Page 340 - Challenges in Corrosion Costs Causes Consequences and Control(2015)

318 CONSEQUENCES OF CORROSION

the financial losses because of corrosion with no concern toward preventive strategies
along with cost–benefit considerations.
The efforts of the aforementioned studies ranged from formal and extensive to
informal and modest. It is estimated that the annual cost of corrosion ranges from 1%
to 5% of each country’s GNP.
Uhlig’s study (7) attempted to measure the costs of corroding structures to both
the owner/operator (direct cost) and to others (indirect costs). The total cost of corro-
sion to owner/operators was estimated by summing the cost estimates for corrosion
prevention products and services used in the entire US economy such as coatings,
inhibitors, corrosion-resistant metals, and cathodic protection and multiplied these
totals by their respective prices. Domestic water heater replacement, automobile inter-
nal combustion engine repairs, and replacement of automobile mufflers were selected
as examples to estimate the cost to private consumers/users. Adding both the direct
and indirect costs, the annual cost of corrosion to the United States was estimated to be
$5.5 billion or 2.1% of the 1949 GNP. This method was used in Japan and estimated
the cost of corrosion at $9.2 billion equivalent to 1–2% of the Japanese GNP.
The Hoar study (United Kingdom, 1970 (3)) identified the sources for the cost of
corrosion by sectors of the economy. The study estimated the annual total corrosion
cost in the United Kingdom to be approximately 3.5% of their GNP.
The Battelle-NBS study (1) used an economic input/output analysis to estimate
the cost of corrosion in the United States. In the model, the US economy was divided
into 130 industrial sectors. For each sector, estimates were made on the costs of cor-
rosion prevention, as well as the cost of repair and replacement because of corrosion.
The following direct costs were included in the study: replacement of equipment or
buildings; loss of product; maintenance and repair; excess capacity; redundant equip-
ment; corrosion control such as inhibitors; organic and metallic coatings; engineering
research and development testing; design; insurance; parts and equipment inventory.
The final results of the Battelle-NBS study for the base year of 1975 were:

1. The total US cost of metallic corrosion was estimated to be $70 billion, which
amounts to 4.2% of GNP in 1975.
2. Fifteen percent or $10 billion was estimated to be avoidable by using corrosion
control technology that is available.

The total cost of corrosion in the United States has been estimated by (i) adding the
costs of corrosion control methods and services and (ii) estimating the total cost by
extrapolating the corrosion costs of representative industrial sectors to the entire US
economy. The latter method incorporates all the costs that the first method is likely
to miss such as the cost of corrosion management, the cost of direct services related
to the owner/operator, and the cost of loss of the capital because of corrosion.
The annual cost of corrosion consists of direct costs and indirect costs. The direct
costs related to corrosion consist of: (i) costs of design, manufacturing, and construc-
tion; (ii) material selection; (iii) additional material such as increased wall thickness
for corrosion allowance; (iv) materials such as coatings, inhibitors, sealants, cathodic
protection to prevent corrosion; (v) application including cost of labor and equipment.