It would be irresponsible to quote the Energy Information Administration (EIA) Weekly Petroleum Status Report’s daily spot price for West Texas Intermediate (WTI) on April 7 and declare the 2026 construction season doomed. The reality is more complicated. And familiar.
We’ve seen these stressors before. Markets react sharply to geopolitical instability. State agencies struggle to plan when Federal funding levels are set to expire at the end of a construction season. And once input costs rise, they rarely fall back to previous levels.
Rather than dwelling on the aspects of business that cannot be controlled, the savvy asphalt professional manages the aspects he can control.
We can’t influence global events, but we can build escalators into contracts to reduce exposure to asphalt price hikes. We can’t force Congress to act, but we can advocate the importance of proper funding at state levels. We can’t make vendors lower prices, but we can reconsider which products we need by how we build.
Let’s give that last point extra attention.
It’s almost cliche to point to this example, but look at one outcome of the 1970’s oil embargo. Crude oil became “difficult to obtain” during the Carter Administration and asphalt prices went through the roof. In response, the asphalt paving industry examined how to recycle its product and introduced better infrastructure for reclaimed asphalt pavement (RAP). The Asphalt Recycling and Reclaiming Association (ARRA) formed in 1976.
A more recent example is from this century. When prices skyrocketed in 2008, we again saw contractors leaning into increased RAP use. That use hasn’t abated. NAPA Vice President for Engineering, Research & Technology J. Richard Willis, PhD, recently shared that our industry remains the country’s top recycler. We put 101.4 million tons of RAP back into use during the 2024 construction season, saving taxpayers $4.7 billion compared to virgin materials, according to NAPA.
When we save money for taxpayers, we save on costs for us, too.
As an industry, we’ve tightened our belts before. We know how to adapt. We know how to build escalators into contracts to protect against abrupt price increases mid-project and how to employ different paving, preservation and recycling methods to reduce input prices.
Does a warehouse parking lot project slated for complete reconstruction require a highly-engineered mix design across the entire property? At today’s asphalt prices, I suggest there’s a less-expensive solution a contractor and property owner could agree upon. While everyone who understands the mantra of “the right treatment for the right pavement at the right time” just gasped in horror, let’s stop and consider a very real opportunity in a volatile season: communication.
We could take this season’s pricing pendulum as an opportunity to sit down with the state DOT materials engineer, the municipal planning director, the property manager’s BOD, or whomever you need to talk to, and discuss the merits of postponing parts (if not all) of a project. If there are ways to save the owner/agency money, will that change order outweigh a three-month delay?
Maybe it’s time to pivot.
If the escalator built into the contract will run your client’s coffers dry, neither of you wins. Maybe it’s time to revisit the parameters of the project, engineer a way to incorporate additional RAP, discuss postponing portions of the work, or explore alternative asphalt-centric treatments that keep both the budget and the surface intact.
The question isn’t whether we can weather volatility. We know we can because we’ve done it before. The question is how the asphalt industry can adjust tools and techniques to get the job done effectively.
Stay Safe,
Sandy Lender