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Are you a highway user who wants to travel on safe, less congested roads?
Join Andrew Stasiowski, President and CEO of the American Highway Users Alliance, as he speaks with leading experts about the latest policies impacting the transportation community. Each month, Andrew will cover topics of critical importance to the highway user community, from reducing congestion on roads, to reforming highway trust funds, to increasing global competitiveness.
Listen to new episodes of “Driving Forward” wherever you get your podcasts.
The American Highway Users Alliance is a nonprofit organization advocating for public policies that promote roadway safety, increase freedom of movement, and preserve opportunities for all people to live, work, shop, and travel unencumbered.
To learn more about AHUA, you can visit our website.
(upbeat music)
- Hello, and welcome to the
"Driving Forward Podcast."
I'm your host, Andrew Stasiowski,
of the American Highway Users Alliance.
(upbeat music)
We have a great episode on
the asphalt industry today,
and I wanted to talk about a few key ideas
that you should take away
from today's interview.
First, innovation has been
critical to the asphalt industry.
Significant progress has been made
to reducing the greenhouse gas emissions
from the overall transportation sector,
and we can dive deeply
into what that means
for the traveling public.
Second, secure funding is essential.
We need a long-term funding solution
for the Highway Trust
Fund that allows for us
to make long-term investments
into our roads and bridges
across this country, and third,
permitting reform is essential.
We need a more coherent permitting process
to make sure roads and
bridges are constructed
on time and at budget,
and now, onto our show.
(upbeat music)
Joining us today is Nile Elam.
Nile is the vice president
of Government Affairs
for the National Asphalt
Pavement Association.
Nile, welcome to the
"Driving Forward Podcast."
- Yeah, thanks, Andrew, for having me.
Looking forward to the chat.
- Absolutely, glad to have you on.
So, you know, as we like
to do on every episode
of "Driving Forward,"
why don't we start off
by kind of just level-setting?
Talk about National Asphalt
Pavement Association, or NAPA,
who are your members, you know,
obviously, pavement and asphalt,
but kind of what do you guys
do, what are your focuses on?
- Yeah, absolutely, so again,
thanks for the time today, Andrew,
and just to give an overview,
I'll start with the industry,
and then I'll get into NAPA itself,
but I'm sure all of your listeners,
whether they realize it or
not, were probably on asphalt,
you know, as they were getting
their morning cup of coffee
or heading into work.
We are the primary material,
as a road-paving material.
Our product covers roughly 94, 95%
of the entire roadway market.
So we like to think
we're pretty ubiquitous
with surface transportation funding
and infrastructure policy,
and we're also about 80%
of the airfield market as well.
We have a big presence as it relates
to horizontal materials and paving.
Our industry is responsible
for roughly 400 million tons a year
in terms of product made,
and asphalt is a pretty
relatively simple product.
I'm showing to you a core sample
of just what it looks like,
but our product is mostly aggregate,
so rock, sand, gravel, and binder.
So the bitumen, the oil,
which is usually typically
the bottom of the drum,
and that's the glue that
keeps these materials together
and creates that black viscosity.
Our product is about 95% aggregate base,
and then the rest is binder,
and then a handful of
other different additives,
slurry seals, other materials you can add
to improve performance,
increase maintenance activities.
Our product is also a fantastic use
of pretty much taking the
undesirable materials,
so you can use tire and
crumb rubber in asphalt,
you can use single-use plastics.
It has a great kind of
circular economy approach,
which is also what's big about our product
is that it's the most
recycled product in the world,
it's the most recycled
product in the country.
Not a lot of people know that.
Reclaimed asphalt product or RAP, R-A-P,
is what we like to call that shorthand,
and we did over 90 million tons of that.
So I know we'll dive
into a little bit more,
but that's essentially
taking up the top two inches
of, typically, roadway, those
millings, taking those out,
you can save on a lot of virgin materials
like the aggregate and
binder I'd mentioned.
You add a little bit of binder,
a little bit emulsifiers
and additives, and then you
can put that same material
back down again, which is
a really fantastic story.
In terms of NAPA itself,
National Asphalt Pavement Association,
so we represent those producers,
those contractors, those pavers.
We represent roughly 70% of that industry.
