Introduction

Chairman Giménez, Ranking Member Thanedar, distinguished members of the subcommittee, thank you for the opportunity to appear before you today to discuss strategic competition in the Arctic.

As part of my work as the CRS specialist for naval affairs, I am the head of the CRS Arctic team, the coordinator of the CRS overview report on the Arctic,¹ and the author of the CRS report on the Coast Guard's Polar Security Cutter (PSC) program.² The Arctic and PSC reports were initiated in 2010 and 2008, respectively, and have been updated periodically since then, most recently on July 5 and July 10, 2023, respectively. My other periodically updated CRS reports include the CRS report on the defense implications of great power competition, which was initiated in 2014,³ and the CRS report on U.S.-China strategic competition in the South and East China Seas, which was initiated in 2012.⁴ My biography is in the Appendix at the end of this statement.

As requested by the subcommittee, my statement focuses primarily on the Coast Guard, and particularly on the PSC program. Portions of this statement are adapted from the PSC and Artic overview reports.

Arctic Geopolitical Environment

The CRS Arctic overview report's discussion of the Arctic geopolitical environment covers the evolution of the Arctic geopolitical environment since the end of the Cold War, the emergence of great power competition (i.e., strategic competition) in the Arctic, the impact on the Arctic of Russia's war in Ukraine, Russian and Chinese activities in the Arctic, and military (including U.S. Coast Guard) operations in the Arctic.⁵ The discussion in that report provides a geopolitical context for the material presented below, which focuses on Coast Guard polar icebreakers, Arctic search and rescue (SAR), and a U.S. Arctic strategic seaport.

Coast Guard Polar Icebreakers

Multiple Polar Missions (Not Just Icebreaking)

Within the U.S. government, the Coast Guard is the U.S. agency responsible for polar icebreaking. The Coast Guard's polar icebreakers, however, do not simply break ice—they are multi-mission cutters that conduct a variety of operations in polar waters. U.S. polar ice operations conducted in large part by the Coast Guard's polar icebreakers support 9 of the Coast Guard's 11 statutory missions.⁶ The roles of U.S. polar icebreakers can be summarized as follows:

• conducting and supporting scientific research in the Arctic and Antarctic;
• defending U.S. sovereignty in the Arctic by helping to maintain a U.S. presence in U.S. territorial waters in the region;
• defending other U.S. interests in polar regions, including economic interests in waters that are within the U.S. exclusive economic zone (EEZ) north of Alaska;
• monitoring sea traffic in the Arctic, including ships bound for the United States; and
• conducting other typical Coast Guard missions (such as search and rescue, law enforcement, and protection of marine resources) in Arctic waters, including U.S. territorial waters north of Alaska.⁷

Polar (Not Just Arctic) Operations

The Coast Guard's large icebreakers are called polar icebreakers rather than Arctic icebreakers because they perform missions in both the Arctic and Antarctic. Operations to support National Science Foundation (NSF) research activities in both polar regions account for a significant portion of U.S. polar icebreaker operations.

Supporting NSF research in the Antarctic focuses on performing an annual mission, called Operation Deep Freeze (ODF), to break through Antarctic sea ice so as to reach and resupply McMurdo Station, the large U.S. Antarctic research station located on the shore of McMurdo Sound, near the Ross Ice Shelf. The Coast Guard states that Polar Star, the Coast Guard's only currently operational heavy polar icebreaker, "spends the [northern hemisphere] winter [i.e., the southern hemisphere summer] breaking ice near Antarctica in order to refuel and resupply McMurdo Station. When the mission is complete, the Polar Star returns to dry dock [in Seattle] in order to complete critical maintenance and prepare it for the next ODF mission. Once out of dry dock, it's back to Antarctica, and the cycle repeats itself."⁸ The Coast Guard's medium polar icebreaker, Healy, spends most of its operational time in the Arctic supporting NSF research activities and performing other operations.

Required Numbers of Coast Guard Polar Icebreakers

The Coast Guard testified in April and June 2023 that it had recently completed a new fleet mix analysis that concluded that the Coast Guard will require a total of eight to nine polar icebreakers to perform its various polar (i.e., Arctic and Antarctic) missions in coming years:

• At an April 18, 2023, hearing on the Coast Guard's proposed FY2024 budget before the Coast Guard and Maritime Transportation subcommittee of the House Transportation and Infrastructure Committee, the Commandant of the Coast Guard, Admiral Linda L. Fagan, stated: "We recently—I recently signed out a fleet mix analysis that indicates we need eight to nine icebreakers."⁹ Admiral Fagan's testimony did not otherwise characterize the results of the fleet mix analysis.¹⁰
• At a June 21, 2023, hearing before the same subcommittee on the Coast Guard's emerging challenges and statutory needs, the Vice Commandant of the Coast Guard, Admiral Steven D. Poulin, similarly stated: "We were on a trajectory to build the polar security cutters, but we recently delivered to this committee and other committees our fleet mix analysis, and in that fleet mix analysis we concluded that we likely need eight to nine new icebreakers. Some of those will be heavy icebreakers like the polar security cutter that's being built at Bollinger, Mississippi. Others may be Arctic security cutters [ASCs, i.e., medium polar icebreakers]."¹¹ Admiral Poulin's testimony, like Admiral Fagan's, did not otherwise characterize the results of the fleet mix analysis.

