Project Management in the Energy Industry-Comparing Two Projects

3714 Words May 9th, 2011 15 Pages
Introduction
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
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(Cohen, 1990). Nuclear power plant opponents may blame the increase on inefficiencies and ineptitude, implying the plants builders are incompetent but the fact remains that these builders built inexpensive efficient plants, rapidly in the 1970’s. (Cohen, 1990).
During the 1970’s, in response to public concern, the Nuclear Regulatory Commission (NRC) began to tighten regulations and requirements for power plant safety equipment as in the case of St Lucie Unit 2. (Cohen, 1990). Safety improvements have a cost and complex plants have many areas to incur such costs, which increased substantially after the accident at Three Mile Island. (Cohen, 1990). This process known as ratcheting, a wrench that tightens but does not loosen and the requirements continued to tighten. (Cohen, 1990). For example, in an equivalent size plant, the amount of steel required increased by 41 percent, concrete by 27 percent, piping by 50 percent and electrical cable by 36 percent. (Cohen, 1990). In addition to the aforementioned requirements, the time from project initiation to groundbreaking increased from 16 months in 1967 to 32 months in 1972 and 54 months in 1980 and construction time almost doubled the final cost of a plant. (Cohen, 1990). The ratcheting, driven by political pressure created from the public outcry was not driven by new scientific or technological information halted all plans

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