Cost of Corrosion Annually in the US Over $1 TrillionThe cost of corrosion exceeded $1 trillion in United States in 2013Posted on June 1, 2011 by admin

Cost of Corrosion Estimate for 2013 by G2MT Labs

The infographic above illustrates the growth in corrosion costs and shows how large of a draw on our economy corrosion is. With little fanfare, a significant milestone in the effect of corrosion on the U.S. economy occurred in 2013 when the total cost of corrosion in the US exceeds $1 trillion annually for the first time. In a widely-cited study (NACE Corrosion Costs Study) by the National Association of Corrosion Engineers, NACE, the direct cost of corrosion in the U.S. was estimated to equal $276 Billion in 1998, approximately 3.1 % of GDP. However, this estimate is incomplete and outdated.Closer examination of the 1998 NACE corrosion studys own analysis, along with a calculation of inflation since the report was produced, indicates that total corrosion costs in the U.S. now exceed $1 trillion dollars a year, and probably exceeds $5 trillion annually around the world (assuming 6% of the GWP of 84.97 Trillion in 2012) . The indirect cost of corrosion of is estimated to be at least equal to the direct cost. In that case, the total cost of corrosion is $993 B in March 2013 and estimated to exceed $1 trillion June 2013 (based on estimates of GDP from http://forecasts.org/gdp.htm).For more information, see the full G2MT Labs Cost of Corrosion page.

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Corrosion will cost the US economy over $1 trillion in 2015. Thats one of the largest expenditures we make, and its all going down the drain. The total annual corrosion costs in the U.S. rose above $1 trillion in the middle of 2013, illustrating the broad and expensive challenge that corrosion presents to equipment and materials. The most commonly quoted figure for corrosion costs is $276B in 1998 and was reported in the NACE Corrosion Costs Study. However, this report leaves out the enormous (at least as much as direct costs) tally of indirect costs that the consumers experience from corrosion and the inflation increases since 1998.From $276B to $1 Trillion: Understanding the Real Cost of CorrosionThe NACE sponsored report examines each industry in depth, providing discussions of the causes, costs, and results of corrosion, and arrived at a figure of $276B in direct corrosion costs. Indirect costs were estimated to be at least as much as direct costs. In the 15 years that have passed since the study was released, inflation has driven both the direct and indirect costs of corrosion over $500 billion annually, totalling over $1 trillion in 2013.At over 6.2% of GDP, corrosion is one of the largest single expenses in the US economy yet it rarely receives the attention it requires. Corrosion costs money and lives, resulting in dangerous failures and increased charges for everything from utilities to transportation and more. For a more thorough breakdown of specific corrosion costs by industry, see the NACE Corrosion Costs Study (and approximately double the numbers to have a good estimate of current values).-About the author: Dr. Jackson is part of G2MT Labs, a company at the cutting-edge of new technologies that promise to dramatically reduce the costs (both economic and social) of corrosion. For more info, please contact us at info@g2mtlabs.com. (To quote or utilize the figures provided here or for more info, just ask!)-The Hard Numbers on CorrosionHeres why corrosion costs are over $1 trillion today (compared to the oft-quoted $276 billion from 1998).First, the math:In 1998, the direct cost of corrosion was 3.1% of GDP is $276 Billion. This is the oft-cited number referred to in the NACE cost of corrosion study.In 2013, the direct cost of corrosion was 3.1% of the 15.1 Trillion U.S. GDP, which in June 2013 is estimated to equal to $500.7 Billion.According to the 1998 NACE study, the indirect cost of corrosion is conservatively estimated to be equal to or greater than the direct cost. If the indirect cost is also 3.1% of GDP, then the total cost of corrosion is $1001.4 Billion annually as of June 2013.Analysis of Corrosion Costs:- The reality is that further study or analysis to more accurately estimate the value of the indirect cost of corrosion is needed to improve the accuracy of the total cost of corrosion estimate.- As it stands, corrosion is one of the largest costs to the U.S. economy, only exceeded by health care and real estate in total costs per year.Additional considerations:- Direct costs of corrosion include the costs reported by companies that are directly attributable to corrosion, and can be split into two main components: (1) design, manufacturing, and construction and (2) costs related to corrosion management.The design, manufacture, and construction costs include:- material selection (using more expensive materials for improve corrosion control), corrosion allowance (which results in increased wall thickness or other parameters to compensate for corrosion), protection technologies (including coatings, paints, sealants, inhibitors, cathodic protection, and other techniques), and corrosion prevention application costs including labor, equipment, overhead, etc.).The management-related cost of corrosion control include:- corrosion-related inspection, corrosion-related maintenance, repairs that are required due to corrosion, replacement of corroded parts that are found during inspections or operation, inventory and maintenance of backup components, rehabilitation and refurbishment, and loss of productive time for operation.Power plants provide an excellent example; and the contribution of each component described above is calculated through a life-cycle cost analysis assessment that allows determination of the annualized value of each type of corrosion. Alternative approaches to corrosion management can then be annualized into up-front capital costs and maintenance costs over the life of structures. The operator or owner can then make decisions based on the direct cost analysis with corrosion included as a factor.The Indirect Cost of CorrosionThe indirect costs are all those incurred by anyone aside from the owners or operators of the facility. The measurement and determination of the value of indirect costs is more complex than direct costs, as there is no central entity being charged. Instead, the indirect costs of corrosion are often spread among many people or across our entire society. Risk-based analysis and other practices can be used to evaluate indirect costs, and in some cases owner/operators can be charged through penalties, taxes, litigation, and other methods for some of those costs (in which case they become direct costs). Other indirect costs, such as problems associated with the loss of electrical power (medical, traffic, and other problems) or lost electrical generation capability are difficult to accurately measure but have a substantial impact on society and the economy.When indirect costs are also assigned a monetary value, they can be included in the corrosion management costs of a facility for analysis of the optimized corrosion control approach that minimizes both direct and indirect corrosion costs. Otherwise, designs with the lowest cost to the owner/operator may be selected without regard the impact on society overall. Such an approach is ultimately short-sighted as costs to the public can have other ramifications to companies (e.g. customer dissatisfaction, public relations, and other costs).Corrosion Costs as a % of GDP- Corrosion as a percent of GDP (reported to be 6.2% in the NACE report, including indirect costs) may have either gone up or down since 1998. In that time, many industries report improved testing capabilities and have implemented these capabilities into new practices that improve integrity managements (potentially lowering corrosion cost as a % of GDP). At the same time, the infrastructure in the united states continues to age, and the percentage of equipment past its designed lifespan is higher than ever before (potentially raising corrosion cost as a % of GDP).G2MT Labs performs corrosion testing, failure analysis, pipeline inspection, and other metallurgical testing services. The g2mtlabs.com blog focuses on bringing those topics to both industry and the general public. (Analysis by G2MT Labs CEO, Joshua E. Jackson at g2mtlabs.com all analysis and website information, pictures, data, and text are property of G2MT Labs and cannot be reproduced or duplicated without express written consent of G2MT Labs management)