The True Cost of Wildfires: Understanding ROI for Automated Detection

The complete economic devastation caused by uncontrolled wildfires is not always fully realized and appropriately documented.  This leads to insufficient statistics and persuades government and private entities to incorrectly believe they can manage the effects of wildfire without automated detection.  In 2010 the Western Forestry Leadership Coalition published a report that challenged traditional methods for calculating the true economic cost of wildfires. 

It said that although direct suppression is often identified as the full cost of a wildfire, it only accounts for a fraction of the actual cost.  Many reports fail to consider longer-term or more complex costs to infrastructures, watersheds, ecosystems and the economy.  In fact some case studies have reported actual costs totaling up to thirty times greater than that of their direct suppression costs.  After understanding that the true cost of a wildfire includes direct suppression, public rehabilitation, private restoration, and other indirect costs, automated detection becomes a better investment and a sensible economic move to protect a community's resources.

Analyzing Types of Costs

Direct suppression costs are often incorrectly cited as the total cost of a fire, leaving the majority of true costs out of annual planning and budgeting scenarios.  A more accurate portrayal of wildfire cost planning includes:

Direct Suppression Costs
Direct suppression costs include expenses paid to the Department of Interior or the Bureau of Land Management, the resource and facility expenses paid to the US Forest Service, the state forest services, county fire departments, and the city fire departments.  It also includes costs associated with federal, state and local law enforcement and evacuation or relocation costs.

Public Rehabilitation
Public rehabilitation costs include flood impact, erosion, water quality impact, Burned Area Emergency Response (BAER) expenses, FEMA public and private assistance and conservations services (i.e. NRCS).  Poor air quality following a fire can lead to respiratory problems for nearby residents both young and old or anyone with compromised respiratory or immune systems.  Ecosystem services made possible by healthy forests such as water filtration and wildlife habitats may be damaged as well, and damaged watersheds may require years of ongoing restoration activities.

Indirect Costs
Often ignored in fire cost totals are indirect costs, which may extend years beyond the actual fire event.  Such costs include public infrastructure repair or shutdowns of bridges, airports, railroads, damns, roads and highways.  This also includes healthcare costs, the loss of tax income from property value losses and the loss of land use from timber,
farming and livestock. 

Private Restoration Costs
Private restoration costs include losses associated with residential homes and commercial buildings and utilities replacement. 

Doing the Math
As an example, an examination of data recorded from the 2003 Old, Grand Prix, and Padua wildfire complex helps put the estimated/actual cost differential into perspective.  This fire affected 125,000 acres in the Santa Ana watershed in southern California. 

Cost Category

Unit Type

Unit Cost Number of
Occurances
Element Totals
Direct Supression Costs        

Dept. of Interior /Bureau Land Mgt. Expense

Per Acre $12 125000 $1,500,000
US Forrest Service Resource/Facility Expense Per Acre $337 125000 $42,125,000
State Forrest Service Resource/Facility Expense Per Acre $116 125000 $14,500,000
County Fire Dept. Resource/Facility Expense Per Acre $13 125000 $1,625,000
City Fire Dept. Resource/Facility Expense Per Acre $13 125000 $1,625,000
Federal/State/Local Law Enforcement Expenses Per Acre $491 125000 $61,375,000
Evacuation/Relocation Costs Per Person $36 100000 $3,600,000
         
Public Rehabilitation Costs         
Flood Impact Per Acre $201 125000 $25,125,000
Water Quality Impact Per Acre $158 125000 $19,750,000
Burned Area Emergency Response (BAER) Expenses Per Acre $72 125000 $9,000,000
FEMA Public/Private Assistance Per Acre $182 125000 $22,750,000
Conservation Services (i.e. NRCS) Per Acre $32 125000 $4,000,000
         
Indirect Costs         
Public infrastructure repair (bridge, damns, roads, highways) Per Acre $146 125000 $18,250,000
Loss of tax income (from property value loss) Per Acre $4 125000 $500,000
Land use losses (timber, farming, livestock) Per Acre $600 125000 $75,000,000
         
Private Restoration Costs        
Residential Homes/Commerical Buildings Total/Partial Loss Per Residence $124,000 4647 $576,228,000
Private Utilities Replacement Per Acre $560 125000 $70,000,000
         
Total Interdiction/Restoration Costs*       $946,953,000
Total Interdiction/Restoration Costs Per Acre
      $7,576

Published analyses of fire fighting costs from this fire, as illustrated in the above chart have led to the following estimates extrapolated by Wildland Detection Systems:

  • Direct suppression costs totaling $126,350,000 with 125,000 acres and 100,000 people directly affected.  These suppression costs can be broken down further into The Department of Interior/Bureau of Land Management Expenses ($12/acre), US Forest Service Resource/Facility Expense ($337/acre), State Forest Service Resource/Facility Expense ($116/acre), County Fire Dept. Resource/Facility Expense ($13/acre), City Fire Dept. Resource/Facility Expense ($13/acre), Federal/State/Local Law Enforcement Expenses ($491/acre), and Evacuation/Relocation Costs ($48/person).
  • Public rehabilitation costs totaled $80,625,000.  These cost estimates include flood impact ($201/acre), water quality impact ($158/acre), Burned Area Emergency Response (BAER) expenses ($72/acre), FEMA public/private assistance ($182/acre), and conservation services ($32/acre).
  • Indirect costs totaled $93,750,000.  These categories included public infrastructure repair ($146/acre), loss of tax income ($4/acre), and land use losses ($600/acre).
  • Private restoration costs totaled $646,228,000.  This cost came from residential homes and commercial buildings with either total or partial losses ($124,000/residence) and private utilities replacement ($560/acre).

The total costs equated to $946,953,000, or a total interdiction/restoration cost of $7,576/acre.

