A $276 Billion-a-Year Crisis May Be Over

The United States spends somewhere in the neighborhood of $700 billion each year on building and maintaining our armed forces.

That’s more than the next 10 biggest military spending nations put together — but one of the costs associated with keeping the world’s most potent army battle-ready may surprise you.

As of 2011, the Pentagon spent $22.9 billion fighting an enemy that’s not human or even man-made…

Rust.

Putting things into perspective, that’s enough for two brand-new nuclear-powered aircraft carriers or more than 50 of the Air Force’s premier frontline fighter, the F-22 Raptor.

It may seem amazing to you that a simple, universal chemical reaction can be responsible for more damage and destruction than has been dealt to the U.S. Military since the end of World War II, but the even scarier truth is that it’s getting worse every year.

You see, as much as the U.S. likes spending money on shiny new high-tech weapons, over the last several decades, it’s also gotten pretty good at refitting and repurposing major equipment.

The Cost of Putting Off Retirement

Today, the average naval ship is 20 years old, the average Marine amphibious landing vehicle is 35 years old, and the average strategic bomber is 34 years old — mostly thanks to the large numbers of 50-year-old B-52s still in the USAF inventory.

Despite the fact that anything flying or sailing under the American flag carries the latest in navigation, threat detection, and defensive gear, the major components like hulls, structural members, and airframes still date back to their initial creation.

Meaning the price of rust will only be rising as we move forward.

And what has the Department of Defense done to combat this problem? What sort of high-tech, paradigm-shifting technology has it come up with to stop these aging fleets from corroding?

Well, in 2003, the Pentagon established the Corrosion Policy and Oversight Office to deal with this problem.

As of 2011, this office consisted of a five-person team based in a leased office about a mile from the Pentagon.

Not exactly an inspiring solution to a problem that costs U.S. taxpayers the equivalent of the El Salvadorian GDP every single year.

And the solutions the office has come up with, while seemingly headed in the right direction, are simply not capable of tackling the mounting issues.

Half Measures… Partial Solutions

Recently, the Navy was able to save an estimated $240 million by applying a new corrosion-resistant coating to the ballast and fuel tanks of its ships.

Sounds great, but at the same time, the costs of corrosion associated with keeping the USAF’s fleet of brand-new F-22 Raptors in flying condition through 2016 will run to $228 million — and that’s despite the fact that builder Lockheed Martin (NYSE: LMT) spent millions on corrosion prevention measures during the design phase of both the F-22 and its contemporary, the F-35 Joint Strike Fighter.

If we win a little, we lose almost as much somewhere else. Unfortunately, it’s a problem we cannot escape so long as steel is used as the main construction material in our most expensive high-tech equipment.

As a national problem, this is big — but it’s still only a tiny slice of the pie.

A Nation of Rust

Taking into account all of our national infrastructure, much of which hasn’t received a major overhaul since the post-World War II years, we spend an estimated $276 billion each year patching and repairing the effects of nature on iron and steel.

Those costs seem incredible, but they also come with a huge price — the price of lives when metal fatigue finally reaches a point of failure.

Of the 68 major bridge failures that occurred globally between 2000 and 2014, 16 of them took place in the United States — with metal fatigue playing a main role.

Only China, where enforced construction standards do not compare with our own, had more bridge collapses over the same period.

As is the case with our sensitive military machines, rust — the slow but inevitable oxidation of metal — is something we simply have to accept until a viable alternative to steel can be developed.

At least, that was the popular wisdom until recently.

A Cloud with a Stainless Lining

Right now, there’s a company working against this force of nature, and it seems it’s come closer to cracking the code of rust than anyone before.

While oxidation of certain materials truly is unstoppable, this company has come up with a method that can increase the useful life of steel components by between 40 and 80 times.

In terms of the speed of rust’s progression, that’s a near 99% decrease.

Just imagine what this sort of innovation could do if applied universally everywhere it’s needed.

It’s a major step forward that’s already earned this company serious industry attention, along with some of the most coveted accolades there are.

Ranked number one by the Wall Street Journal for Global Manufacturing Innovation and called the most promising material science company in the U.S. by Forbes, this firm has received dozens of trade, industry, and technology awards, including multiple R&D 100 awards and a technology and innovation award from the National Institute of Standards and Technology.

Here’s the kicker, though… This company isn’t some household brand name you already know.

It’s not DuPont or BASF or Dow Chemical. In fact, I bet you’ve never heard of this company.

You see, it’s still small. Very small, in fact. It trades at just $0.52 for a total market cap of just $37 million.

Nevertheless, those awards I listed above are quite real, and so are its results.

My friend Nick Hodge recently discovered this company and immediately saw the potential — both in the technology and in the investment.

His report, with all the shocking details, is available right here.

I wouldn’t miss out on this one if I were you.

To your wealth,

Brian Hicks

Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Tech Investing Daily, Wealth Daily and Energy & Capital. Known as the “original bull on America,” Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor’s page.