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March 2012
— by Julie Sneider, assistant editor
During a 2010 Nature Conservancy event in Virginia, Norfolk Southern Corp. Chairman, Chief Executive Officer and President Wick Moorman was seated at a dinner table with Carey Crane, a founding partner of GreenTrees®, a privately managed reforestation and carbon sequestration program created to replant forests on 1 million acres in the Mississippi Alluvial Valley. The two men introduced themselves and struck up a conversation. Moorman, who had never heard of GreenTrees, listened to Crane describe his company's story and its philosophy of "conservation capitalism," or the understanding that environmental progress and business is closely linked.
Moorman was intrigued. He discussed the conservation capitalism idea with Blair Wimbush, NS' vice president of real estate and corporate sustainability officer. Wimbush set out to learn more about GreenTrees, and whether working with the organization might fit NS' sustainability plan, which aims to conserve fuel, reduce emissions, recycle materials, save energy and money throughout the company.
By June 2011, NS and GreenTrees announced a conservation agreement that committed NS to planting 6 million trees across 10,000 Mississippi Delta acres. Trees were planted on 1,400 acres by the end of last year, and NS officials anticipate plantings on another 1,400 acres this year. Reforestation is now a key component in NS' approach to reducing the railroad's impact on the environment, says Wimbush.
"By focusing on reforestation on a scale like this, we are able to improve air quality, soil and water quality in the Mississippi Delta," he says.
NS and the other Class Is have been walking the environmental sustainability path for decades. That path started with their reactions to federally mandated environmental regulations. But over time, the railroads have evolved from simply complying with environmental laws to proactively pursuing "sustainable" business practices that make economic sense and reduce railroading's impact on the environment.
"Whether any particular company or individual believes climate change is real or meaningful or the ultimate threat to the planet, we can all agree that reducing emissions is a good thing," says Wimbush. "From the simple to a more nuanced approach, reducing emissions is good for business and it's good for air quality."
Over the past decade, the Class Is' efforts have focused heavily on upgrading and/or replacing older locomotives to cut fuel usage and reduce greenhouse gas emissions.
"Fuel, in terms of our carbon footprint, is a significant challenge for us, and we have lots of fuel conservation measures under way," says Wimbush.
While those efforts continue, the Class Is also are looking across their entire operations for ways to take sustainability to the next level — from reducing friction on the track to reduce fuel consumption, to saving energy with LED lighting, to recycling waste in offices and shops, to planting millions of trees.
At NS, replanting forests is an example of kicking sustainability up a notch. The Class I will spend $5.6 million over the next five years on the reforestation initiative, in which GreenTrees will contract with private landowners in Mississippi and Louisiana to plant trees on nonproductive agricultural property, says GreenTrees cofounder and managing partner Chandler Van Voorhis.
On each property, GreenTrees works with the landowner to plant a mix of cottonwoods and hardwoods to develop a dense, fast-growing forest.
"We take one acre at a time and compress time and space to accelerate forest growth by six to eight times in the critical first 15 years," Van Voorhis says, adding that the result will be an "ecologically healthy" forest in an area central to the nation's ecosystem.
NS' investment will pay off over time, NS officials say. Ten thousand acres of trees will generate 1.2 million tons of carbon-offset credits that can be sold to companies that want to offset their emissions, according to a July/August 2011 issue of NS' BizNS magazine. The Class I plans to register the credits with the American Carbon Registry, a nonprofit organization that records carbon-offset transactions.
The Class Is' motivation to pursue all things green comes not only from inside company walls, but also from customers who are interested in sustainability more than ever before, execs say. One gauge of that interest has been the availability of "carbon calculators" — which all the Class Is now feature on their websites — to enable customers to estimate and compare the carbon emissions generated by shipping their goods by rail versus truck.
The calculators are just one way the Class Is are informing customers — as well as investors, shareholders and the general public — of their efforts to green up railroading. The railroads also are spreading the word through social media sites such as Facebook and Twitter, through annual "sustainability reports" posted on websites, and through advertising on television and radio.
Last September, NS — in partnership with GE Transportation — promoted the sustainability theme by sponsoring the inaugural Railroad Sustainability Symposium, at which more than 50 U.S. and international rail industry leaders exchanged ideas for incorporating sustainability into core business practices. The event was held at GE's John F. Welch Learning Center in Ossining, N.Y. Planning already is under way for the second symposium, which NS will host in Norfolk, Va., later this year.
At BNSF Railway Co., Chairman and Chief Executive Officer Matt Rose has been sharing his company's sustainability progress with other members of the Business Roundtable, the association of CEOs of leading U.S. companies. To its customers, the railroad has been sending annual letters explaining how much they've saved on fuel consumption by shipping via rail, says John Lovenburg, BNSF's vice president of environmental.
"BNSF is roughly at 500 revenue-ton miles per gallon of diesel — that's a 6 percent improvement over the past five years for us, with corresponding lower emissions and reduced roadway traffic," says Lovenburg, whose position was created last fall.
Since 2008, BNSF has purchased more than 1,100 Tier 2- and Tier 3-compliant locomotives and GenSets, and anticipates making "robust purchases" of new locomotives in 2012, Lovenburg says. As part of its 2012 capital spending budget, BNSF expects to spend about $1.1 billion on locomotive, freight-car and other equipment acquisitions, BNSF officials announced Feb. 2.
