Page 345 - Challenges in Corrosion Costs Causes Consequences and Control(2015)

CORROSION STUDIES 323

4. Bibliography and data base on corrosion economics.
5. Reference point for the impact of corrosion against which other factors affect-
ing the economy can be measured.
6. Basis for technological assessment of the economic effect of proposed means
to reduce corrosion costs.
7. Sectors where high affordability and presently unavoidable corrosion costs are
encountered.

It is also useful to note that corrosion problems were envisaged in areas of energy,
environment, materials conservation, and food production.
In 1982, the Commonwealth Department of Science and Technology initiated a
study to determine the feasibility of the establishment in Australia of a National
Centre for Corrosion Prevention and Control. The feasibility study consisted of the
determination of the annual cost of corrosion to Australia, the need for a national cen-
ter for corrosion prevention and control, and a review of national corrosion centers
in European countries. The study considered organizational structure, technical func-
tions, and the financial structure of the proposed center. The results were presented in
a 1983 report entitled “Corrosion in Australia: the Report of the Australian National
Centre for Corrosion Prevention and Control Feasibility Study.” (5).
The annual cost of corrosion in Australia was estimated to be $2 billion Australian
dollars equivalent to 1.5% of Australia’s GNP in 1982. Improved technology transfer
and establishment of a national corrosion control center were found to be useful in
the potential savings in the nation’s economy.
The Australian study was patterned after the Battelle-NBS study. An IO model
of the Australian national economy was constructed to first represent the real world
and secondly to represent the world of optimum corrosion mitigation technology.
Differences between the two scenarios were used as estimates of avoidable costs of
corrosion and to indicate areas of potential savings.
Some of the drawbacks of the Australian cost estimates were the cost estimates
were large and did not include the cost to users and the cost of disruption. A
high-pressure gas pipeline may fail because of corrosion resulting in a disruption
cost to a third party. Corrosion processes could cause gas pipeline rupture, failure
of industrial plants, buildings to deteriorate, and aircraft to crash. It is useful to note
that secondary costs resulting from corrosion failure could be large in many cases.
The savings or avoidable cost was estimated to be equal to 1.2% of the Australian
GNP in 1982 of which 35% of the savings was because of personal consumption
expenditures, 55% because of fixed-capital formation, and 5% because of federal,
state, and local government expenditures. The various industry sectors expressed the
need for a national center for corrosion prevention and control to lower corrosion
costs. The three roles of the corrosion control center are consulting, research, and
education.
In 1992, Kuwait conducted an economic assessment of the total cost of corrosion
using a modified Battelle-NBS ISO model, and the results were presented in a report
(9) in 1995. The total cost of corrosion was estimated at about $1.0 billion (1987