Propulsion Systems for Navy Ships and Submarines (06-JUL-06,	 
GAO-06-789R).							 
                                                                 
In recent years, the Navy has used nuclear propulsion systems for
its submarines and most aircraft carriers and conventional	 
propulsion systems that rely on fossil fuel for its surface	 
combatants and amphibious warfare ships. As the Navy looks to	 
design an affordable force that is capable of meeting future	 
security challenges, some of the assumptions and factors that	 
have guided past Navy decisions on propulsion systems may require
reassessment. For example, technological advances have enabled	 
greater efficiency in both nuclear and conventional propulsion	 
systems. Moreover, the cost of fossil fuel has risen sharply in  
recent years. Congress requested that we review the Navy's	 
assessment of alternative propulsion methods for submarines and  
surface combatants. Our objectives were to determine (1) the	 
status and scope of key Navy studies on alternative propulsion	 
methods, (2) the major improvements to existing propulsion	 
systems, (3) near-term and future ships' propulsion systems, and 
(4) the various ship propulsion related technologies the Navy is 
pursuing. In March 2006, we provided you with a briefing of our  
findings regarding propulsion systems for Navy ships and	 
submarines. This report summarizes the results of that briefing  
as well as additional work we performed since that time.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-789R					        
    ACCNO:   A56360						        
  TITLE:     Propulsion Systems for Navy Ships and Submarines	      
     DATE:   07/06/2006 
  SUBJECT:   Propulsion systems 				 
	     Nuclear propulsion 				 
	     Fossil fuels					 
	     Military vessels					 
	     Nuclear powered ships				 
	     Nuclear powered warships				 
	     Nuclear powered submarines 			 
	     Military research and development			 
	     Ships						 
	     Submarines 					 
	     DDG-1000 Destroyer 				 
	     LHA Amphibious Assault Ship			 
	     LHD Amphibious Ship				 
	     Littoral Combat Ship				 
	     Navy Future Aircraft Carrier CVN-21		 
	     T-AKE Cargo Ship					 

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GAO-06-789R

     

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July 6, 2006

The Honorable Roscoe G. Bartlett

Chairman

Subcommittee on Projection Forces

Committee on Armed Services

House of Representatives

Subject: Propulsion Systems for Navy Ships and Submarines

Dear Mr. Chairman:

In recent years, the Navy has used nuclear propulsion systems for its
submarines and most aircraft carriers and conventional propulsion systems
that rely on fossil fuel for its surface combatants and amphibious warfare
ships. As the Navy looks to design an affordable force that is capable of
meeting future security challenges, some of the assumptions and factors
that have guided past Navy decisions on propulsion systems may require
reassessment. For example, technological advances have enabled greater
efficiency in both nuclear and conventional propulsion systems. Moreover,
the cost of fossil fuel has risen sharply in recent years.

You requested that we review the Navy's assessment of alternative
propulsion methods for submarines and surface combatants. Our objectives
were to determine (1) the status and scope of key Navy studies on
alternative propulsion methods, (2) the major improvements to existing
propulsion systems, (3) near-term and future ships' propulsion systems,
and (4) the various ship propulsion related technologies the Navy is
pursuing. In March 2006, we provided you with a briefing of our findings
regarding propulsion systems for Navy ships and submarines. This report
summarizes the results of that briefing as well as additional work we
performed since that time, and transmits the briefing slides with the
updated information. (See enc.) Because of command changes at both the
Naval Sea Systems Command and the Office of the Chief of Naval Operations
and other factors, the Navy has not completed two ongoing studies. As a
result, we were not able to assess the results of these studies.

To determine the status and scope of the Navy studies on alternative
propulsion methods, the major improvements to existing propulsion systems,
and the various ship propulsion-related technologies the Navy is pursuing,
we reviewed and analyzed Navy and outside research organizations' analyses
and our prior report related to propulsion systems for Navy ships and
submarines. We also discussed propulsion systems with officials from the
Naval Sea Systems Command, the Office of Naval Research, the Office of
Naval Reactors, the Office of the Chief of Naval Operations Surface
Warfare Directorate, and the Defense Advanced Research Projects Agency. We
obtained and analyzed information on Navy propulsion technologies from
officials from the Naval Sea Systems Command, the Office of Naval
Reactors, the Office of Naval Research, and the Office of the Chief of
Naval Operations Surface Warfare Directorate. We performed our work from
December 2005 through April 2006 in accordance with generally accepted
government auditing standards.