The Cost of Automated Detection 
Automated detection is a time, resource and money-saving solution to the extreme cost of wildfires.  Organizations considering automated detection want to know about specific set-up or installation costs and the continued cost of monitoring each square mile vs. the system's overall accuracy.  Modern automated detection technologies have become increasingly more accurate and cost effective by:

  • Improving pattern recognition algorithms that can recognize smoke or flame more quickly, even at night or under adverse conditions, such as fog, resulting in the detection of a 1-meter-square plume of smoke at a distance of nearly 15 kilometers within 25 seconds of its presence.
  • Lowering or eliminating problems with “nuisance alarms,” which can be caused by camera/sensor vibration or weather/cloud conditions.
  • Lowering technical levels for operators, including the leveraging of operators to those who merely confirm the results of a detection event before deploying response teams.
  • Increasing (leveraging) network operations personnel through the ability to “gang” many networks of sensors together, meaning potentially thousands of sensors (representing millions of square miles) can be monitored in one center.
  • Lowering the cost of system acquisition and deployment by using standard “off the shelf” sensors like standard security cameras or repurposing cellular networks for data transmission.

The chart below itemizes fire monitoring cost estimates based on a system using lower cost, “off-the-shelf” cameras and networking components:

Cost Category

Unit Type

Unit Cost Number of
Occurances
Element Totals
Fire Monitoring Costs        

Setup Costs

       
Visible Light Cameras 74,000 acres per camera $2,000 2 $4,000
Wireless Network Interfaces 2 per camera $2,000 4 $8,000
Solar Power Supply 1 per camera $7,000 2 $14,000
Tower Construction (if needed) 1 per camera $12,000 2 $24,000
Monitoring Center (often uses existing facility) 1 for up to 25 cameras $25,000 1 $25,000
Software 1 package per tower $12,000 2 $24,000
Training       $0
        $0
Ongoing Yearly Costs        
Operator (Assumes operator is multi-tasking while providing other non-monitoring oriented services) 1 per monitoring center $158 125000 $50,000
Power Per Acre $72 125000 $0
System Maintenance Per Acre $182 125000 $0
         
Total First Year Monitoring Cost       $149,000

Fire monitoring costs can be divided into set-up costs and ongoing yearly costs.  Set-up costs include:

  • Visible light cameras ($2000 each covering 74,000 acres).
  • Wireless network interfaces (2 required per camera at $2,000 each).
  • A solar power supply (1 required per camera at $7,000 each).
  • Tower construction (if necessary, these could cost $12,000 per camera).
  • Monitoring center (if necessary, one center could house up to 25 cameras and would cost $25,000).
  • Software (one package per tower at $12,000 each).

Many organizations will be able to save money on set-up costs by using existing infrastructure, such as existing security cameras, towers and monitoring centers.  They may also able to avoid the ongoing yearly cost of staffing an operator if they can employ existing security personnel to both monitor the systems and work on other tasks.

Using the same 2003 California wildfire example, the total first year monitoring cost would be $149,000.  This equates to savings of nearly one billion dollars when compared to the total cost of the 125,000-acre wildfire.  Our internal studies indicate that the daily cost to monitor a square mile is estimated as low as .05, including deployment, hardware, software, power and personnel.  This is $18.25/acre, or, following the California example, $228,1250 to monitor 125,000 acres each year.  Again, the actual cost of the 125,000-acre loss totaled $946,746,590.

ROI Analysis Based on Varied Response Times
Automated detection can offer value to organizations facing the threat of wildfire by identifying emergencies early.  But automated monitoring can save lives, resources and money even with varied response times.  The chart below outlines cost-savings estimates at multiple different response times and indicates that automated detection is still a safe investment.  It assumes that fire consumes 6,400 acres per hour, or a 10 mph spread.

Payback Based on Increased Fire Response Time**

Acres Burned

Acres Not Burned Saved
Suppression/
Restoration
Costs
Automated Monitoring 1st Year Return On Investment
When Monitoring enables 1 hour response time 640 124360 $942,104,601 $941,955,601

When Monitoring enables 2 hour response time

1280 123720 $937,256,201 $937,107,201
When Monitoring enables 3 hour response time 1920 123080 $932,407,802 $932,258,802
When Monitoring enables 4 hour response time 2560 122440 $927,559,403 $927,410,403
When Monitoring enables 5 hour response time 3200 121800 $922,711,003 $922,562,003
When Monitoring enables 6 hour response time 3840 121160 $917,862,604 $917,713,604
When Monitoring enables 7 hour response time 4480 120520 $913,014,204 $912,865,204
         
*Based on 125,000 acre burn similar to Old, Grand Prix, Padua Complex, CA (2003)        
**Payback assumes fire consumes 6400 acres per hour, or 10 mph spread and the above costs for supressing and restoring damage from a 125,000 acre wildfire        

The figures above are based on a burn similar to the Old, Grand Prix Padua California fire with the same suppression and restoration costs associated with this 125,000-acre fire.  Automated detection can save money even if it takes several hours for a response.  For example, even at a 7-hour delay, after 4,480 acres have been destroyed, automated detection can still save over $900,000 in the case of the southern California fire outlined above. 

Exposing the true costs of wildfires also highlights opportunities to manage the potential devastation and head off excessive costs.  Automated detection is fiscally advantageous because it delivers operational efficiencies and improves ROI.  There are plenty of economic benefits to be reaped from automated detection.  It helps organizations protect each new investment they make, whether it is a new building, new equipment or updated technology.  Automated detection systems are fully scalable, growing with an organizations needs.  While upfront costs can be intimidating, automated detection offers real savings in the event of a fire, and the added benefit of having a healthy and safe environment impacts all of society, however difficult to monetize.