The Fuse

Business Executives, Former Military Leaders Call for Bold Actions to Reduce Oil Dependence

by Matt Piotrowski | May 20, 2016

Business executives and former military leaders launched recommendations this week for reducing dependence on oil and fostering the development of technological advancement in the transportation sector. At an event at the Newseum in Washington, DC, on Thursday, hosted by Securing America’s Future Energy (SAFE), speakers provided numerous reasons, from saving lives on U.S. roads to reducing dependence on OPEC oil, for taking bold actions to not only slice demand for oil, but also transform the way society operates.

Fred Smith, the CEO of FedEx and the Co-Chair of the Energy Security Leadership Council (ESLC), stressed, in a discussion with SAFE CEO Robbie Diamond, the importance of deregulation to bring about economic benefits and choice for consumers. It’s important, he noted, that government does not impede the current transition to autonomous vehicles. Smith likened today’s shift in mobilization to the changeover from traveling by horse to automobiles about 100 years ago. Driverless vehicles will change “the whole way society will operate,” Smith told the audience. The government should “provide rules at the federal level to allow for tech and car companies to execute against their goals,” Smith said.

The government should “provide rules at the federal level to allow for tech and car companies to execute against their goals,” Smith said.

The biggest concern for advocates of driverless cars is a patchwork regulations on the state level that could hinder penetration of the new technology. The ESLC is asking the National Highway Traffic Safety Administration to pre-empt state standards so this situation does not occur. The autonomous vehicle fleet will be lighter and also likely run on electricity, therefore undermining dependence on oil.

Smith urged lawmakers to reexamine rules and regulations for “an age that is rapidly coming to a close,” and he reinforced one the main themes of the day: The new regime of autonomous vehicles will save thousands of lives on U.S. roadways.

While Smith is a fervent believer in deregulation and the free market, he pointed out that government has a role to play when it comes to national security and safety regulations. Improving fuel economy through tougher CAFE standards are needed to reduce the demand for oil and the U.S.’ dependence on foreign suppliers that are hostile to the country’s interests. Meanwhile, safety standards can be enhanced through autonomy. The ultimate goal for the ESLC recommendations, Smith told reporters at a roundtable before the event, is to “reduce the oil intensity of transportation and the oil intensity of our GDP.”

Focus on safety

In one panel at the event, the focus centered in large part on the massive safety improvements that will come with autonomous vehicles, given that more than 30,000 people die on the roads every year, mostly because of human error. While the potential to reduce oil demand from autonomous vehicles is huge, so is their added benefit to improve road safety.

Dr. Jeremy Brown of the National Institutes of Health gave spirited remarks about the human and economic costs of traffic accidents, making the case that autonomous vehicles can significantly alter this situation. He noted how the U.S. government spent some $6 billion on tackling the Ebola virus, which killed only one person, while not enough is done to combat deaths on the road. He said that traffic accidents represent “a public health epidemic” and “we should respond to it like others.”

Traffic accidents represent “a public health epidemic” and “we should respond to it like others.”

John Krafcik, the CEO of the self-driving car project at Google, allayed fears about consumer anxiety that will inevitably come with the penetration of autonomous vehicles. “I think we will be fine,” he said. Based upon his company’s observations and research so far, people are quickly coming around to the new technology. “As we put people in our prototype car without a steering wheel, the anxiety lasts only 30 seconds,” he told the audience.

Krafcik also picked up on one of the major themes of the day regarding regulation, making it clear that leadership on this issue has to come from the federal government so that companies and consumers don’t have to deal with different state regulations.

Military leaders, businesses on the same page

Retired Marine Corps Gen. James Conway, a co-chairman of the ESLC, made the case for greater energy security, highlighting both selfdriving cars and the urgent need to reduce vulnerability to OPEC producers. “Autonomous vehicles would reduce a significant portion of that,” Conway told reporters before the event, referring to SAFE’s goal in its new report of reducing oil demand by 50 percent by 2040. “I would argue that we probably don’t get there unless the autonomous vehicle movement succeeds and becomes our mainstay.”

When answering questions about the state of the oil markets, he added: “There are certainly problems on the horizon…What [OPEC members] want to stimulate with this short-term reduction in price is greater demand,” Conway said. “We are getting whipsawed.”

Conway, in his comments to the audience, laid out a number of important issues for improving energy security, including improving alternative vehicle research, looking at fuel economy post-2025, and reforming incentives for electric vehicles so they are “not for rich people to buy their Teslas.”

It’s clear with the wide variety of speakers at the SAFE event shows that concerns about energy security come from many different directions.

Joseph Kopser from moovel explained how his company is creating a suite of solutions to modernize transit access and create seamless transportation access around the country, while a representative Waste Management noted how compressed natural gas (CNG) can not only reduce diesel demand in trucking but also slice costs for companies. With trucking making up some 20 percent of oil usage in the U.S. and the tonnage on highways to rise in coming years, the transition to CNG is an urgent priority.

It’s clear with the wide variety of speakers at the event this week shows that concerns about energy security come from many different directions. And improving energy security not only reduces dependence on oil – which fuels more than 90 percent of the transportation sector – but it also can bring about major implications for road safety, national security, and economic growth.