THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, February 25, 1996 TAG: 9602240419
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Long : 130 lines
A local shipyard that for decades has been in the business of building nuclear-powered warships is now getting into the business of moving and cleaning up nuclear waste.
Newport News Shipbuilding is handling the highly radioactive fuel rods from Pennsylvania's Three Mile Island nuclear plant, which nearly experienced a meltdown in 1979.
The shipyard is moving the rods, now stored at the Idaho National Engineering Laboratory, 30 miles into concrete bunkers at the sprawling government site.
The Peninsula shipbuilder hopes the $12 million contract will be the first of many nuclear clean-up jobs, as the yard tries to turn its decades of experience building and servicing nuclear warships into post-Cold War plowshares.
The cleanup business doesn't mean that nuclear waste will be stored or shipped through the Peninsula shipyard. Nor does it mean more jobs at the shipyard. Instead, contract workers will be hired and the work will occur at the cleanup sites.
But it could mean added revenue and income for the shipyard, which could help it sustain itself as it adjusts to a post-Cold War world where the Navy needs fewer of its warships.
The U.S. Department of Energy will spend billions of dollars over the next 60 years to manage and clean up places like the Hanford Site in Washington state, where the plutonium for nuclear weapons was made, and Rocky Flats Environmental Technology Site in Colorado, where nuclear warhead triggers were made.
Bomb-makers believed themselves exempt from the nation's environmental laws. Now the contaminated sites are packed with spent fuel and radioactive fluids and acids that need to be stored more safely until permanent storage can be developed.
Some sites, slated to close, need to be completely cleaned up, so they can be turned over to states and municipalities for other uses.
The Energy Department estimates it will cost at least $275 billion, although the General Accounting Office's estimate is closer to $1 trillion.
Newport News Shipbuilding figures that, with its experience, it can get a slice of that.
``We've had a long history of being involved in the Navy nuclear program,'' said James A. Palmer, the shipyard's vice president of commercial nuclear.
That history dates to the 1950s when the shipyard began building the Enterprise, the nation's first nuclear-powered carrier. It has since built six more nuclear carriers and 52 nuclear submarines. Two more carriers and one submarine are under construction in the yard.
The shipyard also recently refueled the Enterprise and deactivated the guided-missile cruiser Long Beach, the nation's first nuclear-powered surface warship. Spent fuel from both vessels is now stored at the Idaho National Engineering Lab.
Since the 1960s, the shipyard has provided maintenance and repair services to commercial nuclear power plants through a small subsidiary.
The unit, Newport News Industrial Corp., has recently worked at such power plants as the Seabrook Nuclear Power Station in New Hampshire and the Brunswick 2 station in Southport, N.C., operated by Carolina Power & Light Co.
Newport News Industrial employs about 33 people and has revenues of about $15 million a year, less than 1 percent of the shipyard's 1995 sales of $1.8 billion.
The shipyard expects the subsidiary to start growing by about 20 percent a year thanks to an aggressive business plan, said Palmer, who is also Newport News Industrial's president.
``We're looking at strategic alliances with other companies to provide a better package of services to power plants,'' he said.
But the real money is in the management and clean up of Energy Department sites.
Bids are due March 15 for the next five-year management contract for Hanford. Worth up to an estimated $1 billion a year, the contract is currently held by Westinghouse Electric Corp., whose term expires Sept. 30.
Newport News Shipbuilding is a major partner in a consortium led by Raytheon Co. that is bidding on the contract.
``It's going to be a tough bid,'' Palmer said.
Their competitors are energy services heavyweights, including a group led by Bechtel Group Inc. that includes Westinghouse, and another led by Fluor Daniel.
``We know that we bring a lot to the party,'' Palmer said.
Besides its extensive experience in handling spent nuclear fuel and radioactive liquid systems, the shipyard brings a reputation for safety.
``DOE is concerned that it be done well, efficiently and within budget, but, above all else, that it be done safely,'' Palmer said. ``We set the standard for safety with the Navy. . . .
``What we offer is our method of conducting operations. We do our nuclear work here in the shipyard in a very careful, rigorous-attention-to-detail manner.''
The Hanford project involves the handling of 2,000 metric tons of spent fuel and 50 million gallons of contaminated waste. Newport News would oversee the handling of all of that.
Robert Iotti, who is heading Raytheon's effort to win the Hanford management contract, said Newport News Shipbuilding is ``best-in-class'' when it comes to handling nuclear fuels and radioactive fluids.
Raytheon was attracted to the shipyard's experience and ability to juggle several different projects at the same time, Iotti said. The yard's safety record is an added plus.
``They have over the years demonstrated an excellent safety record with both nuclear and environmental in close proximity to a major population center,'' Iotti said.
The Hanford contract will be awarded in June.
The yard is getting a start with the small contract to handle the Three Mile Island waste. After the 1979 accident, the reactor fuel was moved to the Idaho National Engineering Lab site for short-term storage until a permanent site could be opened.
The development of a proposed long-term site at Nevada's Yucca Mountain has been delayed by protest and environmental concerns. Another site near Carlsbad, N.M., is also being developed.
In the meantime, the Energy Department is focusing on interim storage, Palmer said.
Newport News Shipbuilding is making 30 sealed storage casks designed to store Three Mile Island fuel safely for 50 years, he said.
After Hanford, Newport News Shipbuilding will also be involved in the bidding later this year for the management of a Miamisburg, Ohio, site known as the Mound, where bomb components were assembled. Worth about $130 million a year, that contract calls for the site to be cleaned up so that it can be turned over to the city and developed as a business park.
And next year the management contract for Los Alamos National Laboratory in New Mexico comes up. Other major clean up sites include DOE's Savannah River Site in South Carolina and Oak Ridge National Laboratory in Tennessee.
The shipyard would gain revenue and, it hopes, income, if its bid to enter the nuclear clean-up world succeeds.
``There's a chance for us to make a real contribution to the shipyard's income by getting involved in these things,'' Palmer said. ``It something we could make some millions at every year.'' by CNB