Page 124 - Challenges in Corrosion Costs Causes Consequences and Control(2015)

102 CORROSION COSTS

using tin-free steel (used for soft drink cans) was not included in the Hoar method of
calculation. Thus more than 100 billion yen were omitted in the food industry alone
in the Hoar method of calculation.
Another significant difference between the two estimation methods involved the
treatment of painting costs in the transportation industry (such as ship, railroad, and
motor vehicles). The cost of painting to prevent corrosion was estimated at more than
800 billion yen by the Uhlig method. According to the Hoar method, it was estimated
at 200 billion yen. Thus the difference between the two methods of costing is nearly
600 billion yen with respect to the transportation industry.
Further to this there was another significant difference of 150 billion yen involving
the building industry. The estimates made by the Hoar method were lower.
Even after accounting for the differences between Uhlig and Hoar approaches, the
difference of about 400 billion yen remains to be accounted, which may be ascribed
to the difficulties and uncertainties in the estimation of the costs of corrosion.

2.2.4 The Battelle-NBS Report (United States, 1978)
In response to a congressional directive, the National Bureau of Standards (NBS,
now the National Institute of Standards and Technology (NIST)) studied the cost of
corrosion in the United States. The analysis required in the study was contracted to
Battelle Columbus Laboratories (BCL). The results of this work were published as
NBS reports (4–6).
The Battelle-NBS study consists of a combination of the expertise of corrosion
and economics experts to determine the economic impact of corrosion on the U.S.
economy. A version of the Battelle National Input/Output Model was used to esti-
mate the total corrosion cost. This model quantitatively identified corrosion-related
changes in resources such as materials, labor and energy, changes in capital equip-
ment and facilities, and changes in the replacement lives of capital equipment for
all the sectors of the economy. The input/output model accounts for both the direct
effects of corrosion on individual sectors and the interactions among various sectors.
The final results of the NBS-Battelle studies, after adjustments by NBS to the
Battelle report for the base year of 1975, were: the total U.S. cost of metallic corrosion
was estimated to be $70 billion, which amounts to 4.2% of GNP in 1975, of which $10
billion (15%) was estimated to be avoidable using the available corrosion prevention
technology.
An uncertainty of ±30% for the total corrosion costs and still greater uncertainty
in avoidable costs were estimated.
The final results were based on NBS analysis of the uncertainty in the Battelle
input/output model estimates and adjustments to the Battelle results based on uncer-
tainty analysis. For reference, Battelle estimated the total cost of corrosion to be $82
billion (4.97% of $1.677 trillion GNP in 1975). About 40% or $33 billion (2% of
GNP) was estimated to be avoidable.

2.2.4.1 Method to Estimate Corrosion Costs The Battelle-NBS study (4–6) used
an input/output methodology to estimate the cost of corrosion for the U.S. economy.