Prior to this new fleet mix analysis, Coast Guard officials had stated that the service in coming years would need at least six polar icebreakers, including three capable of breaking heavy polar ice.¹²

Current Coast Guard Polar Icebreakers

The operational U.S. polar icebreaking fleet currently consists of one heavy polar icebreaker, Polar Star, and one medium polar icebreaker, Healy.¹³ In addition to Polar Star, the Coast Guard has a second heavy polar icebreaker, Polar Sea. Polar Sea, however, suffered an engine failure in June 2010 and has been nonoperational since then.

Polar Star and Polar Sea entered service in 1976 and 1978, respectively, and are now well beyond their originally intended 30-year service lives. The Coast Guard in recent years has invested millions of dollars to overhaul, repair, and extend the service life of Polar Star, but as a result of its advancing age, the ship's material condition has nevertheless become increasingly fragile, if not precarious. During its annual deployments to McMurdo Station in Antarctica, shipboard equipment frequently breaks, and shipboard fires have occurred.¹⁴ Replacements for many of the ship's components are no longer commercially available. To help keep Polar Star operational, the Coast Guard is using Polar Sea as a source of replacement parts.

PSC Program

The PSC program was initiated in the Coast Guard's FY2013 budget submission, and envisages the acquisition of at least three new PSCs (i.e., heavy polar icebreakers), to be followed years from now by the acquisition of additional new ASCs (i.e., medium polar icebreakers). The PSC program was previously known as the polar icebreaker (PIB) program. Changing the program's name to the PSC program is intended to call attention to the fact that the Coast Guard's polar icebreakers perform a variety of missions relating to national security, not just icebreaking.¹⁵

The PSC program is managed by a Coast Guard-Navy Integrated Program Office (IPO).¹⁶ The Navy and Coast Guard in 2020 estimated the total procurement costs of the first three PSCs in then-year dollars as $1,038 million (i.e., about $1.0 billion) for the first ship, $794 million for the second ship, and $841 million for the third ship, for a combined estimated cost of $2,673 million (i.e., about $2.7 billion). A Government Accountability Office (GAO) report that was released on April 20, 2023, and which reports on the status of major DHS acquisition programs as of September 30, 2022, states that as of June 2022, the combined estimated procurement cost of the three PSCs was $2,789 million,¹⁷ which is $116 million (about 4.3%) more than the figure of $2,673 million.

On April 23, 2019, the Coast Guard-Navy Integrated Program Office for the PSC program awarded a fixed-price, incentive-firm contract for the detail design and construction (DD&C) of the first PSC to Halter Marine Inc. of Pascagoula, MS, a shipyard that was owned at the time by Singapore Technologies (ST) Engineering. The DD&C contract includes options for building the second and third PSCs. On December 29, 2021, the Coast Guard exercised a fixed price incentive option to its contract with Halter Marine Inc. for the second PSC. In November 2022, ST Engineering sold Halter Marine to Louisiana-based Bollinger Shipyards. The former Halter Marine is now called Bollinger Mississippi Shipbuilding.¹⁸

The PSC program is using the parent design approach, meaning that the design of the PSC (Figure 1) is based on an existing icebreaker design. A key aim in using the parent design approach is to reduce cost, schedule, and technical risk in the PSC program. The parent design is German design for Polar Stern II (also spelled Polarstern II), a ship that is to be built as the replacement for Polarstern, Germany's current polar research and supply icebreaker.

Figure 1. Rendering of PSC Design

Source: Illustration accompanying Sam LaGrone, "UPDATED: VT Halter Marine to Build New Coast Guard Icebreaker," USNI News, April 23, 2019, updated April 24, 2019. The caption to the illustration states "An artist's rendering of VT Halter Marine's winning bid for the U.S. Coast Guard Polar Security Cutter. VT Halter Marine image used with permission."

The PSC program has received a total of $1,881.8 million in procurement funding through FY2023, including $300 million provided through the Navy's shipbuilding account ($150 million each in FY2017 and FY2018), and the remainder provided through the Coast Guard's Procurement, Construction, and Improvements (PC&I) account. The procurement of the first two PSCs is fully funded, and the Coast Guard has started to fund the third PSC. The Coast Guard's proposed FY2024 budget requests $170.0 million in continued procurement funding for the PSC program.

