On the second Tuesday of every month, my model aircraft club meets to talk about various issues. We secured a 10-year lease on a private field last year at a very good price, and we’re working on field improvements. These include things like a clubhouse, restrooms, runway, fencing, pilot stations, benches to work on, awnings for the maintenance area, a helipad, grooming of the grounds, and that kind of thing. These are fairly typical items for any club with its own field, and often the field improvements continue for years and decades.
On the second Tuesday of every month, my model aircraft club meets to talk about various issues. We secured a 10-year lease on a private field last year at a very good price, and we’re working on field improvements. These include things like a clubhouse, restrooms, runway, fencing, pilot stations, benches to work on, awnings for the maintenance area, a helipad, grooming of the grounds, and that kind of thing. These are fairly typical items for any club with its own field, and often the field improvements continue for years and decades.
Last night, we were discussing costs for a runway. For model aircraft, a runway is typically 400 to 700 feet long, and between 30 and 50 feet wide. Usually, this is made from typical paving material like asphalt or concrete, but many clubs use groomed grass, pea gravel, or even paving underlayment to have a flat surface to take off and land from. The club president showed some slides for cost comparisons made for other clubs, and I was flabbergasted.
The cost of asphalt has gone ballistic, and is supposed to continue to do so for at least the next four years.
Take a look at this:
| Year |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
| Yearly % increase |
|
32.4% |
28.9% |
15.6% |
11.7% |
11.1% |
| Runway cost |
|
$ 27,000.00 |
$ 38,000.00 |
$ 45,000.00 |
$ 50,269.38 |
$ 55,851.39 |
| $/ton |
$ 42.37 |
$ 56.11 |
$ 62.09 |
$ 71.75 |
$ 80.15 |
$ 89.05 |
| Increase over prior year |
|
| $ 11,000.00 |
$ 7,000.00 |
$ 5,269.38 |
$ 5,582.00 |
Yes, you aren’t reading wrong. It costs LESS to take out an 8% loan over the course of five years than to save for four years and pay cash due to the dramatically-increasing cost of asphalt. We are at the point where the value of at least this one oil-based commodity is rising exponentially. UDOT has been uncannily accurate in predicting rises in asphalt prices, and I see little reason to doubt their prediction.
On a similar note, there is another commodity which is of great interest to aeromodelers: balsa wood. As you may know, this is an extremely lightweight, fast-growing hardwood grown almost exclusively in Central and South American tropical climates. It requires a prodigious amount of rainfall to thrive, although it can survive long dry seasons if necessary. What it can’t do very well is grow in more temperate climates.
Balsa wood is the primary material used in many model aircraft. While various types of foam have been making inroads in mass-production for smaller aircraft, it doesn’t have the strength to work as the primary building material for most larger planes. Balsa is also used in engineering as a substitute for steel in model versions of bridges, was used for some production aircraft, and is used in a carbon-fiber sandwich arrangement for some automobiles.
Anyway, a recent development in model aviation is the fairly sudden rise in availability and drop in price of almost-ready-to-fly aircraft. These aircraft are typically built in China or Taiwan. Ten years ago, they were considered to be heavy junk, not very well-made, and the last refuge of those incapable of or unwilling to build their own models. Today, with recent advances in carbon fiber production, automation, laser-cutting, Computer-Numerically-Controlled (CNC) lathing machines, and evolutionary improvements in production facilities, ARF aircraft rival home-built airplanes for quality, weight, and strength. The factories producing them are doing so in record numbers.
This has had a side-effect, though. The availability of raw balsa wood in the US has almost entirely dried up. The factories in China and Taiwan are ordering huge volumes of balsa wood to fill pent-up demand worldwide for low-cost, high-quality model aircraft. The sport is also growing around the globe due to recent innovations in battery technology which have ushered in a golden age of low-weight, low-cost electric airplanes to the industry.
I see, however, in the confluence of the rising cost of asphalt and the unavailability of balsa wood, a coming apocalypse for the now-dominant US economy. When most people think “oil”, they think of cars and trucks. They don’t think of asphalt, toothbrushes, and home electronics. Ours is an oil-driven economy, and the cost of labor in the US is dramatically higher than other places. The Chinese manufacturers can pay more than US companies are willing to for raw materials, like balsa wood, because they can make up far more than that little bit of lost profit due to paying their workers less. They can easily out-compete domestic producers, and the domestic ARF and kit manufacturers dwindle in size, catering only to the “Made in the USA” crowd, and those who mistakenly believe the US kits are better-made.
My club, as a result of the rising cost of asphalt, is probably going to forego spending the money on an asphalt runway. At the same time, we are buying more Chinese-made ARF airplanes than ever before, and not able to buy raw balsa wood at local hobby shops because it’s simply not available, and what little is available has tripled in price in the past three years. We are starting to experience small shortages, and losing ground to the increased buying power of the expanding Chinese economy.
A balloon with a small leak will eventually deflate to match the air pressure around it. A mountain with a small stream at the base, carrying away just a little soil at a time, will fall piece-by-piece. I’m no economist (which, obviously, opens my conclusions to some doubt) but I think that, similarly, a nation which does not produce more than it consumes will suffer a deflated economy, until it achieves parity with the pressures surrounding it and is brought low by the stream of money pouring out from it, never to be returned.
We’ve seen dramatic price shifts in recent times in the price of oil and all the industries which rely on it. Recent developments in industries which are “hidden” from your average observer, I predict, are indicative of the future status of manufacturing and technology industries as a whole. I think the 100% price increases we’ve seen over the past three years at the gas pump will just get worse as the value of the dollar falls abroad and the price of oil increases due to unrest and shortages. We are going to have to replace the asphalt in our roads, and at double the cost we’ll feel it in our tax bills.
I’m not exactly certain how to weather this storm I see coming. But coming, it is, and I suspect we’re going to be paying homage to the new economic super-power of the twenty-first century.
Note: For some reason, “Asphalt Apocalypse” sounds like a great name for a band. Or maybe a dessert at Wingers.