# How To Calculate the Cost of Hydraulic Oil Leaks

It’s now more important than ever to ensure that every dollar spent on operating and maintaining hydraulic equipment is a dollar well spent. Furthermore, it’s imperative that the hydraulic equipment you design, repair or maintain doesn’t LEAK money.

Hydraulic systems are often considered perennial consumers of oil and in turn, make-up fluid an inherent cost of operating hydraulic equipment. But to calculate the real cost of one or more ‘minor’ leaks on a hydraulic machine, the expense associated with all of the following need to be considered:

• Make-up oil.
• Clean-up.
• Disposal.
• Contaminant ingression.
• Safety.

Make-Up Oil

The cost of make-up oil should be the most obvious cost of hydraulic system leaks. I say ‘should be’ because many hydraulic equipment users fail to consider the accumulative effect on the cost of one or more slow leaks over time.

Consider a piece of hydraulic equipment losing 0.5 cc of oil per minute. That’s 30cc per hour, and 720 cc over 24 hours – perhaps not a significant loss. But over a month this equates to 22 liters; and 263 liters over the course of a year. Assuming an oil cost of \$3 per liter, the annual cost is around \$800.

Clean-Up

Where there are oil leaks there is almost always a clean-up cost to consider. Clean-up costs include:

• labor;
• equipment required to empty sumps and drip trays, and degrease machine surfaces; and
• consumables such as detergents and absorbent material.

Assuming it costs \$20 per week in labor, equipment and consumables to clean up the piece of equipment discussed above, the annual clean-up bill totals more than \$1,000.

Disposal

I can remember a time, not so long ago, when waste oil companies used to pay for the privilege of emptying waste oil tanks. These days they bill you take it away. Environmentally acceptable disposal of waste oil, and absorbent material containing waste oil, costs money.

Assuming transport and disposal cost of \$1 per liter, the annual disposal costs attributable to the leakage rate discussed above amounts to \$263.

Contaminant Ingression

Where oil leaks out, contaminants such as air, particles and water can get in. Costs to consider here include:

• component damage and fluid degradation as a result of contaminant ingress;
• downtime caused by equipment reliability problems; and
• removal of ingested contaminants.

Safety

In many situations, oil leaks can pose a safety hazard. Like the costs associated with contaminant ingression, the costs associated with the hazards posed by oil leaks are difficult to quantify — short of a lost time accident actually occurring. However, active management of the safety risk posed, through for example, more frequent clean-up than may otherwise be necessary, skews this cost to a quantifiable area.