Great article by Hans Kern, P.E. (“Are Estimating Methods Hurting U.S. Energy Projects?,” July 2010). Another impediment is the lack of risk sharing among the key contributors to a project undertaking. The preferred EPC contract delivery method first evolved in the mid 1980’s when private funding bankrolled projects as limited liability project finance undertakings. This form of contract ensured that the EPC contractor bears all the risks for performance, schedule and lump-sum cost of the project. Unfortunately, it also imposed an additional markup in total project cost, probably around 10 to 15 percent, to protect the contractor from nasty surprises when things did not go according to plan.
Historically the added margin did provide the banks, their engineers and the owner of the project with sufficient cushion to avoid risk and therefore approve the project. Nowadays, however, the piling on of various estimating factors and other conservative contingencies has blown project costs out of whack.
One cost-reduction solution is to replace the EPC approach with an Integrated Project Delivery method, a risk-sharing contract that rewards each contributor according to the risk they are willing to carry in the project team structure. The IPD collaborative approach can offer the power industry a new path to reignite innovative power generation technology construction in the U.S. and enable us to compete on a global basis. It is already gaining a foothold here with successful results reported for some complex infrastructure and vertical-build projects. IPD standard forms of contract are readily available from AIA and other construction industry associations, so we do not need to reinvent the wheel.
Joseph Grynbaum, P.E., Principal
Mediation Resolution International LLC.
To the Editor:
In response to “The Importance of the Control Room Log Book” by Rodger Zawodniak (July 2010) I am surprised and disappointed to read that manual logbooks, and records in general, may still be used in power plants. Over 20 years ago as a consultant I argued futilely for computerized recording of logbook information, plus operators’ observations, at nuclear plants. Although software was much slower and portable computers much larger then, they were adequate to this task. Why is this still delayed anywhere?
Since the vocabulary of these observations is small, it would be easier for the individual user and the results would be more accurate, thorough and accessible. Furthermore, no option is lost; if he insists, the operator could still make a free text entry. Even photographs can be included and huge databases can be quickly checked, even during operator rounds.
Marvin E. Forman, Ph.D., P.E.
To the Editor:
In your recent editorial (“Expect a Mess as EPA Rules Take Hold,” July 2010), you make essentially the same case for not doing anything about carbon that big power and big coal made about soot/dust/particulate at the onset of the Clean Air Act. Unfortunately, as the auto companies also found with their own “woe is me” stance on vehicle mileage standards, the end result of the positive changes of both the Clean Air Act and the mileage standards was no anywhere near what the naysayers were saying 25 to 30 years ago.
In fact, the overall benefits to society in cleaner air and healthier people far outweigh the tiny added cost to society that coal and power companies had to spend. Ditto with the auto industry – how much oil would we be importing today if the mileage standards had not come in? How much less pollution is in the air as a result? What would LA look like today?
The vast majority of all scientists are saying that burning coal causes the carbon numbers to go up and that causes climate change. Whether you believe that or not is not that critical. What we should not be doing is to take the risk that it could be. And we don’t have to take that risk. Alternates abound. And those alternates are not that costly from a long term standpoint.
My own firm has reduced its internal energy use by over 35 percent in the past 2 1/2 years, and we intend to cut it further by 30 percent in the next two years. We have also started to generate our own power and within 5 years I expect we will be energy neutral (and that includes our fleet of over 25 vehicles). Not everyone can do what we can do, but many can, and some can physically do far better than we can. So a 60 to 80 percent cut in U.S. energy usage per capita is very do-able and in the end, the cost will not be anywhere near as exorbitant as some would insist it is. Americans are innovators. Tell me to find a way to use 75 percent less energy to do something and we can do so.
John Polich, P.E., President
Gabriel Environmental Services
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