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By 2005, the U.S. Navy and the Maritime Administration will have accumulated some 360 retired ships in need of disposal. A previous RAND study reviewed disposal options such as recycling (either domestically or overseas) and long-term storage. However, preparation and use of the ships for construction of artificial reefs was identified as the lowest-cost option. With the demonstrated potential attractiveness of reefing as a disposal option, in this study the authors examine the economic, legal, environmental, and programmatic issues that might bear on the Navy’s decision to pursue the reefing option more seriously. They examine the demand for ships to be used as reefs and the impediments to such use, suggest program goals, and review possible business models for their potential to minimize risks and costs to the Navy.

The research described in this briefing was sponsored by the United States Navy. The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center supported by the Office of the Secretary of Defense, the Joint Staff, the unified commands, and the defense agencies.

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