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megimoo
04-20-2009, 11:57 PM
China buying the Navy’s only nuclear fuel provider?

If the rumors are true, PetroChina, a Chinese “Government Controlled Entity” (pdf), is on the verge of buying McDermott International, a company that, as I understand things, is the U.S. Navy’s sole provider of nuclear fuel and nuclear fuel assemblies.

McDermott, a Panama “based” corporate tax-avoider, also manages the U.S. Strategic Petroleum Reserve. (along with a lot of other critical national defense infrastructure. Take a look.)

This rumored buy-out comes at a very interesting time. First, McDermott subsidiary Babcock and Wilcox bought out NFS (a competing nuclear fuel provider for the Navy) in January of this year. (NFS was a troubled company that the Springboard covered previously–here, here and here.)

Second, the 2007 National Defense Authorization act, thanks to Representative Gene Taylor (D-MS), mandates that all future big Navy ships employ nuclear propulsion. But, now that we’re locked in and want high-energy/big power generation capabilities, where will the fuel come from? And at what price?

Third, what better way to transform the Chinese Navy’s expected “carrier-building” announcement into a great-power referendum? Rather than a simple, “hey, we’re building our first carrier, whee!” the announcement becomes, “Not only are we building carriers, we now own the means to build…nuclear supercarriers.”


http://blog.usni.org/?p=2352