: This scenario was consistent with pledges made by various countries per the Paris Climate Agreement limiting the global temperature rise by 2°C. Attainment requires around $65 trillion investment from all countries cumulatively between 2024 and 2050. This funding would grow renewable energy generation by 91% and levies $133 for every ton of carbon emitted.
- Net Zero Scenario: This scenario would limit the global temperature rise by 1.5°C. Attainment requires around $78 trillion investment from all countries cumulatively between 2024 and 2050. This funding would grow renewable energy generation by 94% and levies $157 for every ton of carbon emitted.
To put all the dollar amounts in context, the overall Gross Domestic Product (GDP) of a developed nation such as the United States was $28.7 trillion and that of a developing country such as India was $3.7 trillion in 2024. The cumulative contributions indicated above for different scenarios need to come from developed as well as developing countries.
Wood Mackenzie projected that the “Base Case” would be the most likely scenario by 2050. Under this scenario, global petroleum products demand was still around 85-90 million barrels per day, and this steady decline did not decrease liquid AC production. Specifically, within North America, around 400,000 barrels of projected liquid AC demand would still be met in 2040. Detailed analysis and discussions on this project could be found through publicly available report and webinar proceedings accessible through the AIF website.
Energy Demand Alters
Energy supply and demand is an ever-evolving landscape, and outlooks change with technological advancements and needs. For example, in 2025, Wood Mackenzie added a scenario to their energy outlook and the numbers for above-described scenarios have drastically changed.
- Delayed Transition Scenario: This scenario correlates to 3.1°C rise in temperature. Attainment requires around $130 trillion investment from all countries cumulatively between 2025 and 2060. This funding would grow renewable energy generation by 82% and levies $103 for every ton of carbon emitted.
- Base Case Scenario: This was the most pragmatic scenario projected in 2025 and correlated to 2.6°C rise in temperature. Attainment requires around $137 trillion investment from all countries cumulatively between 2025 and 2060. This funding would grow renewable energy generation by 86% and levies $110 for every ton of carbon emitted.
- Country Pledges Scenario: This scenario was consistent with pledges made by various countries per the Paris Climate Agreement limiting the global temperature rise by 2°C. Attainment requires around $156 trillion investment from all countries cumulatively between 2025 and 2060. This funding would grow renewable energy generation by 95% and levies $150 for every ton of carbon emitted.
- Net Zero Scenario: This scenario would limit the global temperature rise by 1.5°C. Attainment requires around $175 trillion investment from all countries between 2025 and 2060. This funding would grow renewable energy generation by 96% and levies $166 for every ton of carbon emitted.
Key causes for the surge in forecasted prices across different transition scenarios in 2025 as compared to 2024 include the emergence of superintelligence (e.g., additional energy for AI computations), geopolitical changes and other factors.
A clear message that was obtained through the AIF’s research with Wood Mackenzie was the abundant availability (even surplus) of liquid AC produced from both the United States and Canadian refineries for various construction activities in the coming decades. I hope this article along with the additional information from the AIF project provides a data-driven projection on the future of liquid AC supply.
Chait Bhat, Ph.D., LCACP, is the head of sustainability engineering and research at the Asphalt Institute, Lexington, Kentucky.