Corrosion Costs and the Future

The following is an abstract from, “Now is the Time,” a paper presented by George F. Hays, PE, Director General, Word Corrosion Organization.

 Abstract:

“At US 1.8 trillion, the annual cost of corrosion worldwide is over 3% of the world’s GDP.  Yet, governments and industries pay little attention to corrosion except in high-risk areas like aircraft and pipelines.  Now is the time for corrosion professionals to join together to educate industry, governments, and the public.  Now is the time to work together to harmonize standards and practices around the world and to communicate and share corrosion mitigation technologies.  Now is the time to make a major impact to protect the environment preserve resources, and protect our fellow human beings.”

Additional Cost of Corrosion

Published on June 1st, 2011 by Admin in Metallurgical Services – Cost of corrosion to exceed $1 Trillion in the United States in 2012

With little fanfare or notice, a significant milestone in the effect of corrosion on the U.S. economy is projected to occur in 2012 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 total direct cost of corrosion in the U.S. was estimated to equal $276 Billion in 1998, approximately 3.1% of the GDP. However, this estimate is a bit outdated now and closer examination of the NACE data indicates that corrosion costs in the U.S. are now approaching $1 trillion dollars, and will likely pass that unfortunate milestone in 2012 if they have not already.  So how do we get to $1 trillion from $276 Billion?

First, the math:

In 1998, the direct cost of corrosion was 3.1% of the GDP of the  $11.7 Trillion.  This is the oft-cited number referred to in the NACE cost of corrosion study.

In 2011, the direct cost of corrosion was 3.1% of the $15.1 Trillion U.S. GDP in 2011 is now equal to $468.1 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 (6.2% of GDP) will be more than $1 Trillion by the end of 2012.  However, in a slightly less conservative case where indirect costs are slightly more than GDP, then the total of indirect and direct corrosion costs would have already passed $1 Trillion as of mid-2011.