Summary

The Navy has completed one study, and is in the process of completing two
other studies on alternative propulsion systems for surface combatants,
amphibious warfare ships, and submarines. The completed study is a "quick
look" analysis of comparative life cycle costs of nuclear and
fossil-fueled surface combatants and amphibious warfare ships. Although
the study attempted to examine the fiscal break-even point for nuclear and
conventional propulsion systems, it had several limitations. Specifically,
it did not consider the operational requirements or advantages of nuclear
and conventionally powered propulsion systems, nor did it undergo a
high-level, Navy-wide review. According to Navy officials, the second
study, required by the 2005 Chief of Naval Operations guidance, will be
similar, but will provide in-depth analysis covering costs and operational
factors for surface combatants as well as submarines. The Navy anticipates
that the third study, required by the National Defense Authorization Act
for Fiscal Year 2006,1 will build upon the Chief of Naval Operations
study. Our limited review indicates that while the planned methodology for
this study, as described by Navy officials, appears reasonable, its
usefulness will depend on the extent to which the Navy uses accurate,
reliable data and reasonable assumptions for its modeling and considers
all relative costs.

Nuclear and conventional propulsion systems for Navy ships and submarines
have been improved in recent years. According to Navy officials, nuclear
power plants are now simpler and smaller with reduced maintenance and
personnel requirements, and their life span has also been increased. These
reported improvements have eliminated the need for refueling newer
submarines, such as the Virginia class submarines. Improvements have also
been reportedly made to conventional propulsion systems, such as the
Integrated Power System, which produces electrical power for both the
propulsion system and ship's support systems.

Ships being developed in the near term and long term will have a variety
of newly designed propulsion systems depending on their size, mission, and
ship characteristics. For example, the Littoral Combat Ship will have two
diesel engines for low-speed operations, which will be augmented by two
gas turbine engines for high-speed operations. The next-generation
destroyer, DDG 1000,2 will have an Integrated Power System consisting of
four gas turbines and two advanced induction motors, which will supply
electrical power for the propulsion and ship support systems. The first
aircraft carrier to be built under the CVN 21 program will have a newly
designed nuclear power plant, and the Navy's amphibious replacement ship,
LHA 6, will utilize a combined gas turbine and electric propulsion system
instead of the steam propulsion systems now used in many amphibious
warfare ships.

1 Pub. L. No. 109-163, S: 130 (2006).

2 Previously referred to as DD(X).

The Navy spent over $212 million from fiscal years 2003 through 2005, and
plans to invest an additional $264 million from fiscal years 2006 through
2011 to develop propulsion and ship support technologies designed to make
future ships more fuel efficient and mission effective. These
technologies, which are at various levels of maturity and not yet ready
for implementation, focus on making electric motors smaller but more
powerful, using high-speed generators without reduction gears, and using
fuel cells. These technologies will still require fossil fuel as an energy
source, but Navy officials stated they have the potential to reduce the
amount of fossil fuel needed and improve ship operations.

Navy Has Completed One Study on Alternative Propulsion Systems and Has Two
Others in Progress

The Navy has completed one study and is in the process of completing two
other studies of alternative propulsion methods for surface combatants,
amphibious warfare ships, and submarines. These studies are (1) the 2005
"quick look" analysis of comparative costs of nuclear and fossil-fueled
surface ships, (2) the 2005 Chief of Naval Operations guidance-directed
study on alternative propulsion methods for surface combatants and
submarines, and (3) the National Defense Authorization Act for Fiscal Year
2006-directed study on alternative propulsion methods for surface
combatants and amphibious warfare ships.

