Senator MUSKIE. Our first witness, is identified with an organization whose name is a challenge in itself, Dr. Robert Ayres, of Resources for the Future, Inc.

STATEMENT OF ROBERT U. AYRES, RESOURCES FOR THE FUTURE, INC.

Senator MUSKIE. Mr. Ayres, it is a pleasure to welcome you this morning. You may proceed in your own way.

Dr. AYRES. Thank you.

As you just said, my name is Robert Ayres, my education was in mathematics and physics, with degrees from the University of Chicago, University of Maryland, and a Ph. D. from the University of London. In 1962 I joined the Hudson Institute, a policy research organization specializing in national security problems, mostly for the Department of Defense.

Two years ago I embarked on a broad study of urban transportation technology under the sponsorship of the environment quality program of Resources for the Future, Inc., which is a nonprofit organization here in Washington.

Last year I joined RFF on a full-time basis to continue the study and others of a related nature, and I might mention that a first draft of the study in urban transportation technology was finished earlier this year. We are currently working to complete the final version.

It is a great privilege to have the opportunity to be here today.

I take it the purpose of these hearings is not to discuss the effects of economic concentration on the acceptance of new technology in the automotive industry, or to rehash the reasons why the Stanley brothers, Abner Doble and others, were not able to compete effectively against Ford and General Motors. If this is relevant at all today, it would presumbly be in the province of another subcommittee. The explicit purpose of these hearings is to explore the present technological capabilities and future potentialities of steampower, or more generally, external combustion engines for automobiles, buses, and trucks. Before going into specific details on this question, however, I think a few remarks on the broader context would be in order.

In a perfectly operating free competitive market system there would be no "pollution" problem. The markets" "invisible hand” would— subject to some qualifications I need not discuss here-operate to produce maximum social welfare. This is one of the basic postulates we make about the operation of our economy.

This term "welfare" is used in a technical sense quite remote from the usual connotations of assistance to the indigent; welfare, here, refers to the extent to which the whole range of needs and wants of the entire population are satisfied. If, as I say, a competitive market existed for all goods and services as well as disservices, then economists believe the optimum social result would occur if the market were allowed to operate without any interference.

Unfortunately things do not work out that way in practice, due to failures in the market mechanism. One such failure is the existence of monopolies or quasi-monopolies which eliminate or reduce competition. Another more subtle failure is the fact that certain goods, services, and disservices-and if for example, you unwillingly breathe

smog, you are getting a disservice are excluded from the market because of the pattern of existing laws and common property institutions. Most notably, this applies to public goods, which everyone theoretically has a right to use and, by implication, abuse.

In other words, since everybody "owns" the environment, everybody can use it, without payment, as much as he pleases. Unfortunately, some uses exclude others, as we all know: thus if a papermill or chemical factory exercises its right to unlimited free use of the environment as a place to dispose of residuals or wastes from its production processes, the rest of us are unable to exercise our rights to enjoy the natural environment clean and unsullied, and this is an inherent contradiction in the ration of "public" goods.

The point here is that the exclusion of certain goods and services, notably those provided "free" by our natural surroundings, from the market place makes it possible indeed inevitable that two parties engaged in an economic transaction within the operation of the competitive market will often impose uncompensated disservices on third parties not involved in the transaction. The paper mill or chemical plant I spoke of are examples in point. So is the private automobile. Whenever we use our cars we impose uncompensated disservices on others. I refer not only to noxious exhaust gases and noise, but also to congestion each additional automobile on a crowded highway slows down all the others a little bit-and even to social disharmony, since automobile usage requires highways, which must be built through somebody's backyard and some of those who are unwillingly displaced are not the major beneficiaries of the roads.

To summarize my introduction, then, automotive transportation is a producer of a wide variety of significant external costs to parties not involved in the buying or selling of vehicles. These would, in a perfectly competitive market, be internalized and therefore taken into account. As our economy presently works they are not internalized and can only be taken into account through the political process. These hearings are one step in that process.

The topic for today is steampower-or external combustion engines but the underlying question is how to reduce or eliminate the external costs of the internal combustion engine.

I will not dwell on a point which will doubtless be made by others and which I think is established beyond any reasonable doubt; namely that even ordinary reciprocating steam engines are at least the equal of conventional reciprocating ICE's with respect to response, acceleration, peak power and thermal efficiency, or specific fuel consumption. As applied to various types of automotive vehicles, however, there are a number of other important points of comparison.

