Union Pacific Saves Fuel While Increasing Efficiency

Fuel reduction initiatives save nearly $7 million during first quarter

Omaha, Neb., April 28, 2006 – As fuel prices continue to rise, the pain at the pump is leading consumers to look for ways to improve fuel economy. The same is true for the nation’s largest railroad. Imagine the cost of fueling a 4,000 horsepower vehicle with a 4,900-gallon tank. Union Pacific fuels nearly 8,000 of these vehicles every day. They are the diesel locomotives that move the consumer goods, food, energy and construction materials fueling the nation’s economy.

Even though fuel prices are at record highs, and the railroad is hauling more materials than ever before (four percent more than last year at this time), Union Pacific was able to shave two percent off its diesel fuel consumption during the first quarter of 2006 – resulting in nearly $7 million in savings. The railroad was able to achieve the savings through a number of energy conservation initiatives, including:

Creation and deployment of the Fuel Masters program to reward locomotive engineers for efficiently operating trains Acquisition of newer, more fuel-efficient locomotives Implementation of changes in traffic flow and operations to move freight more efficiently." We all have a role to play in helping conserve fuel for our nation, and Union Pacific employees are doing it every day," said Jim Young, president and CEO, Union Pacific. "In a relatively short period of time, our employees have made great strides in implementing and creating world-class energy conservation techniques that are helping us to move more freight while saving fuel. With their help we will continue to improve our efficiency while delivering the goods America needs."

Last year, Union Pacific’s Fuel Masters program saved more than 16 million gallons of diesel fuel and $30 million for the railroad. The program has the potential to more than double the total amount of fuel savings as it is refined and expanded. On average, service units using the Fuel Masters program experience a five percent reduction in fuel consumption.

Here’s how it works: The fuel consumption performance of participating locomotive engineers is compared against fellow engineers operating in the same territory. (A two-month snapshot of each engineer’s fuel consumption performance is used to calculate individual average consumption rates.) Each month, engineers in the top 15 to 20 percent of each territory are awarded fuel cards to help them keep up with the cost of filling up their own vehicle tanks.

"This is a truly great program for everyone," said Tim Brandt, a Union Pacific locomotive engineer based in Marysville, Kan. "The fuel savings make it an obvious winner for the company and it is nice the company is willing to share some of those savings with us."

The creator of the Fuel Masters program was recently honored with the 2005 John H. Chafee Environmental Excellence Award. Wayne Kennedy, Union Pacific’s general director of fuel conservation, was presented the honor for exhibiting outstanding stewardship of the environment. The award is named for John H. Chafee, a four-term U.S. Senator from Providence and a noted environmentalist.

Railroad versus Road

In terms of fuel efficiency, railroads are three times more fuel-efficient than trucks. If just 10 percent of the freight moved by highway were diverted to rail, the nation could save as much as 200 million gallons of fuel each year. And, railroad fuel efficiency has increased by 72 percent since 1980. Prior to 1980, a gallon of diesel fuel moved one ton of freight an average of 235 miles. In 2001, the same amount of fuel moved one ton of freight an average of 406 miles. Overall, railroads and rail suppliers have reduced the weight and increased the capacity of rail cars to improve fuel efficiency and reduce emissions.

Studies also indicate the diversion of freight traffic from truck to rail can reduce highway congestion. For example:

- One intermodal train can take 280 trucks (equal to 1,100 cars) off our already congested highways

- Trains carrying other types of freight can take up to 500 trucks off the highway.

A study of 50 major U.S. metro areas by transportation consultant Wendell Cox found that the diversion of 25 percent of truck freight to rail would lead, by 2025, to:

-2.8 billion fewer traveler-hours wasted in congested traffic

-A savings of 16 billion gallons of fuel

-Nearly 800,000 fewer tons of air pollution.

-" Union Pacific is committed to the development and use of new technologies to preserve the environment for future generations," said Young.

- "Environmental protection is a primary management responsibility as well as the responsibility of every Union Pacific employee."

To access the "UP and the Environment" white paper, go to www.up.com and click on Environmental Management.

Union Pacific Corporation owns one of America’s leading transportation companies. Its principal operating company, Union Pacific Railroad, links 23 states in the western two-thirds of the country and serves the fastest-growing U.S. population centers. Union Pacific’s diversified business mix includes Agricultural Products, Automotive, Chemicals, Energy, Industrial Products and Intermodal. The railroad offers competitive long-haul routes from all major West Coast and Gulf Coast ports to eastern gateways. Union Pacific connects with Canada’s rail systems and is the only railroad serving all six major gateways to Mexico, making it North America’s premier rail franchise.

Source : Union Pacific

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