THE PEACOCK REPORT (TPR)

Energy Dept. Step Closer to Oil Reserve Expansion

The Strategic Petroleum Reserve (SPR) could get a $36 million face lift over the next five years, during which time the Dept. of Energy (DoE)-operated facility would undergo modernization of petrochemical storage facilities and connecting pipelines. According to a "sources sought" notice that The Peacock Report (TPR) has located, the DoE is reviewing "capability statements" that companies submitted to the department by the June 13 submission deadline. 

The SPR is a crude-oil stockpile that the federal government created in response to the Arab Oil Embargo of 1973, which severely impeded U.S.-bound oil shipments during that era. Congress authorized creation of the reserve to serve "as a hedge against disruptions in the oil market," according to the Energy Information Administration (EIA).

A contentious debate has raged in the Congress in recent years over whether to release oil from the reserve into global energy markets -- a move that some members of Congress say would drive down record gasoline prices, a claim that the White House and other policymakers dispute and continue to resist.

DoE anticipates awarding an architectural and engineering contract for the project by May 2009. The reserve, which currently holds about 700 million gallons of crude, would be expanded to reach a one-billion gallon capacity, as spelled out by the Energy Act of 2005.

Solicitation #DE-RP96-08PO92990

Multibillion Nuke Facility Planned for Tennessee

A uranium processing facility with an estimated cost  of $1.4-$3.5 billion is slated to be built in Oak Ridge, Tennessee, according to a Dept. of Energy (DoE) Request for Proposals [Download y12nukecontract.doc (259.0K)] that The Peacock Report has obtained. DoE contractor Babcock & Wilcox (B&W) Technical Services Y-12, LLC, currently is assessing the availability of subcontractors to assist in this nuclear design and construction endeavor.

U.S. Weighs Financial Backing of Oil Refinery Modernization

The U.S. government may offer financial backing to the private sector to build new oil refineries and to modernize existing petroleum-production facilities -- in China.

According to a planning document that The Peacock Report has obtained, the U.S. Trade and Development Agency (USTDA) -- a White House agency based in Arlington, Va. -- intends to send private consultants to China to assess the status of that nation's refinery capabilties. This USTDA "definitional mission" will produce recommendations on whether U.S. taxpayers should financially assist -- and ultimately modernize -- the Chinese oil industry.

The agency is pursuing this project despite "significant expansion activities" upon which China's largest refinery operators, PetroChina and Sinopec, already have embarked. According to the document, which is dated Jan. 2, these ongoing efforts:

have mainly allowed both companies to keep up with existing demand [in China] with little room for anticpated demand increases. Industry analysts estimate that China will need to construct at least twenty large refineries capable of handling high-sulfur crude over the next seven years in order to meet anticipated demand, an investment expected to approach $30 billion.

A corollary aim of the project purportedly is to "facilitate China's transition to higher vehicle emissions standards," the document says. As a matter of policy the agency claims that it is tasked with the dual mission of increasing U.S. exports while "contributing to the improvement and security of the physical, financial and social infratsucture of the developing world."

It should be noted that The Peacock Report previously uncovered a separate USTDA initiative to pay for a feasibility study that likewise would benefit the Chinese petroleum industry (TPR, May 16, 2006); however, in that case the agency was helping to subsidize a project to facilitate the construction of the world's largest petrochemical in the world -- a facility jointly owned by the Saudi Arabian royal family and Dalian Shide Group, a Chinese conglomerate with more than $2 billion in annual revenues.

If interested in obtaining a copy of the above-mentioned planning document, send an e-mail request to The Peacock Report via stevepeacock@yahoo.com.

U.S. Funds Pakistan Coal, Waste-to-Energy, and Renewable Energy Projects

The government of Pakistan and U.S.-based energy consulting companies last month became the dual beneficiaries of more corporate welfare hand-outs that the federal government is providing to Karachi. Habibulah Mines Ltd., a "sister company" of the Pakistani Private Power & Infrastructure Board, is slated to receive an $810,000 grant from the U.S. Trade & Development Agency (USTDA) for a power-generation feasibility study. A U.S. firm will be selected to conduct the study "in anticipation of ramping up" Habibulah's coal reserves designated for a new power generation project, according to procurement document that The Peacock Report located.

