Coast Guard: Observations on Arctic Requirements, Icebreakers, and Coordination with Stakeholders
Published: 2011-12-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The gradual retreat of polar sea ice, combined with an expected increase in human activity--shipping traffic, oil and gas exploration, and tourism in the Arctic region--has increased the strategic interest that the United States and other nations have in the Arctic. As a result, the U.S. Coast Guard, within the Department of Homeland Security (DHS), has responsibilities in the Arctic, which are expected to increase. This testimony provides an update of: (1) the extent to which the Coast Guard has taken actions to identify requirements for future Arctic operations; (2) issues related to the U.S. icebreaking fleet; and (3) the extent to which the Coast Guard is coordinating with stakeholders on Arctic issues. This statement is based on GAO-10-870 , issued in September 2010, and includes selected updates. For the selected updates, GAO analyzed Coast Guard, Department of Defense (DOD,) and other related documents on Arctic operations and capabilities. GAO also interviewed Coast Guard and DOD officials about efforts to identify Arctic requirements and coordinate with stakeholders.
section_title: What GAO Found
paragraphs: The Coast Guard has taken a variety of actions--from routine operations to a major analysis of mission needs in the polar regions--to identify its Arctic requirements. The routine operations have helped the Coast Guard to collect useful information on the capability of its existing assets to operate in cold climates and strategies for overcoming logistical challenges presented by long-distance responses to incidents, among other things. Other operational actions intended to help identify Arctic requirements include the establishment of temporary, seasonal operating locations in the Arctic and seasonal biweekly Arctic overflights, which have helped the Coast Guard to identify performance requirements and test personnel and equipment capabilities in the Arctic. The Coast Guard's primary analytical effort to identify Arctic requirements is the High Latitude Study, a multivolume analysis that is intended to, in part, identify the Coast Guard's current Arctic capability gaps and assess the degree to which these gaps will impact future missions. This study also identifies potential solutions to these gaps and compares six different options--identified as Arctic force mixes--to a baseline representing the Coast Guard's current Arctic assets. However, given current budget uncertainty and the Coast Guard's recent acquisition priorities, it may be a significant challenge for the agency to acquire the assets that the High Latitude Study recommends. The most significant issue facing the Coast Guard's icebreaker fleet is the growing obsolescence of these vessels and the resulting capability gap caused by their increasingly limited operations. In 2010, Coast Guard officials reported challenges fulfilling the agency's statutory icebreaking mission. Since then, at least three reports--by the DHS Inspector General and Coast Guard contractors--have further identified the Coast Guard's challenges to meeting its current and future icebreaking mission requirements in the Arctic with its existing polar icebreaker fleet. Prior GAO work and these reports also identify budgetary challenges the agency faces in acquiring new icebreakers. Given these issues and the current budgetary climate, it is unlikely that the Coast Guard will be able to fund the acquisition of new icebreakers through its own budget, or through alternative financing options. Thus, it is unlikely that the Coast Guard will be able to expand the U.S. icebreaker fleet to meet its statutory requirements, and it may be a significant challenge for it to just maintain its existing level of icebreaking capabilities due to its aging fleet. In 2010, GAO reported the Coast Guard coordinates with various stakeholders on Arctic operations and policy, including foreign, state, and local governments, Alaskan Native governments and interest groups, and the private sector. GAO also reported that the Coast Guard coordinates with federal agencies, such as the National Science Foundation, National Oceanic and Atmospheric Administration, and DOD. More recently, the Coast Guard has partnered with DOD through the Capabilities Assessment Working Group--an interagency coordination group established in May 2011--to identify shared Arctic capability gaps as well as opportunities and approaches to overcome them, to include making recommendations for near-term investments. The establishment of this group helps to ensure collaboration between the Coast Guard and DOD addresses near-term capabilities in support of current planning and operations.
