The CHAIRMAN. Our next witness will be Mr. W. H. Rowand, vice president, Nuclear Power Generation Department of the Babcock & Wilcox Co., who will be accomplished by other officials of the company. Mr. Rowand, do you have someone else with you?

STATEMENT OF W. H. ROWAND, VICE PRESIDENT, NUCLEAR POWER GENERATION, BOILER DIVISION, THE BABCOCK & WILCOX CO.; ACCOMPANIED BY GEN. R. H. HARRISON, U.S. ARMY (RETIRED), VICE PRESIDENT IN CHARGE OF ATOMIC ENERGY DIVISION; JOHN LANDIS, MANAGER, WASHINGTON OPERATIONS OFFICE; AND W. R. SMITH, SUPERVISOR, MARINE PROGRAM GROUP

Mr. ROWAND. Mr. Chairman and members of the committee, I would first like to read a statement by Mr. Nielsen, our chairman and president who unfortunately cannot be with us personally. This is Mr. Nielsen's statement. [Reads:]

STATEMENT OF M. NIELSEN, CHAIRMAN AND PRESIDENT, THE BABCOCK & WILCOX Co., AS READ BY WILL H. ROWAND

I appreciate receiving your invitation to appear before this subcommittee of the Committee of Merchant Marine and Fisheries of the House of Representatives to present testimony relative to the proposed lay-up of the Nuclear Ship Savannah. Because of prior commitment, it is impossible for me to accept in person, but in view of the importance to the United States of continued future use of the Savannah, Mr. W. H. Rowand, Vice President, who heads the company's nuclear power generation department, is appearing in my stead. Mr. Rowand is accompanied by Mr. R. H. Harrison, Vice President in charge of the Atomic Energy Division, Mr. J. W. Landis, Head of the company's Washington Operations Office, and Mr. W. R. Smith, head of the company's Marine Nuclear Programs Group. These men are qualified to give you information on those portions of the NS Savannah project which were B&W's responsibility. This brief introductory statement is being submitted to indicate to you that management of Babcock & Wilcox is aware of the significance of these hearings and to pledge the cooperation of the company in the vital task of improving the U.S. Merchant Marine.

As one who was actively involved in the building of the Merchant and Naval Fleets for World War II, I have direct personal knowledge of the importance of both types of vessels to the Nation's well being and security.

The Savannah has made, and is continuing to make, many contributions to advancing the interests of our Government and of the American Merchant Marine. These include:

(1) Her outstanding performance in demonstrating the feasibility of nuclear propulsion in regularly scheduled Merchant Marine operation.

(2) She is an excellent training center for the crews who must man future new nuclear vessels.

(3) She has helped to crystallize and solve many legal and regulatory problems and has opened many ports to atomic shipping.

(4) Her voyage to many different countries of the world have testified to the sincerity of our Government's efforts to use nuclear power for peaceful purposes.

(5) Her operation is producing technological data essential to the design, construction and operation of future nuclear ships.

All of the foregoing have been confirmed in the Maritime Administration's Technical, Operational and Economic Report on the NS Savannah issued in April of this year.

The Germans will have the "Otto Hahn" in operation in 1968. The Japanese Government is actively considering the building of a nuclear merchant ship. I am certain there are others that will follow.

The commanding lead the United States has developed with the Savannah will be dissipated if she is laid up now, and it will be difficult as well as expensive to try to regain the lead at a later date. Furthermore, at a time like the present, when antiquated vessels are being reconditioned, it is inconceivable that this fast, modern ship will be laid up.

Under any conditions, it makes no sense, either technically or economically, to remove from the seas this highly successful example of "The Peaceful Uses of Atomic Energy".

The Savannah is our country's floating laboratory and is indispensable to the solution of continuing technological and legal problems associated with nuclear merchant ship propulsion. Her continuing example will encourage merchant marine operators to invest in nuclear powered vessels in the future. Her cost of operation is insignificant compared with the national investment being made in aerospace activities and supersonic aircraft, yet, the benefits to the Nation will be far more immediate and equally as meaningful.

I submit that it is in the national interest to maintain regular commercial operation of this outstanding vessel."

Mr. ROWAND. That is the end of Mr. Nielsen's statement. I would like to read the one which we have prepared.

It is a priviledge for me to be here today to contribute what Babcock & Wilcox can to this committee's deliberations on the proposed layup of the NS Savannah.

