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WORLD COMPETITION IN THE NUCLEAR FIELD
If we lay up the NS Savannah at this time, when the whole world is becoming increasingly nuclear-ship conscious, we will not only lose the tremendous lead which we now have as the only nation operating a Nuclear Merchant ship, but we will also lose all of the enormous advantages which four years of personal experience have given our country in nuclear operation.
World acceptance is growing. Foreign countries are beginning to take action. For example:
Germany is now installing the reactor (based on Babcock & Wilcox Savannah design) in an already-constructed merchant nuclear vessel, to be in operation in late 1967.
Russia already has one nuclear ice-breaker in use, which has been so successful that two more are in the process of construction.
Japan has scheduled a prototype oceanographic and cargo nuclear ship for production.
Italy is planning a combination military-commercial type.
Red China, according to the foreign press, is in the process of building a nuclear coastal passenger ship.
Other countries are watching us, and studying plans, to determine exactly what they will build.
We have done all the preliminary work; paid all the preliminary costs. Is this the moment for us to bow out of the Nuclear merchant ship picture? Shall we permit every other country to cash in on our hard-earned knowledge, while we return to ordinary steam? Shall we, once again, tie ourselves to the past, give up our head start, and let our Merchant Marine stagnate?
"SAVANNAH" COST EVALUATION
President Johnson wants to lay up the NS Savannah because "her continued operation is not feasible against the over-all financial needs of the country." Ironically enough, it will cost as much to lay her up as it will to operate her— and perhaps a good bit more!
At the end of her first year under bare-boat charter to FAST, $200,000 was returned to the government to reduce the $1,300,000 they had agreed to invest and the same amount was kept as net profit to the Company. The second year contract provided a $200,000 reduction in the initial amount the government agreed to invest. At the end of the first four months of operation on this secondyear contract, there had already been a proportionate additional saving.
The Savannah has recently made two calls at Rijeka, Yugoslavia (the first port-of-call in a country behind the Iron Curtain), and there were 1,200 tons of cargo waiting on the dock for her the second time in.
FAST is waiting for final approval to assign her to Route #12, to the Far East. The projected revenue from this run looks even better than the Mediterranean run has produced. She is due to start this run early this summer. (A further reduction in government costs is anticipated.)
If we look at lay-up costs, we find that there are two possibilities open to the government:
1. A one-year temporary lay-up, the cost of which would be the same each year she sits. This would involve holding her at the Dock of Galveston, Texas, and the estimated cost would be between $1,500,000 and $2,000,000.
'Under this plan, it would cost more to keep her at Galveston for two years than to sail her.
2. To put her in moth-balls, or to completely lay her up with no intention of future reactivation-would cost a minimum of $3,000,000: about $1,800,000 to remove the core, reactor and fuel, and another $1,300,000 to complete the job.
If this is done, it will exceed the total Savannah costs for over one year, and could run over a two-year cost.
Also, it would probably eliminate, for all time, any chance of ever sailing her again. This at a time when ships for the American Merchant Marine are at an all-time premium! This at a time when revenues are exceeding the best estimates! This at a time when the Savannah is just beginning to prove her potential value commercially!
E. JOSEPH FARR, Executive Vice President.
The CHAIRMAN. I understand that Mr. Rogers has a statement. I hope we can have him at our next hearing. Do you want to say something at present, Mr. Rogers?
STATEMENT OF JOHN S. ROGERS
Mr. ROGERS. I should like to make a very brief comment at this time if I may ask leave of the chairman of the committee to submit. a statement after our committee has had an opportunity to digest the material which has come forward today.
I am an attorney. My name is John S. Rogers, from New York. I am cochairman with Mr. Theodore Kheel of the Citizens' Committee for Nuclear Shipping which was formed when the news of the layup was announced.
We have provided to the members of the committee individually a list of our membership which is industry and labor leadership in the field and outside of the field.
We issued this white paper last week which I should like to enter into the record of these hearings. May I do that, Mr. Chairman? The CHAIRMAN. This is the list of the committee?
Mr. ROGERS. Yes, sir.
(The document referred to follows:)
CITIZENS' COMMITTEE FOR NUCLEAR SHIPPING
Cochairmen.-Theodore W. Kheel, John S. Rogers.
