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Economic Studies

Economic studies have been carried out for the phosphate applications. The computer takes engineering and unit cost inputs and projects capital and operating costs for any prospective system. Major capital cost components include pipeline, vehicles, magnet assemblies, windings and load/unload stations. The elements of operating cost include power, material costs for maintenance (taken as a fixed percentage of capital cost) and labor costs for operating and maintaining the system. The "total system cost" includes operating and capital recovery costs.

The case studies show that pipeline diameters ranging from 18 to 24 inches and vehicle speeds of 20 to 40 mph are generally optimal for systems operating in the 3 to 30 mile, l to 10 million tons/year range. Slower speeds are more efficient at short distances where the load/unload station costs are a substantial fraction of the total cost. In nearly all cases, pipeline costs are the largest single component of capital cost, whereas the second-most expensive component depends on the distance and tonnage. The model minimizes total system cost, which is defined here as the sum of the annualized capital cost plus the operating cost. Calculation of the annualized capital cost requires a choice of a minimum attractive rate of return and a time over which the return will be realized. In our studies we have fixed these at 20% and 20 years as illustrative. Typical cost elements for the minimum cost system to transport 10 million tons/year a distance of 30 miles are summarized in the table. The total operating costs are competitive with rail and truck.

Typical Capital and Operating Costs for 10 Mt/year over 30 miles

Capital Cost

$M

%

pipeline

18.8

30.7

vehicles

15.6

25.5

magnet assemblies

7.8

12.7

motor windings

7.7

12.6

load/unload stations

5.5

9.0

power units outbound

3.3

5.4

power units returning

1.6

2.6

central control

0.5

0.8

block control units

0.4

0.7

total

61.2

100.0

Capital Recovery ($/t-mile)

0.042

 

Operating cost

$M/y

%

Power

3.3

49.3

Maintenance

1.8

27.7

Labor

1.5

23.0

total

6.7

100.0

Operating Cost ($/t-mile)

0.022

 

Total System Cost ($/t-mile)

0.064

 

Impact of the Growth of e-Commerce

Transport of phosphate is typical of a low-end product where transportation cost is of prime importance. In high-end product transport, for example priority mail packages, convenience and speed are more likely to be the dominant factor. Priority mail package delivery can be anticipated to grow significantly in the future driven by e-commerce. The growth of e-commerce, in fact, may well overwhelm the conventional delivery infrastructure, particularly surrounding airports and urban centers. Underground capsule pipeline systems could link airports and distributed warehouse facilities throughout major metropolitan regions where consumers could conveniently pick up their purchases.

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