Project Management in the Energy Industry-Comparing Two Projects

Topics: Project management, Nuclear power, Alaska Pages: 10 (3699 words) Published: April 24, 2011
Throughout the 1970’s and 1980’s, utility industries struggled to manage their nuclear power plant construction prudently in the public eye. Throughout this era, litigation chastised the mismanaged organizations to the tune of billions of dollars. In this same era, Arab countries declared an oil embargo in the United States, oil prices soared and long lines at the gas pumps reflected the nation’s first fuel shortage since World War II. These events fast tracked the immediate need for an increase in alternative domestic energy sources here in the United States. The purpose of this analysis is to compare and contrast two projects in terms of Project Management, Quantitative Analysis and Economics while illustrating the effects of prudent vice imprudent management. The two case studies reveal different management styles within the organizations and ultimately within the projects. This paper examines the successes and failures of the St. Lucie Unit 2 Nuclear Power Plant and the Trans-Alaska Pipeline System projects. These two drastically different projects are located in very different climates; St Lucie Unit 2 Nuclear Power Plant on Hutchinson Island, Florida and the Trans-Alaska Pipeline System that runs from Prudhoe Bay to Valdez in Alaska. As stated, these projects are completely different in scope and perhaps to perform a ‘compare and contrast’ may be unfair without mentioning that power plants were not a new concept whereas TAPS was a very new endeavor at that time. St Lucie Unit 2 completed on time, within budget while TAPS was the exact opposite. Both projects began construction in the mid 1970’s, both were completed, are still in operation today and both are considered successful because in both of these cases, the end does justify the means.  

St Lucie Unit 2 - Overview
St. Lucie Unit 2 is located on Hutchinson Island (Appendix A), southeast of Ft. Pierce, Florida (St Lucie Plant, 2010). This project is an 8.8 percent ownership interest, 838 -megawatt (MW) nuclear power plant operated by Florida Power & Light (FPL) and licensed to operate until 2043. (St. Lucie Project, 2003). The nuclear power industry has been having issues for decades and no plans for any new plants are in the forecast. (Derrickson, 1998, p. 401). Articles stating the out of control costs, schedules and qualities were prevalent. (Bradshaw, Derrickson, and Sweeney, 1996). Inundated with cancellations, redesigns, reconstruction and litigation, management prudence was called into question. (Bradshaw, et al., 1996, p.1). St Lucie Unit 1 and 2 planned as identical units in 1968, but Unit 2 initially canceled due to low load forecasts but reinstated in 1972 when load increased. (Uhrig, 2008). The Nuclear Regulatory Commission (NRC), ordered changes for the Unit 2 design and considered it a new design causing a 15-month delay in the license process. (Uhrig, 2008). FPL have four nuclear units in operation, the newest being St Lucie, this plant received its operation license in June 1983; a record six years after construction began. (Derrickson, 1998). Based on experiences, the project team was determined to complete the plant on schedule, within budget and deliver a quality project. (Derrickson, 1998). Despite interruption from the NRC, forty-four amendments later, an expensive work stoppage, appeals and hearings, FLP completed the project. (Derrickson, 1998). Nuclear capacity is only seven percent of the state’s total electric generating capacity, which puts nuclear power in fourth place behind natural gas, petroleum and coal. (Florida Nuclear Profile, 2010.). Trans-Alaska Pipeline System - Overview

The privately owned Trans-Alaska Pipeline System (TAPS) pipeline transports oil from Prudhoe Bay to Valdez, Alaska. (Absolute Astronomy, 2011). It is one of the world’s largest pipeline systems, designed to endure and protect against the harsh environment as it crosses three mountain ranges, three major earthquake faults and more than...

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