section_title: What GAO Recommends
paragraphs: GAO is not making new recommendations in this statement. GAO previously recommended that the Coast Guard communicate with key stakeholders on the process and progress of its Arctic planning efforts. DHS concurred with this recommendation and is in the process of taking corrective action.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the Coast Guard’s efforts to  identify Arctic requirements and to coordinate with stakeholders on Arctic  issues and operations. The retreat of sea ice, combined with an expected  increase in human activity—shipping traffic and oil and gas exploration— has increased the strategic interest that the United States and other  nations have in the Arctic region. For example, in 2011, northern shipping  routes opened during the summer months, which permitted more than 40  vessels to transit between June and October 2011. As a result of these  and other anticipated changes in the Arctic, the Coast Guard is expected  to face increasing responsibilities in the waters off of Alaska’s 44,000  miles of coast. In addition, the United States has developed national-level  policies that guide the actions of the Coast Guard and other stakeholders.  These policies indicate that the United States has an enduring interest in  working collaboratively with other nations to address the emerging  challenges arising from the effects of climate change and globalization in  the Arctic, and they identify Arctic national security needs including  protecting the environment, managing resources, and supporting  scientific research.
Since the Arctic is primarily a maritime domain, the Coast Guard plays a  significant role in Arctic policy implementation and enforcement. The  Coast Guard is a multimission, maritime military service within the  Department of Homeland Security (DHS) that has responsibilities  including maritime safety, security, environmental protection, and national  defense, among other missions. emerges in the Arctic and human activity increases, 9 of the Coast  Guard’s 11 statutory missions will take on additional importance, including  Defense Readiness, Ice Operations, and Marine Environmental  Protection.
The Coast Guard’s 11 statutory mission areas include: Aids to Navigation; Defense  Readiness; Drug Interdiction; Ice Operations; Living Marine Resources; Marine  Environmental Protection; Marine Safety; Migrant Interdiction; Other Law Enforcement;  Ports, Waterways, and Coastal Security; and Search and Rescue.
The Coast Guard currently has limited capacity to operate in the waters  immediately below the Arctic Circle, such as the Bering Sea. Increasing  responsibilities in an even larger geographic area, especially in the harsh  and remote conditions of the northern Arctic, will further stretch the  agency’s capacity. See appendix I for a map of the Arctic boundary and  the Arctic Circle line of latitude.
Presently, all of the Coast Guard’s assets are based well below the Arctic  Circle, so Coast Guard operations above the Arctic Circle are constrained  by several factors, including long transit times for surface vessels and  aircraft to cover vast distances to reach the Arctic Circle. When the Coast  Guard is able to respond to an incident, its surface and air assets are also  limited by fuel capacity and the distance to fuel sources. Figure 1  compares the State of Alaska to the lower 48 states to illustrate the large  distances between Coast Guard assets and Point Barrow (the  northernmost point of land in Alaska).
My statement today discusses (1) the extent to which the Coast Guard  has taken actions to identify and report on requirements for future Arctic  operations; (2) issues related to the U.S. icebreaking fleet; and (3) the  extent to which the Coast Guard is coordinating with stakeholders on  Arctic issues.
This statement is based on our September 2010 report on the Coast  Guard’s coordination with stakeholders on Arctic policy and efforts to  identify Arctic requirements and capability gaps, along with selected  updates we obtained in November 2011. For our September 2010 report,  we interviewed officials from the Coast Guard, other federal entities, and  the International Maritime Organization, as well as state, local, and  Alaska Native stakeholders. We also reviewed Coast Guard documents  related to coordination with stakeholders on Arctic issues, efforts to plan  for increased Arctic activity, and challenges and factors affecting the  Coast Guard’s Arctic operations. More detailed information on the scope  and methodology for our September 2010 report can be found in that  report. For the selected updates, we analyzed Coast Guard, Department  of Defense (DOD,) and other related documents on Arctic operations and  capabilities. We interviewed Coast Guard and DOD officials about efforts  to identify Arctic requirements and coordinate with stakeholders. We also  reviewed how a recent effort aligns with key practices we have identified  for enhancing and sustaining interagency coordination. For new  information that was based on work not previously reported, we obtained  Coast Guard views on our findings and incorporated technical comments  where appropriate. We conducted the performance audit work that  supports this statement in accordance with generally accepted  government auditing standards.
