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dsktc
12-30-2005, 09:28 PM
Eno Transportation Foundation
Washington, D.C., December 7, 2005

Remarks by:
David R. Goode
Chairman
Norfolk Southern Corporation

Id like to take the opportunity to talk to this group of policy- and opinion-makers about the underappreciated and underdeveloped potential of railroading as the next big benefit to a cleaner environment and a contributor to better emissions and air quality standards.

As I reflect back from the perspective of a railroader about to face retirement after 40 years in the industry, weve been on quite a ride as an industry and industrial company.

I certainly leave with railroads generally in the best shape theyve ever been. In spite of our warts and blemishes, were running regular and improving service for our customers and for the most part making money doing it not returning the cost of capital yet, but moving toward it.

And, in the most meaningful way in my career, were investing private and public money in capacity to handle more freight. Public policy has begun to realize the value, indeed the necessity, for rail service to solve the transportation imbroglio the nation is getting in.

I can look back and remember my speeches lauding rail as a contributor to the restoration of global competitiveness of U.S. industry in the 80s and 90s, and to our role in making the new import/consumer economy work in the last few years by creating efficient, reliable transcontinental intermodal service. One advantage we have for the economy is a relatively good intermodal transportation system with rail a big part. If you doubt its importance, just look at what China is investing in today looking at our freight and intermodal.

Think back to the beginning of my rail career in the late 60s and early 70s. Rail systems were failing badly. There were strongly held beliefs that we were headed for a failed and nationalized system. In that context, you begin to realize the strength of an industry that rebuilt itself albeit with a lot of government policy help, although essentially no government money, and with some luck. Today, we have a pretty strong private system, which in the current high-price energy environment is able to contribute a lot to a sound economy.

I dont think rails get nearly enough credit for our contributions to a sound business environment. I may have to write the book on building the new rail network. What gets attention are issues raised by shippers about pricing and service. I submit that what you see is a reflection of how important we really are.

Look, for example, at moving hazardous substances. Its easy to say stay out of Washington or cities generally but what happens then? It has to move, and efficiently. Were the only way. By the way, as policy makers, you should be aware of the developing problem of getting insurance in this area. Were likely Id almost say certain to need policy help there if were to continue hauling highly hazardous products.

However, thats an aside. The thought I really want to talk about is the underappreciated place rail has in environmental improvement. In short, were a national and international resource for clean air but nobody seems to realize it. In a way Im saying, Im from the railroad, and Im here to help.

First message: Theres a lot of strength and flexibility in this national rail system. Even with strained capacity and operating problems, it still works. Look at Katrina. The untold story is New Orleans in how devastated all the rails were. But after only a few days, we had worked the system back.

As policymakers, you should think very broadly about the value of this infrastructure you can use. Its one that has long recognized and benefited from the publicprivate partnership model, even though we havent always called it by that name.
OK, you say, but so what? Well, let me suggest that neither of us the public transportation or the private rail sector has yet figured out that we have the basis to use rail as a keystone for initiatives in global climate change.

Im not really the expert there are better here; but, let me just throw out a few facts.

You know the basic 4-to-1 train-truck advantage for rail. We move a ton 4 times as far on a gallon of fuel. And a railcar can take an average of three and a half trucks off the road in terms of overall capacity. Thats a lot of fuel leverage, but weve largely and successfully used this to sell efficiency and fuel savings not so much environmental advantage.

But what else is that saving?

How about emissions? The I-81 corridor study estimated that 1,000 trucks per day removed between Harrisburg and Chattanooga would save 18 million gallons of fuel and eliminate 4,900 tons of nitrous oxide, 634 tons of carbon monoxide, and 231 tons of volatile organic compounds just to mention the obvious.

This estimate, by the way, is a very small sample of the conversions that would occur if we really concentrated on long-haul interstate rail improvement projects all at a fraction of the cost of comparable highway building.

So, when projects like our Heartland Corridor or I-81 truck diversions come up, they have powerful appeal as environmental projects or at least they should. And, Ive just been talking freight and trucks. Ill let you do the math on passengers and automobiles. In short, rail makes sense for fuel, congestion and the environment.

Second message: Rail has under way real and exciting projects to make emissions better. They go way beyond the clean-burning locomotive projects youve seen advertised by General Electric.

Norfolk Southern is in the proving stage right now working with the Federal Railroad Administration on LEADER, or Locomotive Engineer Assist Display and Event Recorder. Its a safety and efficiency project in combination with locomotive control technology that will enable the train operator to run at maximum efficiency, guided by a computer screen.

Our results show some encouraging things:

8 percent average fuel savings for loaded trips and 9 percent average savings for empty trips, with commensurate emissions improvements;
combining state-of-the-art rail-based lubrication systems, we get another 11 percent improvement depending on the grade and curvature of the railroad using, by the way, friendly and biodegradable soy-based lubricants developed by Norfolk Southern and the University of Northern Iowa; and,
development of engine shutdown and automatic engine stop systems.
So, rail already produces the lowest emissions and initiatives under way can significantly reduce even that.

Plus, look at the savings if we can reduce highway congestion by putting more freight and people on rail. Benefits of reducing gridlock, excessive stopping and idling by trucks and autos, and improving speed and efficiency are clear factors that can significantly reduce emissions.

Ive just mentioned a few, but it seems to me the message is pretty clear. Greater use of rail for all types of traffic should immediately become a major policy initiative.

The Norfolk Southern television ad showing a tree moving a truck from the road and putting it on one of our intermodal trains has it right were just not taking it broadly enough, because were selling freight, not policy. However, the same reason were successful right now in selling freight should be a call to all of us who are concerned about environmental policy.

Its time to wake up and treat rail as a major contributor to better air quality. Regardless of what we think of global climate change or Kyoto or other treaties and initiatives, the reality is were going to have to improve emissions and air quality.

Rail can be a much bigger policy help than any of us including the rails and the Association of American Railroads have yet demonstrated. Were going to need a lot of help to accomplish what we need to do. Were still viewed by many in the 19th century robber baron mode. The industry and the AARs Ed Hamberger are working on that, but we have a long way to go.

At Norfolk Southern, were now seeing ourselves as the wave of the future, even though were celebrating our 175th anniversary. Were going to be giving you as policy makers more and more examples and offers of help. We want to get out front. I think weve got a good story lets help each other.

I may before my retirement change the Norfolk Southern logo color from black to green.

Southern Railway used to have a slogan Southern gives a green light to innovation. We had a green signal light in the o in Southern. We might go back and put the green light in Norfolk Southern for innovation and the environment.

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