# We must electrify the transport sector by Fred Smith

- Link: https://greenlivingguy.com/2018/12/we-must-electrify-the-transport-sector-by-fred-smith/
- Published: 2018-12-23T15:50:53-05:00
- Author: greenlivingguy

_⌊It is tempting to say that the headlines about rising fuel prices syria libya 
and other events in the middle east will be a wake up call to the dangers of oil
dependence But such calls repeated for almost 40 years and yet the vulnerability&
both in the us and across the globe remains⌉⌊It is tempting to say that the headlines
about rising fuel prices syria libya and other events in the middle east will be
a wake up call to the dangers of oil dependence But such calls repeated for almost
40 years and yet the vulnerability & both in the us and across the globe remains⌉

This story first appeared in The [Financial](https://www.ft.com/) Times on May 9,
2011

It is tempting to say that the headlines about rising fuel prices, Syria, Libya 
and other events in the [Middle East](https://greenlivingguy.com/2015/04/mayors-from-great-lakes-middle-east-to-signpioneering-pact-at-water-after-borders-conference-in-chicago/)
will be a wake-up call to the dangers of oil dependence. But such calls repeated
for almost 40 years, and yet the vulnerability & both in the US and across the globe
remains.

## Disruptions

See, our mobile economy remains defenseless against oil-price shocks and supply 
interruptions. In the US, transport accounts for 70 per cent of petroleum consumed.

Also, 97 per cent of transport fuel in the US comes from oil. And we know there 
are no plausible substitutes. When prices go up, there are only two choices: drive
less or pay more. If supplies disrupted for any reason, the choices are even worse.
This must change.

### Every American recession over the past 35 years gets an oil-price spike.

The last time this happened, just a few years ago. In 2009 to 2011, the average 
retail price of gasoline in the US increased from $1.46 to $3.27. That costed typical
households $2,115 a year in increased fuel expenses. That price spike contributed
greatly to the recession and financial crisis which the world is still struggling
to recover from.

This addiction has also led the US to commit its young men and women in uniform 
to protecting the world’s oil infrastructure. And it means that western diplomacy
handicapped by the need to placate oil-producing nations. That’s including those
that do not share America’s views or values.

#### So what can be done? First the US should produce more oil at home.

Increased safety and environmental standards must come together with this increased
production, but such standards – along with stalled permit processes and endless
litigation – must not stop the US from exploiting its domestic resources.

Drilling is not the sole answer to this problem, far from it; but considering that
last year the US sent more than $260bn overseas to pay for oil, and it is highly
likely it will surpass that number in 2011, the wisdom of producing more domestically
becomes clear.

Second, America must continue on the path started by George W. Bush and continued
by President Barack Obama to make cars, light trucks and commercial vehicles more
fuel-efficient. The less oil used to drive the transport system, the less effect
a price spike will have.

But these are interim measures. The only way to truly end the threat is to move 
toward millions of vehicles that powered not by oil, but by a vast diversity of 
domestic power sources. And the best way to do that is with a large electrified 
transport sector.

Only electricity can give the transport sector the flexibility to switch fuels. 
I mean when one or more become too expensive.

### Electricity from homegrown sources – wind or solar would free America’s mobile economy from dependence on a single source.

And unlike some alternatives, the infrastructure backbone for “rehfueling” electric
vehicles already exists in the US [national grid](https://greenlivingguy.com/2018/06/wind-of-change-as-national-grid-looks-to-renewables-for-growth-says-news-sky-com/),
which offers significant spare generating capacity at night, when it needed for 
this purpose.

I am not someone who tends to advocate for increased government involvement in the
private sector. Free-market solutions to these economic threats would be ideal. 
But there is no free market for oil.

### Global Oil Reserves

To the contrary, today more than 90 per cent of proved conventional global oil reserves
are held by national oil companies. So basically going overseas to pay for oil.

Those that are either fully or partly controlled by foreign governments. So whose
interests often have as much or more to do with geopolitical considerations than
free-market principles.

Every time we invest in decision at FedEx, we ask ourselves: “What is the return
on this investment?” That is the question we must ask here. The Electrification 
Coalition, which I am a member, has put forward a plan to deploy electric vehicles
at scale throughout the US. These policies would cost far less over all the years
of their implementation than the hundreds of billions of dollars America sends overseas
to pay for oil in a single year. In almost every conceivable area, the coalition’s
plan represents a positive return on investment, from a $127bn improvement in the
US balance of trade to millions of new jobs.

We cannot fix today’s gasoline price spike. But we can finally put ourselves on 
the path to a future in which we are in much stronger control of the fuel supply
that drives our vehicles – and our economy. Little done to discuss this problem 
for the past 40 years. The time to do so without truly calamitous consequences is
rapidly running out.

_Frederick Smith is chairman, president and chief executive officer of FedEx Corporation_

_[http://blog.fedex.designcdt.com/blog/we-must-electrify-transport-sector](http://blog.fedex.designcdt.com/blog/we-must-electrify-transport-sector)_

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 greenlivingguy

 The Green Living Guy, Seth Leitman is an independent power producer, a green living
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