Introducing the ICE Pact

The United States, Canada, and Finland agree to collaborate in building icebreakers. A good sign, but the details will matter.

President of the Republic of Finland Alexander Stubb, President of the United States Joe Biden and Prime Minister of Canada Justin Trudeau in Washington D.C. on 10 July 2024. Photo: Emmi Syrjäniemi/Office of the President of the Republic of Finland.

The ICE Pact

Yesterday, alongside the NATO Summit, President Biden, President Stubb, and Prime Minister Trudeau released a joint statement on the new ICE (Icebreaker Collaboration Effort) Pact. Here is the joint statement, in its entirety:

As leaders of Arctic nations, Canada, Finland, and the United States, recognizing the enduring importance of the region to our collective economic, climate, and national security, we resolve to deepen our cooperation to ensure the polar and Arctic regions remain peaceful, cooperative, and prosperous. As part of this effort, we are announcing an enhanced trilateral partnership called the Icebreaker Collaboration Effort or ICE Pact.

Through ICE Pact, our governments will build on our longstanding and ongoing bilateral ties. As the first initiative under ICE Pact, we will commit to a collaborative effort to continue building best-in-class Arctic and polar icebreakers and other Arctic and polar capabilities in each of our respective countries by sharing expertise, information, and capabilities. Over the next six months, we also will jointly develop an implementation plan for this collaboration to build these highly complex and critical vessels for our allies and partners with interests and responsibilities in the Arctic and Antarctic regions.

This partnership will strengthen the shipbuilding industries in each nation with the goal of creating good-paying jobs in shipyards, marine equipment manufacturers, and many other related services across all three countries. In the Arctic, new, faster shipping lanes hold the potential to create new economic opportunities and drive down shipping costs. And in the Antarctic, our partnership can also foster increased scientific research and international collaboration.

This partnership is about more than the collective production of polar icebreakers and capabilities, including Arctic and polar-capable ships. It is about providing the capability for like-minded nations to uphold international rules, norms, and standards to sustain peace and stability in the Arctic and Antarctic regions for generations to come.

The official Biden-Harris Administration Announcement of the ICE Pact describes three initial aspects of the trilateral cooperation:

enhanced information exchange between the United States, Canada, and Finland;

collaboration on workforce development;

and an invitation to allies and partners to purchase icebreakers built in American, Canadian, or Finnish shipyards.

The Biden Admin’s announcement also adds more detail concerning the next step:

By the end of the year, the United States, Canada, and Finland will develop a joint memorandum of understanding that will outline a framework for how this arrangement will be implemented within each country – and a mechanism for adding or including additional allies and partners as participants. The process to develop this non-binding arrangement will be conducted through a regular trilateral consultation process during this period.

The ICE Pact has been greeted with a lot of hope across social media. I, too, am hopeful that something positive (specifically actual icebreakers, built relatively quickly, for the U.S. Coast Guard) will come from this effort.

Hope, But Tempered by Experience

But my hope is tempered by experience. Here is an excerpt from another Joint Statement:

The Arctic provides new economic opportunities, but environmental changes such as the diminishing of sea ice raise environmental concerns. The United States and Finland share a commitment to clean air and water and environmental protection, including the reduction of particulate matter, and with it, black carbon. Our two countries will use our cold-weather proficiency, understanding, and technology to advance our cooperation in the Arctic, including with respect to the production of new icebreakers.

This statement, from October 2, 2019, followed a meeting between then Presidents Donald Trump and Sauli Niinistö.

Less than a year later, a deal appeared to be imminent as President Trump stated in a July 10, 2020 speech at U.S. Southern Command:

And we're going to be trying to get, if we can, an extra 10 icebreakers. We only have one. Russia has 40; we have one. So we will have 2, but we think we'll have 10 because we're trying to do a deal with a certain place that has a lot of icebreakers, and we're seeing if we can make a really good deal where you can have them very fast. You know about that. We're working on it, and I think we can surprise you - at a very good price, which will be nice. Much cheaper than the one we're building, and that's also nice. You could do about five of them.