I am Will H. Rowand, vice president in charge of the nuclear power generation department. Those accompanying me, as indicated in Mr. Nielsen's statement, are Mr. R. H. Harrison, vice president in charge of the company's atomic energy division, Mr. J. W. Landis, head of the company's Washington operations office, and Mr. W. R. Smith, head of our nuclear marine group in Lynchburg.

On March 8, 1957-over 10 years ago-Babcock & Wilcox was awarded a contract by the Atomic Energy Commission to design and manufacture the nuclear power plant for the NS Savannah. As an established and successful supplier of conventional steam-generating equipment to the marine and utility industries, it was natural that B. & W. would wish to supply similar equipment for nuclear applications to these industries. We have already obtained a large volume of nuclear utility business, and we fully expect to play a similar role in the nuclear maritime business as it matures.

Following our work on the Savannah's power plant, we have continued to study and develop advanced propulsion systems for merchant ships. We have also continued to provide supporting services, at some considerable sacrifice, to help keep the Savannah running.

It is obvious from the records of her performance and the reactions to her visits reported from the around the world that the Savannah has been eminently successful in achieving the goals for which she was designed and built. She would not have come into being without the backing and support of this committee.

In previous testimony on this subject, it has been emphasized by others that laying up this pioneering ship would actually end the active program for the development of nuclear merchant ships in this country. This seems to us to be the most cogent reason for continuing to operate the Savannah.

The Savannah's reactor has fully met design expectations with respect to technical capability and reliability. The ship has also, of course, crystallized and helped to solve certain legal, regulatory commercial, public relations and labor problems. The simple fact is, however, that there are no other nuclear merchant ships in existence today.

This means that we have no other medium for the experimentation and training that is so sorely needed to bring this new technology out of the cradle. Even if an order for the building of another such ship were issued tomorrow, it would be 2 years before the ship could be launched and another 2 years at least before she would go into operation. In the meantime, the existing pool of trained operators and short-support personnel would go elsewhere. The support facilities would depreciate and suffer from disuse, and much of the Nation's investment in the program would be lost.

We, as a company, certainly would not benefit directly from continued operation of the Savannah. Although we have provided senior technical personnel as nuclear advisers aboard the ship in all of her operations to date, it is imposing quite a hardship on us to do so since these senior personnel are urgently needed in our advanced design. activities. As a matter of fact, one of the advances that might be tested in future operation of the ship is the feasibility of accomplishing the functions of the nuclear adviser with one or more of the highly trained people now employed by the operating company.

My understanding of the Administration's reason for the proposed layup of the Savannah is that a considerable amount of money would be lost by continuing her operation. We have heard figures quoted ranging from $200,000 to $2 million net annually. This range of expenditure seems reasonable compared to the benefits to be gained.

If other U.S. nuclear merchant ships were on the high seas, or even well along on the ways, it might be worthwhile to consider retiring the Savannah. Until that time, however, it would seem prudent to gain as much knowledge and experience as we can from the Nation's

investment.

The actual ship construction costs-not including training, shore facilities, and so forth-as given by the Maritime Administration came to $55 million. The total amount paid to B. & W. for the complete nuclear propulsion system, the unique feature of the ship was only $13,300,000, including the fabrication of the core and the turbine plant. I think that the latter figure is often overlooked.

We in B. & W. take great pride in the accomplishments of the Savannah. I would like to note for the record several conclusions of a Maritime Administration document published last month and referred to by Mr. Nielsen describing the results of the Savannah's first year of experimental commercial operation. As you know, commercial operation was above and beyond her original purpose. This document is titled "Technical, Operational, and Economic Report on the NS Savannah First Year of Experimental Commercial Operation" and is identified as NSS/ECO-A. Some conclusions were:

(1) NUCLEAR PLANT RELIABILITY

During this year of commercial operation, the Savannah's reactor was shut down for unscheduled outages only 4 percent of the time. The reactor was critical 81 percent of the time and on scheduled outages 15 percent of the time. This is a fine record and indicates a high degree of operational reliability.

(2) REACTOR SCRAMS

Reactor scrams are automatic, rapid shutdowns resulting from some operational limit being approached or exceeded, or from some error in instrumentation. The Savannah's reactor suffered only one scram while at sea during this entire year of commercial operation. Only five scrams occurred during power operation in port. This record compares favorably with the experience of many central station reactors, even though the Savannah's reactor was subjected to over 700 load changes during the year.