Separately, USTDA is awarding a $263,000 grant to the government of Pakistan toward a review of the nation's regulatory and legal structure governing renewable energy. According to a document dated Sept. 7, Pakistan's National Electric Power Regulatory Authority (NERPA) will use the funds to pay for "technical assistance" that will help it "utilize indigenous renewable energy sources such as water, wind, municipal solid waste, and others, in order to provide savings over more costly power generation that is based on imported gas, coal and fuel oil."

A third grant that USTDA awarded to Pakistan that same day will supply $325,000 toward a feasibility study for the construction of a "waste-to-energy" (WTE) plant in Karachi, home to 14 million Pakistani citizens. Karachi, the document says:

[G]enerates about 7,500 tons of municipal solid waste (MSW) per day. This MSW is presently handled by several private contractors and is dumped at multiple landfill sites in and around the city. The city's population continues to expand rapidly, and has resulted in an urgent need to address the environmental problems associated with air and water pollution through proper MSW management and disposal, as well as increased demand for electric power.

USTDA claims that the proposed waste-burning facility would simultaneously "help address the power needs and the environmental concerns of Karachi, while at the same time generating a source of income for the city."

U.S. Commerce Dept. Hires Consultant for Iraq Energy Project -- Then Covers Tracks of Contracting Action

A private contractor tasked with training Iraqi oil- and gas-sector officials on matters pertaining to international trade agreements and law is being hired by the U.S. Dept. of Commerce. Lex Mercatoria, a London-based publishing house and consultancy, will be responsible under the contract to provide "technical assistance to Iraq to ensure that laws and regulations pertaining directly or indirectly to the Iraqi oil and gas sector are compliant with international trade law, with international trade agreements to which Iraq is, or may become, a party...", according to a recently obtained contracting document.

In an unusual move within the FedBizOpps database, which is where the Commerce document was located, the Aug. 5 presolicitation notice was archived the same day it was uploaded to the federal contract-opportunities system; in other words, the document was immediately removed from the daily listing of business dealings made public by the government. Only a word-specific search by The Peacock Report of the FedBizOpps archives produced evidence of this contracting action.

A more detailed solicitation (zip file) also is available.

Retired Nuke Site to Ship Waste from Ohio to Texas

A former uranium-processing facility in southwestern Ohio is gearing up for the shipment of nuclear waste to destinations across the nation, with one known site being Andrews County, Texas.

The Fernald Closure Project, a multi-billion-dollar endeavor involving the environmental remediation of a tainted Dept. of Energy (DoE) site, extends until Oct. 31, 2009, previous contracts that DoE awarded to Fluor Corp. and later extended to Waste Control Specialists, LLC, (WCS) of Andrews, Texas.

DoE intends to award a sole-source contract extension to WCS for the "interim storage" of byproducts that the Fernald facilty produced during the Cold War. This award also has options to "permanently dispose" waste from Fernald Silos 1 and 2 as well as to prepare and load "waste containers for transport," according to a DoE planning document that The Peacock Report has located.

U.S. To Infuse Millions of Gallons of Oil Into Reserve By June

The U.S. Strategic Petroleum Reserve (SPR) is expected to get an infusion of up to 88 million gallons of crude oil  in June, when the Dept. of Energy (DoE) seeks to receive the 4 million-barrel delivery via SPR ports in Texas and Louisiana, according to a Statement of Work that The Peacock Report has obtained. The purchase would bring the 727-million barrel-maximum SPR a notch closer to full capacity. It currently holds about 689.2 million barrels, according to DoE estimates. President Bush in his 2007 State of the Union speech proposed giving DoE the ability to more than double the SPR's maximum storage, specifically proposing to elevate that level to 1.5 billion barrels by 2027. The Bush Administration has rejected calls to sell some of the SPR oil stock to the consumer market to alleviate rising gas prices, wihch once again are topping $3 per gallon.

