Money to Burn: The Economics
of Fire Suppression
by Timothy Ingalsbee, Ph.D.
Director, Western Fire Ecology Center
INTRODUCTION

"Whenever you have opportunities to spend over a billion dollars a year, there are numerous opportunities for waste, fraud, and abuse."
--Gardner Ferry, BLM Fire and Aviation Budget/Program analyst
Beginning in the 1970s, the U.S. Forest Service realized that it had reached a point of diminishing economic returns from further investments in fire suppression capability. With the help of fire scientists and ecologists, federal agencies began to understand that their attempts to exclude fires from forest and grassland ecosystems through systematic fire suppression was causing hazardous fuel loads to increase, resulting in larger, more damaging, more costly wildfires. However, federal agencies such as the U.S. Forest Service receive several hundred million dollars in annual appropriations for fire suppression operations. When this money is exceeded, the agency is allowed to proceed with deficit spending,, and is later reimbursed by Congress through supplemental appropriations. The economic incentives derived from the near-limitless Fire Fighting Fund is driving the agency's pro-suppression policies and practices, at the expense of more economically- and ecologically-sound prescribed burning and wildland fire use. It is time for Congress to re-examine the economics of fire suppression, demand more fiscal accountability on wildfire suppression incidents, and devise a more rational "dollars and sense" approach to fire/fuels management. Congress should invest precious tax dollars in proactive fire planning and non-commercial hazardous fuels reduction projects as the best means of avoiding the high costs to taxpayers, damage to ecosystems, and risks to firefighters from reactive, unplanned, emergency fire suppression actions.

SOARING FIRE SUPPRESSION EXPENDITURES

"There are increased expenditures for suppressing large fires, and risks to financial resources. Expenditures may bear little relation to values at risk."
--Hal Salwasser, USFS Pacific Southwest Research Station Director

According to a USFS study, from 1970-1995 the agency spent about $11.8 (in 1995 dollars) on fire suppression. According to the GAO, from FY 1993 through FY 1997, federal land management agencies cumulatively spent $4.4 billion on wildfire activities, with the USFS spending the lion's share of this amount. The cost of suppression is rising exponentially, as recent data indicates that both the 1998 and 1999 fire seasons cost over $1 billion each year. In general, over half the total expenditures for federal fire management activities are spent on emergency wildfire suppression, with costs rising at an average rate of 15.5% annually. As of June, 2000, the fire season has already surpassed the 10-year average for number of fires and acres burned, and thus will also likely exceed a billion tax dollars for emergency fire suppression actions.

INEFFICIENT LARGE FIRE SUPPRESSION SPECTACLES

"Often we use resources because of the public and political pressure to do something,even though it has no effect on the fire and is an economic waste."
--Richard Mangan, USFS Fire Program Leader

Most wildfires on federal lands are quite small: 96% of all fires are under 100 acres. However, the total costs of suppression are skewed toward "siege-like" firefighting efforts on the few, rare, very large fires that grab the most media attention. On average, 2% of all fires nationwide account for 94% of the total burned acreage and 97% of the total suppression expenditures. For example, in 1999, out of 10,424 total fires on Forest Service lands, the agency spent over $178 million-- about 30% of the total USFS fire suppression budget that year--on just two lightning-caused wilderness fires in northern California. A 1995 Forest Service report cited "public and political pressure" as key factors motivating managers to authorize aggressive suppression strategies even if such actions are futile in the face of extreme fire weather or fuel conditions. Moreover, local Forest Service line officers are not held accountable for their use of the emergency Fire Fighting Fund. Several managers admitted that they "would have fought fires differently, and at lower cost, if the money had come from the Forest's allocated budget" instead of an emergency account from Washington, D.C. The report estimated that fire confinement strategies, instead of aggressive contain-and-control, could save millions of tax dollars each year, especially when considered in conjunction with increased firefighter safety and reduced suppression impacts on the land.

COSTLY COMMERCIALIZATION OF FIRE SUPPRESSION

"There is lots of pressure by Congress to hire private contractors for fire suppression even though it has higher costs."
--Richard Mangan, USFS Fire Program Leader

So-called "contractual services," profit-oriented private companies providing labor, equipment, or services to the federal government, now account for over half the total suppression costs on large fires. Approximately 56% of total nationwide suppression costs go to contract services, compared to 32% for agency personnel wages and 12% for all other costs. From fiscal years 1993-1997, of the $1.7 billion that the Forest Service spent on wildfire suppression activities, $1.2 billion of this amount went to private contractors for services and supplies. As the federal workforce continues to shrink, private contract firefighting companies are increasing in number and price, and this is another factor raising the costs of fire suppression.