Risk/Reward: Congressional Research Service report outlines opportunities of Aussie Virginia Class acquisition

There can be no doubt, Australia’s ambition and plans to field a fleet of nuclear-powered, conventionally-armed submarines through the trilateral AUKUS partnership is one of the most transformative developments in our national history.

Indeed, the AUKUS submarine program has often been described as not only the most “transformative industrial endeavour” in our history, but also in our nation’s strategic capability.

At the core of the first stages of Australia’s nuclear submarine fleet is the initial acquisition or rather transfer of up to five US Navy Virginia Class nuclear-powered submarines ahead of the fielding of locally-built SSN-AUKUS submarines, developed in conjunction with the United Kingdom and the United States.

This “optimal” pathway isn’t without its challenges though, with the very real industrial limitations of the United States submarine yards coming to the fore at a time when the qualitative and quantitative edge of the US Navy’s submarine fleet will become increasingly important in both the Atlantic and the Indo-Pacific.

Equally challenging is the industrial capacity of both the United Kingdom and Australia, coupled with their mounting personnel and industrial challenges, that have resulted in increasing challenges to their respective navies.

Nevertheless, all three parties remain resolute in their continued ambition and commitment to the trilateral development of an Australian nuclear-powered submarine capability.

Recognising the tactical and strategic importance of the transfer of these capabilities to the Royal Australian Navy is the US Congressional Research Service (CRS) in a report titled, Navy Virginia-Class Submarine Program and AUKUS Submarine Proposal: Background and Issues for Congress’.

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Benefits v costs v risks

It goes without saying that the complexity of both the regulatory, legislative, and planning processes surrounding the AUKUS agreement are as immense, if not more so, than the technological challenges presented by the transfer of nuclear-powered submarine technology to Australia.

Congress recognised this, asking a particularly poignant question, stating, “How do the potential benefits, costs, and risks of the proposed Pillar I pathway compare to those of a potential alternative of a US-Australia division of labour on SSNs?”

While these questions have been raised both in the United States, the United Kingdom, and Australia, the trilateral partnership has enjoyed some major milestones ahead of the delivery of the first of the three-to-five Virginia Class submarines, namely, the successful embedding of Australian personnel with the US and UK submarine fleets and the establishment of Submarine Rotational Force-West (SRF-W).

The CRS detailed these milestones, stating, “Beginning in 2023, Australian military and civilian personnel would embed with the US and UK navies, and in the US and UK submarine industrial bases, to accelerate the training of Australian personnel. The United States would increase SSN port visits to Australia beginning in 2023, with Australian sailors joining US crews for training and development; the UK would increase visits to Australia beginning in 2026.

“As early as 2027, the United States and UK would begin forward rotations of SSNs out of HMAS Stirling, an Australian naval base near Perth, in Western Australia, to accelerate the development of Australian naval personnel, workforce, infrastructure and regulatory system. Eventually, one UK SSN and up to four Virginia Class SSNs would be rotationally deployed out of HMAS Stirling under the arrangement, which would be called Submarine Rotational Force-West (SRF-W),” the CRS explained.

Each of these foundational pillars serve as the basis for developing Australia’s domestic nuclear workforce, both from an industry workforce and uniformed workforce perspective ahead of Australia accepting the first Virginia Class nuclear submarines at some point between 2027 and the early-to-mid-2030s.

This agreement isn’t without risks for the US Navy, particularly its own submarine force which is facing increasingly capable and numerous Russian and Chinese nuclear submarine fleets, respectively.

Highlighting this impact, the CRS report articulated, “Selling three to five Virginia Class boats to Australia would reduce the size of the US Navy’s SSN force from FY2032 (when the first boat would be sold) until (as estimated by CRS and CBO) sometime between 2040 and 2049.” In response, the CRS and Congressional Budget Office (CBO) stated that while a challenge to the US Navy’s submarine fleet, it isn’t an insurmountable one.

“The Navy states in its FY2024 30-year shipbuilding plan, ‘the Navy anticipates building additional Virginia Class SSNs in the 2030s as replacements for submarines sold to Australia.’ Strictly construed, building additional SSNs as replacements for three to five Virginia Class boats sold to Australia would involve building three to five SSNs that would be in addition to those that were already envisaged as being built under the Navy 30-year shipbuilding plan that preceded the announcement of the AUKUS agreement in September 2021.

The CRS report articulated, “The Navy 30-year shipbuilding plan with 30-year ship procurement profiles that preceded the announcement of the AUKUS agreement in September 2021 is the Navy FY2020 30-year (FY2020-FY2049) shipbuilding plan, which was submitted in March 2019. This 30-year plan includes the procurement of SSNs at a steady rate of two boats per year from FY2021 through FY2049.”

However, this isn’t the whole solution, which the CRS explained, “On this basis, it might be argued that building replacement SSNs for three to five Virginia Class boats sold to Australia would involve building SSNs at a rate of something more than two boats per year.

“At an October 25, 2023, hearing on the submarine industrial base and its ability to support the AUKUS framework before the Seapower and Projection Forces Subcommittee of the House Armed Services Committee, the Navy testified that supporting both US Navy and AUKUS needs would require the increasing the Virginia Class construction rate from 2.0 boats per year to 2.33 boats per year. Compared to a previously planned procurement rate of 2.0 boats per year, a procurement rate of 2.33 boats per year would equate to one additional boat every three years.”

Meeting this planned rate of shipbuilding is still a long way off, particularly given the increasing supply chain constraints and the very real constraints on the existing two US submarine yards that will be further weighed down as production for the Columbia Class ballistic missile submarines continues to ramp-up.

So, solving these challenges requires some innovative thinking among the tripartite members, which spells exciting opportunities for Australia.

Alternatives to ‘divide labour’, maximise deterrence

In response, the CRS presented a number of alternatives to better leverage the respective strengths and maximise the impact of Australian nuclear submarines in this era of mounting geostrategic challenges.

The CRS stated, “the proposed forward rotations of US and UK SSNs to Australia would still be implemented; the size of the US SSN force would be expanded by at least three to five boats, and possibly eight boats, above previous plans so as to provide additional US SSNs for performing Australian SSN missions.”

Unpacking this further, the CRS added, “Australia, instead of using funds to purchase, operate, and maintain its own SSNs, would instead invest those funds in other military capabilities (such as, for example, producing long-range anti-ship missiles and/or purchasing of US-made B-21 long-range bombers), so as to create an Australian capacity for performing non-SSN military missions for both Australia and the United States.”

Alternative to these few options, the CRS presented two additional options, stating, “Under one variation of this potential alternative, the proposed sharing of US naval nuclear propulsion technology and US submarine technology, the proposed Australian investments in Australian and US submarine-construction capability, and the other proposed actions for supporting eventual Australian construction of AUKUS SSNs would continue, and Australia would eventually build its own AUKUS SSNs, reducing at that point the need for US SSNs to perform Australian SSN missions.

“Under another variation of this potential alternative, the performance of Australian SSN missions by US SSNs would continue indefinitely, and instead of implementing the technology sharing, making Australian investments in submarine-construction capability, and taking the other actions that would be needed to eventually build AUKUS SSNs, Australia would continue investing in other military capabilities for supporting a continuing US-Australia division of labour. Under this variation, the size of the US SSN force would eventually be expanded above previously planned levels by eight boats,” the CRS explained further.