economic analysis for implementation of corrosion...
TRANSCRIPT
The Corrosion Society
Economic Analysis
for
Implementation
of
Corrosion Control Strategies for
Water and Wastewater Infrastructure
Ron Bianchetti, P.E
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Asset Management
• Utilities have Tens of Millions to Billions of
dollars in fixed assets.
• Utilities would like to maximize the life of the
asset beyond the actuarial life.
• To extend the life of the asset corrosion control
plays and important role in that analysis.
• Corrosion control is typically not a key part of a
Utilities Asset Management Program.
Water Source
Transmission
Treatment
Distribution
Storage
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• Industry Sector Analysis– 26 Sectors in 5 categories
• Infrastructure
• Utilities
• Transportation
• Production and Manufacturing
• Government
Congressional Study – 2002a.k.a.(Cost of Corrosion Study)
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• Total Annual Estimated Direct Cost of
Corrosion in the U.S. is:
$137 B (US) based on Sector Analysis
or
$276 B (US) or 3.1% of the GDPbased on extrapolation to include the
full U.S. economy
Cost of Corrosion Study
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The Category for Utilities Included:
– Gas Distribution
– Drinking Water and Sewer Systems
– Electrical Utilities
– Telecommunications
The study annual cost for this category was
$47.9 B or 34% of the $137 B total.
Cost of Corrosion Study
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• Drinking Water and Sewer Systems sector
costs were estimated at $36 B or 76% of
the category total of $47.9 B.
• The Breakdown:
– Drinking Water Systems B$ 19.25
– Sewer Systems B$ 13.75
Cost of Lost Water B$ 3.00» Total:B$36.00
Estimated at B$56.0 in 2010 dollars
*
Cost of Corrosion Study
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Goals of a Corrosion Control Program
Maximize the useful life of new infrastructure
Extend the useful life of existing infrastructure
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• Material Selection
• Coatings
• Cathodic Protection
Corrosion Control Techniques
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• Material Selection
• Coatings
• Cathodic Protection
Material
selection
Material
selection
Material
selection
Material
selection
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• Material Selection
• Coatings
• Cathodic Protection
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• Material Selection
• Coatings
• Cathodic Protection
Cathodic
Protection
Cathodic
Protection
Cathodic
Protection
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0
10
20
30
40
50
60C
UM
UL
AT
IVE
CO
RR
OS
ION
LE
AK
S
193
0
194
0
195
0
196
0
197
0
198
0
199
0
200
0
YEAR
Actual Aqueduct Corrosion Leak History
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• Methods used in this analysis will include:
– Discounted Cash Flow
– Future Value of Cash Flows
– Net Present Value
Economic Evaluation Methods
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where
• DPV is the discounted present value of the future cash flow (FV);
• FV is the nominal value of a cash flow amount in a future period;
• i is the interest rate, which reflects the cost of tying up capital; Assumed
4.5% for these case studies
• N is the number of years before the future cash flow occurs.
Discounted Present Value
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Future Value
where,
PV is the present value, n is the number of
compounding periods, and i stands for the
interest rate per period. (i -is assumed at 3.5% for theses case studies)
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• Typical expected actuarial asset life:
– Distribution Pipelines 50-75 years
– Treatment Plants 75 years
– Pumping Plants 50- 75 years
– Transmission Pipelines 75-100years
– Dams 100 years
– Reservoirs 50 -75 years
Expected Asset Life
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Decision Matrices: Various individuals and
agencies have developed corrosion control
evaluation matrices to better qualify the need
for corrosion control of buried pipelines.
o USBR
o Spicklemire
o Olstad
o DIPRA
Analytical Model Components
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Environmental Considerations
Parameter
In
cre
asi
ng
Co
rro
sivi
ty
Resistivity pH Chlorides Moisture
Low
High
Low
High
High
Low
High
Low
High
Low
Sulfates
1,000
ohm-cm
2,000
ohm-cm
5,000
ohm-cm
4.5
6.5
8.5
1000
ppm
500
ppm
250
ppm
Wet/Dry
Cycling
Continuously
Wet
Intermittently
Wet
Redox
High
Low
2000
ppm
1000
ppm
500
ppm50 mV
100 mV
> 100 mV
Se
ve
reM
od
era
teM
ild
Ne
glig
ible
High
Stray
Current
Low
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• Stray current from DC or AC sources.
