After terrorism and the proliferation of weapons of mass destruction, the U.S. dependence on imported oil "represents the biggest single threat to our nation's economy and national security," FedEx CEO Frederick W. Smith told a National Press Club audience this week.
Smith, speaking as a member of the Energy Security Leadership Council, laid out a plan to convert most ground transportation to electrical batteries powered by a grid energized by domestic sources like solar, nuclear, clean coal, natural gas, hydroelectric and wind power.
The leadership council, made up of senior business officials and retired military generals, made a series of recommendations to slow the dependence on foreign oil last year and released on Monday estimates of the savings in money and jobs such an approach would have.
Converting ground transport to electricity would increase jobs by 3 million more by 2050 than if the plan were not implemented, he said.
And he said the savings would prevent the kind of unsettling oil shocks that come from sudden supply reductions and price rises.
"$147 per barrel oil and $4-$5 per gallon gasoline are less than a year behind us. And if there is one thing I can absolutely guarantee you today, it is this: that was not the last oil shock we will ever see. Far from it.
"We cannot prevent oil price shocks. Events across the world, from terrorist attacks and cartel collusion to accidents and natural disasters, will continue to affect global petroleum prices, sometimes dramatically," he said. "In the past, that has been a recipe for disaster. We have seen five economic recessions since the early 1970s -- and each one of them was preceded by or was concurrent with a significant spike in oil prices."
During questions from the audience, Smith said military leaders recognize that half of military expenditures go protecting vulnerable oil supply lines. He said President Eisenhower believed a 20 percent dependence was potentially harmful, while we are current getting 60 percent from overseas, including from sources hostile to our interests. Smith said the U.S. Air Force is leading the way away from dependence with a commitment to using biofuels for its jets.
Smith shared the head table with several journalists and his invited guests: former U.S. Trade Representative Susan Schwab; Eric Heitz of The Energy Foundation and Lee Scott, chairman of Wal-Mart Stores, Inc.
Noting that 70 percent of all the trips Americans make in any given day are less than 40 miles, Smith said technology is producing batteries that can produce enough electricity to meet those needs now. The advantage over other alternative fuels, he said, is that all of America is already wired. In addition, much of the electricity that would go to recharging batteries is currently going unused at night.
Also during questions from the audience, Smith appeared to endorse a carbon tax if most of its proceeds were returned to the people. And as he has in other forums in Washington and elsewhere, Smith called for the expensing of capital investment in software, which he said would stimulate jobs.
"It's a little bit like what the cardinal said to Don Corleone in The Godfather III when he told him he ought to go to confession," Smith joked. "What have you got to lose?"
E-mail Bartholomew Sullivan at SullivanB(at)shns.com.
Can pair with FEDEX
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