The Coast Guard originally aimed to have the first PSC delivered in 2024, but the ship's estimated delivery date has subsequently been delayed repeatedly. An April 2023 GAO report states that as of August 2022, about 41 percent of the ship's overall design had been completed,¹⁹ raising a question as to how much time the use of the German parent design has in practice saved in designing the PSC. Given the degree of design completion as of August 2022, construction of the ship might begin no earlier than 2024. If so, and if the ship takes at least four years to build, which might be a reasonable estimate for building a lead ship (i.e., first ship in the class) of the PSC's size and complexity, then the first PSC might be delivered no earlier than 2028. Admiral Fagan reportedly provided a similar estimate in testimony at a July 13, 2023, hearing on the Coast Guard's budget before the Oceans, Fisheries, Climate Change and Manufacturing subcommittee of the Senate Commerce, Science, and Transportation Committee.²⁰

Cost growth in other Navy and Coast Guard shipbuilding programs reported in the Navy's FY2024 budget submission and a June 2023 GAO report includes the following:

• About 10% cost growth since the Navy's FY2023 budget submission in estimated unit procurement costs for Navy Virginia-class attack submarines;²¹
• About 40% cost growth between 2012 and 2022 in the estimated the total program acquisition cost of the Coast Guard's Offshore Patrol Cutter (OPC) program;²²
• About 51% cost growth since the Navy's FY2021 budget submission in estimated unit procurement costs for Navy John Lewis (TAO-205) class oilers;²³ and
• About 82% cost growth since FY2022 in the estimated unit procurement cost of the Navy's first TAGOS-25 class ocean surveillance ship.²⁴

Some of the cost growth shown above may be due to inflation resulting from disruptions to supply chains related to the COVID-19 pandemic, some may be due to optimistic initial estimates of the intrinsic costs for building these ships, and some may be due to other causes. Cost growth in these Navy and Coast Guard shipbuilding programs raises a question regarding the potential for a possibly comparable amount of cost growth to occur in the PSC program due to inflation, underestimation of intrinsic building costs, or other causes. If a substantial degree of cost growth occurs in the PSC program, it could raise a question regarding whether to grant some form of contract relief to the PSC shipbuilder, as occurred in the OPC program.²⁵

One option for Congress would be to ask the Congressional Budget Office (CBO) to conduct a more-refined analysis of the potential for cost growth in the PSC program. Something similar occurred with the Navy's Constellation (FFG-62) class frigate program: A preliminary CRS analysis suggested that if FFG-62s were to cost about the same to construct per thousand tons of displacement as other recent U.S. military surface combatants, then the third and subsequent FFG-62s could cost 17% to 56% more than the budgeted estimates for those ships in the Navy's FY2021 budget submission. Following that preliminary CRS analysis, CBO was asked to conduct a more-refined analysis, which estimated that the first 10 FFG-62s will cost 40% more to build than the Navy estimates.²⁶

The April 2023 GAO report mentioned earlier provides additional information regarding cost, technical, and schedule risk in the PSC program.²⁷

Existing Commercially Available Polar Icebreaker (CAPI)

The Coast Guard's proposed FY2024 budget, in addition to requesting continued procurement funding for the PSC program, also requests $125.0 million in procurement funding for the purchase of an existing commercially available polar icebreaker (CAPI) that would be modified to become a Coast Guard polar icebreaker, so as to help augment the Coast Guard's current polar icebreaking capacity until the new PSCs enter service, and to continue augmenting the Coast Guard's polar icebreaking capacity after the PSCs enter service. Under the Coast Guard's proposal, the Coast Guard would conduct a full and open competition for the purchase, the commercially available icebreaker that the Coast Guard selects for acquisition would be modified for Coast Guard operations following its acquisition, and the ship would enter service 18 to 24 months after being acquired. The total cost to purchase the ship and then modify it to meet Coast Guard mission needs is uncertain.

Prior to 2021, Coast Guard plans did not include the acquisition of such a ship. The Coast Guard's FY2022 unfunded priorities list (UPL), dated June 29, 2021, however, included a $150.0 million item for the lease or purchase of a commercially available vessel to provide polar icebreaking capability until the future delivery of PSCs.²⁸ The following year, the Coast Guard as part of its proposed FY2023 budget requested $125.0 million in procurement funding for the purchase of an existing commercially available polar icebreaker. Congress, in acting on the Coast Guard's proposed FY2023 budget, denied the request. The Coast Guard is once again requesting the $125.0 million as part of its proposed FY2024 budget.

Service Life Extension for Polar Star

The Coast Guard plans to extend the service life of Polar Star until the delivery of at least the second PSC.²⁹ The Coast Guard estimated the cost of Polar Star's service life extension work at $75 million, a sum that was funded at a rate of $15 million per year for five years, with the final $15-million increment being provided in FY2023.

