I personally believe that people should step back a little on this thing and try to recognize that nuclear power cannot solve many of the major problems in the maritime program, and there are probably many more substantive issues than nuclear power. I am speaking as an individual right now that has followed this matter intimately for many years. There are many more substantive issues associated with the future of the maritime business. I personally believe nuclear power cannot help solve these in the first order sense. Resolution of these are prerequisites for economical application of nuclear power. These things must be settled, such as containerized ships, such as fast turnaround ports, and all the other assumptions that are associated with the economic studies that have been made in the nuclear power arena. These are all of the ifs that make nuclear power really worth while. They don't take $100 million of research and development either. They don't involve the type of risks that I think one may be talking about here in terms of surety of success that is associated with a difficult nuclear power program undertaking. It is pretty clear in all the reports that I have read that these needs have been highlighted and that nuclear power may only make these fast ships better if these economic advantages are achieved. Mr. EDWARDS. Will the gentleman yield at that point? Mr. EDWARDS. Mr. Shaw, are you saying then that as you see it, AEC has no responsibility for developing a policy and, so far you haven't seen a policy that gives you a course or direction to follow which would cause you to raise your priority as far as Maritime is concerned. In other words, either the administration or the Congress, or both, have not developed the policy that is definitive in your view to cause you to raise the priority on the maritime industry. Is that a fair statement? CHART 9 MERCHANT SHIP QUESTIONS A. How many civilian Maritime ships are needed and of those how many nuclear powered ships may be required? What are the projected ship needs as a function of time similar to those for electrical power projections in the Civilian Power Program? What are the characteristics of these ships, particularly as they affect the propulsion plant? B. Can nuclear power itself make a significant contribution toward increasing the need for additional ships that would not have been the case were it not for the introduction of nuclear power? C. D. E. Without the flexibility related to significantly increasing the size of the power plant and taking advantage therefrom for reduced unit capital investment, can the fuel price advantage for nuclear ships be such to compensate for the differential capital investment and the other increases in operating costs? Can the fiscal relationship that exists between conventional utility power components and plants and maritime plants of the same type be altered significantly as a result of adopting nuclear power? Can the recognized capital and operating investment limitations related to commercial application of nuclear power of these smaller utility plant sizes (less than 200 MWe) be significantly different when applied to maritime plants as compared to utility applications? Mr. SHAW. That is correct, sir, and on the chart now before you we have identified a number of these questions in this form in order to help get the guidance that we need. (See chart 9.) These questions have been put on the table repeatedly. How many civilian maritime ships are needed, and, of these, how many nuclear powered ships may be required? We are not asking for firm information, but someone has to at least know the size of the market here. Mr. EDWARDS. Excuse me a minute. You are saying, though, that if the administration says to AEC, "Our policy is to develop nuclear maritime ships and we want to get on with it", your folks are ready and prepared to get on with it, but are you suggesting that at this point there has been no policy that would cause you to get on with it? Mr. SHAW. Yes, sir and no, sir. Now let me pick up the "yes, sir." Yes, sir, we have a role in this. We are very interested in promoting the use of nuclear power. But those strong advocates who are promoting nuclear power for maritime application kept pointing to the civilian power program's success. It is an extremely successful program, probably unprecedented in the sense of many other R. & D. programs that have been undertaken in this country. What is missing here in making this translation is the fact that the utility people and the reactor manufacturers stepped up, put their dollars on the line, and said they were willing to take the risk associated with making these kinds of commitments with assistance from the Government. I submit to this distinguished committee that perhaps people are pointing too hard to the administration, in a sense, in the area of shipbuilding and perhaps not hard enough at those strong proponents who are saying "We are ready to build ships, and all that, with reactors commercially available, and with reactor manufacturers that will put firm costs down on the table if someone will do this other half of the job." So that we really have these two aspects of this issue. We are certainly aware of the position the administration is in. If we want to undertake a $100 million R. & D. program we would at least like to know what the needs are and how this development may be used in the future. It would be very bad for all of us if we start with a 30,000-shaft-horsepower test facility and invest $50 million or so and people then say, "I didn't really want that size; I wanted a 100,000-shaft-horsepower plant." These are the kinds of things that we think have to be worked out jointly by the administration and the potential user, as they have been worked out in the civilian power program. And we have the question of projections of needs. We have many studies that identify these same types of issues on the civilian power program to help us with our research and development program and help the industry with respect to where the industry should invest its dollars based on what the Government will do. There is no question in my mind that if a manufacturer knows that the ship industry is willing to buy $100 or $200 million worth of ships a year he would be willing to pull people off of other jobs and put them on that kind of business. I think this is the kind of situation we are looking for here. Mr. EDWARDS. Thank you. Mr. MURPHY. Mr. Shaw, has the AEC engaged in any economic evaluations of marine systems as they might be applied to a specific trade route, ship system, or advanced propulsion concepts as currently under consideration by the Maritime Administration? Mr. SHAW. Yes, sir. We have certainly participated in a number of these studies, and we have forwarded to the Maritime Administration