The High Cost Of Corrosion

It’s no secret that corrosion under insulation (CUI) is one of the top concerns facing industry today. It affects everyone from facility owners to plant operators to workers, and if not taken into account, can have catastrophic effects. Naturally, the primary objective for preventing corrosion is to ensure the safety of plant employees and the surrounding communities; however, as we start to look at the actual numbers, it is clear that CUI is not only dangerous, but it can also be extremely costly.

In 2001 NACE International, an industry authority for corrosion control solutions, initiated a study with the U.S. Federal Highway Administration to determine the annual cost of corrosion (for all industries) in the United States. The study estimated that the direct cost of corrosion in the US in 2001 was $276 billion (1). While very little research has been published since the study was completed, experts believe that the cost has only grown since 2001. Corrosion is still one of the largest expenses the U.S. economy faces, outstripped only by enormous industries like health care (2).

The term “direct cost” refers to expenditures that are directly related to preventing corrosion or correcting damage caused by corrosion. These consist of things like designing systems for corrosion management (e.g., material selection, corrosion allowance, corrosion protection, labor, equipment, and overhead) and implementing corrosion control after the structure has been built (e.g., inspections, maintenance, repairs, replacements, and output loss as a result of down time) (2). The in-depth study split the cost of corrosion by industry, as shown in the chart below (accounting for a total extrapolated cost of $137.9 billion – see reference (3) for a full explanation).

While the graph above only refers to the direct cost of corrosion, it does not account for the indirect costs. These costs are more difficult to quantify because they capture the second, third, and fourth-level expenses that result from corrosion. For example, if an underground natural gas pipeline in a neighborhood fails because of corrosion, not only will it need to be repaired, but the neighborhood could lose all gas-powered utilities for multiple days, a potential gas leak could cause catastrophic damage if exposed to flame, home-owners in the neighborhood could have adverse health reactions to the exposure to natural gas, etc.

Each of these impacts has a unique expense and is considered an “indirect cost” of corrosion.   NACE estimated that the indirect costs of corrosion are at least equal to the direct costs, and when coupled together, the total cost of corrosion in the U.S. in 2001 was a staggering $552 billion (1).

The figures the NACE report produced in 2001 have only grown over the last fifteen years. Today’s experts estimate that the total cost of corrosion has stepped into the trillions of dollars (2). While this is an estimate that accounts for all corrosion in the entire U.S., the figures for the industrial sector are still startlingly high. The 2001 report attributed $6.9 billion in corrosion costs to the electrical utility sector alone, and clearly these figures have only grown. Today, industry leaders estimate that 40-60% of pipe maintenance costs are a result of CUI, and 10% of the entire maintenance budget goes to repairing CUI damage (3).

This is partially caused by basic economic inflation, but today’s facilities are also coping with many aging building materials that have outlasted their intended lifespan. These materials require additional attention from maintenance and inspection crews, and often times must be preemptively replaced to avoid creating a hazardous environment.

A perfect example of this was an explosive pipe failure at the Dow Chemical Plant in 2008. While the plant had an excellent track record of maintenance, inspection, and safety standards, they still had aging materials in their pipe system. Their inspection protocol happened to miss corrosion on a 30-year-old pipe in a high-pressure system. When the pipe failed, it exploded with such force that it buckled in two separate places. The explosion could have had disastrous effects for the plant, except that the buckling happened to seal the pipe, preventing further damage until the system could be shut down (4).

As the industry evolves to combat situations like this, NACE’s recommendation from their 2001 paper is still relevant: take every step necessary to prevent corrosion before it happens. This has led to best practices being implemented – from properly sealed joints to correctly detailing a jacketing system.

However, the insulation beneath the jacketing plays a critical role in promoting or inhibiting corrosion as well. Many operating facilities have found that despite jacketing and sealants, water almost always manages to find a way into the system. Data from those operating facilities have shown that up to 60% of insulation that has been in place for more than 10 years will contain corrosive moisture(3).

Given that fact, insulation selection is important to preventing corrosion. While many suggest that using hydrophobic coatings on the pipe or a hydrophobic treatment on the insulation is the best method for preventing CUI, there is a major drawback to hydrophobic coatings. Once operating temperatures have exceeded 450°F, the hydrophobic coating will gradually burn off whether it’s on the pipe or the insulation, leaving the system susceptible to water intrusion and corrosion.

Since we can’t rely solely on the jacketing system or hydrophobic coatings to prevent corrosion, we need to have a backup plan in place for when corrosive liquid does infiltrate the system. Johns Manville Industrial’s Thermo-12® Gold calcium silicate and Sproule WR-1200® expanded perlite contain an exclusive, corrosion-inhibiting package, XOX™, that is highly effective even when the jacketing fails and the hydrophobic-coating has burned off.

This package, which lasts for the life of the insulation and won’t burn off, is activated when water or liquid is present, and it has a two pronged defense. First, when water infiltrates the system, corrosive anions are neutralized by a pH buffering aspect of the insulation’s chemical makeup. Secondly, the insulation combines with the water to create a non-corrosive coating that travels to the pipe surface where it hardens into a passivation layer that prevents water from actually reaching the pipe.

While the cost of preventing corrosion may seem high, it pales in comparison to the costs of dealing with a corrosion-caused pipe or equipment failure. For additional information regarding the cost of corrosion, or specific breakdowns of the cost of corrosion by industry, we strongly encourage you to read through NACE’s paper, Corrosion Costs and Preventive Strategies in the United States. While it is dated research, industry experts concur that the figures have only grown, and the warnings and best practices proposed in the paper are still very applicable today.


  • Gerhardus H. Koch, Michiel P.H. Brongers, and Neil G. Thompson (CC Technologies Laboratories, Inc.). Y. Paul Virmani (US Federal Highway Administration, Turner-Fairbank Highway Research Center). J.H. Payer (Case Western Reserve University). “Corrosion Costs and Preventive Strategies in the United States.” NACE International. Publication NO. FHWA-RD-01-156. Accessed: January 19, 2016
  • Joshua Jackson, CEO G2MT Laboratories. “Cost of Corrosion Annually in the U.S. Over $1 Trillion.” Accessed: January 19, 2016
  • Behzad Bavarian, Babak Samimi, Yashar Ikder, Lisa Reiner, Boris Miksic. “Protection Effectiveness of Vapor Corrosion Inhibitor for Corrosion Under Insulation.” Dept. of Manufacturing Systems Engineering & Management College of Engineering and Computer Science California State University, and FNACE Cortec Corporation. Accessed: January 19, 2016
  • Renato Sampaio (Latin America Process Safety Technology Leader, The Dow Chemical Company), Antônio Luiz M.V. Leite (Senior Specialist Mechanical Engineer, The Dow Chemical Company). “More Lesson Re-Learned from corrosion Under Insulation.” Accessed: January 19, 2016