Reflecting on the aggregate industry, legislation

By |  April 12, 2023

Michael Johnson, president and CEO of the National Stone, Sand & Gravel Association (NSSGA), reflected on the past year for the aggregate industry during a Jan. 25 discussion at the Pit & Quarry Roundtable & Conference. Johnson also touched on legislation and challenges impacting aggregate producers.

ventured into the aggregate industry 10 years ago. Photo: PamElla Lee Photography

Michael Johnson, president and CEO of the National Stone, Sand & Gravel Association, ventured into the aggregate industry 10 years ago. Photo: PamElla Lee Photography

P&Q: How do you feel NSSGA members are situated right now? How would you ultimately characterize the state of the industry at this point in time?

MICHAEL JOHNSON (NSSGA): I don’t have to tell anybody in this room that 2022 had headwinds. We were still creating a plan to get out of the pandemic. People were adjusting and planning for workforce issues. And even now there are labor challenges, supply chain challenges and inflation that continue to persist today.

What really impressed me was how well our industry responded. We adjusted our goals appropriately, which I think was the first thing smart people did. Then, they took advantage of the opportunity to do intelligent price increases to offset inflationary pressures.

What we didn’t see was a contraction in the industry, in a year where a lot of industries did contract. Instead, we saw growth. Every company I talked to said they at least met or exceeded the adjusted goals that they set for themselves.

What we really saw was growth in gross and net at most companies because they were smart about pricing. That was a great thing to see the industry get proactive about given inflation.

2022 was the year where we saw the first real round of IIJA (Infrastructure Investment & Jobs Act) money get out there. What we learned was that many states weren’t ready for that money. On a state-by-state basis, some [states] did better than others in getting the money into the stream. I think in 2023 we will see the states catch up to where they need to be.

P&Q: Those most familiar with IIJA and its inner workings have expressed concerns about the disbursement of IIJA funds – ultimately, making sure the monies dedicated to traditional infrastructure (i.e., roads, bridges, highways) are applied properly. Are those concerns still there? Is there reason to worry IIJA money might be misapplied in a way that hurts our industry?

JOHNSON: The IIJA language was very clear about the application of these dollars. They are to go to real infrastructure. The money in the bill goes to roads, bridges, waterways, airports – traditional infrastructure.

Are there electrical vehicle charging stations in [IIJA]? One hundred percent. Should there be? One hundred percent. And we need to do more of that because, not only is it environmentally responsible, last I checked, all those charging stations are built in concrete, which is also a good thing.

We must have better roads and bridges, as well as the ability to move things more expeditiously throughout the country. If we don’t solve those problems with this bill, we’ve missed the point. So, we’re working with folks to make sure the legislative intent of IIJA, as it relates to how the money is spent, is applied.

P&Q: The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers came forward with a final rule at the end of 2022 that revised the definition of the ‘waters of the United States’ (WOTUS). NSSGA is now part of a coalition that’s fighting against this, filing a complaint with a district court in the state of Texas. What does the road forward look like with regard to WOTUS?

JOHNSON: Waters of the U.S. is a great example of the regulatory dysfunction in the federal government. We are now on our seventh iteration of the Waters of the U.S. rule since the Bush administration. Now, the Biden administration is essentially withdrawing the Trump administration rule, which is still under challenge in the courts, and replacing it with its own [rule].

The Supreme Court has on its docket a Waters of the U.S. case, and we don’t believe it makes sense for the EPA and the Corps to move forward with a new water rule until they hear the Supreme Court’s ruling decision. I don’t think this new rule was really a surprise. I think they wanted to jam their rule into the pipeline before the Supreme Court got a chance to speak. That’s irresponsible, and we’ve addressed that with our champions in Congress.

P&Q: We’ve seen other construction materials associations such as NAPA (the National Asphalt Pavement Association) and PCA (the Portland Cement Association) come forward with organized initiatives to achieve carbon neutrality goals. At some point, is NSSGA going to be pressured or asked by its members to come up with some sort of similarly organized initiative like those? If not something like that, does NSSGA have to take a more proactive role in sustainability and leading our own road forward with aggregates?

JOHNSON: I commend NAPA, PCA, NRMCA (the National Ready Mixed Concrete Association), AEM (the Association of Equipment Manufacturers) and all the others who have put out roadmaps to neutrality. NSSGA applauds their leadership on this, and we think they are doing exactly the right thing for them.

It is not the right thing for us, as we are a low-carbon industry already. The footprint of this industry is really around the equipment we use in our plants, and we are working every day with our OEMs and the folks who are part of our Manufacturer & Services Division to figure out how we lower emissions from equipment.

That is where we as an industry need to work. We’re not going to be out there doing a roadmap to neutrality of our products, because our product is, already, part of the solution – not the problem. We will continue our work to limit emissions from plants and equipment.

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