subsections: section_title: Background
subsections: section_title: Diminishing Ice Opens Potential for Increased Human Activity in the Arctic
paragraphs: Scientific research and projections of the changes taking place in the  Arctic vary, but there is a general consensus that Arctic sea ice is  diminishing and some scientists have projected that the Arctic will be ice- diminished for periods of time in the summer by as soon as 2040.recently as September 2011, scientists at the U.S. National Snow and Ice  Data Center reported that the annual Arctic minimum sea ice extent for  2011 was the second lowest in the satellite record, and 938,000 square  miles less than the 1979 to 2000 average annual minimum. These  environmental changes in the Arctic are making maritime transit more  feasible and are increasing the likelihood of human activity including  tourism, oil and gas extraction, commercial shipping, and fishing in the   As  region.characteristics still provide challenges to surface navigation in the Arctic,  including large amounts of winter ice and increased movement of ice from  spring to fall. Increased movement of sea ice makes its location less  predictable, which is likely to increase the risk for ships to become  trapped or damaged by ice impacts.
section_title: Coast Guard Faces Challenges to Arctic Operations
paragraphs: As we reported in September 2010, the Coast Guard faces challenges to  Arctic operations including limited maritime domain awareness, assets,  and infrastructure. In a 2008 report to Congress, the Coast Guard stated  that maritime domain awareness in the Arctic is critical to effective  engagement in the Arctic as activity increases. However, several  factors—including (1) inadequate Arctic Ocean and weather data, (2) lack  of communication infrastructure, (3) limited intelligence information, and  (4) lack of a physical presence in the Arctic—create challenges for the  Coast Guard in achieving maritime domain awareness in the Arctic. The  Coast Guard also faces limitations in assets and infrastructure in the  Arctic. These include (1) an inadequate portfolio of small boats for Arctic  operations, (2) the environmental impact of Arctic conditions on  helicopters and airplanes, and (3) a lack of cutter resources for Arctic  patrols.
section_title: Coast Guard Is Identifying Arctic Requirements, but Funding Is Uncertain
subsections: section_title: Coast Guard’s Efforts to Identify Arctic Requirements
paragraphs: The Coast Guard has taken a variety of actions to identify its Arctic  requirements. As we reported in September 2010, these encompass a  range of efforts including both routine mission operations and other  actions specifically intended to help identify Arctic requirements. Through  routine mission operations, the Coast Guard has been able to collect  useful information on the capability of its existing assets to operate in cold  climates, strategies for overcoming logistical challenges presented by  long-distance responses to incidents, and the resources needed to  respond to an oil spill in a remote and cold location, among other things.  We also reported that the Coast Guard had efforts underway specifically  designed to inform its Arctic requirements, including the establishment of  seasonal, temporary operating locations in the Arctic and biweekly Arctic  overflights. The temporary operating locations were established during  the summers of 2008 through 2010, and have helped the Coast Guard  identify performance requirements and obstacles associated with the  deployment of small boats, aircraft, and support staff above the Arctic  Circle. The seasonal (March-November) biweekly Arctic overflights were  initiated in October 2007 to increase the agency’s maritime domain  awareness, test personnel and equipment capabilities in the Arctic, and  inform the Coast Guard’s Arctic requirements, among other things. As  we reported in September 2010, these efforts addressed elements of  three key practices for agencies to better define mission requirements  and desired outcomes: (1) assessing the environment; (2) involving  stakeholders; and (3) aligning activities, core processes, and resources.
section_title: High Latitude Study Identifies Arctic Requirements
paragraphs: The Coast Guard’s primary analytical effort to identify and report on Arctic  requirements, the High Latitude Study (the Study), identifies the Coast  Guard’s responsibilities in the Polar regions, discusses the nature of the  activities it must perform over the next 30 years, and concludes with a  high-level summary of the Coast Guard’s material and nonmaterial needs  to meet the requirements. Specifically, the Study identifies the Coast  Guard’s current capability gaps in the Arctic and assesses the degree to  which these gaps will impact future missions. Of the Coast Guard’s 11  mission areas, 9 are expected to experience future demand in the Arctic  region. The Study identifies several current capability gaps that affect the  majority of these mission areas. Specifically, gaps in communications  capabilities affect all 9 mission areas, while deficiencies in the information  available about sea ice coverage in the Arctic affects 8 mission areas.The other major gaps that affect the majority of mission areas are related  to the lack of polar icebreaking capacity, which will be discussed later in  this statement.