We're the lone national
trade association and voice
in Washington on behalf of our members,
and we represent roughly 1,100
members, about 3,500 plants,
and our industry is responsible
for about 350,000
hardworking men and women
who are either producing
material or laying it down.
So for a lot of your listeners,
if you don't know how the sausage is made,
you've probably seen it laid down
as you drive through a work
zone, those are our guys.
So I'd say that's a
pretty accurate snapshot.
We touch pretty much every
district in every corner
of the country, coast to
coast, border to border.
- Great, I appreciate that overview.
I remember, when I was a Hill staffer,
it was always kind of,
some of these words kind
of became interchangeable,
whether it's asphalt, cement.
What's the difference in types of projects
on the highway that you're seeing?
Like what's the difference
between like an asphalt project
and a cement project, and how
would we differentiate those?
- So asphalt, we really see
as that performing material
that's that top layer.
You know, we love asphalt to death,
but, you know, you wouldn't
have like two feet of asphalt
to create a base, you know,
for a runway or a bridge.
It doesn't work very well
when it's stacked upon itself
because what's great about
asphalt is that it's flexible,
depending on the viscosity,
the mixes that you make.
You can have a lot more give,
you can make it more rigid,
you can, you know, it's really
dependent upon the customer,
i.e., the state DOT or contractor to say,
"Hey, you know, here's what
the performance and the specs
and the climate and the budget."
Concrete and cement, that really helps
as a base material for asphalt.
Obviously, it's also used a
lot in vertical construction
as it relates to, say,
bridge construction,
but for our material, it's
really taking that top portion
of the pavement that is intended
to be the most exhausted
regarding use, maintenance, wear and tear,
and that's where we
kind of find ourselves.
So we like to think we're complementary
with our concrete and cement partners.
We have members who are
very vertically integrated,
that does everything
from aggregate to asphalt
to ready-mix, concrete cement.
We also, of course, have a lot of folks
that exclusively work
in the asphalt space,
and, of course, our focus
will always be asphalt,
but I think we work complementary
with a lot of our construction
material partners.
And, you know, when it comes
to roadway construction,
as I mentioned, 94, almost 95%.
So there are cases where
concrete paver is used
because of the durability
or because of cost.
But it's primarily our material,
and we're proud of that
and like to see that continue.
- That's great.
So, you know, if I'm building
out a highway project
or they're gonna be adding,
is that gonna be more
of an asphalt project,
is that gonna be cement concrete project,
or could be a little bit of both?
- Yeah, it could be a little bit of both.
I mean, typically, that's
probably gonna be more
of an asphalt project, particularly,
it's a preexisting road.
You know, we always make the point
that if a road is not performing well,
it's typically not that top
layer, but it's how the base
has performed, or when it was
set, or how it was maintained
'cause then that can create
a lot of the stresses
that then kind of reverberate
up to the top pavement.
And for our listeners, I'm not
an engineer, so please don't,
you know, I'm sure I'm
gonna have some colleagues
that are gonna be looking at me,
you know, kind of wide-eyed.
But having said that,
unless there are new
lane miles being created,
where you do have to
generate the base material
and everything above it,
for most highway projects,
for the jobs that I think
a lot of your listeners
are familiar with on their
commute, they are maintaining
or resetting that top layer material,
which is our asphalt product.
- So that's kind of the
ground-up road you'll see,
and then you'll lay the
layer down on top of that.
- Right, and we call
those the millings, right?
So you're taking those top couple inches.
And I think what's great
when we talk about RAP,
and what's so fascinating
about this industry
that I've learned about,
having only been at NAPA
since the beginning of 2023,
is just how varied you can get.
You know, the pavement you
would lay down at an airport
is very different than the
pavement that you would lay down
in your driveway or, you
know, driving up I-95.
Now, of course, you'd
probably think, "Well, duh,
you know, an airplane performs
as a very different mode
of transportation than
you would your Subaru."
But the way that these
mixes are put together,
and the type of aggregate that they use,
whether that's locally sourced
or from some other regional vendor,
the way that that binder is put together,
the way that you want that
runway to perform based off,
you know, the weight
of something hitting it
versus just a truck that's
going across the same lane miles
day after day, when you're
talking about velocity and torque
of, say, a jet engine taking off
versus someone who's got a heavy foot,
you know, yielding into
traffic, it's just incredible
when you can see all
these different mixes,
and that goes everything from, you know,
an Indy 500 racetrack all
the way down to, you know,
the neighborhood road that you drive to
to get home every day.