our best estimates of what the costs could be if shipbuilding programs were undertaken. Dr. KAVANAGH. That is the nuclear part only. Mr. MURPHY. As far as those costs are concerned, how would the reactor operating costs on a 100,000 shaft horsepower vessel compare with the operating costs of a comparable oil-fired vessel in terms of miles per shaft horsepower? Mr. SHAW. I certainly can provide that information for the record, but I must point out that there is a real wide range of numbers. Mr. MURPHY. But from my information the wide range of numbers is 1.6 to 1.8 on nuclear versus 2.8 for oil and, if you will, get the figures for the record. Mr. SHAW. I will be glad to, but I will point out that those numbers being quoted there, or any numbers being quoted, have a number of "ifs" associated with them. For example, "if" perhaps there are 10 ships built just like it; "if" perhaps we can use burnable poisons and get core lives that currently are not available; "if" you can cut down on the number of reactor operators and don't need maintenance people on board. Mr. MURPHY. How would the near- and long-term nuclear fuel costs compare with the near- and long-term oil-fired vessel fuel cost? If you can, will you provide those figures with a brief analysis on a long-term basis of nuclear versus fuel? Mr. SHAW. We will be glad to provide that. (The material follows:) NUCLEAR FUEL CYCLE COST ESTIMATES There may be seven or eight variables and/or assumptions made in deter mining the fuel cycle cost estimates, i.e., fabrication cost, uranium cost, investment charges, spent fuel recovery cost, credit for discharged uranium and plutonium, plant factors, etc. This will vary from first core loadings to subsequent core loadings as charges for material and interest rates changes and the reactor core physics become definitely known. The following table is estimated to apply for civilian maritime applications at the power levels shown. These estimates are for the first core loading but can be assumed as applicable to subsequent core loadings. Improved economics may be achieved as a result of research and development altered economic conditions. 1 Fuel costs do not include research and development costs, and are dependent upon the contractor that designs the core and provides the fuel, what other work is being conducted at the same contractor's plant, the interest rate, and those many considerations included in the design plant factor. 2 Design plant factor is defined as ratio of hours of annual plant availability resulting from refueling, maintenance, repair, etc., to hours per year, as if plant were not shipborne. 3 Based upon demonstration in a test facility. Total Generating Cost, M/KWH Mr. SHAW. But let me, if I may, Mr. Murphy, point out a reason for a variation in the numbers you hear and how this does tie in to the question of trade routes related to this projection. Before you is a chart which shows on the left mills per kilowatt-hour, or for our discussion, mills per shaft horsepower-hour. Across the bottom is plant capacity factor. (See chart 10.) A ship that is on an extremely long trade route that has long times at sea and short times in port can operate up near the upper part of this curve-that is, in the 80 percent load factor range. However, if she is on a short trade route where her percentage in port may be high, we will work back and be in the low capacity factor range. As you can see, those variations in mills per kilowatt-hour you are referring to can be wiped out completely by the difference in such assumptions as capacity factor of that plant. That is why I alert everyone to the importance of the assumptions that are being used as these relate to the numbers and to what can be done with these ships. Mr. MURPHY. That is why I asked whether you have analyzed any specific trade routes or particular ship missions. Mr. SHAW. Yes, sir. These, by the way, are costs associated with 1,000-megawatt plants which are currently being sold. It is a typical example of the variation that is associated with plant capacity factors. Mr. MURPHY. If the Maritime Administration would have available the necessary funding for a flight of nuclear propelled merchant vessels and an operational profile for these vessels was defined in broad terms, what would you describe as the principal obstacle yet to be encountered? Mr. SHAW. Technically speaking, there is no obstacle in getting a suitable reactor plant for such ships. The principal obstacles to be encountered are related to what the reactor manufacturer will provide at what cost, and what performance warranties will be associated with this equipment, and who will pick up the risk factors associated with these. There are some related questions associated with licensing and regulation which will feed back into the design of the plant; such as, what are the containment requirements, and what are the backup power requirements. These questions will be associated with any reactor plant. We do have some guidance on this, of course, from the Savannah itself. We have guidance on this from the Navy ships that are operating, and, of course, from the civilian powerplants. But I don't think these can be classified as any deterrent to undertaking an active shipbuilding program should people decide to do such. They are not that serious a consideration. I think the primary deterrent today is: Who is going to put up the dollars, and who is going to assume the responsibility for running the ships over their lifetimes, say, 20 years, to make sure the return on the investment is there? The first few years on any new machine like this would not be very profitable for anybody, I think. You can't count on it being profitable. Mr. MURPHY. We do not know, but there are other countries in the world, particularly West Germany, who are going right ahead on a nuclear powered program, taking the experience that we have had with the Savannah and applying it to their own program and they admit that the Otto Hahn, which is the ship they expect to put on the sea shortly, is another prototype vessel that will not operate at a profit but still they are going ahead with the program. They are not just stopping at one ship. They have programed further ships and I think if the Congress appropriates money and charges the Atomic Energy Commission with the responsibility for using that funding to come up with a policy and we say we should have joint meetings with Maritime Administration and the Atomic Energy Commission, that unless some force is put behind that, unless some policy is drawn, we are just going to be having one ship and then supposedly beaching it because its dollars and cents don't prove economical. I just think it is like dangling a cord. There is no direction to it. It is just going to hang there and where does the country stand with |