Project-Based Learning Case Study: The Dilemma Faced by the Board of Directors of The Creighton Group
1. PROJECT SUMMARY (100 Word Maximum)
In 1995, The Creighton Group (TCG) and the U.S. Department of Energy had a challenging public relations problem regarding moving nuclear waste to a special storage location in Nevada’s Yucca Mountain. This case study requires the student to develop a 1,500-word marketing campaign to convince the public that moving nuclear waste from various nuclear plants around the country to a secure centralized storage facility is the best safe option for society.
2. EMPLOYER INFORMATION (100 Word Maximum) The Creighton Group, Inc. is an environmental management firm. It was established as a Delaware C-Corp in 1989. Over the past 30 years, it has provided environmental compliance, training, consulting and auditing services for both public and private entities around the world. The company had offices in Los Angeles, Washington DC, Bangkok and Mumbai. During the 1990’s, it had consulting contracts with several Federal agencies, including the Environmental Protection Agency, the Small Business Administration, and the Department of Defense.
3. LESSONS TO BE LEARNED (100 Word Maximum) Among the important lessons to be learned from this case study are: • Private companies do a lot of good for society • Climate Change discussion does not have to be all “doom and gloom” • Development of effective marketing campaigns move societal sentiments • ESG (environmental, social and governance) has become a common board agenda item
4. BACKGROUND (200 Word Maximum) The global warming debate (now called Climate Change) centered around whether human activities are polluting the Earth or whether natural causes are the primary sources of environmental degradation. Many believed and continue to believe that any nuclear initiative is just another source to hurt the planet and that no nuclear plants should exist. In fact, there haven't been any nuclear power plants constructed in the U.S. for over 30 years. At the time of this project, the public was becoming more and more risk averse to projects that might cause the slightest bit of damage to the Earth. The concerns revolved around excessive solid waste, air pollution, water pollution and nuclear waste. Environmental activists had convinced a significant number of citizens that private sector companies were bad and that the private sector activities had to be curtailed for the betterment of the planet. Yet, the industries craved more and less expensive sources of power so that more economic activity (i.e., jobs, consumer products and profits) could be generated. This debate is still going on today.
5. DESCRIPTION OF CASE (800 Word Maximum) In 1995, The Creighton Group (TCG) had the opportunity to competitively bid on a substantial environmental risk assessment project that required “significant coordination among numerous entities”. The project was to assist with the management and storage of used nuclear rods in a specially constructed facility in Yucca Mountain, which was located in the Nevada desert. Countries around the world were struggling with decisions about how to get rid of the nuclear waste that resulted from various operations, including the nuclear power plants around the world. Governments were attempting to justify the building of new nuclear power plants. It was a clean source of energy with little environmental damage – except when there was an accident like the 1986 Chernobyl incident about 10 years earlier. There were also memories of the 1984 Bhopal accident in India and the 1979 Three-Mile Island accident in the United States that scared environmentalists. This was contrasted with the air pollution generated from fossil fuel-based power generation facilities. The first phase of the project was projected to cost about $30 million. It was to be followed by many more millions of dollars as the Yucca Mountain project moved forward in subsequent years. TCG board of directors was excited because TCG was the preferred contractor under a special government program that limited competition to small, disadvantaged firms. It was called the SBA 8(a) program. Under the 8(a) program, Federal government agencies were required to “set-aside” certain contracts for companies that had been admitted into the program. Decisions as to which contracts would be set aside for this special group of competitors were left up to the individual agencies, but the criteria used included such things as the size of the contract, the expertise required to execute the contract, and the volume of contracts in that agency. Once a contract was set aside, only 8(a) firms could bid on the contracts, thereby substantially reducing the number of competitors. In order to be admitted into the SBA 8(a) program, applicants must be designated as small, disadvantaged, and sustainable. The application process was quite rigorous and there were a limited number of 8(a) firms per industry allowed in the program for each of the SBA’s ten regions. Finally, a bidder located in the region of the agency got first priority. Fortunately, the Yucca mountain project was in the same region as TCG and there were only two environmental management 8(a) firms in that region so TCG was one of only two companies that could bid on this project. The proposal preparation was a Herculean effort, requiring identifying, coordinating, and structuring a project team consisting of eight different companies. The project team, for which TCG would serve as project manager, had senior nuclear experts with decades of experience in the field. It was a networking nightmare that spanned over a six-month period. Numerous subcontracting firms were vying to be part of TCG’s team. Reviewing the capabilities and interviewing personnel took hundreds of hours. Nuclear power facilities used rods that are part of the mechanics to generate electricity. After a period, the rods are used up and must be disposed of. Used rods and other nuclear waste would emit dangerous radiation for hundreds of years. Many of the rods were being stored in special protected areas onsite at nuclear power facilities, but the facilities were running out of space. A permanent storage facility had to be designed and constructed. Some professionals proposed storing the waste at the bottom of the ocean, some proposed shipping the waste out into space, and some suggested storing the waste in extremely remote locations. Yucca Mountain was one of the remote locations. The project included constructing an elaborate storage facility deep within Yucca Mountain. Another location was in Carlsbad, New Mexico. TCG’s job was to develop and manage the transport operations. It was to begin with addressing the public relations nightmare - how to get the public to accept the moving of nuclear waste from around the country to the Yucca Mountain facility. Many communities balked at the prospect of used nuclear rods being trucked through their community. Alternative routes and transportation modes had to be considered.
6. CONCLUSION (100 Word Maximum) The Creighton Group Board of Directors believed it had a “corporate social responsibility” to defend the use of nuclear power in order to reduce environmental degradation from continued and excessive use of fossil fuel to generate electrical power. Further, the board believed that a secure centralized storage facility for nuclear waste was the safest option for society.
7. CONTACT INFORMATION Author: ______________ Email Address:______________
8. COMPANY’S SOLUTION (Optional): Due to substantial public opinion expressed against moving nuclear waste across the country so that it could be stored in Yucca Mountain, the project was canceled. Currently, nuclear waste – the byproduct of producing nuclear power and energy - is stored underwater in spent fuel pools at temporary sites or near the 80 nuclear power plants. Assuming the DOE eventually licenses the Yucca Mountain repository in Nevada, this waste will eventually be stored deep underground. As of October 31, 2020, there were 56 commercially operating nuclear power plants with 94 nuclear power reactors in 28 U.S. states. Of the currently operating nuclear power plants, 32 plants have two reactors, and 3 plants have three reactors. About 20% of the U.S. power is generated from these nuclear plants. Nuclear power plants are much more efficient than other energy generation sources, but it is expensive and can be dangerous if compliance to regulations are not followed. According to the US Department of Energy, the last reactor built was the "River Bend" plant in Louisiana. Its construction began in March of 1977. The last plant to begin commercial operation is the "Watts Bar" plant in Tennessee, which came online in 1996. According to a nuclear regulatory agency official, no new nuclear plants will be built in the U.S. due to the size of the plants and the security needs, both of which make the cost prohibitive. Yet, there are currently 448 operable civil nuclear power reactors around the world, with an additional 53 under construction.