Of the 9 mission areas that the Coast Guard will need to carry out in the  Arctic, the Study identifies 7 mission areas expected to be significantly or  moderately impacted by current capability gaps. In general, these missions  all address the protection of important national interests in the Arctic or the  safety of mariners and the environment. See appendix II for more detail  about the degree of impact that current capability and capacity gaps are  expected to have on future Coast Guard mission performance.
The Study then identifies potential solutions to specifically address gaps  in communications and electronic navigation capabilities, recommending  that the Coast Guard acquire more than 25 additional communication or  navigation facilities for Arctic operations. In addition to these capabilities,  the Study compares six different options—identified as Arctic force  mixes—to a baseline representing the Coast Guard’s current Arctic  assets. These force mixes add assets to the existing baseline force mix,  and contain different combinations of cutters (including icebreakers),  aircraft, and forward operating locations and are designed to mitigate the  mission impacts caused by current capability gaps. See appendix III for a  description of the assets included in each Arctic force mix.
The High Latitude Study also includes a risk analysis that compares the  six Arctic force mixes in terms of the ability of each force mix to reduce  the risk that is expected to exist in the future Arctic environment. Risk  reduction is determined in part by (1) identifying a list of potential Arctic  maritime incidents requiring Coast Guard support, such as maritime  accidents resulting in multiple casualties or a major oil spill, or both; (2)  quantifying the likelihood that these search and rescue and maritime  environmental protection incidents could occur and the resulting impact  should they occur; and (3) assessing the relative effectiveness, or risk  reduction, of force packages the Coast Guard may employ to respond to  those incidents. The intent of the analysis is to provide information on  risk-reduction alternatives to inform the acquisition process. According to  the Study, the baseline Arctic force mix reduces less than 1 percent of  risk in the Arctic because this patrol capability cannot reasonably respond  to northern area incidents, while the six other Arctic force mixes reduce  between 25 and 92 percent of risk annually, though the amount of risk  reduced varies by season. See appendix III for the amount of annual risk  in the Arctic reduced by each force mix.
section_title: Funding for Identified Arctic Requirements Is Challenging and Uncertain
paragraphs: As we reported in September 2010, administration budget projections  indicated that DHS’s annual budget was expected to remain constant or  decrease over the next 10 years. Moreover, senior Coast Guard officials,  based in Alaska, reported that resources for Arctic operations had already  been reduced and were inadequate to meet existing mission  requirements in Alaska, let alone expanded Arctic operations. These  officials also reported a more than 50 percent year-to-year reduction  between 2005 and 2009 in the number of large cutters available for  operations in their region. Officials also expressed concern that the  replacement of the 12 older high-endurance cutters with 8 new cutters  may exacerbate this challenge. Given the reductions that have already  taken place, as well as the anticipated decrease in DHS’s annual budget,  the long-term budget outlook for Coast Guard Arctic operations is  uncertain. The challenge of addressing Arctic resource requirements in a  flat or declining budget environment is further underscored by recent  budget requests that have identified the Coast Guard’s top priority as the  recapitalization of cutters, aircraft, communications, and infrastructure— particularly with regard to its Deepwater program. Recent budget  requests also have not included funding for Arctic priorities, aside from  the annual operating costs associated with existing icebreakers.