I also highlighted the phrase ‘non-binding arrangement’ in the Biden Administration’s Announcement. Only because I want to point out what the ICE Pact Joint Statement is- and what it is not.

An Optimistic Take

Getting the Polar Security Cutter (PSC) Program on track:

Bollinger and the U.S. Coast Guard (USCG) are struggling to complete detailed design for the planned Polar Security Cutter. Additionally, according to the Government Accountability Office (GAO), Bollinger is facing challenges working with special alloys (such as EQ-47) in the required thickness and support arrangements needed to build the PSCs.

Enhanced information exchange and collaboration on workforce development, two of the three aspects highlighted above, could greatly help Bollinger and the USCG. Adding experienced icebreaker designers and personnel from shipyards with experience in icebreaker construction would undoubtedly help the Bollinger/USCG team to get the PSC program on track.

When on track, Bollinger could then build the “four or five” ‘heavy’ icebreakers that the USCG says it needs.

Sourcing the Arctic Security Cutter:

Render of the Canada’s Program Icebreaker (Image: Davie)

Canada is currently building or planning to build twenty-four icebreakers including two PC2 Polar Icebreakers, six ‘medium’ Program Icebreakers, and sixteen PC4 Multi-Purpose icebreakers. Finnish and Canadian companies are already working together on these programs. With all of this planned construction and existing cooperation, it would make sense for the US to join with our partners rather than trying to design and build a new class of icebreaker- the ‘Arctic Security Cutter’- on our own. The PSC program shows the folly of that idea.

That’s not to say that Canada’s programs have gone perfectly; the Canadian Heavy Icebreaker Program has seen delays and cost increases as well, due to inconsistent government funding and other shipbuilding priorities. The Program Icebreaker and Multi-Purpose Vessel programs are still very new. But Davie, by purchasing Helsinki Shipyard to add to its experience in building icebreakers, seems serious about getting things right. The US would do well to join with these partners.

This does not mean buying a ‘standard’ design. Naval Architects have repeatedly told me that a ‘parent design’ or ‘standard design’ is a bad idea. Rather, designers should begin by understanding the operational requirements of the client, and then proceed to custom design a new vessel that meets those needs based on proven design elements.

Joining along with Canada and Finland seems like an ideal way to source the Arctic Security Cutter, vessels that the USCG needs. As of today, the ASC program is little more than a talking point. The USCG has provided no information (at least publicly) concerning when it intends to seek authorization and appropriation for these vessels.

If the ICE Pact were to enable the USCG to acquire vessels built overseas, I would bet that it would get the ‘four or five medium’ Arctic Security Cutters that it says it needs before all of the required PSCs are delivered.

The Pessimistic View

Sending Good Money After Bad into the PSC Program

The Biden Administration’s ICE PACT Announcement doubles down on the PSC Program:

The Coast Guard is working with Bollinger Shipyards to build the first Polar Security Cutters. The Louisiana-based shipbuilder will continue its effort to deliver new American-made icebreakers to the U.S. Coast Guard’s polar icebreaking fleet. These vessels will be the first American-built heavy icebreakers in over 50 years – and the foundation of the American effort to enhance our surface presence in the polar regions. ICE Pact will continue to support their efforts, and the President’s commitment to build more ships in American shipyards.

As a reminder, the PSC is late and over budget. From recent GAO testimony:

PSC. In November 2023, the PSC program declared a cost breach. The program determined it required additional funding in excess of its $3.1 billion cost threshold, based on updated cost data. The program plans to submit its updated life-cycle cost estimate to DHS for approval by September 2024. The program also plans to submit its revised acquisition program baseline to DHS by the end of 2024. While the cost estimate is not complete, the program’s remediation plan indicated that updated costs exceeded 20 percent of the previous baseline threshold of $3.1 billion, or at least $600 million. Additionally, as noted above, in April 2024, the Congressional Budget Office estimated the cost of the PSC program to be about $5.1 billion, or 63 percent more than what is reflected in the program’s cost baseline. This gap raises further questions about the affordability of this program in a constrained budget environment.

