Economics & Access

My Two-Cents on Energy Reform

By Fred Smith on December 3, 2008
 
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There’s been lots of discussion recently about energy reform and America’s need to reduce its dependence on foreign oil.  Given the gravity of this issue, I truly believe the outcome of this national conversation will be a defining moment in American history.

To me, the solution to U.S. energy independence consists of three fundamental pillars.

  1. The maximization of domestic fuel production of all types – ANWAR, shale, the outer continental shelf, for example.
  2. The maximization of renewable energy to the extent that it's technically feasible – wind, solar, nuclear, bio mass, and so on.
  3. A movement to electrify the short-haul transportation system, using plug-in hybrid technology and encouraged through government incentives and other programs.

Plug-in hybrid technology for short-haul transportation has real potential to significantly reduce our reliance on imported petroleum.  About 80 percent of all daily personal driving is less than 40 miles, and hybrids will have a range of 400 miles when the gasoline engine kicks in.

Reducing demand for petroleum by converting the short-haul automotive sector to plug-in would free up more diesel and middle-distillates for use by jets and long-haul trucks.  Electric power is already available in people’s homes, and efforts should be put toward producing electrical power in the cleanest and most economical way possible - wind, solar, nuclear, geo, hydro, and biomass. After all, it’s a lot easier to clean up 1,100 power plants than it is 250 million personal automobiles.

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While this seems like a good

Submitted by Scott on 12/08/08 - 6:48 pm
While this seems like a good alternative and the buzz is surrounding alternative energy, it is a supply and demand cycle. Failed monetary policies of our and many other countries caused this global demand / price spike. Fact is that compared to other contries we are still wasteful in alot of ways. The fedex terminal I work at wastes countless dollars heating the dock area when all the garage doors are open, once the trucks are back in for the night from their routes close the doors! As people who bought hybrid cars are finding now that gas prices are plummeting...mainly because china and others can't keep their currency artificially low anymore to keep their citizens underpaid and keep them flowing with all of our cheap assembly jobs as well as engineering and other higher paying jobs. That has brought people to buy american as our dollar falls they can buy more, that reverses our rediculous trade deficit. Point is these 3rd world workers can't buy gas now at what they are paid...This is going to make demand fall....and that is what is bringing the price in check for gas now. As gas falls these precalculated payback periods fall even further behind and that is why the residential passenger cars should switch to electric. We can make more efficent diesel engines in our fleet...we need the horsepower and torque to haul packages. Our prices will come down, just don't be to hasty with big cost gimmicks...instead let's save what we can with no investment, that will be money truly saved.

I am surprised that no one

Submitted by Barbara Easley on 12/08/08 - 3:48 pm
I am surprised that no one has thought of providing FedEx delivery Vehicles with electric power on a mass basis. Nationwide, FedEx has SO many field offices/FedEx Office locations, that utilizing these locations to provide charging stations would greatly reduce petroleum consumption. Use the field stations for recharging FedEx vehicles.

Reducing demand for foreign

Submitted by sheryl bryant on 12/08/08 - 12:13 pm
Reducing demand for foreign oil is the tip of the ice berg. For America to sustain its Global leadership position we must become the innovators of our past. Harnessing alternative sources of power is not new to us, remember the use of water to power flour mills and steam trains. We have forgotten our Mother of Necessity that formed the strong foundation our country rests on today. Unfortunately, Americans have chosen the quick, cheap, easy fix for everything including our health. We are now experiencing the residual of this behavior, the crumbling infrastructures in every facet of our lives. The chaos that comes from reflective 20/20 hindsight is always tumultuous. The surprise has been for many of us, how we allowed the chosen few our Government, to lead us down this path of total destruction. Now I question governments ability to help me and realize Americans must focus on rebuilding our Nation by individually rebuilding our own lives and the communities we live in. We have to have faith in where we come from one voice and two people.

Wise words from a VERY wise

Submitted by Marie McVay on 12/05/08 - 12:13 pm
Wise words from a VERY wise man! As always, Fred is right on target!

