Jack Futcher is the President of Bechtel Power Corporation, the lead entity among the Bechtel group of companies for Bechtel’s Power Global Business Unit (GBU).

This Business Unit is organized into three markets:
Fossil Power, Nuclear Power, and Renewables and New Technology.

As a 30-year Bechtel veteran, Jack has served multiple business units in a variety of leadership positions around the world. He managed Bechtel’s Global Procurement and Contracts Organization for six years, during which the company purchased $30 billion in equipment and materials. He was responsible for the Downstream business line of Bechtel’s Oil, Gas & Chemicals GBU during a time of exceptional expansion. He has lived in London and Egypt, where he managed Bechtel’s oil and gas projects in the Middle East, India, and the former Soviet Union. He was elected a Bechtel Senior Vice President in 1999. In addition to these responsibilities, Futcher also serves on several committees and task forces of the Nuclear Energy Institute and is Chairman of the Board of the United States Energy Association.

Jack Futcher is the President of
Bechtel Power Corporation

The Fossil Power business line is itself divided into four market segments: Solid Fuel, Emissions Retrofit, Natural Gas, and Integrated Gasification Combined Cycle (IGCC). The Solid Fuel segment works with coal, which has been the largest portion of Bechtel’s power business for the last six years. Futcher, however, sees the coal plant work declining. “With pending CO2 impacts and the difficulty of permitting coal plants, we expect the market for new plants to diminish over the next several years,” he says. “But there are still opportunities for our Emissions Retrofit segment, such as adding pollution control back-ends to existing power plants, which has been a significant portion of our power business.”
Futcher says Bechtel’s mix of work between coal and gas, and its experience with both, provides great flexibility in responding to changes in the market. “Like many others, we see gas being the baseload gap filler until new nuclear plants come online,” he says. “We’re well-positioned in this market and have won a project already in California.”
Futcher is also enthusiastic about IGCC. Bechtel is doing IGCC work for Duke Energy at Edwardsport, Indiana. Bechtel also finished a big IGCC project for Tampa Electric (TECO Energy) in the late 1990s and a gasification project at Kingsport, Tennessee, for Tennessee Eastman that converts coal to syngas for chemicals. Says Futcher, “IGCC is a critical portion of our business. We are the leader in it, and we see it as a big part of our business going forward.”

The Nuclear Power business line has three market segments: Nuclear Operating Plant Services (NOPS), Major Modifications and Services, and New Generation. NOPS supports utilities running nuclear plants, doing engineering, helping during outages, writing Combined License (COL) Applications, and the like. At present, NOPS is involved in seven Combined License Applications.
Under the Major Modifications and Services segment, Bechtel replaces steam generators and reactor pressure vessel heads and also uprates plants. Says Futcher: “When new nuclear plants stopped being built, Bechtel became the nation’s leader for steam generator replacement work. SGR work is demanding, but we have competence and credibility in the market.”
With respect to the uprates, Futcher says Bechtel’s analysis of the market identified the kind of big complex work at which it excels and led to several contracts. It is now working at FPL’s Turkey Point and St. Lucie plants in Florida, as well as their plant at Point Beach, Wisconsin. The New Generation segment is working on the Watts Bar 2 completion project in Tennessee. Although technically not new because it has already received its permits, Bechtel is treating Watts Bar as such because it is a restart. “It’s as close to new nuclear as you can get,” Futcher says. New Generation is also looking at the possibility of a third reactor at Calvert Cliffs, Maryland. The customer is UniStar, a joint venture of the French company EDF and Constellation Energy. For this project, Bechtel has partnered with the French company AREVA and is using AREVA’s EPR (Evolutionary Power Reactor) technology. Futcher says New Generation is also looking at new nuclear work outside the US.

Futcher’s Renewables and New Technology division is building on Bechtel’s 30-plus years experience in carbon capture, solar thermal, photovoltaic, wind, and biomass projects. Ian Copeland (World-Generation Class of 2008) started the business about a year ago. Futcher says that Renewables and New Technology has won the contract for BrightSource Energy’s Ivanpah facility in California, the largest solar thermal project in the world at 440 MW. Bechtel is taking a small ownership position in the project and is enthusiastic about the technology. Futcher expects Bechtel to be active across a wide range of renewable energy projects, both in the US and abroad. “We have the experience and the focus to succeed in a market poised for tremendous growth.”