To optimize fuel use, BNSF has applied several techniques and technologies, including speed-limit restrictions on trains; installation of GE Transportation's Trip Optimizer system, which is designed to operate as a sort of "cruise control" on trains; installation of idle-start-stop technology on 80 percent of its locomotives; and training of locomotive engineers and train crews to operate trains with as fuel efficiently as possible, Lovenburg says. Through the company's fuel efficiency "most valuable player" award, engineers and train crews can compete for bonuses and other incentives that are rewarded for better managing their fuel consumption.
In intermodal yards, BNSF has been installing automatic gates to minimize truck idling at entrances and exits, and employing wide-span electric cranes that produce zero emissions and reduce the number of trucks needed to move containers.
"Over 95 percent of our emissions are from diesel, which is why these initiatives are so critical," says Lovenburg.
Reducing CSX Transportation's carbon footprint is top of mind for Carl Gerhardstein, assistant vice president of environmental systems. In 2011, as part of the U.S. Environmental Protection Agency's voluntary EPA Climate Leaders Program, CSXT met a five-year goal to cut greenhouse gas emissions by 8 percent per revenue-ton mile one year ahead of schedule. Later this year, CSXT plans to set a new greenhouse gas emission reduction goal, as well as objectives to reduce water usage and waste generated at its facilities.
"We are really excited that we met the goal a year early," says Gerhardstein. "That equates to a reduction of over 1.5 million metric tons of CO2, which is the equivalent of taking 300,000 cars off the highway."
The Class I achieved the goal through a number of initiatives, starting with upgrading locomotives to more fuel-efficient models and adding energy management technology that enables engineers to find the most efficient setting when accelerating and decelerating trains.
A prime example of stepped-up sustainability efforts at CSXT facilities is the intermodal terminal near North Baltimore, Ohio, which opened in 2011, Gerhardstein says.
The terminal's sustainable features include five wide-span electric cranes that produce 80 percent less pollution than conventional cranes; semi-automated gates designed to cut truck idle time; hybrid shuttle carriers that reduce fuel consumption; Leadership in Energy and Environmental Design (LEED) green building certification; steel crossties in yard tracks; and 12 hydrogen powered fuel cells for backup power to public grade crossings and train signals.
"We have embraced sustainability through responsible and efficient practices," Gerhardstein says. "We try to align our performance with purpose and devotion to environmental, social and community stewardship. That's the key focus for us."
Increasingly, the railroads' employees are the motivation behind new ideas for sustainability projects: In 2011, after CN's employees told company leaders they wanted to be more active in cleaning up the environment, the Class I joined forces with Earth Day Canada to create "EcoConnexions," a program designed to improve the railroad's attempts to conserve energy; reduce, reuse and recycle; improve housekeeping in yards and offices; and recognize employees' environmentally friendly practices.
To reach all 21,000 CN workers, the program trains key employees, known as "EcoChampions," in sustainability practices that lead to environmental protection and preservation, said CN Director of Communications and Public Affairs Mark Hallman in an email.
In the program's first year, CN used EcoConnexions to train more than 300 EcoChampions, launched the program at the Class I's headquarters in Montreal and seven of its largest yards, and actively engaged more than 5,000 employees in environmental projects, said Hallman.
Employees' interest in sustainability at Union Pacific Railroad is encouraging to Bob Grimaila, UP's vice president of safety, security and environment.
"We are seeing many more new ideas coming from employees and greater participation in the various programs we have in place," he says.
An example: the popularity of UP's "Fuel Masters Unlimited," a program that measures and compares locomotive engineers' fuel consumption when running a train against a set of ideal circumstances. The engineers are "highly competitive" with each other in the total gallons of diesel fuel saved each month, Grimaila says. In 2010, the program helped UP lower its fuel consumption rate by 3 percent.
When it comes to the locomotives themselves, UP has spent about $6 billion since 2000 to purchase more than 3,400 units that meet tighter federal emissions standards. At 165, UP now has the industry's largest GenSet fleet, says Grimaila, adding that each unit saves about 12,000 gallons of fuel annually compared with a typical switching locomotive. Plus, about 65 percent of UP's locomotive fleet is equipped with fuel-saving, emissions-reducing automatic-engine-stop-start (AESS) technology; UP plans to upgrade 300 to 400 locomotives with AESS technology in 2012. And in a pilot program, UP is installing trip optimizer technology on a small number of locomotives.
In the future, UP anticipates applying aerodynamics to reduce fuel consumption.
Currently, the Class I is testing "Aerowedge," a nonrevenue container designed for intermodal use. Unique to UP, the wedge-shaped structure is placed on top of the first rail car of a double-stack container train to reduce drag, says Grimaila. Early test results have shown promise for fuel savings and emission reductions, he says.
"In the automotive industry, you see the shapes of cars changing and a lot of that has to do with efficiency and aerodynamics," Grimaila says. "We're taking that same theory and applying it to over-the-road freight trains, and we're hopeful it will be very successful."
As railroads focus on research and development to shrink their environmental footprints, they're also broadening their definition of what it means to be sustainable businesses. As NS' Wimbush explains it, sustainability covers three "pillars" — the economy, environment and society. It's about "doing business in the right way," he says.
"Being sustainable is making sure that you're mindful and respectful of all three of those pillars as you go about your business," says Wimbush. "It's not about just being a for-profit company and maximizing profits in everything that you do."
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