Last month, I reviewed Florida’s aggregates shortage and how it affects that state’s ability to supply the material required for the construction projects you see as you drive up and down I-95 or the Florida Turnpike.
Now lets look at California. While that state enjoys far more aggregate reserves due to its size and geology, social, political, and economic conditions indicate that permitted reserves the next 50 years are woefully inadequate.
“California has plenty of reserves; permitting is another issue.”
This reality is soberly set forth in the California Geological Survey’s Map Sheet 52. This visual compilation of data spells out aggregate availability collected over a period of about 28 years and updated to 2006. The map compares projected aggregate demand for the next 50 years with current permitted aggregate resources in 31 regions of the state. Most significantly, it highlights regions where there is less than 10 years of permitted aggregate supply remaining, and where the shortages are most acute.
But what is most telling is how far off the mark prior estimates were when the map was last updated just four years earlier. California witnessed significant changes in prior reserve estimates due to revised aggregate production and county population projections, coupled with new mining regulations, mine closures, new mining permits, haulage restrictions, and five years of actual consumption. All have caused significant revisions to these estimates.
In the 2002 map, permitted aggregates reserves were estimated at 6.848 billion tons, but the 2006 update revises that to 4.343 billion tons, a drop in estimated permitted reserves of almost 37%. This loss of 2.5 billion tons was largely attributed to underestimates in aggregate consumption during the high-growth years early this decade, coupled with revised reclamation plans in the Yuba City-Marysville area that pulled 1.6 billion tons of reserves out of the prior estimates.
Orange County blues
Today, the map’s colorful data points to stark realities: Orange County’s permitted resources are practically exhausted. The county now relies on the Temescal Valley for much of its aggregates needs. Western Ventura County faces the same dilemma, relying heavily on aggregate production from the Simi Valley area.
The San Fernando Valley-Saugus Newhall region has only 88 million tons of permitted reserves, or 19% of its projected 50-year demand. And of that amount, 56 million tons were only recently permitted when Cemex won a hard-fought battle to extract material in its Soledad Canyon operation. What the region would have done had Cemex not prevailed.
And the shortages don’t end there; North San Francisco Bay, Sacramento County, Fresno County, and northern Tulare County all face less than 10 years of remaining permitted reserves.
Construction aggregates are the largest non-fuel mineral commodity produced in California and in the nation. The state consumed about 235 million tons of construction aggregates in 2005, or about 6.6 tons per person. Only 32% of the projected 50-year demand identified for the 31 areas in the Map is currently permitted.
But unlike Florida, California has good news, as only 6% of total aggregate reserves are currently permitted, indicating a ready supply to meet the 50-year demand if the state can face the daunting challenge of overcoming social and political pressures that resist new permits.
Of course, new and existing reserves all face longer transportation from source to final use, which is a reality in such a large state. But again unlike Florida, at least the material is there. Politicians in California must face the inevitable, and if they want to support population and tax revenue growth, they must allow additional permitting of these reserves.
Pierre Villere is President and Managing Partner of Allen-Villere Partners. Contact Pierre Villere at pvillere@allenvillere.com or telephone 985-727-4310.
© 2007 Hanley Wood, LLC. All Rights Reserved. Republication or dissemination of “Rocky Times for Aggregate” (The Concrete Producer, November 2007) is expressly prohibited without the written permission of Hanley Wood, LLC. Unauthorized use is prohibited. Allen-Villere is publishing “Rocky Times for Aggregate” under license from Hanley Wood, LLC.