The Gulliver Bechtel Corporation Dossier

61 Bechtel Corporation

See also - Talk on Bechtels at the 1997 WMC Alternative AGM.

Founded by Warren Bechtel in 1898 as a railway company, Bechtel is now the 25th largest corporation in the US, and the largest engineering construction company in the world. It "has participated in engineering and constructing almost half the nuclear power plants built in the USA. It reportedly has the closest links of any company with the American Central Intelligence Agency (CIA), excluding the CIA's own front companies" (1).

The US Agency for International Development (AID) - the "aid" wing of the CIA - has awarded Bechtel a US$4.3 million technical services contract to "help" several third world countries to "develop" their fossil fuel resources; the countries include Morocco, Bangladesh, Costa Rica, and Jamaica (2).

The appointment of George Schultz as US Secretary of State in June 1982 brought light to bear on the secrecy with which the Bechtel Corporation operates, for Schultz is a former president of Bechtel, while US Secretary of Defense Weinberger was formerly chief counsel to the corporation, and other right-wing US officials (such as Richard Helms of the CIA under Nixon, and Secretary of the Department of Energy, W Kenneth Davis) also held high office in Bechtel.

Schultz remains chairman of the company but the finance is firmly in the hands of the Bechtel family which owns the majority of the company's shares.

In order to buy the silence of former top executives it gives them huge handshakes on their retirement - something which has turned many former executives literally into overnight millionaires (3).

Philip Habib, US special "peace" negotiator, is also a consultant of Bechtel, hired by none other than George Schultz in 1981 (4). After Schultz's appointment there were allegations among US congress members that the company would "tilt" against Israel because of Bechtel's Middle East interests (16% of its 1981 revenue came from the oil states, especially from Saudi Arabia where it is turning an indigenous fishing village into an industrial city of 300,000 inhabitants at Jubail) (3).

Bechtel built Da Nang, the US air-force base in South Vietnam; the Alaskan oil pipeline; was involved in construction on RTZ's Bougainville copper project in Papua New Guinea; and assisted Cominco in its plans to open a mine on Aboriginal land in the Canadian high arctic (5). Pancontinental will also use Bechtel's dubious services in its construction at the Jabiluka uranium mine in Australia's Northern Territory (1).

Most recently Bechtel linked up with RTZ (through US Borax): it is to build the Quartz Hill molybdenum mine in Alaska from 1984 on. This proposed mine has been the subject of strenuous environmentalist objections in the USA (see RTZ).

Bechtel also owns 17% of the huge Peabody Coal Co which is currently the biggest threat to Navajo farmers in the Big Mountain area (see Peabody Coal).

It is also the corporation which put the San Onofre reactor on backwards (6).

Bechtel was targeted, among half a dozen corporations, for special attention by the Black Hills Survival Gathering in South Dakota, USA, during 1980.

Bechtel holds 21% of Inter North Inc, which, with another US Company, Energy Transmission Systems, in 1983 was planning to transport coal slurry from Wyoming's Powder River basin area - already ravaged by uranium mining - to southern central US (7).

Among Bechtel's notable mishaps are the following:

  • The Humboldt Bay, California, plant was one of the first operating nuclear power plants to be shut down permanently, in 1977, after it was discovered it was sitting directly on top of an earthquake fault.

  • Consumers Power Co of Michigan sued Bechtel for US$300 million in 1974 when its Palisades plant broke down shortly after it started operation. Bechtel agreed to a US$ 14 million settlement.

  • Portland General Electric Co sued Bechtel for US$32 million after severe leaks in the steam generator tubes of its Trojan nuclear plant shut it down, and the discovery that it did not meet earthquake standards set by the NRC. Bechtel countersued, and an out-of-court settlement was reached in 1981.

  • The 420-ton reactor vessel of its San Onofre Unit 2 was installed 180 degrees backwards in 1977: this was not discovered for seven months, a fact other nuclear engineers found incredible. San Onofre also sits near an earthquake fault. Unit 1 has been shut down by the NRC until it meets federal seismic standards after being almost constantly plagued with other mechanical problems preventing its operation.

  • Bechtel designed the first privately-owned fuel reprocessing plant in West Valley, New York, which shut down in 1972 after six troubled years. During its operation there were repeated radioactive leaks into the air and into a creek that feeds into Lake Erie. Left behind are 600,000 gallons of high-level radioactive wastes buried underground in leaking tanks and 163 tons of irradiated fuel sitting in the spent fuel pool.

