T. Boone Pickens V. Fred Smith: A Fuel Debate

For a while, T. Boone Pickens stood out as a business tycoon who made his fortune on oil but became a true believer in using less of it and more natural gas (and wind energy). He won over many politicians and environmental activists as fans and faced few public challenges.

Not anymore.

As the new administration takes power and intends to pass all sorts of policies on renewable power generation and energy-efficient transportation, more business hot shots are making their views known. And they don’t think much of Pickens’ plan. 

FedEx's CEO Fred Smith is one of them. Smith thinks using natural gas is not much better than using oil, and has embraced hybrid diesel-electric technology instead, noted the Wall Street Journal’s Environmental Capital blog Friday. FedEx has 80,000 hybrid diesel-electric trucks, the largest fleet in the country.

FedEx’s director of sustainability, Mitch Jackson, penned a blog post last Sunday where he argued that substituting one non-renewable fuel source with another isn’t the answer. Rather, the country should invest in cars powered partly or wholly by electricity generated from cleaner sources (i.e., solar and wind). 

Jackson also argued that although diesel is made from crude oil, it burns more efficiently than natural gas. “Diesel usage has better fuel efficiency than these other fuels, which translates to lower carbon, or greenhouse gas, emissions as well. Any replacement fuel needs to improve the nation’s fuel economy from where we are today,� Jackson wrote.

Pickens didn’t take the criticism lightly and took to his blog to defend his position. Pickens said Jackson needed to “do more homework� before making his argument against natural gas. Pickens added that diesel fuel isn’t as attractive as Jackson has portrayed it to be: “According to the California’s Air Resources Board and Energy Commission, the carbon content of diesel fuel is almost thirty percent higher than domestic natural gas and less than one percent lower in carbon content than gasoline.� 

Europe has taken to diesel-powered passenger cars while the United States has relegated diesel largely to large trucks. U.S. politicians have been gung ho about using ethanol to replace oil, but their plan hasn’t worked out so well. Corn ethanol has been vilified, and companies that want to make ethanol from non-food sources, such as switchgrass and algae, have yet to make it in commercial quantities.

President-elect Barack Obama is keen on promoting fuel-efficient cars. But who will he listen to: Pickens or Smith? Or both?