Page 132 - Challenges in Corrosion Costs Causes Consequences and Control(2015)

110 CORROSION COSTS

TABLE 2.7 Best Practice Ratings
Industry Incentive Response
Industrial chemical High High
Livestock products Moderate Low
Wholesale and retail trade Low Low

costs of corrosion. Economic parameters such as return on investment, discounted
cash flow, present and future worth of money had to be incorporated into the data.
To determine avoidable corrosion maintenance costs, B.C.L. determined a best
practice rating for each industrial sector. Best practice ratings were determined by a
qualitative comparison of industrial sectors as to their incentive or urge to use the best
corrosion practice and their response or capacity to use the best corrosion practice.
Each industrial sector was rated as high, medium, or low in both categories.
Qualitative ratings for incentive and responsiveness were based on: (i) relationship
of profits to corrosion cost; (ii) quality of product; (iii) awareness of corrosion; (iv)
regulation; (v) safety; (vi) personal responsibility; (vii) consequences of failure.
The factors considered in rating are: (i) size of the company (ii) level of tech-
nology; (iii) availability of corrosion expertise; (iv) time frame over which costs
are incurred; (v) complexity of the problem; and (vi) administrative system through
which practices are implemented. Priority is of the utmost importance in cases of the
release of toxic gases.
Table 2.7 lists three of the best practice ratings according to B.C.L.
On the basis of these ratings, maintenance and repair costs were reduced from 5%
for high ratings to 45% for low ratings. These ratings are considered by B.C.L. to be
realistic.
2.2.5.2.1 Rationale of the Model to Determine the Cost of Corrosion Three
economic scenarios representing the U.S. economy were presented. The total cost
of corrosion was defined as the difference between the GNP of a world of corrosion
and a hypothetical world devoid of corrosion. To estimate the avoidable costs of
corrosion another construct (World IV) was formulated in which best corrosion
prevention practice was used by everyone. The difference in costs between World I
and III represents the total national avoidable costs of corrosion.
To determine the costs of corrosion, B.C.L. identified the following four data
requirements:

1. Inputs required to produce a product.
2. Capital equipment to produce a product.
3. Replacement lives of the capital equipment.
4. Final demand for the product.

The data were gathered by a comprehensive survey of U.S. industry and govern-
ment, a literature survey, and interviews with industry experts. All the information