- Let's talk a little bit,
you mentioned this earlier
when you're describing
what goes into asphalt,
and you mentioned oil and kind
of the bottom of the barrel
on an oil.
We've seen a lot
in the world of permitting
the last few years,
coming out of CQ, coming out of, you know,
the admin, out of Congress.
What has the impact been on permitting
in terms of getting projects built,
both highways or runways,
but also, you know,
the ability to get oil,
how's that impacting the cost
of asphalt and increasing
the cost of projects?
- Yeah, you bring up a good point.
You know, when we talk energy policy,
opportunities to permit and
drill and extract, you know,
domestically available energy
sources compared to importing,
a lot of people probably don't
think of the roadway market.
They don't think of asphalt
producers, but they do need to.
And we actually fill
a very important niche
because I mentioned earlier
we're kind of the bottom
of the barrel.
You know, when you have a drum of oil,
a predominant amount of that
is probably going towards
combustible engines,
you know, diesel, gasoline, the
stuff that we use every day.
But it's this more kind of
thicker viscosity binder
that is really a prime
product to use as an input
for asphalt, and there's
a lot of discussions
on how certain materials
should be sourced,
you know, environmental impacts.
I'm a firm believer that
economic and national security,
as well as opportunities to
build our domestic workforce
and manufacturing, shouldn't
run mutually exclusive
to environmental
protections and stewardship.
I think those are
complementary, and, you know,
I think that has been a little
bit more of a discussion
with the policymakers that you
and I probably interact with
on a daily basis.
However, I think, currently now,
there's a little bit of frustration
because we have such a
wealth of raw material,
you know, in and around our border
that I don't think we're
taking full advantage of,
and from an energy manufacturing
standpoint, you know,
the drilling capacity that we've had,
that extracts the kind
of materials we need,
has certainly changed over the years.
There are refiners that have closed down
or have pivoted their economic
model because, you know,
just based off what they have available,
they need to make those
business decisions.
So it is frustrating, and
it means in certain markets,
like, for instance, the
Northeast, Pacific Northwest,
for example, it's difficult
to get that binder locally sourced
because the refining isn't there
'cause it can't be permitted
or the business has shifted entirely,
and because of that, that
material typically comes
from, say, Canada 'cause
they have a "sweeter crude"
is what we like to say, but in doing so,
then we talk about some
other permitting items
and regulatory issues that we
may get into in Buy American,
and where that material's sourced,
so it's kind of this domino effect,
and if we skew towards one end
of the pendulum or another,
that could have some really
significant reverberations
on disrupting what I see
is a relatively delicate,
you know, construction supply chain.
And once that runs afoul,
that could really run amiss
with project delivery, with jobs,
with using taxpayer dollars
efficiently for, you know,
the roadway projects we
all need and use every day.
- Well, let's dive into that.
We, you know, we just saw
manufacturing product waiver rule
come out of FHWA,
dealing with Buy America,
and I know you guys did
a lot of work on that.
Can you talk about that, but also,
how does that play in with the oil and gas
as you're talking about there?
Let's dive into that completely.
- Yeah, no, I appreciate that.
So, you know, we, NAPA,
as well as our construction
material trade partners,
so the aggregate industry,
the ready-mix industry,
the cement industry, we've
really been in lockstep
ever since IIJA was starting
to get off the grounds
back in 2020, 2021.
So we kinda have to take the clock back
almost four or five years
because there were expansions
to Buy America that
ultimately were enveloped
in this larger transportation
package, and of course,
it was, you know, record funding amounts
and, you know, a lot of
other bells and whistles,
but you wanna make sure that those dollars
are spent responsibly and
even well-intended policies
of a Buy America issue, which, you know,
I'm sure a lot of your
listeners are familiar,
but, you know, how you
source your workforce,
how you source your raw materials,
how you source your plants
and manufacturing processes.
Is that domestic?
If so, how much, you know,
what does that in total cost
as it relates to the
output of your material?