This budget challenge is exacerbated when the costs of the High Latitude  Study’s proposed resource requirements are taken into account.  Specifically, the Study estimates that the cost of acquiring the assets  associated with each of the six Arctic force mixes would range from $1.01  billion to $6.08 billion, and their corresponding annual operating costs  would range from $72.3 million to $411.3 million. See appendix III for the  estimated acquisition cost of each Arctic force mix. Additionally, the  estimated cost for the recommended communications and electronic  navigation capabilities for Arctic operations is about $23.4 million. Given  current budget uncertainty and the Coast Guard’s recent acquisition  priorities, it may be a significant challenge for the Coast Guard to acquire  the assets that the Study recommends.
section_title: Coast Guard Continues to Face Challenges Related to Icebreakers
paragraphs: The most significant issue facing the Coast Guard’s icebreaker fleet is the  growing obsolescence of these vessels and the resulting capability gap  caused by their increasingly limited operations. As we noted in our 2010  report, Coast Guard officials reported challenges fulfilling the agency’s  statutory icebreaking mission, let alone its standing commitment to use  the icebreakers to support the Navy as needed. Since then, at least  three reports have further identified the Coast Guard’s challenges to  meeting its current and future icebreaking mission requirements in the  Arctic with its existing polar icebreaker fleet, as well as the challenges it  faces to acquire new icebreakers. The Coast Guard’s existing fleet  includes three icebreakers that are capable of operating in the Arctic:
Polar Sea (inoperative since 2010): The Polar Sea is a heavy   commissioned in 1978 with an expected 30-year  icebreaker lifespan. A major service life extension project, completed in 2006,  was expected to extend the Polar Sea’s service life through 2014.  However, in 2010, the Polar Sea experienced major engine problems  and is now expected to be decommissioned in 2011. According to a  Coast Guard budget official, this will allow its resources to be  redirected toward the ongoing service life extension of the Polar Star.  Fig. 2 below shows the Polar Sea in dry dock.
Polar Star (inoperative since 2006): The Polar Star is a heavy  icebreaker commissioned in 1976 with an expected 30-year lifespan.  The Polar Star is currently undergoing a $62.8 million service life  extension, and is expected to return to service in 2013. The ongoing  service life extension is expected to extend the Polar Star’s service  life through at least 2020.
Healy (operative): The Healy is a medium icebreaker, commissioned  in 2000, with an expected 30-year lifespan. The Healy is less capable  than the heavy icebreakers and is primarily used for scientific  missions in the Arctic. As a medium icebreaker, the Healy does not  have the same icebreaking capabilities as the Polar Sea and Polar  Star. Because of this, it cannot operate independently in the ice  conditions in the Antarctic or ensure timely access to some Arctic  areas in the winter.
ABS Consulting, U.S. Polar Icebreaker Recapitalization: A Comprehensive Analysis and  Its Impacts on U.S. Coast Guard Activities, prepared for the United States Coast Guard,  (October 2011). icebreakers (Recapitalization report), which assessed options for  recapitalizing its existing icebreaker fleet, including building new  icebreakers, or reconstructing the Polar Sea and Polar Star to meet  mission requirements, among other options. This October 2011 report  found that the most cost-effective option would be to build two new  heavy icebreakers, while performing minimal maintenance to keep the  existing icebreakers operational while construction is taking place. In  addition to having the lowest acquisition cost of any option—at $2.12  billion—this option also has the lowest risk due to the complexity (and  therefore risk) associated with the other options of performing major  service life extensions or reconstructing the Polar Sea and Polar Star.  The risk associated with these options is driven by high levels of  uncertainty in terms of cost, scheduling, and technical feasibility for  reconstructing the existing fleet. Given the time frames associated with  building new icebreakers, the Recapitalization report concluded that the  Coast Guard must begin planning and budgeting immediately.
High Latitude Study.
ABS Consulting, High Latitude Study Mission Analysis Report. medium icebreakers). The Study does provide cost estimates for  acquiring the recommended icebreakers, but it does not directly  assess the feasibility of its recommendations.
subsections: section_title: Funding Limitations Remain the Main Challenge Related to Icebreakers
paragraphs: As mentioned above, the Coast Guard faces budget uncertainty and it  may be a significant challenge for the Coast Guard to obtain Arctic  capabilities, including icebreakers. Given our analysis of the challenges  that the Coast Guard already faces in funding its existing acquisition  programs, it is unlikely that the agency’s budget could accommodate the  level of additional funding (estimated by the High Latitude Study to range  from $4.14 billion to $6.9 billion) needed to acquire new icebreakers or  reconstruct existing ones. The Recapitalization report similarly concludes  that the recapitalization of the polar icebreaker fleet cannot be funded  within the existing or projected Coast Guard budget. All three reports  reviewed alternative financing options, including the potential for leasing  icebreakers, or funding icebreakers through the NSF or DOD. The  Recapitalization report noted that a funding approach similar to the  approach used for the Healy, which was funded through the fiscal year  1990 DOD appropriations, should be considered.Guard has a more immediate need than DOD to acquire Arctic  capabilities, including icebreakers, making it unlikely that a similar funding  approach would be feasible at this time. For more details on Coast Guard  funding challenges and options specific to icebreakers, see appendix IV.
