Economics

The high population growth rate being experienced in Texas combined with national, state and local economic conditions – dwindling funding levels combined with high infrastructure needs – have elevated the importance of owners needing to make prudent spending decisions. The asphalt paving industry through TXAPA's partnership with the Texas Department of Transportation (TxDOT) has stepped up to meet these demands by adding tools to a product that is already the most economical paving product available to owners. Specifications have been developed or are under development that allow the addition of recycled asphalt pavement (RAP), recycled asphalt shingles (RAS), and substitute binders to asphalt mixes. All of these additions, along with other changes in TxDOT specifications, have helped to reduce the price of asphalt on Texas roadway projects.
 

Asphalt pavements have always possessed Economical, Engineering, and Environmental benefits which are second to none in the paving industry. These three "E's” have helped to make asphalt the preferred pavement type in America. Asphalt has accomplished this in part by being the most cost effective pavement type. Proof in point: the United States has 2.2 million miles of paved roads, and about 94 percent of them are surfaced with asphalt, America's choice.  The asphalt industry reclaims about 100 million tons of its own product every year in the form of RAP. 95 million tons of this is reused or recycled every year making it America's number one recycled product.
 

The average binder percentage of RAP is 5%; therefore, when it is reused in asphalt the quantity of virgin binder needed in the new mix can be reduced. This reduction in virgin binder quantity can be passed along to the owner in the form of reduced asphalt prices.
 

The use of RAP also saves on the amount of virgin aggregate required in the new mix. Again this reduction in the need of virgin aggregate can be passed along to the owner in the form of reduced asphalt prices.  11 million tons of waste asphalt roofing shingles are generated in the United States each year. Asphalt paving is the most common process and the best use for RAS. Without allowing this use the RAS would end up in landfills across the country. An asphalt shingle is made of various materials and fibers with asphalt amounting to 25% of the shingle by volume. By using RAS in asphalt paving mixes the amount of virgin binder required in the mix can be reduced. This reduction in virgin binder quantity can be passed along to the owner in the form of reduced asphalt prices.
 

With the use of RAP and RAS in asphalt paving mixes the advent of binder substitution has occurred. Binder substitution, sometimes known as grade dumping or grade bumping, is the process of substituting a lower grade binder into the asphalt paving mix than the original binder grade called for in the plans. In plan sets that allow this type of substitution the final asphalt paving mixture must still meet the requirements of the original mix and binder called for in the plans.
 

There has been a concern that mixes that allow the use of RAP and/or RAS can end up being overly stiff; crack prematurely; or have a shortened pavement life. Studies have shown that approximately 20% RAP added to mix can stiffen the binder by one grade. The same studies have shown that 5% RAS added to mix can have the same effect. With this in mind in order to make an effective use of recycled materials it is in the owners and contractors best interest to allow binder substitution. When binder substitution is allowed the use of RAP and RAS can occur without the concern of the mixes becoming overly stiff; cracking prematurely; or having a shortened pavement life. As shown above the addition of RAP and RAS to asphalt paving mixes has the potential to reduce asphalt paving mix prices.
 

The substitution of a lower binder grade can potentially reduce the price of the mix as well. The Louisiana Price index from November 2008 through October 2010 shows that the price differential between PG 64-22 and PG 70-22 has fluctuated between $70-140/ton. Over this same time frame the price differential between PG 70-22 and PG 76-22 has fluctuated between $50-60/ton. This price differential is mainly due to the polymers being added to the mix as you move from PG 64-22 to PG 70-22 to PG 76-22. The price differential when binder substitution is allowed can be passed along to the owner in the form of reduced asphalt mix prices.
 

The TxDOT typically uses between 5 million and 15 million tons of asphalt each year. In 2010 TxDOT used approximately 8.2 million tons. TxDOT typically generates between 1 and 3 million tons of RAP each year. Within Texas the exact quantity of RAS produced is not currently known, but it is estimated that over 95% of that quantity ends up in landfills not benefiting anyone.
 

The addition of RAP and RAS to asphalt paving mixes can occur in surface and subsurface mixes and it can occur to mixes originally calling for a variety of PG binder grades. The percent of RAP and RAS currently allowed in conventional asphalt mix types varies depending on whether it is being added to surface mixes or subsurface mixes. RAP and RAS can be added at the same time to the asphalt mix called for in the plans. There is a maximum ratio by percent of recycled binder to total binder allowed in mixes depending on whether the mix is surface or subsurface mix. Note the percent of RAP and RAS along with the percent of recycled binder to total binder varies by depth from the surface.
 

Combining everything discussed above RAP, RAS and substitute binders have the most value when they are used in higher cost materials. The value of the recycled materials is dependent on what they are replacing. With this in mind asphalt mix prices have the potential to be reduced by 10 to 30% when using RAP, RAS and substitute binders. With these percentages TxDOT, which typically spends over $500 million on asphalt, can save anywhere from $50 million to $150 million by allowing the addition of RAP and RAS and the substitution of binder grades. With these potential savings the days of 100% virgin mixes will be very rare in the future.
 

To read more on this subject please read an informative article entitled "High Price HMA going the way of the Cave Man.”

Decision makers can also show good stewardship practices by justifying their choices to the citizens of Texas. Good stewardship practices can include but are not limited to a detailed, logical, and documented pavement type selection process that includes a life-cycle cost analysis as a key component. The Asphalt Pavement Alliance (APA) has a very good discussion of Pavement Type Selection (PTS); Life-cycle Cost Analysis (LCCA); and Alternate Bidding in the Economics portion of the APA website or click on these helpful APA produced documents:


ASPHALT FACT #109

Environmentally Friendly
Porous asphalt is an environmentally
friendly tool for storm water management