Pickens has merit... I think Mr. Pickens natural gas/wind plan has merit as does the hybrid/plug-in electric. The truth and "real" actionable strategic solution is likely in-between. At the heart of both plans is how we transform our rapidly aging electric generation, transmission, and distribution systems and process. I encourage everyone to keep an open mind. Louis

First, let me state that I admire the efforts that FedEx and you have made to improve fuel efficiency on fleet vehicles. I read your blog because I value your opinion and while every one has an opinion, not many people or organizations have put up the results that FedEx and you have. Now, it is with regret that I must differ in opinion with you on your points and hope to persuade you to reconsider. 1. Historically, natural gas has a lower price than diesel. While this is a black swan relationship, there are fundamental cost advantages that natural gas has over diesel that make me think the relationship will hold over time. For example, natural gas requires little processing before usage… primarily filtering, drying, odorizing, and compressing; while diesel needs to be transported in the form of oil from overseas in high polluting ships, then refined generating more emissions. Per dollar and per emission, my ballpark guess is natural gas wins the comparison. 2. New public-private partnership arrangements will create access for passenger and light trucks. My company works with Municipalities to create and finance these partnerships. 3. The underground distribution network for natural gas already exists. The problem to date has been how to begin the process of identifying which potential users of CNG should go first, and then how to leverage the preceding demand to create incentives for new demand. 4. Heavy daily users of diesel fuel go first. They possess the largest financial incentive to do so. The demand for CNG vehicles will create economies of scale and lower the costs for the next group of users and the cycle repeats. 5. the reliability problem is being solved by multi compressor stations and combinations of time fill and direct fill applications. 6. Except for what I said earlier, I agree that this is a wash. 7. Again I agree. The price of natural gas in not related to its domestic location. However, the cost to the U.S. of securing our access to oil does not show up in the price. It shows up in our taxes and should be added into the price per gallon for any meaningful comparison. Additionally, the supply of oil is fragile and partially controlled by governments that are neither stable nor popular. This makes the price hard to predict. Finally, the economic argument for domestic fuel versus foreign is predicated on the concept of currency velocity. If you have a dollar and you buy something from me and I buy something from Joe, who in turn buys something from you; then our currency acts as a lubricant for each of us to facilitate the exchange of goods between each other. The example works the same way if you do the transactions with foreigners, but only so long as the amount of money going out is returned equally for goods that have a similar effect on the nation’s wealth. Currently, the transfer in not equal on two levels: first, we buy more from foreigners than they buy from us…second, in the case of oil, we buy something that gets burnt and destroyed, the foreigners take our money and buy our companies, real estate, and technological advantages. Were this money to stay domestically it would drastically improve the future wealth of US citizens. As global manufacturing and the global middle class grows, the competition for energy will intensify and should we do nothing the effect of the wealth transfer will intensify also. Currently electric and hybrid technology are not achievable at a large scale, however, for potential users like FedEx, CNG is viable immediately. I joined the Alternative Energy industry from the Investment industry. Before I chose CNG, I also looked at battery technology companies. I talked to executives of several different battery manufacturers about the constraints specific to their industry. I did the same for the CNG fueling industry. In the end, I based my decision on a belief that there is immediate demand for CNG fueling from large scale users of diesel fuel, which will expand to cover all vehicles…even hybrid. I could not see the same foothold to expansion scenario for new or existing battery technology companies.

There are a couple of misconceptions about natural gas in Mr. Jackson's analysis. First, natural gas is much less fungible than petroleum because liquefying natural gas requires very large facilities and specialized ships. For this reason, and because of the expanding production of natural gas from domestic shale formations, the U.S. currently imports only a very small percentage (<2%) of natural gas as a liquid (LNG). The fact is that pipeline natural gas prices in North America have been consistently lower than global LNG prices. Thus, relying more on natural gas for transportation does not subject us to the same global market price issues as petroleum. The second area that is missing in Mr. Jackson's environmental conclusions is the fact that natural gas can and is produced from renewable resources such as manure, wastewater and landfills (the latter of course not completely renewable). There is much potential for expanding the production of renewable natural gas in the U.S. Finally, why limit ourselves to one solution? Compressed natural gas for long-distance routes and hybrids (potentially natural gas hybrids) for more urban routes.

Some of your criticisms are valid (e.g. infrastructure), some not so valid. For example, natural gas is only "fungible" via LNG (overseas) or pipelines (within the North American market). The lower 48 imports gas; Some gas is exported to Mexico and from Alaska to the Far East. When you say natural gas is "plentiful" in the US, you should note that we are talking about shale gas, a form of unconventional gas. I think the jury is still out on how much the ultimately recoverable (in Trillion Cubic Feet (TCF)) will be. More importantly, unconventional gas is also very expensive gas and will very likely remain so because technology improvements have already been factored in. I agree with your view that the Pickens Plan in not practical. On the other hand, electric transportation for long-haul trucking is also impractical. These problems are complex. It is likely that diesel will remain the fuel of choice for trucking for some time to come. One fix is to build electrified railroads to replace diesel.

Energy is a fungible item. The creation of usable energy for transportation and the DISTRIBUTION of energy for transportation are two separate items. And distributing energy for transportation is probably more important than how energy is produced. Creating a new distribution network is not the way to go. This article very clearly points this out.

Mr Jackson ,your reference to greening the energy infrastructure hits the nail on the head! The electrical grid is already set up and we should add to this, as you said, by alternate energy means such as solar. It just makes since in these economic challenged times to work with what we have. We could learn a lot from our forefathers in keeping it simple.

Excellent!! Well done.

An article well written! I enjoyed reading your article and agree with your approach! Thanks, Simran

Mr.Jackson,Thanks for your insight on this matter. Seems like everyone is trying to develop The next great energy plan and forget that the energy to set up this type of plan self defeats the actual intention,that of being conservation,air quaility ,etc.Millions of dollars are spent on research to get 10 more miles out of an engine while the same could be said if we reduced our hwy speed from 70 to 55miles per hour. Sometimes the simple changes by all of us as a collective can make a big impact.

I agree that we need to look at alternative energy sources. We need to look at the possibility of producing and using availble energy sources that exist in the United States. Obviuosly, the cost to implement and supplies available need to outweigh the circumstances we as a nation find ourselves in. Also, we need to consider whether we cause more harm than good, such as more pollution and toxic waste, when we look at different solutions.