section_title: Coast Guard Coordinates with Numerous Stakeholders on Arctic Operations
paragraphs: The Coast Guard continues to coordinate with various stakeholders on  Arctic operations and policy, including foreign, state, and local  governments, Alaskan Native governments and interest groups, and the  private sector. In September 2010, we reported that the Coast Guard has  been actively involved in both bilateral and multilateral coordination efforts  such as the Arctic Council. The Coast Guard also coordinates with  state, local, and Alaskan Native governments and interest groups;  however, some of these stakeholders reported that they lack information  on both the Coast Guard’s ongoing planning efforts and future approach  in the Arctic. In response to these concerns, in 2010 we recommended  that the Commandant of the Coast Guard ensure that the agency  communicates with these stakeholders on the process and progress of its  Arctic planning efforts. The Coast Guard agreed with our  recommendation and is in the process of taking corrective action. For  example, in April 2011, the Coast Guard issued a Commandant  Instruction that emphasizes the need to enhance partnerships with Arctic  stakeholders. Additionally, in August 2011, the Commandant participated  in a field hearing in Alaska which included discussion about the Coast  Guard’s Arctic capability requirements.
The Coast Guard also coordinates with federal agencies, such as the  NSF, National Oceanic and Atmospheric Administration (NOAA), and  DOD, and is involved with several interagency coordination efforts that  address aspects of key practices we have previously identified to help  enhance and sustain collaboration among federal agencies. For  example, as discussed above, the Coast Guard collaborates with the NSF  to manage the nation’s icebreaker fleet, including scheduling icebreaker  time for research activities, while NOAA provides the Coast Guard with  weather forecasts and warnings, as well as information about ice  concentration and type. Additionally, the Coast Guard is involved with  interagency efforts such as the Interagency Policy Committee on the  Arctic, created in March 2010 to coordinate governmentwide  implementation of National Security Presidential Directive 66 / Homeland  Security Presidential Directive 25.
Since our September 2010 report, the Coast Guard has partnered with  DOD on another interagency coordination effort, the Capabilities  Assessment Working Group. DHS and DOD established the working  group in May 2011 to identify shared Arctic capability gaps as well as  opportunities and approaches to overcome them, to include making  recommendations for near-term investments. DHS assigned the Coast  Guard lead responsibility for the working group, which was directed to  focus on four primary capability areas when identifying potential  collaborative efforts to enhance Arctic capabilities, including near-term  investments. Those capability areas include maritime domain awareness,  communications, infrastructure, and presence. The working group was  also directed to identify overlaps and redundancies in established and  emerging DOD and DHS Arctic requirements. This working group will  address several of the key practices we have identified—articulating a  common outcome; identifying and addressing needs by leveraging  resources; and reinforcing agency accountability for the effort through a  jointly developed report containing near-term investment  recommendations. The establishment of the working group helps to  ensure that collaboration between the Coast Guard and DOD is taking  place to address near-term capabilities in support of current planning and  operations; however, upon the completion of the report in January 2012,  the working group is expected to be dissolved.
GAO is also conducting an ongoing review of DOD’s May 2011 Report to  Congress on Arctic Operations and the Northwest Passage that was  directed by the House Committee on Armed Services and will report on  our results in January of next year. That report will assess the extent to  which DOD’s Arctic Report addressed congressional requirements and  DOD’s efforts to identify and prioritize the capabilities needed to meet  national security objectives in the Arctic, including through collaboration  with the Coast Guard.