Energy Dept. Gets Ready for More Nuclear Power in Space

The U.S. government appears to be gearing up for additional nuclear-powered, space-based operations, as it is now amassing a list of potential contractors capable of providing support for such endeavors. According to a "sources sought" notice that The Peacock Report located through a routine search of the FedBizOpps database, the U.S. Dept. of Energy (DOE) is conducting a market survey of firms "capable of providing specialized technical, analytical, advisory and assistance and administrative support services" to DoE's Office of Nuclear Energy. This DoE unit, also known as NE-34, is particularly interested in partnering with companies experienced in the area of "space radioisotope power systems" -- the same kind of nuclear-enabled power source that makes possible the controversial Cassini space probe's continued flight across the solar system.

The Oct. 1997 launch of the Cassini spacecraft had met fierce resistance from opponents who unsuccessfully sought to halt the launch based on their position that the ship's power system -- packed with 72.3 pounds of plutonium -- was a threat to humanity.

The Lockheed Martin Titan IV rocket carrying the craft had a track record of mishaps, including an explosion three years earlier which sent a billion-dollar U.S. spy satellite plummeting into the Pacific Ocean. Although the same class of rocket ultimately catapulted the Cassini probe into outer space without complication, critics claim that NASA had done so after recklessly gambling on the health of the world's inhabitants, all of whom potentially would have been subjected to traces of cancer-causing plutonium.

This most recent nuclear initiative seeks to cull together nationwide experts to assist in the development of new radioisotope systems as well as to provide guidance on terrestrial radioisotope power systems and space reactor power systems. DoE similarly is looking for information from firms capable of providing launch operations and project management assistance as well as nuclear safety analysis services.

DoE expects to award contracts prior to April 1, when work could feasibly commence at multiple vendor sites, according to the document:

"This effort will require travel to various DOE facilities and locations. On-site performance at selected DOE facility will be required. Day to day interaction with NE-34 is a requirement for this contract; the Contractor shall maintain its facility within 40 miles of the NE-34 Germantown [Maryland] Office."

It remains unclear whether this endeavor is related to the Bush Administration's proposal to build a colony on the Moon. That project includes tentative plans to construct a nuclear power plant there, a March 23, 2006 breaking story that TPR was the first to report via the piece New Details of U.S. Moon-Base Project Reveal Nuclear Intentions.

Energy Dept. Plans Further Cleanup of Nuclear Waste in Washington State

Nuclear "burial grounds" at a U.S. Dept. of Energy-owned wasteland in southeastern Washington state are slated to undergo additional environmental remediation this summer, part of a larger cleanup aimed at ultimately removing millions of tons of contaminated soil and materials.

The 586 square-mile area known as the Hanford Site operated for 50 years as a military plutonium-production facility, beginning with the Manhattan Project’s World War II development of one of the atomic bombs dropped on Nagasaki, Japan.

Washington Closure Hanford LLC (WHC), which DoE selected in 2005 as the prime contractor for the initiative, is vetting potential subcontractors to focus on the cleanup of specific radiological trenches and other nuclear hotspots at the sprawling Benton County complex. According to a contracting document that TPR located during a routine search of the FedBizOpps procurement database, this phase of the remediation effort will take between two and four years to complete at an additional cost of $10-$20 million.

The contracting document, dated Dec. 14, says that work for the latest procurement action involves "excavation and removal of radiologically and/or chemically contaminated soils and debris. Work may be performed in radiation areas (including High Radiation Areas and Airborne Radiation Areas)..."

This segment of the cleanup is just one part of a larger effort centering on a 210-mile stretch of land along the Colombia River corridor, portions of which in 2000 were designated as the Hanford Reach National Monument/Saddle Mountain National Wildlife Refuge. According to WHC’s website, the cleanup "is scheduled to be completed in 2012 and cost $1.9 billion." During that time, WHC will "decontaminate and remove 510 facilities, close or remediate 486 waste sites, cocoon three reactors, and dispose of about four million tons of contaminated material."

To put the breadth of this endeavor in additional context, progress made -- and progress that needs to be made -- was spelled out in a 1,256-page declassified report released a year ago.

Public meetings and updates on the Hanford Site are regularly held in Richland, WA. For further information, a DoE "public involvement" site is available.

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