Is your material utilized
in federal procurement?
And we were very concerned
because a very aggressive
expansion of Buy America,
fine, great, that's fantastic,
but we have had a waiver
in place at FHWA since the early '80s
that would protect our
construction material inputs,
like aggregate, like
binder, like additives
that, as I had mentioned earlier,
from a binder perspective,
can't be sourced locally in Maine,
that's really difficult, or New Hampshire,
or Seattle, Washington, and
from the aggregate perspective,
if you're sitting in Florida,
where you're pretty much at sea level,
you know, there's not a lot of rock,
there's not a lot of
limestone to go around.
Pretty much any of the gulf communities,
from Texas to Florida,
would have those issues,
coastal communities, and,
you know, thankfully,
we have friendly trade
partners with Mexico and Canada
that fills the bulk of
those raw material voids
that we can't get locally,
but absent working on a waiver
and maintaining that exemption,
these Buy America expansions
could really make a problem
for how we source 400 million
tons worth of asphalt mix
that we utilize every year.
But we had worked hard
with the administration,
we worked hard with a
lot of folks on the Hill,
we worked closely with
the HUA and other partners
to really kind of hammer that
point, and happy to report
that, finally, this past
summer, OMB last year
kind of affirmed that
construction material exemption.
But you pointed out,
they're still exploring the waiver process
and essentially pulling that all together
in that manufacturing threshold,
and while our fight has,
I think, largely been quelled,
we still have concerns
because there are other
partners in this space,
like I'm thinking, on highway
safety equipment, you know,
guardrails, signs, you know,
where that's sourced, and it's unfortunate
because I think there's a
lot of good ideas in play,
but I think no one is
really thinking about,
well, how does everybody
operate, how do we implement?
And then when we're talking
about these projects
through DOTs, where there's
multi-year planning processes,
there are hundreds if not
billions of dollars at stake
for the appropriate execution,
I mean, this impacts how
communities are gonna operate,
how they're gonna design,
how they see themselves
in 20, 30 years.
A lot of these policies are
running afoul of ensuring
that those projects get online
and get implemented properly.
So, you know, we continue to
work, Andrew, with your team
to say, you know, there's
still a lot of questions
before we have answers,
and we need to make sure
this process is made easier,
simpler, and more navigable to implement
than just kind of putting out a North Star
of try to get it as
locally as best you can,
and when you can't, what
are your alternatives?
I mean, you can't build a
road without a guardrail.
You can't build, you know, a major highway
without the steel signs telling
you what exit's coming up.
So even everything from those
little screws, you know,
it's important where
that's sourced, I get that,
but we also gotta do
it in a reasonably way.
So it's a policy that I think
needs a lot more massaging
before I think anyone would
say we did it correctly.
- Yeah, and I mean I
think adding more time
to give companies and
industries to get in compliance
with kind of some of these requirements,
I think it's an
aspirational goal for sure,
but we would need to make sure
that just because there may be one company
that can build something doesn't mean
that every company can
get that product easily
if they're trying to build a road
or they're trying add a
guardrail or whatever.
You know, when we're doing
construction projects,
they have to be complete.
So you have to have every
aspect of it when you're,
you know, building a new road.
Can't quite build a road without
a guardrail or, you know,
lane markings or whatever it might be.
- Yeah, or the striping, yeah,
where the glass beads come from,
I mean, folks don't think about it,
and I don't even think a lot
of folks in DC think about it,
why should they, but when they
put the policies together,
all of a sudden now,
that's a vulnerable part
of the supply chain that no
one ever thought to worry about
because maybe we could have
never sourced that locally
in the first place.
- Right, yeah, for sure,
flexibility is key in this.
So, yeah, we talked about IIJA, you know,
how has IIJA been for your industry?
How have you seen the projects?
I know, initially, there
was a lot of concern
that money wasn't really
going out the door,
but I think there's,
that seemed to have been
moving a little bit faster.
I know there's also been concerns
about, you know, inflation
and the impact it's had on the ability
to meet all the construction
goals we had in this bill.
How have you seen the bill
for the asphalt industry?
- It's hard to think, Andrew,
that we're already at year three of IIJA.
You know, we're past the halfway point.
