Registration is open for two premier asphalt industry events in Orange County next month: the Spring Asphalt "Tech Tune-Up" educational workshop, and a "Spring Tee" golf event. Spots for both events are limited so early registration is strongly recommended.

Caltrans District 7 Director Tony Tavares (pictured) will be the opening speaker for the "Tech Tune-up" educational event, which will take place on Tuesday, April 5 at the Embassy Suites-North Orange County Hotel, 900 E. Birch St. in Brea. The packed agenda includes presentations on eTicketing, Cold-in-Place Recycling, Cold Central-Plant Recycling, Warm Mix Asphalt, and a detailed presentation on the new HMA-LG model asphalt specification for local agencies. There will also be a presentation on how the Superpave initiative has changed over the years, and an update on ever-changing environmental regulations that impact the asphalt pavement industry.

The event begins at 8 a.m. with on-site check-in and breakfast, with the daylong program commencing at 9 a.m. Lunch and refreshments are also included for the $239 registration fee for CalAPA members and agency personnel. As with all CalAPA events, there will be ample time to network and visit vendor tables. On-line registration for the Tech Tune-Up event must be completed via the event website HERE. A timed agenda is HERE.

A companion event, the CalAPA "Spring Tee" Golf Event, will return to the popular Black Gold Golf Club in nearby Yorba Linda on Wednesday, April 6. Check-in begins for the event at 7 a.m. with a shotgun start promptly at 8 a.m. The event on the famed Black Gold champion-caliber course includes all green fees, golf cart, breakfast, an awards luncheon, refreshments and a few surprises. Registration must be completed on line via the event website HERE. The Black Gold Golf Club website is HERE.

CalAPA has secured special discounted room rates at the Embassy Suites in Brea for attendees to either or both of these events. Rooms are $159 per night but are limited and available on a first-come, first-served basis. Details on how to access the discount is on each event web page. Mildly scandalous photos from the previous CalAPA event held at the Black Gold Golf Club in 2020 can be viewed on the CalAPA Facebook Page HERE.

For those old enough to remember the Arab oil embargo and resulting gas shortages of the 1970s, you can be excused for having some PTSD (Post-Traumatic Stress Disorder) symptoms in recent days. The Russian invasion of Ukraine has sent shock waves through many business sectors, but none more prominent than the oil industry that is particularly sensitive to global events.

Since Russia is one the world's largest exporters of oil, the West is looking to impose economic sanctions on the Putin regime, which could crimp supplies further and send already sky-high prices even higher. Those price disruptions find their way to California in the form of higher fuel prices and other petroleum-based products, such as asphalt.The photo that accompanies this story was snapped by a reader in Los Angeles County over the weekend.

This is where the risk to the contractor comes in. A company that bids on a project based on today's pricing, but may not actually utilize materials or other resources to construct the project for months or even years later, is playing Russian roulette. If prices decline, they are in great shape. If prices go up, however, they are on the hook for the higher prices and a low-bid price that suddenly makes the project a profit-killer.

Caltrans and the asphalt pavement industry recognized this dilemma in the 1970s and developed what is now known as the asphalt index. The concept is simple: Bid today with your best estimate of the cost of delivering the job. If an unforeseen event sends oil prices soaring, you can be compensated for the higher price at the actual time you are consuming the material. If prices suddenly drop, however, you are crediting the owner for the lower cost of acquiring the material. It's only fair. Contractors who feel like their crystal ball is a bit sharper than others can opt out of the index, and they are own their own.

In recent years the index has been re-examined by committees of Caltrans and industry representatives and found largely to work as intended -- smoothing out the gyrations in commodity prices and reducing risk for the contractor. Just a quick glance at the posted Caltrans crude prices used to calculate the asphalt index shows prices have careened from a pandemic low of $109 to this month's high of $507. You can view the Caltrans index page HERE.

For a system that has worked so well for so long, it's a wonder that it hasn't been widely adopted by local agencies, or for other commodities, such as fuel. Inevitably, a "Black Swan" event is going to come along, and in recent years we have seen a couple of them: a global pandemic, and now a ground war in Europe. Any system that helps prevent those types of events from ruining an industry seems to make sense on multiple levels.

CalAPA has produced white papers for its members on the subject of the asphalt index in California, how it is used, and various changes made over the years in how the index is administered by Caltrans. Members who wish to re-evaluate their strategy on how they utilize the Caltrans asphalt index are encouraged to request one of these reports from the association by submitting an inquiry HERE.

