FORT WORTH — In a nondescript strip mall across town from the heavy security of its fighter jet operations, defense contractor Lockheed Martin opens its doors each day to a rotating crew of Chinese engineers.
While the U.S. and Chinese governments spar over the theft of classified military data, Lockheed has entered into a deal with China’s State Nuclear Power Technology Corp. to help build that country’s next generation of nuclear plants.
The only hitch is that the Chinese want their own engineers working on the project. As a military contractor, Lockheed has to be sensitive about employing foreign nationals anywhere where classified military technology is being developed. So it found alternative digs near Dallas/Fort Worth International Airport.
Nowhere is the outlook for nuclear power brighter than in China, where the government is on a campaign to clean up the country’s air. Most of China’s electricity is generated by burning coal, which casts a lung-wrenching haze over its major cities. One of China’s goals is to add to its existing fleet of around 15 nuclear power plants. Analysts believe China will build between 60 and 100 more nuclear plants over the next four decades.
Right now Lockheed has a contract to engineer its reactor control system for China through 2017. But Michael Syring, director of nuclear systems for Lockheed, says the company believes the project will lead to a longer-term relationship helping China develop its nuclear sector.
Lockheed and other U.S. nuclear technology companies are looking for new markets in the wake of 2011’s Fukushima meltdown in Japan. The United States and most Western European countries are backing away from nuclear power. That means Lockheed and other companies worldwide that build nuclear plants are scrambling to court power companies in Asia and Eastern Europe.
“The French, the Russians, the Koreans are all competing for contracts,” said Daniel S. Lipman, executive director for policy at the Nuclear Energy Institute, an industry group in Washington, D.C. “Right now, there are five plants being built in the United States. Sixty-seven are being built abroad.”
Subs and carriers
Lockheed has more than a 50-year history of building nuclear power systems for U.S. Navy submarines and aircraft carriers. The company took a stab at applying its technical know-how to commercial power plants in the 1970s. But after the partial meltdown of a reactor at the Three Mile Island nuclear power plant in Pennsylvania in 1979, much of the U.S. nuclear engineering industry shut down.
“This is a relatively new venture for us,” Syring said. “As the nuclear industry was revitalizing in the early 2000s, it looked like a good market to be in.”
But then came Fukushima. And perhaps more dramatically in the United States, the hydraulic fracturing boom brought a surge of natural gas onto the market, crashing wholesale power prices in unregulated markets like Texas.
There are five new nuclear reactors under construction in the U.S. at three plants — the Vogtle plant in Georgia and nuclear facilities in South Carolina and Tennessee. All three plants are in states where state regulators set power rates and control what projects are built.
Texas’ two nuclear power plants, Comanche Peak and the South Texas Project, have tabled their plans to add more reactors. And a wave of plant closures in places including Vermont and Wisconsin has rattled the industry.
“Most of the applications submitted pre-Fukushima have been pulled,” said Bud Weinstein, associate director of Southern Methodist University’s Maguire Energy Institute. “If we’re really concerned about greenhouse gas emissions, it seems to me nuclear has to be part of the solution. But there’s a fly in the ointment in cheap natural gas. And it’s supposed to stay low for a long time.”
Looking abroad
U.S. companies like Lockheed, Westinghouse and General Electric that build nuclear systems and reactors hope that taking their engineering programs abroad will sustain them in the meantime.
Lockheed declined to discuss the financial terms of its contract with China or the sales generated by its nuclear division. All the defense contractor would say is that nuclear is part of its $7.8 billion-a-year Missiles and Fire Control division, based in Grand Prairie. Lockheed’s total sales topped $45 billion in 2013.
Lockheed’s project with China comes as international tensions rise around the theft of classified information from U.S. defense contractors. Earlier this month, the U.S. Justice Department filed charges against a Chinese businessman living in Canada, accusing him of stealing information about U.S. military aircraft and weapons from Boeing Co. and Lockheed.
Lockheed’s new Chinese nuclear division is lodged between a Subway restaurant and a construction contractor. The office has been designated part of the People’s Republic of China — as a sign in the spartan lobby reads.
Syring says that distinction is part of a trade agreement that allows Lockheed to send its work back and forth to China without going through a formal export process.
Inside, the intrigue fades away into a typical arrangement of cubicles.
About 55 people work in the office, with between 10 and 12 Chinese engineers rotating in and out on three-month shifts.
During working hours, they work alongside Lockheed engineers to design the systems that will one day control nuclear plants back home. The Chinese employees live together in a nearby apartment complex, taking trips on weekends to state parks and learning about American culture.
Before they come to Texas, they get a crash course in the do’s and don’ts of living in America and working with Lockheed, said Li Lingpo, an engineer from Shanghai.
“We can do many things here, but we can’t talk about religion, race, weapons,” he said. “And we can’t talk about Lockheed’s other products, only about ours.”
Follow James Osborne on Twitter at @osborneja.
To post a comment, log into your chosen social network and then add your comment below. Your comments are subject to our Terms of Service and the privacy policy and terms of service of your social network. If you do not want to comment with a social network, please consider writing a letter to the editor.