Committee members.-Ralph E. Casey, president, American Merchant Marine Institute; Adm. Ralph K. James, president, Committee of American Steamship Lines; former Chief, Bureau of Ships, U.S. Navy; Edwin M. Hood, president, Shipbuilders Council of America; Joseph Curran, president, National Maritime Union; Thomas Gleason, president, International Longshoremen's Association; Paul Hall, president, Seafarers International Union; Hon. Herbert Halberg, commissioner, Department of Marine and Aviation, New York City; Oliver Townsend, director of the New York Atomic and Space Authority; E. Joseph Farr, executive vice-president, Brotherhood of Marine Officers; Commodore John W. Anderson, honorary chairman of the Council of American Master Mariners; Frank O. Braynard, Moran Towing and Transportation Co., secretary; Adm. Arleigh Burke, U.S. Navy retired.
Mr. ROGERS. Following that is a paper of some 19 pages entitled "The Proposed Layup of the Nuclear Ship Savannah.” The CHAIRMAN. You may submit that.
(The document referred to follows:)
THE PROPOSED LAYUP OF NS "SAVANNAH"
"It means much more than life for one new ship. It means the birth of an entire new era for merchant shipping-and new hopes the world over for the furtherance of nuclear power for peaceful purposes."
These words were spoken at the launching of NS Savannah on July 21, 1959– a bright day of optimistic hopes for a handsome new ship being readied for a precedent-shattering career and for a new epoch in man's use of the seas for friendly commerce.
Today, seven years later, we are faced with the spectacle of that ship destined to go into mothballs after only two years of commercial operation, while obsolete, over-age ships are being brought out of mothballs.
Are the fruits of nuclear propulsion to be used by the United States only in military vessels? Is the nuclear propulsion technology for peaceful purposes developed by the U.S. at great cost to be abandoned for use only by foreign merchant nations?
Many feel that the proposed lay-up of the Savannah provides the wrong answers to these and related questions.
The Vietnam experience proves for the third time in less than a generation that America needs a merchant marine. 98% of all material going to Vietnam has had to be moved by ship, but to do so has strained U.S. maritime cargocarrying capacity almost beyond its limits. Numerous government and industry studies have shown that if America is to have a place on the seas of tomorrow, it can only be through large, high-speed nuclear-propelled ships made possibleand competitive-by the United States' technological leadership.
The federal government's budget for fiscal-'68 cuts expenditures for studies on nuclear ship construction from $60,000 in the previous year to zero, and for NS Savannah it provides $2.32 million to be used to decommission and lay up the ship. According to the Acting Maritime Administrator, the decision to propose lay-up was taken purely on budgetary rather than policy grounds.
But what is the worth in dollars of the future of our merchant marine? or of our country's active demonstration to the world that it will support the use of the atom for peaceful purposes as well as for war?
The proposed mothballing of the world's first-and our country's only-nuclear merchant ship urgently demands that these questions be faced. It also poses more sharply-defined questions: is continued operation of Savannah important, or even indispensable, to the country's merchant marine? to its prestige as a pioneer of atoms-for peace? Are the dollar figures that have been cited in the press for Savannah's lay-up or for her continued operation really accurate?
It is to try to bring about answers to these specific questions that the Citizens' Committee for Nuclear Shipping has been formed. The Committee believes that such meager explanations as have been offered to date for the lay-up decision are inadequate, and that a unique national asset should not be allowed to be thus tied up to rot away without a detailed public scrutiny of the facts.
SIGNIFICANCE OF "SAVANNAH" TO THE FUTURE OF OUR MERCHANT MARINE The future of our merchane marine is without question intimately linked to our nuclear ship program, but one may rightfully ask: Has Savannah already performed her function as a prelude to second-generation nuclear ships? Despite allegations to the contrary by a Maritime Administration seeking to justify an unjustifiable proposal, the answer is no. It is clear that abandonment of Savannah means either abandonment of nuclear shipping or costly and wasteful abandonment of all forward planning.
The role of Savannah as ice-breaker for future nucléar merchant ships is far from over, as shown by these facts:
1. Crew training.—Savannah is a vital focus for the training of marine nuclear reactor operators. The Savannah classroom training center at King's Point (the U.S. Merchant Marine Academy) and its many graduates now support the ship enthusiastically. But if the ship is decommissioned, this support will disappear promptly, and future nuclear ships will be hard pressed to recruit qualified crews. Even now, Savannah-trained engineers are in great demand for shoreside industry in the new central-station nuclear plants. On the other hand, Savannah herself, if still operational, would continue to be an invaluable training facility for the additional experienced engineers needed to staff a fleet of nuclear ships.