Every president mentions infrastructure in the annual State of the Union speech, but for the first time in many years there was some good news report.

President Joe Biden, in an address to Congress, touted the passage of the $1.2 trillion Infrastructure Investment & Jobs Act, and the standing ovation he received from Republicans and Democrats in the Capitol gave a strong indication of how popular the bill is.

“America used to have the best roads, bridges and airports on Earth,” the president said during his March 2 speech. “Now our infrastructure is ranked 13th in the world. We won’t be able to compete for the jobs of the 21st century if we don’t fix that.”

But unlike previous State of the Union speeches, the president wasn’t imploring Congress to act, he was commending Congress for passing the bipartisan bill, which he called “the most sweeping investment to rebuild America in history.”

The years-long effort to advocate for investing in our crumbling roads and aging bridges has been chronicled in this publication, and too often it was half-measures and kicking the proverbial can down the pothole-strewn road. In California, SB1, the $50 billion Road Repair & Accountability Act of 2017, was the most prominent example of how making prudent investments in infrastructure is not only good policy but also very popular. Using a similar template, a broad coalition pressed the case on the federal level, resulting in the IIJA passing last November. The New York Times on Feb. 20 concluded that “the asphalt industry may ultimately receive the biggest share” of the federal legislation. A previous Asphalt Insider story about The Times coverage is HERE.

“This was a bipartisan effort,” the president said last week, “and I want to thank the members of both parties who worked to make it happen. We’re done talking about infrastructure weeks. We’re going to have an infrastructure decade.”

Later in the speech, the president noted the impact to jobs and the economy coming from the investments in the IIJA, and how projects are already starting to appear.

“We’ll create good jobs for millions of Americans, modernizing roads, airports, ports, and waterways all across America,” Biden said, adding “4,000 projects have already been announced. And tonight, I’m announcing that this year we will start fixing over 65,000 miles of highway and 1,500 bridges in disrepair.” A full transcript of the president's State of the Union speech is HERE.

The infrastructure portion of the president’s speech received robust applause from both sides of the aisle. That might be noteworthy for California Gov. Gavin Newsom, who issued the following statement about the speech: “Tonight, President Biden reminded us of what we have in common, and how much stronger we can be when we work together.” Newsom, as is the custom for most California governors, likes to look presidential and deliver their own version of a “State of the State” speech. Infrastructure is generally also mentioned. However, Newsom's budget proposal released earlier this year to drain more than $500 million from the state highway account via a fuel excise tax adjustment “pause” at the pump would seem to run counter to the concept of investing in infrastructure and the future touted by the president. CalAPA has come out strongly in opposition to the proposal, calling it in media reports “a budget stunt” and “highway robbery.” When the governor presents revised revenue numbers next month, which are expected to be robust, perhaps his undercutting of the state highway fund will find an off-ramp to oblivion. Then we can get to work, as the president said, on the "infrastructure decade."

SUPERPAVE™: A mix design using volume metric concepts and specific performance criteria. The Strategic Highway Research Program developed the Superior Performing Asphalt Pavements (Superpave™) method of mix design to replace the Hveem and Marshall methods.

Each week we highlight a key point or best practice of interest to asphalt paving crews, inspectors and others working in the field. We welcome suggestions. More tips can be found in our "Asphalt Parking Lot Construction Checklist" HERE. Information on the CalAPA "Quality Paving Certificate" program is HERE.

PRE-CONSTRUCTION REVIEW: Every paving project should start with a detailed review of the project's contract, plans, and specifications. Any questions arising from this review should be promptly directed to the design firm's engineers.

Each week we highlight a term that is specific to climate-change issues related to the asphalt pavement industry. This feature is intended to raise awareness of the asphalt industry's climate-change initiatives and the specialized terminology that goes with them. More information on the "Road Forward" asphalt industry climate initiative can be found HERE.

CARBON FOOTPRINT: Measurement of climate impact over a lifecycle.

“The greatest doer must also be a great dreamer."

-- Theodore Roosevelt

We hope you enjoy CalAPA's Asphalt Insider newsletter. We are committed to providing you with the most up-to-date information on technical issues, regulation, news, analysis, events and trends in California that is of interest to the asphalt pavement industry and our various agency partners. Click HERE to contact us with any comments or suggestions.

Sincerely,

Executive Director

California Asphalt Pavement Association (CalAPA)®