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Editor's Note: As 2024 draws to a close, we pause to highlight our choices for the Top 10 stories that impacted the asphalt industry in California over the past year. Click HERE to read last year's roundup. Look for our 2025 predictions in next week's issue of this newsletter.
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1. Earthquake at the ballot box
Voters across California and the United States registered their unhappiness at the ballot box during the presidential elections, retuning Republican Donald Trump to the White House by a convincing margin Nov. 5 over Vice President Kamala Harris, a Democrat from California. Voters also gave the GOP Control of both the U.S. Senate and the U.S. House of Representatives, albeit by a slim margin. The incoming Trump administration is expected to continue its anti-regulatory bent that was on display during his first term from 2016 to 2020. This, plus a U.S. Supreme Court that is solidly conservative, may not bode well for California’s regulatory dominance in environmental regulations, particularly in the clean-air regulatory area. Lawsuits challenging that authority, meanwhile, continue to wind their way through the federal court system and a likely Supreme Court showdown. Democratic Gov. Gavin Newsom spent much of the year stumping for Democratic candidates and claiming the mantle as leading opposition figure to Trump. Newsom is entering the final two years of his tenure as governor and cannot seek re-election due to term-limits. A Republican Congressman from California, U.S. Rep. Kevin Kiley, a member of the House Transportation & Infrastructure Committee, gave a preview of the fireworks to come when he proposed to curb funding for California’s troubled High Speed Rail project. More than 30 new faces were elected to the California Legislature, but the Democratic tilt remained, with Democrats holding super-majorities in both houses and also holding all statewide constitutional offices.
2. Transportation funding overall remains robust but storm clouds are on the horizon
The steady and robust flow of tax dollars to pay for critically needed road improvements continued to be the top news story in 2024, with record amounts being spent in the space at all levels of government. But beneath the overall numbers there continued to be a persistent concern that not
enough investments were making it to the place motorists notice the most – pavements. This is despite the optimism over the passage in late 2022 of the federal Infrastructure Investment & Jobs Act, a $1.2 trillion investment in a myriad of infrastructure needs, including roads and bridges, resulting in hundreds of millions of dollars flowing to the Golden State. And that was on top of funding from SB1, the Road Repair & Accountability Act of 2017 that raised fuel taxes to pay for projects to stem steady declines in pavement conditions. Inflation also raised the cost of construction projects. CalAPA analysis of Caltrans data indicated that HMA-related projects were flat or declining in recent years. This data and other data was folded into a somewhat gloomy Asphalt Market Forecast for 2025 that was published by CalAPA on Dec. 2. Transportation coalition partners, meanwhile, continued to gather information in 2024 about a long-term solution to transportation funding as more Zero-Emission Vehicles are sold in California, reducing fuel-tax revenue.
3. Oil industry in California continues to go through changes
The petroleum industry, makers of an essential ingredient in asphalt, endured another year of assaults by politicians, environmentalists and others, and continued on a trend of contracting even as California’s appetite for energy continued to be robust. Chevron announced it was moving its California headquarters to Texas, and Conoco Phillips announced that it would cease its operations at its Los Angeles-area refinery sometime in 2025. Due to changes in public reporting of pricing by some refineries, Caltrans was forced to change its Statewide Crude Oil Price Index to align with an international benchmark. CalAPA helped facilitate industry-agency meetings to develop a new formula that is used to smooth out price spikes in the cost of liquid asphalt binder.
4. Embedded carbon a top policy topic
“Decarbonization” continued to be a hot term in 2024, with the U.S. Environmental Protection Agency soliciting comments on various Greenhouse Gas (GHG) reduction strategies, the National Asphalt Pavement Association publishing an authoritative paper on the subject, and Caltrans and industry representatives meeting to brainstorm on ways to meet various state GHG-reduction targets. The use of Environmental Product Declarations (EPDs), meanwhile, continued to gain traction as more companies responded to requests from project owners for EPDs for construction materials.
5. California’s clout in Washington continues its downward trajectory
With Vice President Kamala Harris losing her bid for the White House in November, California’s influence in Washington continued a year’s long decline in 2024. Long gone are the days when Nancy Pelosi from San Francisco wielded the Speaker’s Gavel, and later, Kevin McCarthy from Bakersfield. Although the Golden State retained the nation’s largest Congressional delegation at 52, and Democrats flipped some GOP seats from red to blue, minority-party status limited California’s ability to influence the national policy debate.
6. CalAPA launches charity to help address workforce challenge
CalAPA launched a charitable foundation, the California Asphalt Research & Educational (CARE) Foundation in 2024, aimed at turbocharging the association’s workforce recruitment and development efforts. The creation of the foundation, called for by the latest CalAPA Strategic Plan, builds on work the association has done informally over the years to promote the rewarding and diverse careers available in the asphalt pavement industry. That effort was given even greater urgency with the 2022 formal creation of the Women of Asphalt California Branch. The CARE Foundation will support WofA activities as well as provide scholarships, mentoring, educational programs and other initiatives. The CARE Foundation was officially recognized by the Internal Revenue Service in 2024 as a charitable organization, and a board of trustees has convened and developed its own strategic plan and is making regular reports to the CalAPA Board of Directors.
7. Optimism surges in CalAPA annual ‘Better-Worse’ survey
CalAPA’s annual “Better-Worse” survey recorded the biggest upsurge in optimism in years, with 55 % of respondents saying 2025 would be better than 2024, while only 13% said the coming year would be “worse.” The survey results were in sharp contrast to last year, when optimism was in short supply. The optimism levels approached those seen in 2018, when the passage of SB1, the $50 billion Road Repair & Accountability Act brought the first major influx of transportation dollars into the system since the 1990s. CalAPA has been conducting the annual survey of its “Asphalt Insider” readers since 2008.
8. Key leadership changes
The California Department of Transportation continued to lose senior leaders due to retirements, including State Pavement Engineer Tom Pyle and Office of Asphalt Pavements Chief Cathrina Barros. Pyle was replaced by Tigi Thomas, who faced a steep learning curve on pavement-related issues. A recruitment to find a permanent replacement to Barros will be conducted in 2025. Several Caltrans district directors also moved on, with positions being filled by temporary managers. On the industry side, former Utah Asphalt Pavement Association Executive Director Reed Ryan took over as executive director of the CalAPA-financed Asphalt Pavement Alliance, only to relinquish the position to become the President of the Asphalt Institute, a CalAPA partner.
9. Massive state budget deficit evaporates
The year began with dire predictions about reduced state tax revenue that could generate a state budget hole of tens of billions of dollars. But various budget gimmicks put in place by mid-year, plus a better-than-expected economy, led state finance experts to proclaim that the budget deficit was largely eliminated by year’s end. Nevertheless, strident bicycle and environmental groups continued to lobby to divert more transportation dollars to non-vehicle projects.
10. Recycling continues to gain in prominence
The California Department of Transportation released new specifications for Cold In-Place Recycling, and reconfigured its Division of Pavements to carve out an office devoted to recycling. It was the latest in a series of actions that have continued to raise the prominence of recycling asphalt, which is the world’s most recycled product. With California aggregate sources increasingly difficult to secure, the increasing use of Reclaimed Asphalt Pavement (RAP) and other recycling strategies were positioned to help fill the gap for construction materials destined for pavements.
Honorable Mention: The asphalt industry continues to be disrupted by mergers and acquisitions in
California, part of a larger trend of family-owned businesses being acquired by multi-state, national
or even international companies.
Next week: Our predictions for the top stories that will be making headlines in 2025.
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