Perhaps the outstanding advantage of steam engines and potentially, all types of external combustion engines, is the fact that high torque at zero speed makes it possible to eliminate the clutch and transmission which adds substantially to the complexity, weight, cost and maintenance problems of today's ICE-powered vehicles. The last point is especially significant for large vehicles, such as trucks and buses, with relatively much less power per unit weight than automobiles. Because they are underpowered they require a great deal more gear changing than automobiles. As a consequence bus and truck transmissions re

ceive very heavy wear and require a great deal of maintenance. This could be totally eliminated by using steam or vapor engines.

Brake lining wear and replacement-another constant problem for heavy vehicles-apart from the possibility that serious health hazards may arise from the asbestos particles injected into the atmosphere, could be substantially eliminated since a steam engine can provide instantaneous reverse acceleration, not merely an added drag as in the case of an internal combustion engine, thus making mechanical brakes virtually unnecessary except for keeping the wheels locked when the engine is off. I am assuming here that the engine is properly designed for this purpose.

In addition, steam engines and external combustion engines in general, require no starter motor, no carburetor, or fuel injection, no engine-block cooling system, no distributor, only one spark plug, no muffler and no elaborate air-pollution control equipment. The engine itself is likely to be smaller, since a 2 cylinder double acting (or 4 cylinder single acting) has the same number of power strokes as an 8 cylinder ICE. These savings more than compensate for the extra weight of the steam or vapor generator and condenser. Moreover, most of the above-mentioned ancillaries absorb parasitic power and detract from the power available at the rear wheels.

In toto, it is estimated that 40 percent of the engine power of an ordinary internal combustion engine is dissipated within the power train, whereas only about 10 percent of the power of a steam engine is wasted in this manner. A comparison between several types of internal combustion engines, including turbines and several types of external combustion engines is shown in the following table.

COMPARISON OF ALTERNATIVE PRIME MOVERS PROVIDING A MAXIMUM OF 200 HORSEPOWER AT WHEELS

It will be noted that, contrary to folklore, a reciprocating steam engine of a conventional design, together with its associated steam generator, condenser, and water tank, will probably require a significantly smaller rated horsepower and weigh less than an internal combustion engine power train capable of delivering the same amount of peak power at the rear wheels. This is the only appropriate basis for comparing horsepower outputs. When engines using working fluids other than steam, such as freon gas, are considered, the comparisons are even more favorable to the external combustion engine. Since fuel is burned continuously at atmospheric pressure-rather than explosively in a confined space-there are no stringent requirements on "octane" ratings and no need for tetraethlyl lead in the fuel. From tetraethyl lead we get about 200,000 tons of finely divided lead particles in the atmosphere environment each year. This is, I think, generally admitted to be a growing health hazard.

Since any distillate hydrocarbon fraction, will serve quite well— and I say distillate only because we don't want sulphur in the fuelthere is no need for catalytic "cracking" and secondary reforming in the petroleum refining process. The extreme scarcity of platinum, now used as a catalyst (notably in the platinum reforming process called platformate in Shell Oil Co. commercial advertising) might be somewhat relieved. More to the point, the petroleum companies would recover more salable fuel per barrel of crude oil, and I think this is a rather important advantage. Continuous combustion at low pressures also results in far more complete burning. Even without controls, external combustion engines produce far fewer unwanted emissions than internal combustion engines, as shown in the next table.

1 Calculated by assuming volumetric emissions shown in parentheses (in ppm), 15 lb of air/lb of fuel and molecular weights as follows: CO=28 (air), HC=140 (~5Xair); NOX=36 (=1.3Xair); also

2 Calculated assuming 63 lb of air/lb of fuel, volumetric emissions in ppm as shown in parenthesis and molecular weights as above, plus SOX=64 (=2Xair).

Calculated by assuming volumetric emissions shown in parenthesis (in ppm) 15 lb of air/lb of fuel and molecular weights as above. Sulfur emissions assumed to be the same as Diesel, with similar fuel. If external combustion engines use more than 15 lbs air/lb of fuel coefficients should be increased by the corresponding ratio.

Coefficients supplied by letter from Robert J. Harvey, Manager, Advanced Programs and Planning, Thermo-Electron Engineering Co., Waltham, Mass.

Comparing the Williams engine with the uncontrolled internal combustion engine you would expect a reduction of about a factor of 70 for carbon monoxide and 45 for unburned hydrocarbons. However, the Thermo-Electron burner is probably a better indicator of what a modern external combustion engine can do. The improvement factor is of the order of 1,000 except with regard to NOX. Even so, the im