So the fact that we're
already starting now
to think about how
implementation's going now
because the next highway
bill's on the horizon,
it's just amazing how time's flown by.
Yet, in that same vein, I
mean, we are very thankful
that Congress passed that,
we are very supportive
of the senators, you know, the 67, 70-plus
that supported for the bill.
We had, you know, bipartisan
support in the House.
Only about 13 Republicans,
but a lot of Democrats.
I mean, we're very appreciative
of everybody's efforts getting that ball
across the finish line.
And thank God we had
that $500 billion plus-up
for state highway projects
because, as you pointed out,
I think inflationary
impacts, workforce issues,
the supply chain, and Buy America comments
that we just went through,
a lot of that has really
impacted our industry,
not to mention just COVID
and how everything has
really disrupted a lot
of how businesses traditionally operate.
Yeah, I think in some markets,
it's grown a little bit.
In other markets, it's
relatively stagnant,
and we've seen, in a couple areas,
it's actually gone down slightly.
And one thing we've tried
to tell members of Congress
is, you know, there are some companies
that have a more robust bottom line.
You know, they are showing
signs of investments
and expansion because of
the investments provided
through IIJA, but if you
look at tonnage reports,
the tonnage is not anywhere
near that we had anticipated
given the bump of what this
bill provided back in 2021.
And I think a lot of that is
because costs are being eaten
from a regulatory standpoint, you know,
from permitting, from overhead.
When the bill first came out,
FHWA had some mixed signals
on fix-it-first versus, you
know, working on new capacity,
so it's kind of the stop-go.
There's some state DOTs that
I think were well-prepared
and anticipated what was coming
and had their projects teed up.
I think there's some
other state DOTs that,
through COVID or other means,
either had other
distractions or priorities,
and so they've had a hard
time getting their dollars
out the door.
Thankfully, now that we're
getting into year three,
our hope, from a NAPA perspective,
is that we're really gonna
start to see a little bit more
of a takeoff because while
there's a lot involved
from a formula funding
perspective, you know,
there's a lot of
discretionary spending too,
and that takes time to get out the door,
and that takes time to
implement in those processes.
But NAPA is working on some
documents with our friends
at the road builders,
where we're gonna show a
state-by-state breakdown
of not only the IIJA-supported projects,
but, you know, where asphalt was used,
how much asphalt, to kind of give a sense
because we have our State
Asphalt Pavement Associations,
which are our state partners
that work on these policies
at the local and state level.
And you do a straw poll,
and some of them are great,
some of them have have been very happy,
but there are others that
there's a lot of frustration
and a lot of concern that, you know,
everybody thought we got the
sun, the moon, and the stars,
but if you were to look at our projects
these last couple years,
we're not making the inroads.
And I think that's gonna be
a real interesting narrative
that a lot of us are
gonna have to navigate
because you wanna be
appreciative to the members
on the Hill of what we've
achieved, but the same token,
it's not enough.
And had we not gotten
that plus-up, you know,
things could be a lot more precarious.
So, a mixed bag, but I'm one
of those glass-half-full guys.
I mean, I think there's a lot of momentum
we could still build that IIJA provided
that will hopefully benefit us as we work
in this next congress with
this next highway bill.
- Yeah, I think, you
know, we've talked a bunch
on this, and I think
Chris Spear said it first,
but we've often said this is
a once-in-a-lifetime bill.
And I think, from our
perspective, and I know,
from your perspective and
a lot of our members',
we wanna change that to this should be
what the bill should be.
The bills need to be big.
We need to keep, we've got so much need,
I think it's 800 billion in the backlog.
We really need to be building
and continue to invest
at this level because we,
in order to not only
meet our current needs
but also the needs of our
future, we need to keep building.
So I think that ties into, you know,
one of our biggest concerns
for this next bill,
and I think the lesson,
one of the lessons learned
is we need to fix funding.
So what do you think the potential issues
for funding will have on your industry
if we can't get a long-term
solution for funding
and general fund money
may dry up down the road
as we deal with some of our debt issues?
You know, how is that
uncertainty of funding
going to impact your industry?
- You hit the nail on the head.
