Nuclear Safety Model May Prove Useful for Oil Industry

August 25, 2010

Oil exploration companies like BP Plc and their drilling partners could learn from a little-known U.S. nuclear industry watchdog group that focuses on sharing safety know-how and peer criticism, executives involved with the group said.

Two officials from the Institute of Nuclear Power Operations, or INPO, will be part of Wednesday’s meeting of the White House commission looking into the BP Deepwater Horizon oil spill in the Gulf of Mexico, the worst offshore oil spill in U.S. history.

The commission, appointed by President Barack Obama to make recommendations on the future of offshore drilling, may suggest that the oil industry create a self-regulatory agency based on INPO, commission co-chairman Bill Reilly said.

Any new organization would be in addition to strong federal regulation, Reilly said.

After the March 1979 accident at the Three Mile Island nuclear plant in Pennsylvania, INPO was formed, at the recommendation of a panel set up by President Jimmy Carter, to promote the highest levels of safety and excellence in nuclear operations.

Utility officials credit INPO’s work to raise nuclear operating standards, perform tough plant audits and accredit employee training programs with a steady increase in U.S. nuclear fleet output over the past three decades.

A year after the Three Mile Island accident brought nuclear development to a halt, U.S. reactors ran about 60 percent of the time. For the past three years, the industry capacity factor has been above 90 percent.

“INPO is a significant contributor to making sure that none of the peers do anything that will hurt the industry as a whole,” said Marvin Fertel, president of the Nuclear Energy Institute, an unrelated Washington-based nuclear policy organization.

It’s not federal authority, costly penalties or public embarrassment that makes INPO work, however.

Rather, active participation by top executives representing every U.S. nuclear station, along with a highly critical, yet private, peer-review process, is the prescription.

“There is no question that CEO involvement is the key to the success of INPO,” said Michael Morris, chairman of American Electric Power Co, owner of the Cook nuclear station in Michigan.

While AEP utilities operate dozens of power plants, “I am always clear about what is going on at Cook 1 and 2, and less so about Conesville 4 and 5,” Morris said, referring to the Michigan plants and two AEP coal-fired units in Ohio.

CEOs meet several times a year and attendance at a meeting to discuss INPO plant evaluations is mandatory. Executives of poorly performing nuclear stations must answer to their peers on existing problems and planned solutions.

“Those CEOs are really challenged by their peers about the actions taken, the results seen, the decisions made and how they are going to get better,” said Jim von Suskil, NRG Energy’s vice president for nuclear oversight, who has watched INPO operate for many years.

“It is 80 percent more serious than any other organization” Morris is involved with, he said. “When the CEO of INPO calls you, you call him back immediately.”

Nuclear officials said other industries can benefit from the INPO model.

“The industry knows we sink or swim together,” said Morris, a recognition that followed Three Mile Island and spurs companies to constantly share safety practices at INPO and lend assistance to other companies when problems arise.

He cited recent discussion about well pressure and various drilling practices raised by the BP disaster. With a strong, self-regulatory organization in place, “these lessons would have been shared long before” the accident, Morris said.

While competitive issues vary among industries, “there have got to be components that are transferable,” said Fertel. “The success has been so demonstrable for us — plant performance, the safety, the training.”

“Other industries are going to have to take a look at how we’ve done things and see if it works for them,” said INPO spokesman Ron Smith. “We’re certainly willing to share what we’ve done.”

(Editing by Walter Bagley)

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