Chairman LoBiondo, Ranking Member Larsen, and Members of the  Subcommittee, this completes my prepared statement. I would be happy  to respond to any questions you may have at this time.
section_title: GAO Contacts and Staff Acknowledgments
paragraphs: For information about this statement please contact Stephen L. Caldwell,  Director, Homeland Security and Justice, at (202) 512-9610, or  caldwells@gao.gov. Contact points for our Office of Congressional  Relations and Public Affairs may be found on the last page of this  statement. Other individuals making key contributions to this testimony  include Dawn Hoff (Assistant Director), Elizabeth Kowalewski (Analyst-In- Charge), Christopher Currie, Katherine Davis, Geoffrey Hamilton, Adam  Hoffman, John Pendleton, Timothy Persons, Steven Putansu, Jodie  Sandel, David Schmitt, Amie Steele, Esther Toledo, and Suzanne Wren.
section_title: Appendix I: Map of the Arctic Boundary
paragraphs: This appendix provides a map of the Arctic boundary, as defined by the  Arctic Research and Policy Act. As discussed in the report, the Coast  Guard currently has limited capacity to operate in the waters immediately  below the Arctic Circle, such as the Bering Sea. Increasing  responsibilities in an even larger geographic area, especially in the harsh  and remote conditions of the northern Arctic, will further stretch the  agency’s capacity.
section_title: Appendix II: Impact of Capability Gaps on Coast Guard Mission Performance
paragraphs: This appendix provides information on the degree to which the Coast  Guard’s existing capability gaps in the Arctic are expected to impact  future mission performance. Of the Coast Guard’s 11 mission areas, 9  are expected to experience future demand in the Arctic, and the degree to  which existing capability gaps are expected to impact these missions has  been classified as Significant, Moderate, or Low. Examples of how these  gaps are expected to impact each mission are also included below.
section_title: Appendix III: Arctic Force Mixes
paragraphs: This appendix provides information on potential solutions to the Coast  Guard’s existing capability gaps in the Arctic. The High Latitude Study  compares six Arctic force mixes in terms of the ability of each force mix to  reduce the risk that is expected to exist in the future Arctic environment.  The force mixes add assets to the baseline force mix (which represents  the Coast Guard’s current Arctic assets) and include different  combinations of cutters (including icebreakers), aircraft, and forward  operating locations. The specific asset combinations for each force mix  are described below. The estimated acquisition cost for each Arctic force  mix and the percent of risk the force mix is expected to reduce in the  Arctic is also shown below.
section_title: Appendix IV: Funding Limitations Related to Icebreakers
paragraphs: This appendix provides an overview of the funding challenges the Coast  Guard faces related to icebreakers. These include limitations in the Coast  Guard’s existing and projected budget, as well as alternative financing  options.
subsections: section_title: Coast Guard Budget Limitations
paragraphs: The Coast Guard faces overall budget uncertainty, and it may be a  significant challenge for the Coast Guard to obtain Arctic capable  resources, including icebreakers. For more than 10 years, we have noted  Coast Guard difficulties in funding major acquisitions, particularly when  acquiring multiple assets at the same time. For example, in our 1998  report on the Deepwater program, we noted that the agency could face  major obstacles in proceeding with that program because it would  consume virtually all of the Coast Guard’s projected capital spending. In  our 2008 testimony on the Coast Guard budget, we again noted that  affordability of the Deepwater acquisitions would continue to be a major  challenge to the Coast Guard given the other demands upon the agency  for both capital and operations spending. In our 2010 testimony on the  Coast Guard budget, we noted that maintaining the Deepwater  acquisition program was the Coast Guard’s top budget priority, but would  come at a cost to operational capabilities. This situation, of the  Deepwater program crowding out other demands, continued, and in our  report of July this year we noted that the Deepwater program of record  was not achievable given projected Coast Guard budgets. Given the  challenges that the Coast Guard already faces in funding its Deepwater  acquisition program, it unlikely that the agency’s budget could  accommodate the level of additional funding (estimated by the High  Latitude Study to range from $4.14 billion to $6.9 billion) needed to  acquire new icebreakers or reconstruct existing ones.
