February 29, 2012

The US Navy’s mirror-image cost problems with aircraft carriers

Filed under: Economics, Environment, Military, Technology — Tags: , , , — Nicholas @ 09:51

Strategy Page talks about the ever-rising cost of building aircraft carriers:

The first of the new Ford class aircraft carriers keeps getting more expensive. The price for the first one has gone up $161 million in the last ten months. The USS Gerald R Ford (CVN 78) was originally supposed to cost $8 billion, plus $5 billion for R&D (research and development of new technology and features unique to this class of ships). Now it appears that the cost of the Ford will not be $13 billion, but closer to $15 billion. The second and third ships of the class will cost less (construction plus some additional R&D). Thus the first three ships of the Ford class will cost a total of about $40 billion.

The current Nimitz-class carriers cost about half as much as the Fords. Both classes also require an air wing (48-50 fighters, plus airborne early-warning planes, electronic warfare aircraft, and anti-submarine helicopters), which costs another $3.5 billion. Three years ago, the USS George H.W. Bush (CVN 77), the last of the Nimitz class carriers, successfully completed its sea trails and was accepted by the U.S. Navy. The Bush was ready for its first deployment in 2010.

At those costs, it should be no surprise that few other navies operate carriers at all, and none operate the size of carrier that the US Navy does. Build costs are rising rapidly, and although the Ford class will carry significantly fewer crew members, they’ll still be very expensive to operate.

The costs don’t end there, however, as all warships have limited lifespans. Disposal of the retired ships is another area where costs are headed ever higher:

Last year, the U.S. Navy decided to go back to the breakers (where ships are broken up for scrap). Four retired aircraft carriers (USS Constellation, USS Forrestal, USS Independence and USS Saratoga) were to be scrapped instead of sunk, or simply allowed to rust away while tied up. These ships were taken out of service between 1993 and 2003 and have been waiting since then while a decision was made on their disposition. But there are seven carriers waiting to be scrapped and the navy has an economic disaster on its hands. Keeping carriers in reserve costs $100,000 a year, but it can cost over a billion dollars to scrap one of them.

Since the 1990s, sending warships to the scrap yard has not been considered a viable alternative. It’s all about pollution, bad press and cost. The largest warship to be scrapped, the 45,000 ton carrier USS Coral Sea, took until 2000 (seven years) to be broken up. Thus the process is not only expensive, it takes a long time. Then the navy discovered that the cost of scrapping the carrier USS Enterprise would be close to a billion dollars. This was largely the result of lots more environmental and safety regulations. With so many navy ships (especially nuclear subs) being broken up in the 1990s, and all these new regulations arriving, the cost of disposing of these ships skyrocketed. This was especially true with carriers.

[. . .]

It gets worse. With the really vast number of single hull tankers being scrapped and large numbers of old, smaller-capacity container ships laid up and likely to be offered for scrap fairly soon, the market for difficult-to-scrap naval ships is going to shrivel, and the price for scrap steel will drop. Efforts to get the navy include the costs of disposal in the budget for lifetime costs has never caught on, and now it’s obvious why not. The real nightmare begins in 2013, when the first nuclear powered carrier (the 93,000 ton USS Enterprise) is to be decommissioned. The cost of dismantling this ship (and disposing of radioactive components) will be close to $2 billion.

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