1. What is Defense Fuel Support Point (DFSP) San Pedro, and why is it important?
DFSP San Pedro, began operation in 1943, and has provided a strategic location in the Pacific region for sourcing of fuel for Navy ships and other military entities. The facility has been used to receive, store, and distribute marine and jet fuels for military use in California, Arizona, and Nevada. Other than the Navy fuel pier in San Diego, it is the only Navy-owned facility potentially capable of ship fueling in the region. DFSP San Pedro is a Special Area within the Naval Weapons Station Seal Beach area of responsibility.
2. What is the Navy proposing to do, and why is it needed?
The Navy proposes to enter into a commercial outlease of DFSP San Pedro property and related pipelines. The need for the Proposed Action is to ensure the fullest possible use and continued maintenance of the Navy’s assets (e.g., the DFSP San Pedro Main and Marine Terminals and associated pipelines) through the commercial use of facilities and infrastructure.
3. What is an outlease?
An outlease in this case refers to the leasing of military-owned property. The Navy would pursue an outlease to allow for retention of the property for future Navy use, sustainment of the Navy’s property, and collection of fair market value in exchange for a lessee’s use of DFSP San Pedro. The areas at DFSP San Pedro proposed for outlease consists of approximately 311 acres of the Main Terminal, with a second outlease including the approximately 8.3-acre Marine Terminal and a network of off-site pipelines totaling approximately 14 miles.
4. When would commercial operations start at the Marine and Main terminals?
Commercial operations at the Main and Marine Terminals would start following the signing of commercial outlease agreements with the Navy. The Main Terminal lease is currently scheduled to be signed in spring 2022 (the timing for which could vary depending upon the variable time required to complete the environmental documentation). A specific timeline for completion of the Marine Terminal outlease agreement has not yet been firmly established.
5. How much would this project cost and where would the money come from?
Most project costs will be borne by the commercial lessees. Because of this, the full extent of the costs will not be known until the commercial outleases are awarded. The lessees would assume all expenses required to rehabilitate, operate, and maintain the complex.
6. What happened to the Navy requirement to fuel ships?
The requirement for contingency fueling of Navy ships still exists, however, the Navy has made the decision to utilize other assets and capabilities to meet this need.
7. Why is the Navy still moving forward with the outleases if there is no longer a need use the facilities to fuel Navy ships?
The property is still considered a strategic location and asset, to be retained for future operational requirements.
- The Navy retains for the right to terminate the lease in the case of a national emergency or other urgent operational need.
- The Navy will receive payment of fair market value in exchange for the lessee’s use of the property. This payment will include in-kind consideration projects such as construction, maintenance, repair, and renovation performed by the lessee on Naval Weapons Station Seal Beach and/or other Navy locations, thereby saving taxpayer dollars.
- The property may be used for current and future Navy training requirements.
- The Navy’s property will be maintained and sustained by the commercial use of facilities and infrastructure to the maximum extent possible, at no cost to the taxpayer.
8. Why did the Navy release a new RFP in February 2021 for lease of the Marine Terminal?
The requirements delineated in the prior RFP had changed after the proposal due date closed. The Navy no longer requires fuel at Pier 12. Accordingly, a new RFP was issued that captured the leasing arrangement available at the Marine Terminal. There is no obligation for the accommodation of fuel for the Navy at Pier 12 in the current solicitation.
9. Is the Navy going to release a revised Draft Environmental Assessment for further public review and comment?
After the RFP advertisement process is complete and during the period of discussion and negotiation with the selected offerors, the Navy will determine if the proposals are substantially different from information in the Draft EA. At that time the Navy will either move to finalize the EA, or revise it and provide the opportunity for further public review and comment as appropriate.
10. When will the Navy be able to provide more information?
The Navy will be able to provide more information following the completion of each individual solicitation process. The Main Terminal solicitation is currently scheduled to complete in spring 2022. Timeline for completion of the Marine Terminal solicitation has not yet been determined.