• Changes in site conditions
– Cyclic water table
– Third party damage
– Foreign utilities
– Leaking joints
• Microbiologically Influenced Corrosion (MIC)
• Cathodic protection shielding
• Structural losses due to corrosion
• Collateral damage
Analytical Model does not include:
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• Rossum Equation Leak Analysis
Utilizes soil characteristic data (pH, aeration, resistivity)
Pipe wall thickness
Pipe Diameter
Pipeline Length
Output data
Estimated Year to first leak
Estimated Year of each subsequent leak or leaks
Estimated cumulative leaks over pipeline design
life (75 years)
Pipeline Case Study
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Economic Analysis
• Case Study:– Transmission Pipeline
• 35,000 lineal feet (10,668 m), 60-inch (1524mm)
diameter dielectrically coated steel water
transmission main.
• Assume 10% coating damage
• 40-foot (12.19m) sections non-welded joints
• Installation in urban and rural areas. Approximately
50% in each area.
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Soil parameters:
– pH 7.5
– resistivity range 500 to 7,000 ohm-cm
(use 2,000 for example)
– chlorides 500 to 2350 ppm
– sulfates 170 to 1100 ppm
– Redox negative
– aeration fair
Pipeline Case Study (con’t)
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• Decision Options Evaluated:– Do Nothing Option: This option provides no additional
corrosion control improvements other than the selected coating
on the pipeline.
– Corrosion Monitoring Option/Deferred CP: This
option includes installation of joint continuity bonds, dielectric
insulating joints, and test stations for corrosion monitoring and
deferred CP.
– Cathodic Protection Option: Includes option 2 items
and the initial capitalization and the installation of a
cathodic protection system
Pipeline Case Study (con’t)
The Corrosion Society
Do Nothing Option: This option provides no additional
corrosion control improvements other than the selected coating
on the pipeline.
Assumes future leaks due to corrosion will
be minimal.
Installation of corrosion control components
in the future may be cost prohibitive.
Assumes life extension beyond expected
design life may not be achieved.
Pipeline Case Study (con’t)
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Do Nothing Option:
Project leak frequency and quantity and year leak occurs
evaluated using Rossum analysis. Based on that analysis the
first leak occurs at year 9 and accumulated leaks over the
design life (75 years) is 85.
Leak repair cost is estimated at $10,000 (2009 dollars)
Determine FV of leak repairs based on Rossum analysis.
Calculate total cost and DPV for Option over expected 75
year life.
Total cost is $5,493,929 and the DPV is $1,101,870
Pipeline Case Study (con’t)
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Corrosion Monitoring and Deferred CP Option:
This option includes installation of joint continuity bonds,
dielectric insulating joints, and test stations for corrosion
monitoring.
Assume implementation of a CP system will be installed
following the second leak (year 13) as determined from the
Rossum analysis.
Calculated FV for repairs of 2 leaks and installation of
corrosion monitoring components and cathodic protection in
year 13 following leak 2.
Total cost $844,898 and the DPV is $201,911
Pipeline Case Study (con’t)
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Cathodic Protection Option :
This option includes installation of joint continuity bonds,
dielectric insulating joints, and test stations for corrosion
monitoring and cathodic protection as part of the pipeline
installation.
Calculated FV for installation of corrosion monitoring
components and cathodic protection.
Total cost $770,017 and the DPV is $209,442
Pipeline Case Study (con’t)
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Summary Pipeline Case Study(75-year)
Options DPV Total Cost
Do Nothing $1,101,870 $5,493,929
Corrosion
Monitoring/Deferred
CP
$201,115 $844,898
Cathodic Protection $209,442 $770,017
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• Base Assumptions:
– 3MG Steel shell with knuckle roof.
– Average water resistivity 3,500 ohm-cm
– Marine atmospheric environment
– Non-freezing area
3MG Steel Reservoir Case
Study
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• Decision Options Evaluated:– Do Nothing Option: This option provides no additional
corrosion control improvements following initial construction.
Minor maintenance coating repairs every 2 years.
– Ongoing Recoating and Cathodic Protection :
This options includes Recoating Exterior Yr 20,40 and 60.
Recoating interior Yr 30 and 60.
Initial CP installation costs and anode replacement
Yrs. 20,40 and 60.
3MG Steel Reservoir Case
Study
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Summary Steel Reservoir
Case Study (75 year)
Options DPV Total Cost
Do Nothing $7,679,508 $40,302,665
Maintenance
Recoating and CP$2,883,493 $6,669,560
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• Economic analysis applied to key infrastructure
components for any utility asset is a useful tool
to evaluated the benefits of a corrosion control
program.
• Based on the case studies presented the
benefit-to-cost ratios when properly
implementing sound corrosion control strategies
is 6.8 and 6.0 times that of the Do Nothing
Option.
Conclusions
Questions ????
and
Possible Answers !!!!!
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