In the first study, the Office of Naval Reactors, which is responsible for
all aspects of the Navy's nuclear propulsion program and plants, conducted
a "quick look" analysis of comparative costs of nuclear and fossil-fueled
surface ships in 2005. The study attempted to determine the fossil fuel
price point at which it becomes advantageous to use nuclear propulsion for
amphibious warfare ships and surface combatants. This analysis was based
on a review of historical and projected fossil fuel costs as well as the
historical costs associated with nuclear aircraft carriers and cruisers.
However, Navy officials cautioned that the study did not undergo a
high-level Navy-wide review and contained several limitations and
assumptions. For example, the study did not consider

such factors as the operational advantages of nuclear and conventionally
powered propulsion systems, the mission requirements under its Sea Power
213 concept of operations, and costs associated with lead ship design. The
"quick-look" analysis indicated that the breakeven points for a notional
large deck amphibious warfare ship (LHA/LHD) and a notional surface
combatant are $80 and $205, per barrel respectively. However, since this
analysis contained several limitations and assumptions, a more
comprehensive analysis may yield different results.

3 Sea Power 21 is the Navy's vision of how it will organize, integrate,
and transform its forces to perform missions in the 21st century. Its
pillars are (1) Sea Strike, which is projecting precise and persistent
offensive power; (2) Sea Shield, which is projecting global defensive
assurance; and (3) Sea Basing, which is projecting joint operational
independence. Its ForceNet concept integrates the three pillars.

In addition to the "quick look" analysis, the 2005 Chief of Naval
Operations guidance directed the Naval Sea Systems Command to conduct a
study on alternative propulsion methods for submarines and surface
combatants. The objective of the 2005 Chief of Naval Operations-directed
study is to evaluate current propulsion systems, considering the
operational needs of Sea Power 21 and the cost and availability of
technology and energy sources. The 2005 Chief of Naval Operations guidance
directed the Naval Sea Systems Command to complete this study by July
2005; however, at the time of our review, Naval Sea Systems Command
officials stated that because of command changes at both the Naval Sea
Systems Command and the Office of the Chief of Naval Operations, the study
would not be completed until May 2006.4 According to Navy officials, the
Chief of Naval Operations-directed study will use a more comprehensive
model to evaluate fuel source and propulsion plant alternatives for both
submarines and surface combatants than did the "quick look" study. It will
analyze ship design, using such factors as mission requirements;
operational and support costs; manpower requirements; and fuel
consumption, costs, and sources to determine at what price level the cost
of diesel fuel (over the life of the ship) equals the additional life
cycle cost of a similar ship powered by a nuclear propulsion plant.

The National Defense Authorization Act for Fiscal Year 2006 directed the
Navy to conduct an analysis and report on alternative propulsion methods
for amphibious warfare ships and surface combatants by November 1, 2006.
Additionally, the conferees directed the Navy to brief the congressional
defense committees on the organization and study plan for the preparation
of the report by April 1, 2006.5 On April 6, 2006, the Subcommittee on
Projection Forces, House Committee on Armed Services, held a hearing at
which the Navy testified on its plans to conduct the study in order to
fulfill the requirement for a briefing. Navy officials stated that study
guides will be developed for the National Defense Authorization Act study,
and the study will build upon the methodology and results of the 2005
Chief of Naval Operations-directed study. Specifically, the study will
analyze alternative propulsion systems in amphibious warfare ships, medium
surface combatants, and small surface combatants; evaluate cost versus
operational effectiveness; and compare nuclear plant with diesel fuel
marine6 plant alternatives. According to Navy officials, the study will
analyze conceptual ship design to estimate acquisition costs and the life
cycle costs of each variant. For each ship type, a break-even cost
analysis will be performed to determine the cost of crude oil for which
the life cycle cost of a nuclear propulsion variant of a ship concept will
equal the life cycle cost of a diesel fuel marine concept. Navy officials
said that the study will consider technologies such as nuclear power, gas
turbines, diesels, fuel cells, mechanical drive, electrical drive, and
various types of propellers, as well as other innovative concepts.

Based on our limited analysis, the Navy's plans to conduct the National
Defense Authorization Act for Fiscal Year 2006-directed study, as outlined
in the Navy's statement for the hearing before the Subcommittee on
Projection Forces, House Committee on Armed Services, appear reasonable
for conducting a more thorough analysis on alternative propulsion systems
for surface combatants and amphibious warfare ships. The methodology
indicates that study guides will be developed to guide the study and major
assumptions will be identified and documented. Additionally, the
methodology will include consideration of nuclear and fossil fuel power
plants that will meet mission requirements, and the use of modeling
techniques to capture appropriate costs and evaluate mission effectiveness
of various propulsion plant alternatives.

