if at all possible, enhance its advantages over other prime a two-stroke engine builder, after he had changed the turbo movers. Fuel consumption/reference conditions Among the advantages of the diesel, the first and foremost is its fuel consumption rate. Depending on the size of the engine, the fuel consumption of medium-speed engines developing between 500 and 900 kW per cylinder (related to International Standards Organization (ISO) 3046 conditions with 3 percent tolerance] is in the region of 197 to 207 g/kWh and that of two-stroke engines in the region of 197 to 212 g/kWh The lower consumption rates are those of larger engines, due to their lower rpm and somewhat higher mechanical efficiency, and the higher rates are those of smaller engines At the beginning of 1979 the decisive issue of fuel consumption gave rise to a dispute because the rates published by charging system for an engine series to constant-pressure turbocharging, were based on unusual reference conditions and on very high calorific values so that the consumption rates appeared to be very low. Objections were raised to this kind of presentation because, where two-stroke engines are concerned, there is no generally accepted method of converting fuel consumption rates based on nonstandard reference conditions and because it was therefore impossible to realistically compare the published rates with others. Where four-stroke engines are concerned, there is a generally accepted method of converting changes in fuel consumption due to derating on account of installation at different altitudes, for instance. With certain restrictions, this method can also be used to determine the fuel consumption at one and the same power output but under different reference conditions, and, provision for this method has therefore been made in ISO Standard 3016/1 as well as in national standards. There is not as yet a similarly substantiated method for two-stroke engines, although various manufacturers carry out complete cycle cal culations and thus are able to ascertain the influence of different reference conditions in individual cases. A generally applicable correction method, however, would have to be supported by a large number of such calculations, as well as operating results, and would then still be relatively unreliable on account of different simplified assumptions being made in the various programs as a consequence of the nonavailability of operating results. The CIMAC Work Group "Supercharging," which was instructed to look into this problem, have proposed to the engine makers that they should use their own conversion methods. At the same time, however, a computer program designed for turbocharged two-stroke engines is being offered. The results which the CIMAC group has obtained on the strength of this program with a pulse-turbocharged 3-cyl test engine are shown in Fig. 4 next to the correction factors. It turns out that the correction factors of CIMAC, Sulzer, and M.A.N. agree rather well, whereas the correction method adopted by B&W has not been corroborated. If the consumption values of the builders of larger two-stroke engines are put on the same basis as the CIMAC method: Basis: Motortechnische Zeitschrift (MTZ) 2/79, pp. 67-71, on the assumption of Diesel Propulsion Systems of the Future APPENDIX (D) Executive Summary - Data Resources, Inc. This report presents the results of an extensive study by Data Resources, Inc., of the economic impact of the shipbuilding and ship operating industries on the U.S. economy. This analysis employs a system of models designed specifically to evaluate alternative maritime policies. The system is based on the DRI input-output model and macroeconomic model of the United States. These models are widely used throughout industry, the financial community and government for policy analysis. DRI believes that this system of models and the resulting analysis embody the most comprehensive and sophisticated approach to measuring the economic impact of maritime policy alternatives ever undertaken. The system is unique in its ability to assess not only the national impact on GNP, investment, balance of payments and inflation but also to pinpoint the effect on specific industries and geographic areas. The system can be employed to evaluate alternative assumptions concerning: (1) U.S. fleet size; (2) whether the vessels are constructed in the U.S. or abroad; (3) whether the vessels are financed in the U.S. or abroad; (4) availability of various tax and subsidy packages. Hence the system has the potential to provide a vehicle for more comprehensive evaluation and more informed debate on the relative merits of alternative policy decisions. The approach taken has involved modifying the DRI input-output model to provide additional detail on the inter-industry impacts of constructing four basic commercial ship types and nine basic naval ship types. Extensive data were collected from shipyards and the Maritime Administration to perform this modification and to establish the regional patterns of purchases from supplying industries. The input-output model was linked to the DRI macroeconomic model of the United States. The macromodel consists of over 800 behavioral equations for variables such as business investment, consumer spending, government receipts and expenditures, wages, corporate profits, major price indices, imports and exports and interest rates. These equations relate each variable to important explanatory factors. All of the equations are linked together so that the changes imposed in one area will be carried throughout the economy. For given