THE A T M O S P H E R I C R E S E R V O I R Examining the Atmosphere and Atmospheric Resource Management Cloud Seeding Has Big Economic Impact

By Darin Langerud E

RADAR SITE G A R

SEEDING AIRCRAFT Kenmare E

The North Dakota Cloud V O

TARGET AREA WILLIAMS C Modification Project Minot R

OPERATIONS A

Stanley D (NDCMP) has a 50-year AREA Williston MOUNTRAIL WARD A R $60.5 history of conducting cloud Y NDCMP E

L seeding operations to in- N A ECONOMIC Watford City T S crease rainfall and reduce McKENZIE BENEFITS hail in participating western (in millions) North Dakota counties (see North map). The project’s previous Dakota 2009 NDCMP measures of success have Montana Cost: $768,000 $37.1 been determined by rainfall

SLOPE E

increases or crop-hail dam- G A

R

Bowman E

age reductions. In fact, sev- V BOWMAN O C eral independent, long-term $19.7 NDCMP R A evaluations of the project D PROJECT A R $12.0 show it increases summer N AREA South A M rainfall 5 to 10 percent and W Dakota O reduces crop-hail damage by B 45 percent. 5% 10% 5% 10% But how does this in- Scenario Scenario DIRECT crease in rain and reduction of crop- lion annually, while in the 10 percent GROSS hail damage translate into dollar scenario the value of increased BENEFITS TO AG ECONOMIC BENEFITS amounts? And how does it impact production is estimated to yield $16 PRODUCTION North Dakota’s economy? million annually.

A recent study by Dean Bang- The analysis of hail reduction – or sund and Dr. Larry Leistritz at North hail suppression – shows the average seeding, averaged across the NDC- Dakota State University shows crop value saved through cloud seed- MP counties, is estimated to range the NDCMP provides a significant ing is $3.7 million per year. Includ- from $5.16 to $8.41 per planted impact to the local and state agricul- ing hail suppression benefits, the acre,” said study author Dean tural economy. total direct impact in the 5 percent Bangsund. “Those values represent rainfall scenario is $12 million an- a meaningful boost in revenues to Direct Impacts for the NDCMP nually, while the total direct impact producers.” The economic impact of rainfall in the 10 percent scenario is $19.7 enhancement from cloud seeding million. These results yield a benefit- Total Impacts for the NDCMP was evaluated at two intervals: 5 to-cost ratio, based on anticipated Under the 5 percent rainfall sce- and 10 percent. These two numbers 2009 project costs, of 16 to 1 for the nario, total direct impacts from the reflect the long-term evaluations of 5 percent scenario, and 26 to 1 under NDCMP were estimated to average the NDCMP’s ability to increase the 10 percent scenario. $12 million annually. This addi- rainfall. In the 5 percent scenario, tional net revenue would generate the value of increased crop produc- “From a producer’s perspective, secondary economic activity of $25 tion is estimated to yield $8.4 mil- the direct economic value of cloud million annually, resulting in gross

18 North Dakota Water ■ June 2009 from the cloud seeding efforts. As those direct impacts are worked through the North Dakota economy, additional economic activity is created. The combination of direct AVERAGE NDCMP IMPACTS (per planted acre) and secondary economic activity is COMBINED GROSS the gross business volume or total VALUE OF HAIL VALUE OF RAIN DIRECT BUSINESS economic activity. SUPPRESSION ENHANCEMENT IMPACT VOLUME Potential Statewide Benefits 5% Scenario $ 1.57 $ 3.58 $ 5.16 $ 15.87 10% Scenario $ 1.57 $ 6.84 $ 8.41 $ 25.89 In addition to estimating the benefits from current cloud seeding operations, the study calculated the potential benefits of a hypothetical POTENTIAL STATEWIDE IMPACTS statewide program. As you can see COMBINED GROSS from the table on the left, the poten- PLANTED VALUE OF HAIL VALUE OF RAIN DIRECT BUSINESS ACRES SUPPRESSION ENHANCEMENT IMPACT VOLUME tial impacts are enormous.

5% Scenario 19.6 M $ 53.3 M $ 42.1 M $ 95.4 M $ 293.8 M NDCMP results are comparable 10% Scenario 19.6 M $ 53.3 M $ 81.3 M $ 134.5 M $ 414.2 M to other long-term cloud seed- ing programs around the world. Analysis of a long-running hail suppression program in southwest- business volume of over $37 million, Study Methods ern France indicates reductions in or $15.87 per planted acre. The economic effects of cloud hail size and damage on the order of seeding were calculated by estimat- 40 to 50 percent. Further, a recent In the 10 percent rainfall sce- ing the agricultural value of reduc- analysis of a rain enhancement nario, total direct impacts from the ing crop-hail losses and enhancing project in Australia over a 45-year NDCMP were estimated to average rainfall at the levels determined from period found rainfall increases in $19.7 million annually. This ad- prior studies. Consistent with previ- the range of 5 to 14 percent. These ditional net revenue would gener- ous research, this study used data are just two of several examples of ate secondary economic activity of over a ten-year period (1998-2007) successful programs with findings $40.9 million annually, resulting in and selected the top eight crops similar to the NDCMP. gross business volume of $60.5 mil- based on harvested acreage over the lion, or $25.89 per planted acre. study period. Due to the regional im- Overall, cloud seeding in North portance of forage crops in the state, Dakota is a small investment that State Tax Revenues alfalfa was also included. provides significant benefits through Governmental revenues are an- increased rainfall and decreased other important measure of econom- Economic impacts were com- crop-hail damage, while contribut- ic impacts. Collections from person- puted by calculating the crop output ing significantly to North Dakota’s al, corporate, and sales and use taxes saved due to hail suppression and economy. were estimated based on the second- increased crop yields under two ary economic activity generated by enhanced rainfall scenarios, 5 and Atmospheric Resource Board increased agriculture revenues. For 10 percent. Yield responses for each North Dakota State Water Commission the NDCMP, annual collections from crop were then computed based on 900 East Boulevard, Bismarck, ND 58505 personal, corporate, and sales and these criteria. Once increased crop (701) 328-2788 use taxes were estimated at $745,000 yields were calculated, the value of http://swc.nd.gov and $1.2 million respectively, for the those enhanced yields were com- ND Weather Modification Association PO Box 2599, Bismarck, ND 58502 5 and 10 percent rainfall scenarios. puted: these are the direct impacts (701) 223-4232

North Dakota Water ■ June 2009 19