Real Estate Development, Transportation Costs, And Wasatch Front Gravel Operations

Extensive gravel deposits exist within a six-county area in the mountains surrounding the Salt Lake Valley, and in the mountain ranges to the west. The six-county area includes Davis, Salt Lake, Summit, Tooele, Utah, and Wasatch Counties. The majority of these are beach deposits from prehistoric Lake Bonneville. However, real estate development associated with a projected population increase of 54 percent over the next 20 years is expected to remove most gravel deposits in Salt Lake County from consideration for mining, forcing gravel operations to relocate from eastern Salt Lake Valley to the Oquirrh and Stansbury Mountains farther west. The gravels in these ranges are of lower quality and require additional processing to manufacture asphalt and concrete. Replacing gravel resources along the Wasatch Front with resources in the Oquirrh and Stansbury Mountains over the next 20 years has the potential to increase construction costs by nearly $1 billion. The majority of this cost (82 percent) is the result of increased transportation costs due to longer distances to market. The remainder of the cost is attributable to lower quality gravels that will require additional processing in the manufacture of asphalt and concrete. The following analysis and discussion does not take into consideration the amount of crushed stone that is currently being used in the construction industry in northern Utah, its use as a substitute for lower quality gravels, or as a factor in the base case projection.