Northeast Oil Refineries And Nuclear Plants Brace For Hurricane Sandy

As Hurricane Sandy bears down on the U.S. Northeast, two key industrial sectors have begun to steel themselves for the potential perfect storm expected to cause billions of dollars in damages: nuclear power and oil.

Electrical companies are bracing for heavy winds, rain, and potential flooding that could tear down power lines and even force their plants to shut down.

Excepting a New Jersey nuclear power plant already closed for repairs, no other energy facility has announced it will be shutting down operations yet.

More than a dozen nuclear power plants stand in Hurricane Sandy’s anticipated path through the mid-Atlantic and Northeastern regions, according to Reuters. At particular risk are key locations in New Jersey, Maryland, and Pennsylvania -- three states where the so-called Frankenstorm is expected to hit especially hard.

Neil Sheehan, a representative of the U.S. Nuclear Regulatory Commission, told the Star-Ledger of Newark that the hurricane is expected to “have a pretty good hit” on the newspaper's home state.

"These plants have to be able to withstand all sorts of natural phenomena: earthquakes, severe flooding, tropical storms, lightning storms, tornadoes. They need to be able to deal with all of that," Sheehan added. "We like to say they're very robust structures, they can deal with a lot of punishment, but at the same time they have procedures in place to guide them through this."

The Exelon Corp.’s (NYSE: EXC) Oyster Creek nuclear power plant in Forked River, N.J., has already been offline since Oct. 22, when it was first shut down for maintenance and refueling. No firm date was established for the plant to return to regular operations before the Hurricane Sandy alert, the Associated Press reported via Bloomberg Businessweek. The company said it had created a special “storm response team” to protect the plant and workers during the storm.

“Safety is our number one priority. We are prepared to protect our plant, our workers and the public no matter what this storm throws at us,” Michael Massaro, Oyster Creek vice president, said in a statement quoted by the Star-Ledger. “In its 42 years of operations, Oyster Creek has withstood its share of severe weather and our storm preparations this week will ensure our readiness.”

Other energy facilities in New Jersey, such as the two nuclear power plants in Salem County operated by a unit of Public Service Enterprise Group Inc. (NYSE: PEG), are planning to shut down if wind speeds reach 74 mph for more than 15 minutes at the site or if the water level of a nearby river rises to 100 feet from its standard 89 feet.

"We continue to monitor the weather conditions," PSEG Nuclear representative Joe Delmar said in a statement quoted by the Star-Ledger.

Six oil refineries on the East Coast also stand in the expected path of Hurricane Sandy, Reuters reported. Together, these refineries process about 1.19 million barrels of oil per day, or bpd, around 7 percent of the total U.S. capacity.

Like operators of nuclear power plants, those responsible for running the oil refineries in harm's way are monitoring weather conditions to determine whether they need to shut down or wait out the storm.

Phillips 66 (NYSE: PSX), owner of the Bayway Refinery in Linden, N.J., where it processes 238,000 bpd, told Reuters it is closely monitoring the Frankenstorm’s progress.

"All of our East Coast operations continue to operate normally while we prepare our facilities for the storm," said Rich Johnson, a representative of the company.

Beyond their private concerns over financial damages, energy companies face public worries about environmental hazards potentially associated with the effects of Hurricane Sandy.

Michael Karlovich, a representative of the privately held PBF Energy, a company with two refineries in Delaware and New Jersey that process about 370,000 bpd, told Reuters, "We are taking this seriously, monitoring the storm's progress and weather forecasts, with comprehensive preparedness plans in place."