County’s sole supplier of asphalt to close
Routine summer maintenance of Mesa County roads may be nixed this year.
SEM Group LP, the former parent company of SEM Materials, Mesa County’s sole supplier of asphalt and emulsions for chip sealing roads, is in Chapter 11 bankruptcy.
The local SEM Materials facility, 202 Fourth Ave., has since been spun off and is now a part of SEM Group Energy Partners, a company formed from the collapse of SEM Group LP.
The facility, which supplies Mesa County, much of western Colorado and eastern Utah with asphalt and emulsions for road maintenance is being mothballed, leaving many road and bridge crews idle. If new ownership is not found soon, many repairs and overlays planned for county roads this year will have to wait until next year.
“Our chip seal program for 2009 is suspended,” said Eric Bruton, director of county road and bridge department.
But Suncor Energy may be riding in over the hill to save the day, according to Tom Peterson, executive director of the Colorado Asphalt Paving Association.
He said that in a meeting two weeks ago with Colorado Department of Transportation officials and industry representatives, Suncor executives said they “have reached a tentative agreement” with SEM Group Energy Partners, based in Tulsa, Okla., to take over all of the company’s assets. It could mean a full supply of asphalt and liquid emulsions for chip seals will be ready and flowing from the former SEM facility in Grand Junction by June 1, Peterson said.
“So we expect with this announcement that 2009 will allow programs to be implemented consistent with previous years,” Peterson said.
A representative with Suncor, a Canadian company, was not so sure the deal was done, but indicated there was a deal in the works to keep the local SEM plant open and rev up production.
“We are in discussion with the owner of the assets to try and utilize them and have the products for sale this summer,” said Norb Schreiber, manager of asphalt marketing for Suncor in Denver.
If Suncor’s deal is successful, the county’s chip seal program could proceed, Bruton said.
“That would definitely affect what we do,” Bruton said. “If there is an availability for liquid asphalt in Grand Junction this year, we would probably go ahead and do our chip seal program, maybe somewhat scaled back (for economic reasons)... but we would definitely have a chip seal program if that availability does exist.”
Mesa County usually spends $400,000 a year on liquid emulsion to make enough chip seal to cover about 35 miles of road, Bruton said. The emulsion is mixed with rock to become chip seal. It is then spread in a thin layer over roads. The process is done to extend the life of the road.
Bruton said he chose not to seek other suppliers along the Front Range or out of state because he had confidence the SEM Materials facility would reopen in time for next year’s road maintenance programs.
CDOT, on the other hand, contracted with other suppliers, said David Eller, CDOT program engineer.
“We are able to get asphalt for paving,” he said.
But the emulsions are of a slightly different composition than those that had been supplied by SEM. State road crews do not have as much experience working with the new materials.
In addition, the transportation costs for the materials have increased and, because of funding from the American Recovery and Reinvestment Act, there is more demand for asphalt and emulsions for chip sealing, Eller said.
CDOT has budget constraints, and the higher cost of asphalt will further hamper the agency’s ability to do road maintenance, Eller said.
“We are already falling behind on our surface-treatment program,” he said. “By reducing our ability to have preventative maintenance, our system will get worse faster, and then it will be more difficult to get it back up.”
The city of Grand Junction is not affected by SEM’s closing, said Darren Starr, street and solid waste manager for the city.
About five years ago, the city switched to a Front Range supplier that makes a chip seal material that dries in minutes, rather than the hour or more it takes for the SEM-produced emulsion to dry, Starr said.
“We can put that oil down and pour rock over it and in 10 minutes have traffic moving,” he said. “We want to get people back on it as quickly as we can.”
Bruton said the county opted not to switch to another supplier years ago and refused to do it this year because the type of oil it uses in its chip seal is superior to the city’s.
“I think our chip seal is top-notch,” Bruton said.