I mean, uncertainty is the Big Bad Wolf
as it relates to
infrastructure, investment,
and implementation because,
you know, our members,
and a lot of our partners
and folks across the
construction material space,
the investments in their
plants and their people
and the equipment, I mean,
these pavers and trucks
are costing millions of dollars.
I mean that's not, you
know, that's not a line item
you just decide nilly-willy
that you're gonna put it in
in one year and see what happens.
I mean you have to anticipate
what your state DOT,
what your federal partners
are willing to put up
so that you can anticipate
your cost expenses.
Having said all that, the
800-pound gorilla in the room
is what happens with
the Highway Trust Funds
given the current outlays.
I mean, while IIJA was a boon
in terms of that investment,
like you had said, and
I'm sure like Chris Spear
and others have mentioned
on your podcast before,
you know, this is a over-utilized
and underfunded infrastructure network,
and what we got in IIJA was
not everything we needed,
it was just a drop in the bucket.
And I think one of the big
items that IIJA didn't address,
that I think a lot of us wish they had,
was creating more awareness,
as well as consistency,
on new revenue generation
for the Highway Trust Funds.
I know I'm preaching to the choir,
but we haven't raised the
gas tax in over 30 years.
We haven't tweaked this model whatsoever.
It's been a blank check from
the treasury over the last,
you know, 15 years, 20 years.
And looking ahead, we
need to get more creative
because the mode and the
transportation vehicles
that are in front of us,
and what a lot of other OEMs
are anticipating over the
next, you know, two decades,
are radically different
than the car you and I drove
in high school.
So I'm trying to figure
out a way to get Congress
to take that seriously, and I think now
that we've gotten that initial
surge of support for IIJA,
as you pointed out, we
gotta keep that momentum,
so, you know, to run through
a little bit of a scenario,
if we maintain those IIJA outlays
in terms of dollars out the
door from the federal government
to our state DOTs, and
we don't do anything
to the Highway Trust Funds, by
2028, if not soon thereafter,
it's gonna start running a deficit,
and over the next decade-plus,
that's gonna get in the tens of billions,
over 150, 200 billion by
the end of the next decade,
so it's imperative
that we have some really
tough discussions,
and NAPA certainly has a view
of being a little bit agnostic
in saying whatever gets
us there, you know,
if you wanna get creative
on P3s, you wanna work
on a vehicle miles traveled,
you wanna work on registration fees
based off your vehicle,
gross vehicle weight?
Great, fantastic.
You wanna capture the EV market, you know,
there's a lot of different levers
I think we could all be pulling,
but I think the one
thing no one wants to see
is to sit stagnant and have to worry
about some really big numbers
that get political very quickly
if we have to worry about transfers.
And there are some people
that I think are more
on the fringe of the political
spectrums on either side
that say, "Well, just get
rid of the trust fund,
just get rid of it, you
know, and go about it,
you know, through the treasury,"
well, then we're gonna get
into a debate of, you know,
is infrastructure funding
on the chessboard,
as you pointed out, with
debt limit negotiations
and everything else?
So I think we need to keep
our little piggy bank,
we just need to make sure
that we're responsible
in keeping it filled and
not expecting or hoping
that because who may hold the pen
or political favor a
certain day determines
whether or not they're
gonna cut a big check
to cover the massive amount
of investments we need
to be making and should have been making.
- Definitely, having some kind
of a consistent trust fund
that's predictable,
where we know how much money
we're gonna raise every year
is essential because, as you
pointed out earlier, you know,
you're making plans based
on not just what we think's
gonna be there next year.
You're making plans over what
the investments are gonna be
over the next 5, 10, 15 years.
So whatever we do, you know,
and we're working on a plan
as you know, you know,
I think we have to make
sure it's predictable,
the revenue is expected, and it's secure
for highway funding
and highway investment.
So appreciate your thoughts on that.
- And one thing, just to
quickly add on that too, Andrew,
I was on a panel with the new Dems,
and they had an
infrastructure round table,
and there were some partners,
and one of the things
that a lot of us were sharing was,
look, IIJA had transformative investment
for the EV infrastructure,
you know, charging network
for rural broadbands.
I mean, you know, worthy, worthy causes
that are outside of the
more traditional scope
but, you know, ultimately,
is infrastructure dollars.