Search and Rescue (SAR)

Increasing sea and air traffic through Arctic waters has increased concerns regarding Arctic-area search and rescue (SAR) capabilities. Given the location of current U.S. Coast Guard operating bases, it could take Coast Guard aircraft several hours, and Coast Guard cutters days or even weeks, to reach a ship in distress or a downed aircraft in Arctic waters. The Coast Guard states that "the closest Coast Guard Air Station to the Arctic is located in Kodiak, AK, approximately 820 nautical miles south of Utqiagvik, AK, which is nearly the same distance as from Boston, MA, to Miami, FL."³⁰ In addition to such long distances, the harsh climate complicates SAR operations in the region.

Particular concern has been expressed about cruise ships carrying large numbers of civilian passengers that may experience problems and need assistance. There have been incidents of this kind with cruise ships in waters off Antarctica, and a Russian-flagged passenger ship with 162 people on board ran aground on Canada's Northwest Passage on August 24, 2018.³¹

The Coast Guard is participating in exercises focused on improving Arctic SAR capabilities. Further increasing U.S. Coast Guard SAR capabilities for the Arctic could require one or more of the following: enhancing or creating new Coast Guard operating bases in the region; procuring additional Arctic-capable aircraft, cutters, and rescue boats for the Coast Guard; and adding systems to improve Arctic maritime communications, navigation, and domain awareness. It may also entail enhanced forms of cooperation with navies and coast guards of other Arctic countries.

On May 12, 2011, representatives from the member states of the Arctic Council, meeting in Nuuk, Greenland, signed an agreement on cooperation on aeronautical and maritime SAR in the Arctic.³² The agreement divides the Arctic into SAR areas within which each party has primary responsibility for conducting SAR operations. Figure 2 shows a map of the national areas of SAR responsibility based on the geographic coordinates listed in the Annex to the agreement.

U.S. Arctic Strategic Seaport

Some observers have expressed concern about whether the United States is doing enough militarily to defend its interests in the Arctic, and in some cases have offered recommendations for doing more, such as building ice-hardened Navy or Coast Guard surface ships other than icebreakers, or establishing a strategic seaport in Alaska's north to better support DOD and Coast Guard operations in the Arctic. (Anchorage, in the southern part of Alaska's mainland, was designated a U.S. strategic seaport for supporting DOD operations in 2004.) A June 2023 press report stated that a $600 million project to expand port facilities at Nome, Alaska, will make Nome "the nation's first deep-water Arctic port. The expansion, expected to be operational by the end of the decade, will accommodate not just larger cruise ships of up to 4,000 passengers, but cargo ships to deliver additional goods for the 60 Alaska Native villages in the region, and military vessels to counter the presence of Russian and Chinese ships in the Arctic."³³

Figure 2. Arctic SAR Areas in Arctic SAR Agreement (Based on geographic coordinates listed in the agreement)

Source: Map posted at "Arctic Region," U.S. Department of State, accessed July 11, 2023, at https://www.state.gov/key-topics-office-of-ocean-and-polar-affairs/arctic/.

Conclusion

Chairman Giménez, Ranking Member Thanedar, thank you again for the opportunity to appear before you today, and I will be pleased to respond to any questions the subcommittee may have.

Appendix. Biography

Mr. O'Rourke is a Phi Beta Kappa graduate of the Johns Hopkins University, from which he received his B.A. in international studies, and a valedictorian graduate of the University's Paul Nitze School of Advanced International Studies, where he received his M.A. in the same field.

Since 1984, Mr. O'Rourke has worked as a naval analyst for the Congressional Research Service of the Library of Congress. He has written many reports for Congress on various issues relating to the Navy, Coast Guard shipbuilding, China's naval forces, U.S.-China strategic competition in the South and East China seas, U.S. defense strategy, defense acquisition policy, the international security environment, and the Arctic. He regularly briefs Members of Congress and Congressional staffers, and has testified before Congressional committees on many occasions.

In 1996, he received a Distinguished Service Award from the Library of Congress for his service to Congress on naval issues.

In 2010, he was honored under the Great Federal Employees Initiative for his work on naval, strategic, and budgetary issues.

In 2012, he received the CRS Director's Award for his outstanding contributions in support of the Congress and the mission of CRS.

In 2017, he received the Superior Public Service Award from the Navy for service in a variety of roles at CRS while providing invaluable analysis of tremendous benefit to the Navy for a period spanning decades.

Mr. O'Rourke is the author of several journal articles on naval issues, and is a past winner of the U.S. Naval Institute's Arleigh Burke essay contest. He has given presentations on naval, Coast Guard, and strategy issues to a variety of U.S. and international audiences in government, industry, and academia.