4 On June 14, 2006, the study had not been approved by senior Navy
officials.

5 H.R. Conf. Rep. 109-360 (2005).

6 Diesel fuel marine is a type of military fuel that is a complex mixture
of hydrocarbons produced by distillation of crude oil. The cost of diesel
fuel marine is approximately 15 percent greater than that of crude oil.

However, because the Navy had not completed its study guides for the
analysis at the time of our review, we could not independently verify that
they will be adequate to guide the study, nor could we determine if all
relative costs will be considered and other pertinent factors addressed.
For example, while the methodology indicated that manpower costs will be
considered, it did not indicate whether these costs will include the
additional training costs for nuclear-qualified personnel. Our prior work
on the cost-effectiveness of conventionally and nuclear-powered carriers
indicated that personnel training costs are substantially higher for
nuclear-qualified personnel.7 Our prior work also documented that the
support activities required for nuclear-powered ships add significant
costs. Additionally, it is highly important that accurate, reliable data
are used for all of the models used to support the study. The
consideration of all relative costs and use of accurate, reliable data
will determine the extent to which the study results will be valid and
useful.

Improvements Have Been Made to Conventional and Nuclear Propulsion Systems

The Navy has made improvements to both its nuclear and conventional
propulsion systems. According to Navy officials, nuclear power plants are
now simpler in design and smaller; have reduced maintenance requirements;
and require half the manpower of older plants, as demonstrated by the
design of the CVN 21 class aircraft carrier. Officials also stated that
the life of nuclear reactor cores has been extended. For example,
according to Navy officials, the extended life span of reactor cores
eliminates the need for refueling newer submarines, which have a 33-year
life span. This compares with the earlier Los Angeles class submarines,
which are usually refueled at the 18- to 20-year point in their service
life.

Improvements have also been made to conventional propulsion systems.
Currently, conventionally powered ships have separate systems dedicated to
propulsion and ship support systems. An improvement upon this is the
Integrated Power System. According to Navy officials, the Integrated Power
System will enable conventional systems to produce electrical power for
both the propulsion system and ship's support systems.

Instead of the propeller drive shaft being connected to the engine through
reduction gears, the Integrated Power System enables the propeller to be
connected directly to an electric motor without the use of reduction
gears. Officials further stated that the

7 GAO, Navy Aircraft Carriers: Cost-Effectiveness of Conventionally and
Nuclear-Powered Carriers, GAO/NSIAD-98-1 (Washington, D.C.: Aug. 27,
1998).

Integrated Power System will provide the electrical power for
transformational weapons systems on future ships, improve survivability by
allowing rapid reconfiguration of

Power, and reduce acoustic signature or detection by sonar. The design of
the Integrated Power System will require fewer components to the system,
which, according to Navy officials, will result in reduced maintenance
requirements and life cycle costs.

Navy Ships in Development Will Have a Variety of Newly Designed Propulsion
Systems

Navy officials stated that ship requirement factors, which are developed
during the early phases of ship design, drive the type of propulsion
system that is selected for a ship. Some factors that influence the type
of propulsion system selected are the maximum sustained speed required,
operating profile (a characterization of how the ship will be used),
acquisition cost constraints, industrial base capabilities, and the
maturity of any new technology being considered.

The ships planned for both near-term and future ship construction will
utilize a variety of newly designed propulsion systems. Navy officials
said that a new underway replenishment vessel, the T-AKE, will utilize a
diesel-electric propulsion system. Delivery of the first T-AKE ship is
expected in June 2006. Another type of ship, the Littoral Combat Ship, is
expected to have a hybrid propulsion system consisting of two gas
turbines, for high-speed use, and two diesel engines, for low-speed use.
According to Navy officials, the hybrid system of the Littoral Combat Ship
will enable efficient low-speed cruising. Delivery of the first Littoral
Combat Ship is expected in fiscal year 2007.