  • Four Bechtel plants are among those having the most severe accidents in the last 10 years, according to a new NRC report: Rancho Seco, California; Turkey Point 3, Florida; Point Beach 1, Wisconsin; and Davis-Besse, Ohio (8).
  • Among its most recent contracts, Bechtel was awarded work on the new L10 million Gold Quarry gold mine in Nevada, operated by Newmont. Bechtel has also been awarded smaller contracts to build gold mines in Nevada (9). Meanwhile, Bechtel's Los Angeles Power Division (called LAPD but not to be confused with the LA Police Department!), together with Bechtel Petroleum, is completing the USA's first coal-gasification plant in southern California. Vaunted by the company as an operation which may launch a "new breed of power plant", the Cool Water scheme involves grinding coal, which is mixed with water to form a dirty "slurry", pumping this to a gasifier, combining it with oxygen, and converting it into gas (along with pollutant sulphur) suitable for a Combined Heat and Power (CHP) turbine. According to Bechtel, since "clean up" happens before combustion, sulphur removal and waste disposal is therefore made more effective. This new scheme, says Bechtel, obviates the necessity of expensive coal-scrubbers.

    Owners of the Cool Water plant include General Electric, Bechtel Power Corp, an unnamed Japanese consortium, and the Electric Power Research Institute - all are notable proponents of nuclear power.

    Within the first two years of its operation the programme ran into financial snags - but the new US Synthetic Fuels Corp, created by US Congress in 1980, then stepped in with a US$120 million commitment in price support (10).

    Bechtel is responsible for evaluation of the expansion of the Chuqui copper project, controlled by the Chilean state mining company Codelco (11).

    A feasibility study contract for a coal mine and slurry pipelines in the Zhungeer coal field of Inner Mongolia (China) was awarded to Bechtel in June 1983 (12).

    Bechtel in 1981 put forward proposals for the Trans-Sahara pipeline, after ENI and the Algerian government initially discussed the idea in 1972. Bechtel entered the arena just as Phillips Petroleum and BP were pulling out - "no coincidence", as the Financial Times has put it (13). The same year, Bechtel and Morrison-Knudsen formed a JV to construct the huge Ok Tedi mine in Papua New Guinea. Bechtel embraced this scheme - of enormous logistical difficulty with its customary ethnocentric brashness. Everything "from beans to bulldozers" would be shipped to the site, and an entire township was constructed on indigenous lands to house 2500 people, with temporary camps for another 4000 workers, not to mention an airstrip, schools, hospital and other provisions for the Ok Tedi workforce.

    Bechtel's biggest problem in construction of Ok Tedi to date has been the unfortunate tendency of Mother Nature to undo their best work: in January 1984 some 50 million cubic metres of hillside slid into the Ok Ma valley "precisely in the area where Bechtel MKI engineers had planned the dam to contain tailings from the gold recovery process" (14).

    At its peak, Bechtel was employing 3270 workers, of whom 70% were from Papua New Guinea itself. Carl Perkins, Bechtel's project manager at Ok Tedi, has called the scheme "a megaproject, a one-of-its-kind challenge, something that provided much more than just a new mining complex" (15).

    The Sami of northern Scandinavia, having been defeated in their heroic attempt to stop construction of the Alta-Kautokeino dam (20), may now also be the "beneficiaries" of another assault on their land, caribou routes and culture. Bechtel in 1980 took part in a preliminary survey for the construction of a gas pipeline across huge tracts of Sami land, a major aim of which is to provide fuel for military (NATO) use. As of the beginning of 1984, the project was still under (serious) discussion (16).

    In early 1984, Bechtel also put in a bid for the faltering Scott Linlithgow shipyard in Scotland, against a bid by Trafalgar House (17). This came at a time when Bechtel urgently needed to diversify and consolidate operations. It also coincided with a vigorous defence of Bechtel's record on nuclear power plant construction made by Bechtel's old friend RTZ (in the person of its chief executive Alistair Frame) at the Sizewell Inquiry in England into the siting of a nuclear reactor (18). But as the shipyard's 2000-plus workers decided to occupy their workplace, to guarantee its future, Bechtel withdrew its take-over offer (30).

