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[The following was received for the record.)

NECESSARY WORKING SHIPYARDS It is not just the number of yards that is significant but also the number of working shipbuilding ways. The answer to this question is contained in the Navy/ MARAD study of the U.S. mobilization base for shipbuilding promulgated in April 1978. We understand that this Committee has been furnished a copy of this study. The answer to this question contains classified information which we can supply if required.

Mr. McCLOSKEY. Thank you, Mr. Chairman. I hope, Mr. Secretary, you understand these questions are not directed to embarrass you. They are directed to try to bring out the facts that this committee has been disturbed about for years about the lack of coordination between the Navy and the merchant marine on the matter of the number of ships and the number of shipyards. It is disturbing, after the President has vetoed a bill that asked for greater cooperation between the Navy and the merchant marine, not to get immediate answers to these questions.

But if I may go to the final page of your testimony, "we believe that the merchant marine should be provided parity of treatment in competing with foreign flag shipping." What do you mean when you say the merchant marine should be provided parity of treatment?

Mr. WOOLSEY. That was intended as a general endorsement of the operating subsidy program

Mr. McCLOSKEY. But you do not know how that program operates, do you?

Mr. WOOLSEY. In what particular-

Mr. McCLOSKEY. In any particular. Do you know how the operating subsidy program operates?

Mr. WOOLSEY. I am not familiar with it in detail.
Mr. McCLOSKEY. Then why do you indicate your support of it?

Mr. WOOLSEY. As a general proposition, the Navy is in favor of a strong American merchant marine, serving a number of trade routes around the world, so that ships will be available to us in different parts of the world, at different times, for different contingencies, if that should be necessary.

The CHAIRMAN. Would the gentleman yield?
Mr. McCLOSKEY. I would be glad to yield.

The CHAIRMAN. Mr. Secretary, this committee has gotten the strong impression over the years that it was Navy policy to suppress funding for the American merchant marine, not to talk to the Maritime Administration, but to keep the maximum dollar for construction or capital ships and that was the predicate of the Navy's policy position vis-a-vis the merchant marine.

Now, we have gotten nothing but lip service when this committee, both majority and minority, has attempted to draw out just where we stand today on the Nation's seas. Where we have fallen into 10th place, where the Navy comes up here, and they know that they cannot support a logistical movement. We have an interagency task force and maritime policy group on the executive level, and yet the Defense Department, who is a part of this policymaking group, still does not come out with any strong support for American flag merchant marine when it counts.

I did not mean to take the gentleman's time.

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Mr. MCCLOSKEY. Thank you, Mr. Chairman. I just want to express the hope, Mr. Secretary, that the followup answers to these questions can be precise and comprebensive. I think the number of shipyards that this Nation should have to meet its security is probably the number one question that we address.

Let me move back to your testimony on page two, where you state that, "Our own tanker fleet is not however, expanding and our ships carry only approximately 4 percent of our vital oil innports. This situation, 100, Deeds improvement benever it can be accomplished."

It is true, is it not that al:boagh L. S.-Lag ships carry 4 percent of our oil imports, about 55 percent of our oil in ports are carried by U.S.-owned ships under foreig fag is that correct, sir? Mr. WOOLHY. I bebeve that is a sorocaies correct.

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Mr. McCLOSKEY. I am referring to a GAO report dated August 30, 1978, entitled “The Navy Should Reconsider Plans to Acquire New Fleet Oilers and Ocean Tugs."

Are you following the recommendations of the GAO in that report?

Mr. WOOLSEY. We are probably going to be buying very few fleet tugs in the future, Congressman. That capability, unlike the salvage capability, is available commercially. But fleet oilers are a very different capability from commercially available tankers, and in our judgment, both are required.

There are certainly similarities between the two kinds of ships, and some oiler functions, particularly in the shuttle ship role, can be performed by tankers. We are looking hard at the substitutability now of tankers for oilers, particularly small tankers, of course, but I cannot tell you now that we are going to get out of the business of building oilers.

If I might add one further point. I think one option we are going to have to very seriously consider is service life extension programs for our existing oilers, because funds from our point of view are very limited, and whether or not we are going to be able to afford to buy, or otherwise have new ships, and exactly the kind of ships that we would like to have, is very questionable.

Mr. McCLOSKEY. Mr. Secretary, I do not think the committee questioned at all the Navy's need for a certain number of fast fleet oilers but let me read you the specific recommendation of this GAO report, because I would like to ask you specifically if you are following it.

