When gravel has to travel, prices climb sharply
Construction aggregates, including gravel, crushed rock and sand, are crucial parts of virtually all construction projects. And while the Northwest is rich with deposits of these resources, it is becoming more difficult for companies that process these materials to gain access to them.
“There is sufficient supply for the foreseeable future,” said Charles Hawkins, executive vice president and chief operating officer of the National Stone, Sand and Gravel Association. “The bigger issue is land supply and permitting to extract the materials.”
With the rising level of new construction in Clark County, demand for gravel has grown, but the amount of available resources is diminishing. Local aggregate supplier J.L. Storedahl and Sons says many of Clark County’s sites have marginal gravel quality, lack suitable roadways or have subdivisions built on top of or near the finest aggregate resources.
Storedahl Vice President Kimball Storedahl expects currently operating Clark County mines to be depleted within five years. Insufficient supply would result in materials transported from outlying areas to meet the demand.
Washington Aggregates and Concrete Association Executive Director Bruce Chattin said 45 to 50 percent of the cost of gravel is for transportation. Hawkins said the cost of gravel increases by 10 to 15 cents per ton for every mile it is transported from its excavation site to where it is used.
According to Chattin, construction of an average home requires about 250 tons of sand and gravel, and a mile of one-lane roadway uses 36,000 tons of aggregate. Chattin said more than half of the aggregate consumed in the state goes into transportation projects.
Schlecht Construction President Larry Schlecht said he has seen commercial construction costs rise 30 to 35 percent in the past two years, and aggregates alone have increased by as much as 15 to 20 percent, he said.
“Construction costs are directly impacted by the availability of rock and gravel,” said Schlecht. “We can’t build anything without these products.”
Washington State produces about 80 million tons of construction aggregates each year, which is barely enough, said Chattin. The state is expected to require 100 million to 110 million tons annually by 2015.
Storedahl said gravel prices have risen from $6 per ton a year ago to $9 per ton today, with the county producing about 3.5 to 4 million tons each year.
“The cost of permitting, the cost of transportation and a finite supply (will increase) costs over time if we do nothing,” said Chattin.
Those in the industry say poor planning has led to shopping malls and subdivisions being built on tens of millions of dollars worth of aggregate. Cities and counties need to do a better job of planning ahead by identifying aggregate resources and setting them aside for future use, said Chattin. He points to San Francisco, where gravel now costs $25 to $30 per ton, versus $12 just a few years ago.
Suppliers are also facing increasing costs to mine sites. Chattin said it takes between 7 and 10 years to permit a sand and gravel mine, with costs of between $750,000 to $1 million each year.
Storedahl and Sons received a setback when Clark County commissioners voted to restrict mining at its 300-acre Daybreak property near the East Fork of the Lewis River. Despite a finding by a hearings examiner that Storedahl had a pre-existing right to mine the entire property, the commissioners voted 2-1 to only allow the company to mine 71 acres of the property it had previously mined before the county passed zoning laws restricting mining in 1973. Storedahl had plans of mining gravel on 101 acres of the property, which was approved as environmentally sound by federal fish agencies.
Despite his attempts to create a situation in which his industry and the environment can co-exist, Storedahl has not been able to gain permit approval at the county level.
“If that’s any indication as to what the industry has facing it in Clark County, I am reluctant to believe there will be adequate supplies permitted to maintain consumption,” he said.
As has occurred with concrete supplies recently, Schlecht said the concern is that there is the potential for limited supplies to delay projects, and some developers have chosen to shelve projects to see if prices come down, he said.
“We could leave millions of tons of resources in our own backyard and have to import it at huge costs from somewhere else,” said Schlecht.
