FedEx chief executive officer Fred Smith, co-chairman of the Energy Security Leadership Council, envisions a future transportation system that does not rely on oil.
Smith said increased dependence on foreign oil represents the biggest threat to the U.S. economy and national security after terrorism and the proliferation of weapons of mass destruction.
The U.S. consumes 20 million barrels of petroleum a day, and in 2008, that oil cost the nation nearly three quarters of a trillion dollars, said Smith, founder of the Memphis-based transportation and services company, “There can be little doubt that a major part of the financial crisis that led to the current recession was the 2007 and 2008 run-up in oil prices,” he remarked at The National Press Club.
To reverse the trend, Smith, together with several military and business leaders, promote a transportation system that no longer relies on oil. They back the council’s plan released in September for “the electrification of short-haul transportation.” Electrical power can be generated from solar, hydroelectric, wind, nuclear, coal or natural gas, reducing the nation’s dependence on one fuel source or producer, he said.
In addition to national security benefits, Smith noted the Council’s policies will create jobs and strengthen the U.S. economy. However, it also means “reducing the corporate tax rate and changing the tax code to allow the expensing of capital equipment.”
Smith also called for increased funding for the Department of Energy’s applied research and development budget, together with the reform of the existing R&D structure to streamline spending and new institutions that can accelerate the commercialization of energy technologies.
A study commissioned by the Energy Security Leadership Council finds that the policy proposals would result in significant benefits for the U.S. economy, remarked Smith. Released Monday by the University of Maryland and Keybridge Research, the study projects that if the U.S. reduces consumption of imported energy by 2050, it will result in higher employment and annual household income, less pollution, an improved trade balance and a higher level of federal tax revenue.
Smith concluded that a “reduced dependence on imported oil that results from our policy will act as a 400 billion dollar insurance policy for the U.S. economy, saving 1.8 million jobs in the event of a severe oil shock.” Click here for the full transcript of Smith’s remarks and here for a video
FedEx has recently announced plans to cut aircraft emissions and increase vehicle fuel efficiency.