(3) FUEL FAILURES

No failures in the Savannah's nuclear fuel core have been noted in any of her operations to date.

(4) ROD DRIVES

The control rods which adjust the power of the Savannah's reactor continued to operate satisfactorily during the year.

(5) WASTE DISPOSAL

In accordance with normal practice for the Savannah, no radioactive liquid of any kind was discarded in port waters and only 9 millicuries of total detectable activity were released at sea. There were no accidental releases of active liquid or gas.

(G) OPERATION

The ship traveled an additional 72,000 nautical miles and visited 36 domestic and 36 foreign ports in continuing to demonstrate the peaceful uses of nuclear power in world commerce during the year.

The Savannah was authorized as a demonstration vessel and was built to be safe, reliable, and dependable. She has met these design criteria successfully on all counts. In addition, her operating record in commercial service is a compliment to the ship and to her operators, FAST, Inc.

In summary, it is our opinion that putting the Savannah on the inactive list at this time would seriously jeopardize the long-range U.S. nuclear maritime program.

German nuclear ship: Babcock & Wilcox is participating in an advanced maritime reactor project, the design consultant for the powerplant for the German nuclear ship, Otto Hahn. We understand that several members of this committee, including Representatives Murphy, Hathaway, and Reinecke, accompanied by the committee counsel, Mr. Drewry, recently returned from a visit to Germany and an inspection of the Otto Hahn. Therefore, you may be even better informed on this program than we at the present time. In brief summary of the Otto Hahn's status, however, let me note the following:

(1) The reactor vessel has been fabricated, the internal heat exchanger fabricated and installed, and the entire integral reactor unit. was to have been shipped to Kiel last week for installation in the ship.

(2) The reactor containment vessel and primary shield tank have been erected, and the concrete shielding has been installed on the reactor compartment bulkheads.

(3) As to the ship's schedule, although the Germans originally planned to complete the ship in 36 months, this has since been adjusted to a more realistic 48 to 54 months. I would consider the latter to be a reasonable rate of progress for their first nuclear ship project.

(4) On the present schedule, the Otto Hahn reactor should be taken critical before May 1968. The ship should be ready for sea trials by the middle of 1968.

The Otto Hahn will be used by the West German Government and Euratom for extensive tests to attain second generation, economically competitive nuclear ships based on the advanced maritime reactor plant now being installed. A recent report in a West German technical journal (Atomwirtschaft, August-September 1966) shows how they hope to reach a position competitive with conventionally powered ships by 1970.

It is evident from this and other activities, that other nations are preparing to usurp our leadership in nuclear maritime shipping. Thank you for this opportunity for testifying before your committee today.

Attached to the statement are two photographs taken of the Otto Hahn and of the once through steam generation portion of the combined reactor and steam generator.

The CHAIRMAN. That is a very fine statement.

Mr. ASHLEY. I have no questions.

The CHAIRMAN. Mr. Mailliard.

Mr. MAILLIARD. Thank you, Mr. Chairman. I am interested in the part of your statement in which you talk about the Otto Hahn. It is not quite clear to me exactly what your company's part is in this. You mentioned what has been completed and so forth. To what extent was your company involved?

Mr. ROWAND. B. & W., U.S.A., furnished the engineering design to Deutsche Babcock & Wilcox, an associated company of ours in Germany, and they are part of a consortium that actually furnished the complete design and equipment for the reactor plant for the ship. We are furnishing no manufactured parts.

Mr. MAILLIARD. You are furnishing technical information?

Mr. ROWAND. This is correct. This was completely licensed by the Atomic Energy Commission and the State Department before we did so. Euratom is also involved in the final product.

Mr. MAILLIARD. You refer to the Otto Hahn plant as advanced. I presume you mean advanced over the Savannah plant? Mr. ROWAND. This is correct.

Mr. MAILLIARD. In what respect is it advanced?

Mr. ROWAND. It is what we call an integral reactor and steam generating design as compared to the Savannah being separate pieces, a reactor and steam generator, primary pumps, and so forth. It involves saving of equipment and construction costs compared with the Savannah and also saving of weight.

Mr. MAILLIARD. What would be the order of magnitude? You mentioned $15 million plus for the Savannah plant. Do you know roughly what the comparable costs would be?