### MEMORANDUM

TO: Airport Deicing Administrative Record

FROM: Mark Briggs and Mary Willett, ERG

DATE: October 2010

SUBJECT: Estimated Land Requirements and Oppo rtunity Costs for the Anaerobic Fluid Bed Treatment System and ADF Stormwater Storage Tanks

EPA agrees with comments provided on the propos ed airport deicing rule that the opportunity cost of land use for treatment and storage shoul d be included in the overall costs. This memorandum estimates the land required for bot h the anaerobic fluid bed (AFB) treatment system and for storage tanks that store ADF cont aminated stormwater. EPA also evaluated what opportunity cost to assess with the land re quirements for use in the costing model.

Costing Approach

EPA’s approach to estimating the cost for land is to first estimate the amount of land needed for the AFB and storage tanks, and th en apply an opportunity cost pe r square foot. The opportunity cost assumes the land could potentially be leased for some other use by an airport tenant if not being used for the treatment and storage syst em. Another alternative for evaluating the opportunity cost of the land is if the land were pu rchased and that cost were amortized over time to assess its value.

Land Requirements for AFB and Storage

To estimate the area of land associated w ith the AFB treatment system, ERG obtained information on the footprint of the AFB system s at Albany and Akron. According to Albany, their AFB treatment system occupies less than 3,500 squa re feet (sq.ft.) 1 . Examining the space proposed for the AFB treatment at Akron indi cates this system would occupy approximately 5,200 sq.ft. 2 Unfortunately, neither of these data so urces provides sufficient information to determine if this space included the AFB reactor s and any associated buildings and ancillary equipment. Therefore, to obtain a better estimat e of the footprint needed for a complete AFB treatment system, ERG used GoogleEarth and ex amined the entire treatment system area at Albany. Based on a review of the GoogleEarth images, ERG estimates a more appropriate footprint for the AFB treatment system is appr oximately 2.4 acres or 104,544 sq.ft. This area would include the reactors, associated buildings, pump houses, roadways and parking areas, etc. The GoogleEarth image used to estimate the si ze of the complete AFB treatment system is provided at the end of this memorandum. Since most AFB systems are expected to have similar land requirements, regardless of the daily COD loading and individual reactor size, EPA will assume all airports that install an AFB treat ment system will require 104,544 sq.ft. of land.

1 Bascom, R., Sober, M., Owens, R., Anaerobic Treatment of Deicing Wastewater at Albany International Airport – A Case Study. 14 th Annual Aircraft and Airfield Deicing Stormwater Conference, August 2005.
2 McQueen, R., and Arendt, T., Development of a Deicer System for Akron-Canton AirportMemorandum October 2010 Page 2

To predict the amount of land needed for storage tanks, ERG used the following equation developed for predicting storage tank costs:

Storage Tank Size (gal) = ADF Use gal/yr × 13.1 gal/gal/yr

Combining this equation with the equation develo ped from Figure 1 allows EPA to estimate the minimum footprint for storage ta nks at individual airports ba sed on ADF use. The equation shown in Figure 1 is based on stor age tanks with a 14 foot sidewall 3 depth.

Tank Area Versus Volume

y = 0.0095x - 7E-12
R 2 = 1

0 10000 20000 30000 40000 50000 60000 70000 80000 90000

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000
Volume (gal)Area (ft2)

Figure 1. Footprint for Various Sizes of Circular Storage Tanks

Minimum Storage Tank Footprint (sq.ft.): ( ADF Use gal/yr × 13.1 gal/g al/yr × 0.0095 ft2/gal)

Since storage tanks require a barrier free area of approximately 20 feet around the entire tank for maintenance, along with access roads to the ta nks, ERG decided to increase the minimum tank footprint by 20 percent.

Actual Storage Tank Footprint (sq.ft.): 1.2 × (ADF Use gal/yr × 13.1 gal/gal/yr × 0.0095 ft2/gal)

The following example shows how the equation a bove can be used to predict a storage tank footprint for an airport that appl ies 400,000 gallons per year of ADF.

Example Storage Tank Footprint:

Storage Tank Footprint (sq.ft.): 1.2 × ( 400,000 gal/yr × 13.1 gal/ga l/yr × 0.0095 ft2/gal) = 59,736 sq.ft. (or about 1.4 acres)

3 Fulhage, C.D., and Pfost, D., Storage Tanks for Liquid Livestock Manure. University of Missouri Extension, EQ 389.Memorandum October 2010 Page 3

Opportunity Cost of Airport Land

EPA believes that siting of AF B and deicing stormwater storage systems will require their placement away from the terminal and main runway area. In assessing the opportunity costs for that property, EPA considered lease/fee costs and land purchase costs. Table 1 shows the information that ERG identified from publicly available financial reports for various airports related to types of leasing costs or fees for property that is away from the main terminal area:

Table 1. Leasing/Fee Cost Information by Airport

Airport Hub Size Lease Type Leasing Costs ($/sq.ft.) Albany Small Apron Fee $1.02/sq.ft. in 2004 Indianapolis Medium Apron Fee $2.62 sq.ft. in 2010 Bismarck, ND Non-Hub Land Lease $0.2 - $0.4/sq.ft. in 2009 Shreveport, LA Cargo Apron Fee $0.75/sw.ft. in 2009 Lot Rental $0.18 - $0.48/sq.ft. in 2009

ERG also looked at land purchase costs for Ch icago O’Hare Airport’s improvement program. As part of this program, the airport purcha sed 433 acres for $283 million (about $653,000/acre). This amount amortized over 30 years using an assu med 7 percent real rate and converted to an annualized cost per square foot results in $1.21/sq .ft. The actual nominal interest rate for land acquisition is believed to be cl oser to 4 percent which would re sult in an amortized cost of $0.87/sq.ft.

Based on these potential opportunity costs, EPA selected an estimated $1.00/sq.ft. cost for purposes of the costing model.

Summary

The equations included in this memorandum will be used in the airport deicing costs model to estimate the amount of land needed for storage tanks and an AFB treatment system. For AFB treatment systems, approximately 104,544 sq.ft. of land will be required. For storage tanks, land requirements will be predicted based on annual ADF use. For both the AFB treatment systems and storage tanks, land opportunity costs will be estimated by multiplying the land requirement (sq.ft.) by an opportunity cost for the land of $1.00/sq.ft to estimate the annual cost for land use.Memorandum October 2010 Page 4

GoogleEarth Image for Albany Airport AFB System