Futcher says the company strategy has always been to work for repeat business. With this in mind, Bechtel is not looking to grow too fast, but rather to attract skilled persons, do work that exceeds expectations, and grow slowly where it sees opportunity. “We had been concentrating on the United States, but noting the demand curve in the US is flatter than in other places has made us look increasingly overseas,” he says. “We have targeted six countries to begin with: Canada, the UK, Libya, Egypt, the UAE, and India. We have very good opportunities in each of these countries in each of our business lines. We have good offices there and know the countries well. So we see a good future in these nations.”
Concerning power mix, Futcher sees coal struggling because of the carbon problem, and nuclear as the big opportunity. But with nuclear, cost is the biggest challenge. Increasing the Department of Energy loan guarantee program beyond the present allocation of $18 billion will help. “If the US can get six nuclear plants online by 2020, I think we’ll be doing well” he adds.
For renewables, Futcher worries over the issues of high cost and intermittency. “The market has to play out on these things,” he says. “We see gas as the gap solution. Building a gas turbine with solar or wind projects may be a remedy for the intermittency problem.” He’s bullish about gas, at least for a while: “With the price of gas and the relative ease of bringing gas on line, we think gas will be heavily in play in the next 10 years.”
Of carbon capture and sequestration (CCS), Futcher is confident in the technology, noting that the oil industry has been pumping CO2 underground for years in oil fields to maximize their yields. The big problems are scalability—the amount of CO2 to be injected is huge—and liability in the event of significant CO2 leakage: “Some entities might take the liability for 2 or 5 years, but who is going to take it for 100 years? I think the government may have to step in as it has with nuclear and structure a liability regime like the Price-Anderson Act.” Futcher is hard pressed to see the decades ahead without higher energy prices. “We are moving away from our lowest cost fuel—coal—and toward higherpriced ones. How do we deal with carbon without raising the cost of energy so high in the United States that industry sends even more jobs overseas, to countries that are less inclined to reduce carbon emissions? I think our carbon price will have to be balanced with technical innovation that will allow us to deal with energy prices more effectively than what we see now with CCS, wind, solar, and nuclear. But you have to place a high-enough price on carbon to drive innovation. And how do you say to developing countries that they should have high energy costs? It’s hard to figure out what the right thing to do is.”

Futcher notes that the marketplace for bids has changed a bit since the beginning of the recession. “Owners are demanding higher- risk terms from contractors and more fixed price contracts,” he says. “Reduction in demand has led to fewer projects, which means fewer jobs to bid on by more contractors, which has meant more risk being taken on by the contractors.” But Bechtel has always worked well with lump-sum contracts, he says. “If we have good history on a technology, we don’t object to lump-sum contracts. But familiarity with the type of job the owner wants is a big factor in how much risk we are willing to take. With combined cycle plants, which we know very well from having completed 50 of them, we know the scope and risk and we can price them accurately.“
New technology and first-of-a-kind projects present more of a challenge for the contractor and the owner,” says Futcher. “The pricing of a job becomes less a cards-to-thevest negotiation and more of a collaboration. The pencils are still sharpened of course, but we’re working on the same page to reach a fair price.”
Futcher is quick to point out Bechtel’s competitive advantages. “For the biggest, most complex projects in the world, we are the best,” he says. “For the newest, too, such as the BrightSource solar thermal project. In addition, we are the largest employer of union labor in the country. We are very proud of our relationship with the unions; they do great work for us, and they are a differentiator for our company. We know union labor and how to work with unions. “
Moreover, we are able to engineer, buy everything, and build a project using our own people and our own construction equipment. So we are one of the few big engineering, procurement, and construction companies that do all the work themselves, using our own craft people. And we are private; we don’t have the same pressures on us as publicly owned stock companies. We try to grow prudently, because our model is driven by repeat business with satisfied customers. We try to make sure that for every job we take on, we apply the best people, persons who know how to get the work done in the way customers want. Thus, our customers have certainty on the outcome of the project. We have never walked away from a job; we finish what we start. It’s the culture of a private company that sets us apart.“
Additionally, Bechtel is not just a collection of projects. We invest a huge amount of money in what we call our functional organization. We have hundreds of people working above the project helping get the job done correctly. These people own the work processes, the tools, and the computer systems, and they try to improve them all the time. This is unique in our business. No one matches us in that sort of investment,” he says.