Additional future ship construction includes a next-generation destroyer,
DDG 1000; an amphibious replacement ship, LHA 6; a new CVN 21 class
aircraft carrier; and a next-generation cruiser, CG(X). According to Navy
officials, DDG 1000 will have an Integrated Power System consisting of
four gas turbines and two advanced induction motors. The amphibious
replacement ship, LHA 6, will utilize a combined gas turbine and electric
propulsion system instead of the steam propulsion systems used in many
amphibious warfare ships. Delivery for both DDG 1000 and LHA 6 is expected
in fiscal year 2012. According to Navy officials, the first aircraft
carrier to be built under the CVN 21 program, CVN 78, will have a newly
designed nuclear power plant, allowing for a reduction in both manning and
reactor plant components. Delivery of CVN 78 is expected in fiscal year
2015. A propulsion decision has not yet been made for CG(X), although,
according to Navy officials, CG(X) is likely to leverage the technology
used in the DDG 1000 propulsion system, such as the Integrated Power
System.

Navy Is Spending Some Research and Development Funds to Develop New
Propulsion Technologies

In addition to analyzing alternative propulsion technologies for ships
currently in development, the Navy is also spending research and
development funds to develop new technologies to improve propulsion and
support systems. For fiscal years 2003 through 2005, the Navy spent over
$212 million and plans to spend an additional $264 million for fiscal
years 2006 through 2011 to conduct research for various technologies, such
as superconducting motors, fuel cells, and high-speed generators. None of
these technologies are immediately ready to be implemented in ship
designs. However, the Office of Naval Research, which is responsible for
managing advanced research, has categorized the maturity of each
technology being funded by technology readiness levels 1 through 9. For
example, a technology readiness level 1 indicates that the technology is
still in a basic research phase, while a technology readiness level 9
indicates that a technology has been fully demonstrated. Some technologies
being explored by the Navy, including fuel cell technology, high-speed
generators, and superconducting motors, are at technology readiness levels
3 through 5. Level 5 indicates that the technologies have advanced to the
point where stand-alone experiments can be conducted or the technology can
be integrated with other systems in the target environment. These
technologies will still require fossil fuel as an energy source, but Navy
officials stated that when and if they are implemented, they will
significantly reduce the amount of fuel required and improve ship
operations.

According to Office of Naval Research officials, improvements to
electrical components will generally improve fuel efficiency and overall
mission effectiveness of future Navy surface ships. For example,
superconducting motors, using special wiring to lower the resistance of
electricity flow and employing cryogenics to reduce temperatures within
the motor, will be more powerful and smaller, thereby reducing weight and
saving onboard space for other purposes. High-speed generators, also
projected to be smaller, will make it possible to couple high-speed gas
turbine engines directly to the generators without the use of reduction
gears, thereby reducing weight, saving space, and making the engines more
fuel efficient. Eliminating these reduction gears will also help future
ships to be quieter and consequently more difficult to be detected by
enemy forces. The Office of Naval Research is also conducting research
into fuel cell technology. Germany recently produced two submarines with
fuel cell propulsion systems, but a Navy official said that nonnuclear
submarines do not meet the mission requirements of the United States Navy.
Additionally, these fuel cells use onboard hydrogen in its natural state,
which is difficult and dangerous to store in large quantities. Conversely,
the fuel cell technology the Office of Naval Research is pursuing involves
extracting hydrogen from diesel fuel, which can be safely stored and
transferred at sea, according to the official. The hydrogen is used to
produce electrical power without the use of diesel or gas turbine engines.
The use of fuel cells would also permit a ship's power system to be
dispersed throughout the ship, increasing the ship's ability to survive if
attacked, according to Navy officials. Office of Naval Research officials
stated that fuel cell technology is promising for naval application and
has already completed some prototype testing. However, officials stated
that the technology is at least 3 to 5 years away from acquisition
consideration.

Agency Comments

We received technical comments from DOD, which we incorporated as
appropriate.

__ __ __ __

We are sending copies of this report to the Secretary of Defense and other
interested parties. We will provide copies of this report to others upon
request. In addition, the report is available at no charge on the GAO Web
site at http://www.gao.gov .

If you or your staff have any questions about this report, please contact
me at (202) 512-4402 or [email protected] . Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Key contributors to this report were Patricia
Lentini, Assistant Director, Willie Cheely, Elisha Matvay, and George
Morse.

Sincerely yours,

Janet A. St. Laurent

Director, Defense Capabilities and Management

Enclosure

(350779)

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