Modern diesel electric subs cost 60-85 percent less than nuclear subs and are known to be more difficult to detect in coastal waters and sometimes even on the high seas. Yet all major navies want the nukes. It’s all about energy and the fact that the nuclear boats have a lot more of it. Diesel-electric boats have enough food and fuel on board to stay at sea for about a thousand hours. And that assumes moving slowly (most of the time at a sluggish 10-15 kilometers an hour) and not using a lot of electronics all the time. Nukes don’t have that problem as they have years’ worth of nuclear fuel on board and can generate much more electricity than a diesel-electric boat. Being 3-4 times larger (in terms of displacement) than most diesel-electric boats the SSNs can carry a lot more electronics and run them all the time. This provides an enormous advantage because passive (not broadcasting) sensors are the perfect tool for detecting other ships or subs while you lie quietly below the surface. Those passive sensors work because they use a lot of computing power, which requires a lot of electricity which SSNs have no problem supplying. SSNs can also run fast and deep to escape an enemy threat. That’s why naval professions prefer nukes, because they can stay at sea longer and do more while they are there. In fact most diesel-electric boats are only really effective for coastal defense and are much less useful if you send them long distances to do anything. Meanwhile much is made of the fact that under some conditions diesel-electric subs are quieter than nukes. The true extent of that will not really be known until there is a war and most naval experts are not sure the diesel-electric boats will have much of an edge when operating on batteries. The big problem here is that subs have not had much wartime experience since World War II (1939-45). So no one really know exactly how the nukes would be in a major conflict. In the meantime the admirals would prefer to have more nukes.
Meanwhile work continues on trying to shed more light on the problem. The U.S. Navy has been secretive about how effective it has become in detecting non-nuclear submarines. That discretion is necessary to prevent the enemy from fixing any vulnerabilities that have been found and are being exploited. The quietness of modern diesel-electric boats puts nuclear subs and surface ships at a serious disadvantage, especially in coastal waters. This is a big problem for the United States, which went to an all nuclear submarine fleet in the 1960s. While the nuclear sub is the most effective high seas vessel, especially if you have worldwide responsibilities and need subs that can quickly move long distances to get to the troubled waters, the diesel electric boat, operating on batteries in coastal waters, is quieter and harder to find.
For over a decade the U.S. Navy has been trying to get an idea of just how bad the threat is and developing technologies and tactics to deal with it. This was part of a larger ASW (anti-submarine warfare) effort that began in the 1990s to deal with post-Cold War submarine threat. A major part of this effort using a state-of-the-art non-nuclear subs to practice on. Thus from 2005 to 2007 the United States leased a Swedish sub (Sweden only had five subs in service then) and its crew, to help American anti-submarine forces get a better idea of what they were up against. This Swedish boat was a "worst case" scenario, an approach that is preferred for training. The Gotland class Swedish subs involved are small (1,500 tons, 64.5 meters/200 feet long) and have a crew of only 25. The Gotland was based in San Diego, along with three dozen civilian technicians to help with maintenance.
For many years before the Gotland arrived, the U.S. Navy had trained against Australian diesel-electric subs and often came out second. The Gotland has one advantage over the Australian boats because of its AIP (Air-Independent Propulsion) system (which allows it to stay under water, silently, for several weeks at a time). Thus the Gotland was even more of a challenge and a glimpse of what American surface ships and submarines might have to face in a future naval war. Since the Gotland experiments the U.S. has borrowed other AIP subs for further work in refining detection methods. None of America's most likely naval opponents (China, North Korea, or Iran) except China has built any AIP boats yet. These three nations have plenty of diesel-electric subs which, in the hands of skilled crews, can be pretty deadly. China is making an effort to create experienced and well trained crews as well as AIP equipped boats.
The U.S. has found that, given current sensor (sonar, magnetic, heat, chemical) technology it is possible to detect very quiet diesel-electric and AIP subs. To do this required many small tweaks to existing sensors. AIP boats, in particular, were found to have many vulnerabilities. The AIP technology generated more noise and heat than just using batteries. The more the U.S. studied AIP subs in operation the more ways they found these subs could be detected. It is known that the passive (listen only) sonar systems in the new Virginia class SSNs (nuclear attack sub) was tweaked to better find diesel-electric and AIP boats.
Apparently the modern, quiet diesel electric boats continue to be a major threat to U.S. surface warships and subs. Meanwhile, potential enemies build more of their cheaper and higher quality diesel-electric boats and train their crews by having them stalk actual warships (including U.S. ones). The subs are getting more numerous, while U.S. defenses are limping along because of the sheer technical problems of finding quiet diesel-electric boats in coastal waters.
Despite keeping most of the details secret, some potential targets of these new ASW capabilities realized the danger they were in. One reason China wants to keep American naval forces out of their economic zone (370 kilometers from the coast, an area which does not bar foreign warships) is so that Chinese diesel electric subs can train without being stalked by American subs, surface ships, and aircraft looking for realistic practice tracking Chinese boats. At the same time the U.S. Navy has lost the full use of its most effective underwater anti-submarine training area (a well mapped and instrumented area off southern California) because environmentalist activists have convinced judges that the use of active sonar in this training area is harmful to some species of aquatic animals. So going after potential targets off their coasts is more important than ever.
There are 39 nations operating a total of 400 diesel electric subs. Only three of these nations (China, Iran, North Korea) are likely to use their subs against the U.S. or its allies. China has fifty of these boats, Iran has three (plus 25 much smaller mini-subs) and North Korea has 20 (plus 50 much smaller mini-subs). So the U.S. has to worry about 150 diesel electric subs, half of them mini-subs. But about half of all these boats are elderly, obsolete, and noisy. That leaves about 70 subs that are a clear threat (though the older stuff can be a threat if you get sloppy). That’s a lot of subs, and they make the East Asian coast and the Persian Gulf dangerous places for American warships.
Moreover, the North Korean and Iranian fleets (and governments) are in decline, while China is pouring more cash into their armed forces. If there’s any diesel-electric boats the U.S. Navy has to be extremely concerned about, it’s the Chinese. While China continues to try and develop world class nuclear subs, they are also moving ahead in creating world class diesel electric boats.