Daniel Acker/Bloomberg News

Axeon Specialty Products is shuttering the largest asphalt refinery in the United States when the country might need it most.

The Stamford, Connecticut-based company announced In January that it plans to close its Paulsboro, New Jersey, refinery and convert it into a terminal. The planned shutdown would occur as President Trump has pledged to build new roads, highways and bridges across the country. The United States would need 63% more asphalt than its consumes now, just to pave roads at the rate it reached a decade ago, Energy Information Administration data show.

Any new road building runs up against the question of funding, and a simple pledge isn’t enough to keep Axeon’s plant running, Gurpal Dosanjh, Bloomberg Intelligence analyst, said in a phone call from New York.

“It’s very difficult for any company to base its future on a one-sentence policy,” he said. “I don’t think it’s too surprising it closed.”

U.S. consumption of the road sealant, measured in product supplied, fell to 335,000 barrels a day in 2016 from 343,000 in 2015, EIA data show. Demand has fallen since reaching 546,000 in 2005, the second-biggest year on record after 1999. U.S. refiners also have been producing less, with domestic output dropping a yearly 2.1% to 333,000 in the first 11 months of 2016.

Asphalt is a mix of crushed rocks and viscous oil, typically produced from heavy crude at refineries. As much as 30% of asphalt produced is recycled.

Axeon’s New Jersey refinery can produce 49,000 barrels a day of the road sealant, more than any other plant in the United States, including Flint Hills Resources’ Minnesota plant, Energy Department data show. Dave Kirshner, Axeon’s CEO, declined to comment on the plant when contacted by phone.

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By Robert Tuttle
Bloomberg News

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