U. S. Merchant Fleet Energy Conservation and the Outlook for a Diesel Retrofit Program - The U.S. merchant fleet is not, despite its similarity in propulsion systems, a homogeneous entity. A wide diversity of functional, operational, and environmental requirements dictated by available owner resources, market conditions and the product to be carried, results in a spectrum of ships that varies significantly in form, size, speed, and/or operational scenario. Consequently, no single economic feasibility study could include sufficient parametric data to substantiate an energy conservation program that would be applicable to more than a relatively few vessels of the same type, engaged in the same trade, and operated by the same owner. Figure 8 graphically illustrates the impact of the aforementioned parameters on

an economic feasibility study performed to determine whether a slow speed diesel propulsion system should be retrofitted into certain Lash type vessels presently engaged in container service. The study clearly showed that if the ship was to be operated at near design speed and draft, and if the owner had the resources to obtain relatively low interest money for a relatively long period of time, savings of up to $3000 per at-sea day would be realized. The savings is depicted

in the "diesel" curve shown on the left side of Figure 8 and is a savings when comparing a ship with a diesel retrofit to that of ship operating with the presently installed steam plant. However, if the owner, supported by market conditions, could operate his ships at lower speeds and if he was carrying generally light cargo, a diesel engine retrofit could not be justified. That is, by retaining the steam propulsion system the owner would be operating at daily costs about $1000 per day less than a similar vessel which had undergone a diesel retrofit. (Under these latter conditions the respective owner would be advised to give serious study to the benefits of upgrading his basic steam cycle, and/or implementing an energy audit to assure that his plant is operating at optimum efficiency.)

The Lash vessel main propulsion system modernization program study together with a number of similar studies performed for other class vessels has established a set of general criteria that at least provides an initial screening mechanism that can be used to determine if a certain vessel engaged in a certain trade is a potential candidate for diesel retrofit or steam cycle upgrade. Appendix D identifies the criteria, gives a basis for its derivation and discusses the strength of its applicability. This general criteria was used to screen the approximately 480 steam propelled U.S. flag vessels listed in Appendix A. Of these vessels, a large number would be candidates for some form of propulsion system modernization. About seventy of these ships show the greatest potential for conversion to slow speed diesel propulsion. (On a selected basis, owners were contacted to substantiate that a particular ship was viewed by the owner as a strong candidate for diesel retrofit.)

The seventy ships selected as viable candidates for diesel retrofit have met, in general, several common criteria. A majority of the vessels are in strong trades but are marginally competitive. Some of the vessels can, during the period

of time that the vessel is being laid-up for diesel retrofit, accomplish other modifications that would strengthen their

competitive edge. These modifications would include converting from a breakbulk or barge carrying vessel to a container carrying vessel, increasing cargo carrying capacity, increasing automation and/or improving quarters. Few of the candidates are tankers and most of the candidates have an installed horsepower between 15,000 and 23,000 H.P. In each case the maximum owner advantage accrues if the retrofit can be accomplished within the next few years. In all but a few cases, it is not likely that a detailed economic feasibility study would show owner benefit unless some portion of the retrofit capital costs were subsidized by the government. A government subsidy program for diesel retrofit would, however, assure that the retrofit work would be accomplished in U.S. Shipyards.

If all seventy vessels were retrofitted a three to four year program could be envisioned and the program would provide a 500 million dollar impetus to U.S. Shipyards during that period of time, 1980 to 1985, when order books are lean and the expected upsurge in fleet replacements has not begun. See Figure 9.

Depending on the particular ship converted, a 15 percent to 25 percent reduction in fuel oil consumed by that ship would be realized. In the aggregate, a conversion program encompassing all seventy candidate vessels would save over 2.5 million barrels of oil per year, representing at today's fuel price an annual operating cost saving for the owners of over 75 million dollars.

Relatively high capital costs are required to accomplish the retrofit of diesel propulsion systems. For particular vessels some Government incentives may be required to reduce owner capital costs to that point where the fuel savings obtained by the diesel retrofit can justify the capital outlay. incentives can be justified on the basis of the Government

These