    However, in the long run - according to the Financial Times - Bechtel's future may lie "across the Pacific in Indonesia, Malaysia and above all China. If and when the Japanese make their expected full-scale landing in the US, they are likely to meet a lot of Bechtel men going the other way" (19).

    Just before the cataclysm of Three Mile Island cut off the US nuclear industry in its prime, Bechtel had constructed some 23% of all US reactors (46 in all) and engineered some 31% of the total (64 in all) - more than twice as much as its closest rival (21).

    Bechtel, together with Alexander Gibb and Partners (GB), are carrying out feasibility studies for the Aye Koye aluminium smelter in Guinea - a project long mooted by foreign aluminium giants (especially Alusuisse) (22), but not pulled back onto the drawing board until the death of Guinea's leftist president Sekou Toure (23).

    China's National Coal Development Corporation in 1984 signed a 15 year "pact" with Bechtel, setting up a US$3 million JV called China American International Engineering, which will undertake work outside and inside the Peoples' Republic, involving coalmines, pipelines, civil engineering, "energy" and communications projects (24).

    Bechtel built Freeport's copper concentrate pipeline to take copper concentrate from the mine at Tembagapura (West Papua (Irian Jaya), Indonesia) to the coast some 110km away for shipment to Japan and Germany (25). In 1981, this was the largest such pipeline in the world (26). The line was cut by the OPM freedom movement in 1977.

    In August 1984, the corporation was awarded the contract to manage construction of Alcoa's US$1500 million aluminium smelter at Portland, Victoria, Australia. Work started in November 1984 and the smelter was operational in 1987. Bechtel was responsible for engineering, procurement, site construction and "generally related activities" at the smelter (27).

    The site is part of the traditional land of the Aboriginal Gunditj-Mara people, who strenuously fought - using court claims, direct action, occupations and sabotage of Alcoa's machinery - to stop the smelter being built (28). Under such pressure and because of the high electricity price charged by the Victorian state government, the project was mothballed in 1982. The Labour government in the state - despite token gestures towards Aboriginal land rights - revived the project soon after coming to power in 1983, and will in fact take 25% stake in it (29).

  • In late 1984, Bechtel was awarded a US$40 million contract to build a phosphate rock slurry pipeline over mountains from Bernal (Utah) to Rock Springs (Wyoming), to feed Chevron's fertiliser operations (31).

  • Meanwhile another slurry pipeline - for coal - in which Bechtel had been part of a construction consortium with Internorth as the operator, was cancelled because of"legal and regulatory delays" (32).

  • In 1983, Bechtel was awarded a contract by the Gabonese government to help it draw up its five-year plan, focusing on petrol, manganese, lead, talc and uranium (33).

  • Study of Utah's high-volatile sub-bituminous coal deposits, with a view to converting them to synthetic crude oil ("syncrude") led Bechtel in 1985 to conclude that the state could be commercially producing by the early 1990s (34).

  • The following year Bechtel gained a half billion pound contract to construct a thermal power station for the Turkish government (35).

  • As its expansion into plant automation, waste treatment, space, defence and power cogeneration continued in 1986, the company booked in around half a billion dollars worth of new business. (However, Bechtel is not required under US law to disclose its earnings) (36).

  • 1986 also saw Bechtel commissioned to carry out a feasibility study into developing the Algerian port of Algeciras as a "superport" (37).

  • In 1987, the International Indian Treaty Council reported that Bechtel had approached the Chickaloon Traditional Village Council in Alaska, with a view to building a waste incinerator on tribal lands. Although ash from the plant has been classified as hazardous waste by the US government, Bechtel apparently told the tribal members that it could be used as "fertilizer for their gardens" (38).

  • Venezuela was the site of another major Bechtel venture in 1988 as the company was commissioned to carry out a feasibility study for the country's Guayana province aluminium smelter - one of the largest of its kind in the world (with technology supplied by Pechiney) (39).

  • The same year, the huge Escondida mine in Chile (in which RTZ has a 30% share) began construction. Bechtel carried out the on-site studies, although Fluor Daniel has provided the engineering and construction management services (40).

  • Further Reading:

    Jim Riccio, "Incompetence, Wheeling and Dealing: The Real Bechtel" in MMon, Washington, 10/89.

    SOURCE: "The Gulliver File - Mines, people and land: a global battleground" by Roger Moody.

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