maritime policy alternatives, the macromodel is adjusted for first round changes in the balance of payments, domestic investment, federal subsidy levels and similar considerations. The macroeconometric model then calculates the net economic impact, which is disaggregated by the inputoutput model to obtain industry detail, which in turn is used to calculate regional impacts. This report focusses on two alternatives to no change in the present maritime outlook. The first examines results of a significant expansion of the U.S. commercial and naval fleets over the next ten years compared with status quo projections. The first analysis assumes that both commercial and naval vessels are built in the U.S. The second analysis compares the impact of domestic versus foreign construction of the vessels required to permit the expansion of the U.S. flag commercial fleet. Expanded Navy and Commercial Program The forecasts of the expanded U.S. operating fleet employed in this study follow from projections developed by Temple, Barker and Sloane, Inc. (TBS) for the Commercial Shipbuilding Committee of the Shipbuilders Council in the report Analysis of Future U.S. Merchant Fleet Shipbuilding Requirements 1980-1990 dated March 19, 1979. These projections are based upon the attainment of specific bilateral trade shares. The base case used in this analysis is intended to represent the ship construction activity which can be expected to occur under current conditions and in the absence of any changes to current maritime policy. The limited bilateral scenario compared to the base case translates into approximately 300 additional U.S.-built, U.S.-flag ships over the 1980-1990 period. The construction and operation of these ships results in first round changes in imports, subsidies and U.S. investment. The base case naval scenario is the building plan which was contained in the April-May versions of the Administration's FY 1980 budget request. The high level building plan is predicated on a program developed by the Shipbuilders Council which anticipates a five-year naval ship construction activity greater than the presently forecasted 67 ships. The fleet assumptions provide the basis for the changes in military expenditure and private investment employed in the macroeconomic analysis. It is also assumed that current subsidy programs, specifically CDS and ODS, are extended to the expanded commercial fleet. The larger U.S.-flag fleet also results in a first round reduction in the balance of payments outflows for foreign shipping services. The impact of this scenario on the economy was calculated for two alternative sets of government spending assumptions. In Case I first round government expenditure increases due to military and subsidy outlays. In Case II first round expenditures are held constant by reductions in other spending categories. Both scenarios have been compared to DRI's March 1979 long term forecast, which is the baseline economic forecast for the 1980-1990 period.* Macroeconomic Results The aggregate economic impacts of the expanded shipbuilding and operating scenario with no government spending offset are summarized below. Results for GNP, investment, inflation, the balance of payments and the Federal deficit are included. These impacts are discussed in terms of deviations from the baseline forecast. The expanded shipbuilding program increases the pace of economic activity over the baseline throughout the period. The cumulative increase in GNP expressed in 1978 dollars is $64.5 billion. The peak yearly impact of $10 billion occurs in 1985. Investment in the shipping industry increases output levels and required investment in supplying industries. On the national level this translates into $15 billion additional investment in producers' durable equipment. The alternative scenario has little impact on the rate of inflation. The implicit price deflator for GNP averages .1% higher with this program. Non-merchandise imports are reduced directly by the substitution of domestic for foreign shipping services. By 1990 non-merchandise imports are 1.7% below the baseline and net exports in current dollars are almost $3 billion above the base. In addition to the direct increase in military spending and maritime subsidies there is an induced increase in both tax receipts and expenditures, however expenditures rise more. The nominal deficit is $35 million higher in 1985. The gap increases to $1 billion in 1987 and $4 billion by 1990. Case II with spending offset is a less expansionary scenario than Case I in which government spending increases in the first round. GNP, inflation, and investment change in the same direction but the magnitudes are smaller. The net export position improves more. The impact on the deficit differs significantly from Case 1. Although Federal Government expenditures are unchanged in the first round both tax * This is a stable simulation which incorporates a return to a period of full employment and an absence of external shocks after adjustment to short term events. A recession begins in late 1979 brought on by high interest rates, inflation and other imbalances in the economy. Economic growth resumes in 1980 but inflation continues to be a problem. Renewed monetary restraint slows down the pace of economic activity from mid 1981 through 1982. From 1982 through 1990 there are no external shocks to the economy such as the oil and food price increases of the 1970's. Economic growth resumes, financial and inflationary pressure ease. The economy settles down on a smooth high employment growth path for the remainder of the forecast period. |