The U.S. Polar Icebreaker Recapitalization Report contains an analysis of  the Coast Guard’s budget which also concludes that the recapitalization  of the polar icebreaker fleet cannot be funded within the existing or  projected Coast Guard budget. This analysis examined the impact that  financing a new polar icebreaker would have on Coast Guard operations  and maintenance activities, among others. The report found that given the  Coast Guard’s current and projected budgets, as well as its mandatory  budget line items, there are insufficient funds in any one year to fully fund  one new polar icebreaker. Additionally, though major acquisitions are  usually funded over several years, the incremental funding obtained from  reducing or delaying existing acquisition projects would have significant  adverse impact on all Coast Guard activities.
This means that it is unlikely that the Coast Guard will be able to expand  the U.S. icebreaker fleet to meet its statutory requirements as identified   the Commandant of by the High Latitude Study. As we reported in 2010, the Coast Guard has recognized these budgetary challenges, noting that  the Coast Guard would need to prioritize resource allocations, while  accepting risk in areas where resources would be lacking. Given that it  takes 8-10 years to build an icebreaker, and the Coast Guard has not yet  begun the formal acquisition process, the Coast Guard has already  accepted some level of risk that its statutory mission requirements related  to icebreakers will continue to go unmet.
section_title: Limitations on Alternative Financing Options
paragraphs: The three reports discussed earlier in this statement all identify funding as  a central issue in addressing the existing and anticipated challenges  related to icebreakers. In addition to the Coast Guard budget analysis  included in the Recapitalization report, all three reports reviewed  alternative financing options, including the potential for leasing  icebreakers, or funding icebreakers through the National Science  Foundation (NSF) or the Department of Defense (DOD). Although DOD  has used leases and charters in the past when procurement funding  levels were insufficient to address mission requirements and capabilities,  both the Recapitalization report and the High Latitude Study determined  that the lack of existing domestic commercial vessels capable of meeting  the Coast Guard’s mission requirements reduces the availability of  leasing options for the Coast Guard. Additionally, an initial cost-benefit  analysis of one type of available leasing option included in the  Recapitalization report and the High Latitude Study suggests that it may  ultimately be more costly to the Coast Guard over the 30-year icebreaker  lifespan. Another alternative option addressed by the Recapitalization  report would be to fund new icebreakers through the NSF. However, the  analysis of this option concluded that funding a new icebreaker through  the existing NSF budget would have significant adverse impacts on NSF  operations and that the capability needed for Coast Guard requirements  would exceed that needed by the NSF.
section_title: Related GAO Products
paragraphs: Coast Guard: Action Needed As Approved Deepwater Program Remains  Unachievable, GAO-11-743, Washington, D.C.: July 28, 2011.
Coast Guard: Efforts to Identify Arctic Requirements Are Ongoing, but  More Communication about Agency Planning Efforts Would Be  Beneficial, GAO-10-870, Washington, D.C.: September 15, 2010.
Coast Guard: Observations on the Requested Fiscal Year 2011 Budget,  Past Performance, and Current Challenges, GAO-10-411T, Washington,  D.C.: February 25, 2010.
Coast Guard: Observations on the Fiscal Year 2010 Budget and Related  Performance and Management Challenges, GAO-09-810T, Washington,  D.C.: July 7, 2009.
Homeland Security: Enhanced National Guard Readiness for Civil  Support Missions May Depend on DOD’s Implementation of the 2008  National Defense Authorization Act, GAO-08-311, Washington, D.C.: April  16, 2008.
Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent  Performance, and Related Challenges, GAO-08-494T, Washington, D.C.:  March 6, 2008.
Results-Oriented Government: Practices That Can Help Enhance and  Sustain Collaboration among Federal Agencies, GAO-06-15. Washington,  D.C.: October 21, 2005.
Coast Guard Acquisition Management: Deepwater Project’s Justification  and Affordability Need to Be Addressed More Thoroughly,  GAO/RCED-99-6, Washington, D.C.: October 26, 1998.
Executive Guide: Effectively Implementing the Government Performance  and Results Act, GAO/GGD-96-118, Washington D.C.: June 1996.
This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.