Recommendations: In coordination with MA and commercial operators, identify areas in merchant marine tanker fleets that could improve national defense value and enhance overall readiness. Specific attention should be given to national defense features, the tankers' role in fleet support, methods effecting responsive and timely availability, and construction alternatives that optimize commercial and defense value.

The origin of that recommendation was our concern, that if commercial tankers exist, that did not have pumps, or hose, or connection compatibility with Navy ships, that we were missing the boat, is that recommendation, being complied with?

Mr. WOOLSEY. As that recommendation is stated, the answer is yes. Because it asks us to pay specific attention. We are doing that vigorously in the study, and otherwise. We are looking at the whole spectrum of service life extension programs on existing oilers of construction of oilers, using commercial specs, of utilization of specially constructed tankers, and national defense features on new tankers, national defense features being retrofitted on existing tankers.

But, as you are aware, Congressman, frequently the problem with the oiler/tanker issue for the Navy is that the type of tanker it is normally desirable to construct, from the Navy's point of view, is the handy size, 30,000 tons or so, or 70,000 tons, maximum. That is not the size tanker that is normally most attractive from the commercial point of view, and therefore there is frequently a mismatch.

Mr. McCLOSKEY. Mr. Secretary, I wonder if you could supply for the record, subsequent to this hearing, a precise statement of the

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plans related to non-U.S.-flag ships, bulk carriers as well as tankers, that would be necessary in case of a national emergency to continue the input of goods to the United States that the Navy has permitted MA to go forward with?

Mr. WOOLSEY. I will.
[The following was received for the record.)

FOREIGN FLAG SHIPS SERVICES In connection with securing the services of ships registered under foreign flag but owned or controlled by U.S. citizens, MARAD has several methods of assuring commitment when needed. These methods include conditions attached to war risk insurance binders and permits to register under foreign flag. We would defer to MARAD to provide the details of their program.

Mr. McCLOSKEY. I understand it is a MA program, but it seems to me that it falls within the national security, and your responsibility, and I would like to have a summary from you of just what ships will be available, and under what programs, and with what degree of certainty, and in what places in the event of a national emergency, say the Iran situation, or the Straits of Formosa require an expeditionary force.

Mr. WOOLSEY. This is non-Union flag?
Mr. McCLOSKEY. Correct.
Mr. WOOLSEY. I will.
Mr. McCLOSKEY. Thank you
The following was received for the record:)

CEPARTMEN OF THE NAVY
CFF CE OF THE SECRETARY
#*5*GTON DC 20350

April 3, 1979

onorable Paul N. Motoskey, Jr.
Panking Minority Member
Committee on Merchant Marine and Fisheries
House of Representatives
wasnington, 1.c. 20575

Dear Mr. McCroskey:

This is in response to your recent letter to Mr. Woolsey concerning his appearance before the House Merchant Marine Subcommittee in connection with the Maritime Administration Authorization Bill for FY 1980.

in accordance with your request, I am attaching a copy of the Summary Record of ty meeting with Mrs. Kreps, Secretary of Commerce, on :2 January 1979. Concerning your questions on shipyards, I am attaching three additional enclosures which should be responsive to your needs.

en respect to your question on foreign-flag shipping, we understand that the Merchant Marine and Fisheries Committee was provided in April 13 with a study prepared by the Joint Chiefs on the utilization of the Erfective U.S. Controlled (EUSC) Fleet. The EUSC fleet consists of U.S. owned or U.S. controlled ships of foreign registry which are subject to call for the use of the U.S. government. Sealift resources identified in the Joint Staff study included the EUSC fleet as one of the several sources of sealift for reinforcement of Europe. Department or Derense (DoD) planning for contingencies includes the use of EUSC assets, as necessary, based on the availability of U.S.-flag shipping. ESC sealift envisioned is minimal, and is comprised of tankers. There is presently sufficient U.S.-flag tanker capacity to support DoD needs for a Wo contingency. However, there is the likelihood of a requiremens ror EUSC shipping to carry sufficient petroleum imports to meet nacional security requirements. While all EUSC ships might not be needed or necessary under contingency conditions, we have no reason to believe that a significant portion would not be made available if required.

Sincerely,

Waruhan

Claskent

Attachments (4)

W. Graham Claytor, Jr.
Secretary of the Navy

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