2. Technical knowledge.-Millions of dollars have already been spent by the government to develop new equipment for future Savannah operations. The second reactor core for the ship has already been fabricated; it is of a new design and its installation and use should yield significant operational data. An entirely new design control-rod-drive system also has been built and tested prior to installation. These two items alone represent a government investment of approximately $5 million. This money will bear technological fruit only if the ship continues to sail.
3. Shore support.-The Galveston, Texas, nuclear ship support and refueling base is designed to service ten nuclear vessels. The closing of this facility would spell the fate of our merchant marine even more effectively, it not more dramatically, than the mothballing of Savannah.
4. Manning scales.-The question of crew requirements for nuclear ships should be examined in the light of extended operation of Savannah. Already, Savannah experience is just beginning to show how reduction of the excess crew requirements attributable to the nuclear power plant can be accomplished, to
bring it to parity with conventionally-powered crews. Resolving this question should be the mission of the prototype, carried out before a second-generation nuclear fleet is built, so that the results may be factored into the advanced ships' design.
5. Port access.-Savannah has already made a major contribution to the cause of nuclear shipping by opening numerous European ports to atomic commerce. It takes considerable time and effort to open a port and, as a demonstration ship, Savannah is ideally suited to the job. This task was in fact part of her original mission, and should be completed before that mission is regarded as accomplished. But many parts of the world-including those offering the greatest profit potential in U.S. nuclear ships, namely Far Eastern ports-have never seen Savannah. Nor, for that matter, has Africa, the Middle East, South and Central America. In fact, Savannah is still engaged in working out minor bugs affecting the use of Italian and Yugoslav ports by nuclear merchant ships. 6. Insurance. Initially insurance rates for nuclear ships will depend on the nature and extent of the only operating experience available-that of Savannah. There are no blemishes on her record, but she has not been in commercial opera. tion for sufficient time (usually at least five years is required to amass minimum actuarial experience) to make a substantial contribution to the economic success of the ships that hopefully will follow in her wake.
7. Safety. Continued operation of Savannah is required to further evaluate whether, and to what degree, she has been burdened unnecessarily with extra costs due to over cautiousness in imposing safety restrictions. On this point, it is enlightening to note that in 1963 a joint group of shipping experts representing Euratom and the French and German ship-certificating bodies, Bureau Veritas and Germanischer Lloyd, published the results of a detailed three-year study of Savannah design and operation, in anticipation of her visits to European ports. Their conclusion: "Operation of NS Savannah in coastal and port waters involves neither any particular conventional risk nor any excessive radiological hazard, even in the event of an accident." Moreover, they concluded that the U.S. had been too severe in evaluating potential Savannah hazards (“. . . proceeding on the basis of the maximum hypothetical accident . . . and assessing its consequences on the strength of pessimistic assumptions will result in overestimating the radiological hazards..."). They recommended that European countries "avoid making for (European) ports extensive reports like (Americans) have been obliged to make."
Proposals to build a new fleet of nuclear merchant ships have been put forth many times only to be shelved or stymied each time. Lay-up Savannah is a definite step-in the wrong direction. Assuming the inevitable place of nuclear propulsion on the seas, failure to operate Savannah becomes impossible to justify. The proposal to lay up Savannah is all the more incomprehensible in the light of news published only this Monday (Feb. 27) that another government body, the new Department of Transportation, is proposing the construction of three nuclear merchant ships. It is entirely unclear what relationship this proposal bears, if any, to the proposal to do away with the one source of vital information needed to make the three proposed new nuclear merchant ships successfulnamely, continued operation of Savannah.
SIGNIFICANCE OF SAVANNAH ECONOMICS
No one ever involved with the Savannah project from its genesis-not President Eisenhower who first proposed her as a floating exhibit-hall "peace ship"; not the Congress, which transformed the concept to that of a working merchantman and appropriated the funds for her construction; not the Atomic Energy Commission and Maritime Administration, which were assigned to design, build and operate her—ever believed for a moment that she would be cheaper to build and operate than an oil-fired ship of equal size and speed. To have done so would have been to expect Henry Ford's first automobile, or one of the Wright Brothers' earliest airplanes, or the Baltimore & Ohio railroad of 1830 to have shown a net profit. Savannah's purpose was to be a forerunner for the economic nuclear merchant ships to follow her, and to pave the way for them by achieving acceptance for nuclear merchant ships in the U.S. merchant marine and in foreign commerce.
