The production and manufacturing category includes industries that produce and manufacture products of crucial importance to the ecomoy and the standard of living in the United States. These include gasoline products, mining, petroleum refining, various chemical and pharmaceutical products, paper, and agricultural and food products. The annual cost of corrosion in the production and manufacturing category is $17.6 billion, which is 12.8% of the total cost of the sector categories examined in this study. The production and manufacturing category is divided into nine industry sectors: 1) oil and gas exploration and production, 2) mining, 3) petroleum refining, 4) chemical, petrochemical and pharmaceutical, 5) pulp and paper, 6) agricultural production, 7) food processing, 8) electronics, and 9) home appliances.

Oil and Gas Exploration and Production

The majority of cost savings for any oil production facility is in the prevention of failure in one of the production arteries, such as downhole tubing, surface pipelines, and production vessels. Downhole tubing, surface pipelines, pressure vessels, and storage tanks in oil and gas production are subject to internal corrosion by water, which is enhanced by the presence of CO₂ and H₂S in the gas phase. Internal corrosion control is a major cost item consideration. The total cost of corrosion in the U.S. oil and gas production industry is estimated to be $1.372 billion annually, made up from $589 million for surface piping and facility costs, $463 million in downhole tubing expenses, and $320 million in capital expenditures related to corrosion.

Mining

Corrosion in the mining industry is not considered a significant issue. Interviews with several mining engineers indicated that equipment wear and tear was the primary concern in maintaining the equipment operational. Although various forms of corrosion could be identified in mining machinery, corrosion is not considered to be a life-limiting factor for this equipment. Maintenance painting is, however, heavily relied upon to control corrosion, and it is estimated that an average of $93 million is spent annually for the coal mining industry, which is a very small portion of the overall cost in the production and manufacturing category.

Petroleum Refining

The U.S. refineries represent approximately 23 percent of the world's petroleum production, and the United States has the largest refining capacity in the world, with 163 refineries. In 1996, U.S. refineries supplied over 18 million barrels per day of refined petroleum products. The total annual direct cost of corrosion is estimated at $3.7 billion. Of this total, maintenance-related expenses are estimated at $1.8 billion, vessel turnaround expenses at $1.4 billion, and fouling costs are approximately $0.5 billion annually.

Petroleum refining is an industry, which is undergoing intense amounts of scrutiny in the United States from regulatory agencies and environmental groups. As a result, releases of pollutants caused by corrosion leaks are becoming a high consequence event. The Clean Air Act of 1990 has forced refiners to implement a number of costly measures to reduce their impact on the environment, both with the types of products they produce and the manner in which they operate their refineries.

Chemical, Petrochemical and Pharmaceutical

The chemical, petrochemical and pharmaceutical industries play a major role in the U.S. economy by providing a wide range of products. The chemical industry includes those manufacturing facilities that produce bulk or specialty compounds by chemical reactions between organic and/or inorganic materials. The petrochemical industry includes those manufacturing facilities that create substances from raw hydrocarbon materials, such as crude oil and natural gas. The pharmaceutical industry formulates, fabricates and processes medicinal products from raw materials. The total annual direct cost of corrosion for this industry sector is estimated at $1.7 billion per year (8 percent of total capital expenditures).

Pulp and Paper

The $165 billion pulp, paper and allied product industry supplies the United States with approximately 300 kg of paper per person per year. More than 300 pulp mills and more than 550 paper mills support its production. Paper production consists of a series of processes and can be roughly divided according to the five major manufacturing steps: pulp production, pulp processing and chemical recovery, pulp bleaching, stock preparation, and paper manufacturing. Each manufacturing step has its own corrosion problems related to the size and quality of the wood fibers, the amount of and temperature of the process water, the concentration of the treatment chemicals, and the materials used for machinery construction. Examples of corrosion affecting production are corrosion products polluting the paper and corrosion of rolls scarring the sheets of paper. Corrosion of components may also result in fractures or leaks in the machines, causing production loss and safety hazards. The total annual direct cost of corrosion is estimated at $6.0 billion, with the majority of this cost in the paper and paperboard-making industry, and calculated as a fraction of the maintenance costs. No information was found to estimate the corrosion costs related to the loss of capital.

Agricultural Production

Agriculture operations are producing livestock, poultry, or other animal specialties and their products, and producing crops, including fruits and green house or nursery products. According to the National Agricultural Statistics Service, there are approximately 1.9 million farms in the United States. Based on the 1997 Census, the total value of farm machinery and equipment is approximately $15 billion per year. The two main reasons for replacing machinery or equipment include upgrading old equipment and substituting because of wear and corrosion. Discussions with people in this industrial sector resulted in an estimate of corrosion costs in the range of five percent to ten percent of the value of all new equipment. The total annual direct cost of corrosion in the agricultural production industry is estimated at $1.1 billion.

Food Processing

The food processing industry is one of the largest manufacturing industries in the United States, accounting for approximately 14 percent of the total U.S. manufacturing output. Sales for food processing companies totaled $265.5 billion in 1999. Because of quality of food requirements, stainless steel is widely used. Assuming that the stainless steel consumption and cost in this industry is entirely attributed to corrosion, a total annual direct cost of corrosion is estimated at $2.1 billion. This cost includes stainless steel usage for beverage production, food machinery, cutlery and utensils, commercial and restaurant equipment, and appliances, aluminum cans and the use of corrosion inhibitors.

Electronics

Corrosion in electronic components manifests itself in several ways. Computers, integrated circuits, and microchips are now an integral part of all technology-intensive industry products, ranging from aerospace and automotive to medical equipment and consumer products, and are therefore exposed to a variety of environmental conditions. Corrosion in electronic components are insidious and can not be readily detected; therefore, when corrosion failure occurs, it is often dismissed as just a failure and the part or component is replaced.

Because of the difficulty to detect and identify corrosion failures, the cost of corrosion is difficult to determine. Arguably, in many instances, particularly in the case of consumer electronics, such devices would become technologically obsolete long before corrosion-induced failures. In addition, while corrosion-related user costs, due to irretrievable lost data, could be staggering, as the electronic information and data exchanges become more intensive, most sensitive information is frequently backed up. Capital-intensive industries with significant investments in durable equipment with a considerable number of electronic components, such as the defense industry, and the airline industry, tend to keep the equipment for longer periods of time, where corrosion is likely to become an issue. Although the cost of corrosion in the electronics sector could not be estimated, it has been suggested that a significant part of all electric component failures are caused by corrosion.

Home Appliances

The appliance industry is one of the largest consumer product industries. For practical purposes, two categories of appliances are distinguished: "Major Home Appliances" and "Comfort Conditioning Appliances". In 1999, 70.7 million major home appliances and 49.5 million comfort conditioning appliances were sold in the United States, for a total of 120.2 million appliances. The cost of corrosion in home appliances includes the cost of purchasing replacement appliances because of premature failures due to corrosion. For water heaters alone, the replacement cost was estimated at $460 million per year, using a low estimate of 5 percent of the replacement being corrosion-related. The cost of internal corrosion protection for all appliances includes the use of sacrificial anodes ($780 million per year), corrosion resistant materials (no cost estimate), and internal coatings (no cost estimate). The cost of external corrosion protection using coatings was estimated at $260 million per year. Therefore, the estimated total annual direct cost of corrosion in home appliances is at least $1.5 billion.