We don’t yet know how much Bollinger believes the ships will cost, or when they expect to deliver any of the three ordered vessels. But the Biden Administration is committed to making it work.

In the worst case scenario, that means contractual relief to Bollinger (lots more money!) regardless of whether they start working with Canadian and Finnish firms experienced in designing and building icebreakers.

Politics Blocks Meaningful Change

One potential problem, and the source of some of my pessimism, was highlighted in this week’s House Transportation and Infrastructure Committee’s Roundtable on Reinvigorating the U.S.-Flag Fleet and Shipbuilding Industry. I watched the hearing, in which the majority of participants repeated the mantra that the US has the best shipyards, the best workers, and the best crews. The only thing holding back the U.S. shipbuilding industry, according to this panel, was unfair foreign competition. The witnesses spoke specifically of Chinese shipbuilding.

But rather than suggesting that the US work with its allies and partners to build up the Coast Guard, Navy, and Merchant fleets of NATO and its allies and partners, they suggested protectionism and Buy American provisions. The attending members of Congress seemed receptive. It was this Congressional attitude that probably blocked the Trump Administration’s earlier effort to work with Finland on building or purchasing icebreakers.

I hope that that the President and Congress can come together to support the ICE Pact, including authorizing the USCG to buy foreign built icebreakers. But the politics of the issue leaves me with some doubt.

The Social Media Responses

Bollinger Shipyard’s response to the ICE Pact announcement- in their press release and X post- must have come from a different reality. The press release contains the following sentences:

The first and only shipbuilder in the United States to engineer and construct a heavy polar icebreaker in over 50 years, Bollinger will play a critical role in ICE Pact and its efforts to strengthen the polar capabilities of the United States and its allies through the creation of a fleet of polar icebreakers….

“As the premiere builder of American-made polar icebreakers, Bollinger Shipyards is proud to support the United States and our NATO allies with our deep expertise and capacity,” said Ben Bordelon, Bollinger Shipyards President and CEO. 

Did I miss Bollinger delivering a heavy polar icebreaker? Does anything you’ve read about the PSC give you the impression that Bollinger has “deep expertise” that we can share with our NATO allies regarding icebreaker construction?

As many readers have pointed out- especially those working within U.S. shipbuilders- the government is often the problem, with USCG or USN representatives coming in with unrealistic demands that result in late design changes and a resulting spiral of design despair. I understand that, and the USCG and USN must change the way they procure ships.

But from a realistic perspective- wouldn’t it be better to make some progress BEFORE proclaiming expertise? I thought that the press release was, like the witnesses in the Congressional roundtable above, just another example of the “everything is great, just send more money” mentality.

And then I saw Bollinger’s tweet.

I just cannot put my reaction to that in words.

In contrast, here are some excerpts from Davie’s press release:

Davie, the Canada-based multinational shipbuilder, today announced its intention to be among the first private sector contributors to an historic trilateral agreement between the governments of Canada, Finland, and the United States.

As the world becomes more volatile, there is an unprecedented willingness and urgency among NATO allies to increase collaboration in research, trade, energy, and security in the contested polar regions. Icebreakers are key to meeting shared priorities. While adversaries’ shipbuilding industries operate on an effective war footing, Western allies markedly lack sufficient icebreakers and other specialized ships. No single nation can solve this challenge alone, but trusted allies with common goals and advanced shipbuilding can.

Davie commends the vision of the partners in creating the ICE Pact. As an icebreaker specialist with advanced facilities in Canada and Finland, Davie is uniquely qualified to be a major contributor. Davie’s Finnish business, Helsinki Shipyard, has built over 50% of the global icebreaker fleet. Davie is also building the world’s largest order book of polar icebreakers for the Government of Canada in Québec.