But as we've discussed, there's
a lot that needs to be done
and investments that need to be made.
This next highway bill, we would
love it to be a big number.
We would love it to be a
trillion-plus or whatever,
but not knowing what
November will give us,
I think it's also seeing
the forest from the trees.
It's understanding that this
next highway bill really needs
to focus on highway funding
and highway projects
because everything that
receives something in IIJA
that established or will
guarantee a market going forward,
but we are working in a market
that has been underfunded
for so long that while we got that bump,
we need to make sure we kind of stick
to the core policies and the core projects
before a lot of other things
may potentially be thrown in.
So maybe that next highway
bill isn't as big a number,
but on an annual
distribution basis, you know,
for investments on infrastructure,
it does everything we need to do.
We talked a little bit,
but you look at the impact
that inflation had in the
transportation sector, I mean,
it really did eat away at
most, a lot of that investment
that we made, that increased investment.
So, you know, maintaining
that level, I think,
is gonna be big because it's
not as if we're gonna see
those inflationary costs recede.
They're not gonna go back
down to where it was the cost
to build a, you know, mile
of highway was pre-2020.
So, you know, we gotta keep that in mind
as we're looking at these investments.
- You've touched on this a little bit,
but I know sustainability
and the reclaimed asphalt
product has been a big issue
for you guys.
Maybe take that from the base level,
talk about what that means and, you know,
how much of that is just
trying to be thoughtful
with how you use all your
products and all that,
but kind of talk about
that issue a little bit.
- Yeah, totally.
I think this is an area where
our industry has long led,
and as I mentioned,
now that more environmental consciousness
has kind of entered the lexicon
of pretty much any policy
in DC no matter what it is, I
think we're well-positioned.
I mean, the construction material sector
is the largest carbon output
throughout our economy,
and there are certain materials
that are much more
responsible for that output,
but I know they're doing a
lot to increase, you know,
their carbon capture and net
zero goals, which is all great.
We're all rowing in the same direction.
I think where we're
really well-positioned,
and where I'm really proud of
what our members have done,
is I mentioned 400 million tons,
94, 95% of the roadway
market, I mean that is a,
that's a big bucket that we
carry, yet we're only .03%
of those carbon outputs
within our industry sector,
which is phenomenal.
So we may not get all the bells
and whistles if we take that
from .03 to .02, but that is
still a huge gain relative
to the ubiquitousness of our material
and how much it's manufactured,
and RAP is certainly a very
key process in how that works.
NAPA's long led on EPDs,
environmental product declarations,
which is becoming more
common now in how we acquire
and use the materials
through federal procurement,
and for those that don't know,
it's almost like the
nutrition label that you see
on a bag of chips, that's how it's applied
for your material, so where
did your aggregate come from,
your binder, how much
environmental cost was associated
with how it was extracted, transported,
manufactured, et cetera,
but within the realm of RAP
that you'd asked about,
the national DOT average
is right around 20% of RAP usage.
As I mentioned, over 90 million
tons were used last year.
There are some states, like
North Carolina, Virginia,
that have a much higher RAP concentrate,
like up in the upper 20s, low 30s.
You can actually take
that RAP pretty high.
And there are a ton of very
smart reports written by people
that I could never keep up with
that outline how successful
that is from a performance
and spec process, and think
of New York City, right?
You know, there's, you're not
gonna find an asphalt plant
in the Financial District,
but they have to recycle,
they have to use what
they have in front of 'em,
so they try to recycle as much
of that roadway as they can.
So they're almost up to, you know,
100% just within the city alone.
But I think what is really
fascinating is if we're able
to increase RAP usage at a
national level by just 1%,
that's the equivalent of
taking over 25,000 vehicles
and their greenhouse gases
off the road every year.
So it's a great stat, and
it, and again, it delivers
on cost, it delivers on performance,
and it delivers on execution.
RAP is not always gonna
be the solution everywhere
all the time, but I think a
focus that we hope to have
is just making sure that our
DOT partners, both here in DC
and across the States,
just have an understanding
that the studies that maybe
they solve RAP from, say,
45, 50 years ago, it's much
different than where we are now.
And the different additives, emulsifiers,
and other byproducts you
can include in that material
to not only make it last but
perform well is phenomenal.
