Oil Scare Turns FedEx On To Energy Efficiency
[Note from Editor: We love this story of powerful environmental leadership
born out of bottom line objectives, and morality. Whatever road gets us
there...]
The rising cost of oil isn't just a hit to the family budget. Businesses are
hurt, too. Few are more affected than firms like FedEx. It deploys nearly
700 planes and tens of thousands of trucks and vans every day to deliver
packages around the world. And few business leaders are more focused on
finding alternatives to petroleum-based fuels than FedEx CEO Fred Smith.
Shortly after Smith founded Federal Express, the 1973 Arab oil embargo
almost killed it. The experience imprinted Smith with a keen interest in the
price and availability of oil.
"That would be an understatement," Smith laughs. "For sure."
once again, the potential for conflict in the Middle East, specifically with
Iran, has boosted prices and raised fears of a supply disruption. Smith says
keeping the supply of imported oil flowing has cost the U.S. dearly over the
past 40 years. "We spend about $70 [billion] to $80 billion a year as a country,
not just for ourselves, but for the rest of the world as a whole," Smith
says. "And that's even before we get to the $1.3 trillion we've spent on
Afghanistan and Iraq, and as Alan Greenspan, the former chairman of the
Federal Reserve, said pretty plainly, 'Iraq was about oil.' Not totally, but
... so these are very big issues."
Smith, a former Marine, has tried to address those issues, advocating
strategies for the country through his seat on the Energy Security
Leadership Council , a group of CEOs
and retired generals and admirals. He has also developed a corporate plan to
reduce the use of petroleum at FedEx. It includes three strategies - one for
its light vehicle delivery vans, another for its heavy trucks and a third
for its planes.
For delivery vans, says Smith, FedEx is betting on electric or hybrid
vehicles. "An all-electric pickup and delivery van will operate at a 75 percent less
per-mile cost than an internal combustion engine variant," he says. "Now, I
didn't say 7 1/2 percent - [I said] 75 percent. These are big numbers."
Smith points out that the vehicles would be charged in off-peak hours,
minimizing the need for additional power plants. Battery life and cost
remain a challenge, but Smith is optimistic. In FedEx's fleet of over 90,000 vehicles, 408 are hybrid or electric, and 4,000 are fuel-efficient, lower-emitting "Sprinter" vans.
"I think in three or four years you will have a battery vehicle with a range
that's probably double what it has today - a couple of hundred miles versus
a hundred miles - and it'll probably be 25 percent to 40 percent cheaper
than [it] currently is." Smith says he believes that six years from now, electric vehicles will be in
wide commercial use, transporting everything from FedEx packages to plumbers
and pizza.
produced with algae, will replace much petroleum-based jet fuel. The
technology has already been proven, but breakthroughs are needed to produce
the fuel on the scale that's necessary.
FedEx's Fuel Efficiency Improvement For larger trucks, Smith says, the alternative energy answer is liquid or
compressed natural gas. He says companies like Navistar and Cummins are
developing new engines to power those trucks on natural gas, at savings of
about 40 percent compared with diesel at current prices. "As Cummins and Navistar and these folks put these engines out there,
anybody that makes their living driving long-haul trucks or locally fueled
trucks or buses is going to have a powerful incentive," he says.
While natural gas refueling stations are a hurdle, Smith thinks an adequate
number, as few as 700, could be quickly installed along the interstate
highway system to make long-haul trucking with natural gas viable within a
few years. Smith says the discovery and unlocking of the vast amounts of natural gas in
shale formations is a game changer.
"For the United States, it's been near providential," he says. "I think it
offers us an opportunity to deal with a lot of issues that have been very
difficult."
That includes America's reliance on coal to generate electricity. If natural
gas were used instead, harmful emissions could be cut 50 percent.
Smith believes the country's immense shale gas resource, along with shale
oil deposits in places like Texas and North Dakota, could help make the U.S.
energy independent for the first time since he founded FedEx. But, he says,
only if these resources are coupled with conservation and a move to
alternative fuels.
issue," Smith says. "You've got to be willing to maximize our resources, and
you've got to be willing to conserve and transition to nonpetroleum-based
transportation." That would be a big change from the way things were when FedEx began.
"To me, the most tragic thing is to think about these families that lost
these 5,000 wonderful young men and women in Iraq and Afghanistan," he says.
"The human cost of this reliance on petroleum from unstable and unfriendly
parts of the world has cost this country dearly, and we need to work as hard
as we can to solve this problem." Reposted from npr.org - written by John Ydstie








