SOURCE: NACE International

October 09, 2008 17:00 ET

NACE Report on Refinery Corrosion Reveals $12 Billion Lost Profit

HOUSTON, TX--(Marketwire - October 9, 2008) - Petroleum remains the largest source of energy for the United States, and the nation's refineries represent nearly a quarter of the global production. In response to the rising cost of petroleum and the impact of corrosion on our infrastructure, NACE International released a gap analysis report on refinery corrosion.

The "Petroleum Refinery Gap Analysis" cites the benchmark 2002 Federal Highway Administration (FHWA) and NACE-sponsored study, "Corrosion Costs and Preventive Strategies in the United States," which estimated that corrosion costs refineries $3.7 billion annually. Of this amount, plant turnarounds, or outages for maintenance, cost $1.4 billion.

The cost of corrosion also impacts refineries' production capacity and profitability. The gap analysis report estimates profit loss ranging from $2 billion to $12 billion for ceasing production to perform maintenance.

After a review of 82 corrosion issues unique to the refining industry, the gap analysis report identified four specific technology needs for the industry, which, if addressed, will directly reduce these costs.

The four technology gaps identified in the report include corrosion knowledge management, corrosion prediction and modeling, corrosion damage assessment, and new materials. Identified within these gaps is the need to invest in corrosion prevention strategies, modeling and monitoring tools that predict corrosion rates, updated standards, and corrosion-resistant coatings.

"Though efforts to manage corrosion are performed at the operations level, executive levels of management may not fully realize the implications of corrosion until they see the bottom line," says Tony Keane, Executive Director of NACE International. "This report quantifies the costs of corrosion to help financial decision makers justify corrosion mitigation programs. By minimizing corrosion, U.S. refineries can sustain or increase the current production of petroleum products to meet the escalating global demand, reduce costs, and minimize lost profit."

The complete "Petroleum Refinery Gap Analysis," commissioned by the NACE Technical Coordination Committee (TCC), is available at www.nace.org/gapanalysis. A summary of the 2002 report, "Corrosion Costs and Preventive Strategies in the United States," is also available on the NACE Web site at www.nace.org/corrosioncoststudy.

NACE International is a professional association dedicated to promoting public safety, protecting the environment, and reducing the economic impact of corrosion. Established in 1943, NACE International has more than 20,000 members worldwide and offers technical training and certification programs, sponsors conferences, and produces industry standards, reports, publications, and software.

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