I'd like to see FedEx

Submitted by Andrew on 12/05/08 - 9:13 am
I'd like to see FedEx starting incorporating Green building practices into their facilities. Surely there are long term advantages with installing solar panels on the roofs, collecting the engery could pay the utility bill and we could potentially sell the excess to nearby powerstations. Same concept for wind. Sure these inital costs could be high - but not having to pay the high electrical costs tp power a building, lower operating cost, potential tax breaks for green technology, and the profit for selling off the excess would outweigh this. In addition - a distinct competitive advantage which puts FedEx at the forefront. We should lead in this.

And electrify the long-haul

Submitted by Carl Hardeman on 12/04/08 - 6:05 pm
And electrify the long-haul system with a nationwide set of electric rails running along and above the medians of the interstate highway system. We already are experts and have a microcosm of such an automated freight delivery and switching system in the Hub. Freight would be in ULD's. Heavy and bulky freight would continue to be moved in trucks.

Has our company assesed the

Submitted by Ryan Walsh on 12/04/08 - 1:47 pm
Has our company assesed the value of using plug-in battery electric vehicles for "tighter" routes? There are numerous vehicles available already getting anywhere from 40 to 100+ miles on a charge, they cost pennies to operate, have fewer routine maintanence costs, and release no emissions...

I agree completely that we

Submitted by Kimberly Morris on 12/04/08 - 12:42 pm
I agree completely that we should take short-haul transportation to the next level which would be plug-in technology. I know that it will be a long process, but one that would be well worth the wait. We must think though, what can we do right this minute as a company. There is one thing that I see everyday that I think would help it all. There are contractors that own delivery vans that run on a less than desirable level. Leaking oil, smoking pipes and just over all poor quality of our delivery vans. I pride myself as a FedEx employee and have decided to make this my career. My brother has been employeed with the company for close to 20 years so I have seen it grow in ways. I find that the quality of these vans unaceptable and wish more would be done to hold these contractors responsible for the problems. I find it embrassing to be questioned about the 'smoking FedEx Ground van' that was seen today. These conditions can not be good for the fuel economy of the vans or our environment. How do we fix these problems? Maybe we should start small with something like this. Thank you. Kimberly Morris QA Clerk II STLD 434

I am all for renewable

Submitted by Tom Tompkins on 12/04/08 - 12:11 pm
I am all for renewable energy, the increase in Hybrid vehicles and reducing our dependence on foreign oil. As we increase number of Hybrid vehicles we would also have to increase our infrastructure that produces electricity. A summer doesn't go by where parts of the country today experience brown outs due to the demands on the power companies. Our utility costs are increasing at high rates. Our utility companies can barely provide the capacity that we need just to keep pace with heating, cooling and lighting. The hybrid solution is going to be another drain on the elecrticity producing infrastructure that isn't there today. Hybrid vehicles are definitely better for the environment however what is the true energy cost per mile that we end up paying per mile of travel? Is it cheaper then foreign oil? Does the consumer end up paying the utilitiy company more and the oil company less and essentially improves the environment but doesn't really save any money? As I move toward retirement I am interested in environmental issues and also reducing the cost of transportation to the consumer. I hope these solutions are a means to this end.

Next year, I will celebrate

Submitted by Henry Nickell on 12/04/08 - 12:02 pm
Next year, I will celebrate the 30th year in my career of representing energy consumers trying to navigate the “boom and bust” cyclical behavior of the worldwide energy markets. As the United States spends a greater portion of its GDP on foreign energy sources, those expenditures are removed from the US economic engine and are no longer available in the United States to fuel growth in the US economy. The chairman's remarks are dead on. The huge extraction of wealth from the US that has occurred over the past 10 years of the energy bull market has now caught up with the US economy. If you look back through the post war era at spikes in energy costs, you will see a high degree of correlation between energy price spikes and recession in the US economy. We are at a crossroad where the US must decisively break the cycle of its growing postwar energy dependence if we desire to have a stable and prosperous US economy for the future. Just as Federal Express must have long-term strategic plans to be successful in competitive world markets, the US must develop and implement long-term strategic plans to minimize our dependence on foreign sources of energy, and to halt the migration of US economic power by developing a policy of reinvestment of US GDP in domestic energy resources and cost effective energy technology. Henry Nickell Manager, Fuel Administration FedEx Express

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