US Needs Plan to Cut OPEC Oil Imports: FedEx CEO

Creating a national strategy to find alternative energy sources is not a market issue but a matter of national security, and conservatives in Congress should get on board, FedEx Chairman Frederick Smith told CNBC Monday.


"This isn’t about liberal programs and changing society. This is about energy conservation and national security by getting us off of imported oil," said Smith, a member of the Securing American's Future Energy Council, or SAFE.

The FedEx CEO told "Squawk Box"the U.S. spent $328 billion last year to buy imported petroleum. The cost of that fuel for the average American family has risen from $1,700 in 2001 to $4,000 last year.

"There is no free market for oil. It's controlled by a cartel, OPEC," he said. "They own 80 percent to 90 percent of the reserves in the world. They produce about 42 percent."

Besides increasing U.S. oil and gas production, and moving to natural gas for heavy-duty vehicles — something long supported by natural gas mogul T. Boone Pickens— SAFE wants Congress to mandate higher fuel-efficiency standards and fund development of more electric cars and light-duty trucks.

Subsidizing alternative energy has prompted an "almost irrational opposition on the part of many conservatives" in Congress, who think any alternative is part of the Obama administration's agenda on the environment and climate change, said Smith.

"In essence, it’s the government trying to transition us into those technologies as opposed to spending so much on the military budget, much less having two shooting wars over the last 10 years that have cost us 5,000 young men and women," he said.

In the same interview, Robert Lutz, former vice chairman of General Motors, said the auto maker received a lot of flack over the federal subsidies it received for developing its electrified Chevrolet Volt. The Obama administration "had absolutely nothing to do with the development of the Volt," he said — the subsidies came during the George W. Bush administration, and that was after GM pleaded its case to "auto czar" Stephen Ratner.

"We are all for 'drill, baby, drill' and the vision of the U.S. potentially becoming self-sufficient in petroleum and gas production," Lutz said. "It is a dream that we fully support."

However, "being energy self-sufficient…is not going to insulate us from world energy prices. It will reduce the degree of American vulnerability." he said. "Finding alternatives to fossil fuels is still justified from a standpoint of national security and economic benefit."

To which Smith added, "What’s the subsidy for a Navy aircraft carrier or F-35 fighter? It’s exactly the same thing. We continue to look at this as a market issue and it’s a transition issue where we have got to get off reliance on imported petroleum…from parts of the world where a lot of people wish us ill. That’s the issue."