To do this involves a program that no private ship operator can afford to-nor is in a position to-carry out, as can be seen from its scope: it means setting all
the necessary precedents, smoking out all the hidden headaches, probing all the regulatory pitfalls-and settling the issues thus raised-in the realms of port entry and clearance, health and safety control (by federal, state and municipal authorities), water and food supply, waste disposal (both in normal operation and at infrequent refueling times), short maintenance, American Bureau of Shipping classification, Coast Guard certification, insurance, admirality law, and union labor relations. All these problems require solutions domestically, and then again for each country where the ship is to call.
This is the job on which Savannah has made a brilliant-and undeservedly little-known-start, and which should not be interrupted only partly done Savannah's annual operating cost to the government is about $1.2 million, as compared with $700,000 government subsidy to operate a C-4 freighter. However this cost is $600,000 less than estimated, because in her first year of commercial operation, Savannah earned $600,000 more than had been anticipated, and averaged more than 90% fully-booked cargo capacity on her trips to western European ports. (The ship's nuclear power plant, incidentally, has been operating like clockwork-more reliably than ever, now that she has shaken down to regular service on a regular trade-route.)
However, the cost of maintaining her in her present state at the Galveston nuclear-ship service base has been estimated at about $1.5 to $2 million per year— not counting about $1.5 million additional to decommission her without removing her fuel. This is more than the cost of continuing to operate her for a year. The Administration's fiscal 1968 budget provides $2.32 million for seven weeks' operation from July 1, 1968 (beginning of the fiscal year) to August 20, 1968 (end of the charter year), and for decommissioning. Is this adequate? If she were to be placed in the reserve fleet, she would not only have to be defueled; since there are no facilities for monitoring the residual radiation from her nuclear plant in any reserve fleet, her entire nuclear steam-generating plant would have to be decontaminated, removed from the ship and disposed of; estimates on doing this begin at $5 million. Thus the notion of saving the government money by laying her up makes no sense at all. Furthermore, she is scheduled for a partial refueling in September 1968; at that time, when the reactor has to be opened anyway, a decision whether to refuel or discharge fuel would at least be logically timed. But to decide to lay her up a year before her core needs to be touched is almost absurdly ill-timed.
Savannah is still operating on her original core, or charge of uranium, on which she made her sea-trial runs in March, 1962. As of mid-July, 1966, during her annual outage, physics tests showed that only 46.4% of the core life had been used, and that the ship would not require refueling during the three-year charter period ending August 20, 1968. At that time, it was planned that the four most highly exposed of the 32 fuel elements would be replaced by four dockside spares; this would prolong the life of the first core by another four years. Present estimates are that at the present rate of utilization of the ship, there is enough fuel on hand (including the four Core I spare elements and the new Core II) for from seven to nine years' additional operation.
During her first year of commercial operation (July 1, 1965 to June 30, 1966), Savannah traveled 60,650 nautical miles, or almost 21⁄2 times around the world. Consumption of U-235 in this period was slightly over 10,000 grams, or 22.4 pounds; net fuel consumed was 6,750 grams, or 14.9 pounds-a mileage rate of more than 4,000 miles per net pound of fuel consumed.
The government's niggardliness toward development of nuclear merchant ships contrasts sharply with its record of achievement in making possible the spectacular success of commercial land-based, central-station nuclear power. In 1966, 27 commercial power-generating reactors were ordered or committed, having a total output of 22,280,000 kw; in just the first two months of 1967, 11 more reactors were ordered or committed totaling 8,265,000 kw more. Altogether, 39,512,000 kw of commercial nuclear power are presently under construction or on order. Earlier, however, the government had built the Shippingport, Pa., reactor, first large-scale commercial-type nuclear power plant in the U.S., to prove out the principles and gain design, construction and operating experience. It is operated for AEC by Duquesne Light Co. of Pittsburgh, and provides a close parallel with Savannah. Then AEC built the Dresden, Yankee and some other reactors in partnership with private utilities, with the government contributing research and development funds and making the data obtained available to the entire utility industry. This is the second step, bridging the gap from