Here is an excerpt from a Linked In post by James Davies, CEO of Davie:

Davie wil be among the first private sector contributors to this multinational effort. With facilities in Canada and Finland, and decades of icebreaker expertise, Davie is uniquely qualified to advance this shared mission. Our Helsinki Shipyard alone has built over 50% of the global icebreaker fleet and is ready and waiting for many more.

The ICE Pact comes at a pivotal time in international relations.

As Davie has long advocated, the erosion of western shipbuilding expertise and capacity has a fundamental consequence.  It plays into the hands of our competitors - those nation/states who through subsidizing their own shipbuilding industries, do so in preparation for the imminent return of great power competition to the polar regions.

Clearly, western countries markedly lack sufficient shipbuilding capacity across many specialised ship types, especially icebreakers, essential to maintain sovereignty, project power and safeguard our waters in these increasingly volatile times.

Icebreakers are our bread and butter, this announcement is a beacon, a worked example of how the West can work together today and stand up for tomorrow.

I am pleased (and relieved) to see the governments of Canada, the United States, and Finland recognize and collectively meet this challenge head-on through the ICE Pact.

Davie has been more than happy to provide our expert opinion over the past several months and stands ready to support this buildup, which will strengthen collective sea power and create thousands of jobs in partner countries. It’s a compelling time for allied shipbuilding, and we are ready to lead the charge.

With luck and a following wind, our combined efforts will rebuild our critical industries and deter would-be aggressors from their current path. Repairing our fences is necessary if we want good neighbors committed to returning the polar regions to places of collective peace and prosperity for future generations.

In Finland, Davie’s Helsinki Shipyard posted the Davie press release. Aker Arctic had a short tweet, as it is currently Finland’s summer vacation season. I expect we will hear more about their willingness to help when its employees return from their summer cottages in August.

I ask you, dear reader, which shipyards do you think best demonstrates an understanding of the strategic imperative to increase NATO presence in the Arctic?

Additional press releases and posts by other companies involved in international icebreaker programs such as Seaspan Shipyards, Vard, and others highlighted their history of cooperation with foreign partners across national boundaries on previous icebreaker projects. Only one company claimed to be at the ‘new icebreaker’ capital of the world. SMH.

Concluding Thoughts:

The ICE Pact must succeed.

Icebreakers are but one small, specialized segment of shipbuilding. Many pundits have written thousands of articles and studies documenting China’s domination of shipbuilding, as well as their evolving strategic alliance with Russia.

As NATO and its partners debate how to respond and struggle to increase defense budgets, China continues to grow both its Navy, Coast Guard, and merchant fleets. NATO, along with its allies and partners, must counter by re-industrializing, by taking back key industries that were offshored to China.

Otherwise we will have too few ships and too few repair facilities to defend our interests. With only a token fleet of non-Chinese merchant vessels, we will be dependent on the goodwill of China to move cargo and keep complex supply chains functioning. In that scenario, we would lack the ability to keep China from dominating the South China Sea and re-taking Taiwan.

However, if we can cooperate to build icebreakers that challenge Russian (and Chinese) dominance of the poles, perhaps we can cooperate to challenge China and Russia elsewhere. Joint work on icebreakers is a positive signal, the canary in the coal mine that shows not danger, but rather that we can leave narrow interests behind and work together to challenge China and Russia. Rhetoric challenging China and Russia is cheap. Action is required, and needs to start now.

If we don’t do this, I fear that we cannot tackle the larger, more difficult strategic challenges that are coming in the years ahead.

So let’s look at the facts, overlook parochial interests, and get this done!

I’ll be tracking the details as they come out.

Thanks for reading. If you like what you’ve seen, press the heart and subscribe to make sure that you never miss an update. Consider sharing with a friend or fifteen; it takes me some time to research and write these articles, so I’m happy to see them spread far and wide. It’s important to keep this conversation going.

Until next time.

All the Best,

PGR