So we're really proud of that endeavor,
and we've been working on bills
that address decarbonization
in the construction material
space 'cause we think,
"Hey, there's a lot of good stories here.
Let's not prescribe what should happen,
but let's complement
what the industry's doing
in trying to get that
deployed more markets
and more frequently."
So I think there's a lot there
that we're certainly proud
of, but there's always more
that we could be doing, and
we're leading that charge.
We have a 2050 net zero carbon goal,
like some other industries do as well,
and we're very proud of that.
But it took a lot of our
members seeing the long picture,
and I think embracing that
no matter who's in charge
in the next 5, 10, 15, 20
years, this is an issue
that can't be swept on the rug or ignored.
And you'd rather be better positioned,
particularly, if it impacts
federal procurement now
than playing catch-up after the fact
and finding a lot of other
difficult conversations
that you need to have.
- Great use of a recycled material that,
you know, we, instead of
just paper, it's a great way
that we can actually drive
on these recycled materials.
That's awesome.
Let's move into our last question.
We've asked every guest this.
If you could do one thing, if
you could wave your magic wand
and implement one policy
for the asphalt industry,
what would that be?
- One policy for the asphalt industry.
And just so I'm clear,
so I'm understanding
the question correctly,
this is just something, a
policy within the NAPA universe?
Are we talking about like,
hey, if there's a highway bill,
you know, next year, do X, Y, Z?
- Whatever you think would be
the most transformational,
so, for example,
you know, we've had, one
answer was, you know,
truck parking was the
biggest thing that ATA said.
So, you know,
whatever you think would
be the most impactful thing
to help your industry
in the highway space.
- Honestly, I think it would
be a more collaborative
and graceful approach of new mix designs,
which we call performance-based specs
or a balanced-mix design,
where certain decision makers,
whether they be from the political side,
or like an engineer at a state
DOT or FHWA, really utilizing
and taking advantage of a
lot of different recipes
that you could get the same
outcome instead of saying,
"When I make a batch of cookies,
it has to be a ton of chocolate,
and I don't care if there's,
you know, too much sugar
or flour or whatever."
We kind of see that
same with asphalt mixes.
There's, you do hot, warm,
cold, you can use RAP,
you can use plastic,
crumb rubber, you know,
the list goes on and on.
And I think one thing
that would be beneficial
is just making sure that
folks see it holistically
and not using just one defining attribute
to determine your outcome,
but using all of them
as a complement to each other,
but it kind of gets back to RAP.
I mean, if we're able
to increase that usage,
I mean, that's material that
doesn't have to find itself
in a landfill or sitting,
you know, in a yard
at a producer site.
It's getting back on the
material and the roadways
that they were intended
to be used all along.
I think as we start to increase
that greater flexibility
and appreciation for
what a material could do,
and I don't even think this
is really just asphalt,
I think there's a lot of materials
that could fill this void too,
I think you find yourself
giving yourself more leeway
and not a rope to fail, but
just giving more opportunity
to explore and say, "You know,
we've always done hot mix,
but let's try a warm mix,
let's try a cold mix,
let's try these materials,
those materials,"
and just getting a chance for
those to prove themselves.
You know, I think, as we
speak within the NAPA world,
a lot of engineers, you know,
when they find a solution
to a problem, they usually like to go back
to that same solution.
So I think it's just making sure
that we have that whole
recipe book afforded to you,
and whether that's a brand new road
with brand new materials,
different inputs,
different emulsifiers, RAP, whatever,
I think that's something
that could go a long way
in not only improving how we build roads
and how we think of roads, but
really, how we are ensuring
that that environmental responsibility
is not only adhered to
but actually implemented.
- Well, thank you so much, Nile,
for coming on today, and
this was a great interview,
and I look to have you
on again sometime soon.
- Yeah, thanks so much,
Andrew, really appreciate it.
(upbeat music)
- All right, I wanna thank Nile
for coming on to the podcast today.
I think it was a great interview,
and I hope we all learned a
lot about the asphalt industry.
Please continue to listen to and subscribe
to the "Driving Forward Podcast"
wherever you get your podcasts.
(upbeat music)
(bright music)
- Next topic.