2015 SUSTAINABILITY REPORT

RAIL PROTECTION

PARTNERSHIPS

GRI

G4-EN25

G4-EN27

COMMUNITY

MOVING CRUDE OIL

In 2014, Norfolk Southern served as an important link in the U.S. crude oil supply chain, safely and efficiently transporting crude petroleum to meet the needs of the U.S. economy and help the nation achieve energy independence. During the year, the railroad experienced a 36 percent year-over-year increase in crude oil volume, with transport rising to 102,234 carloads.

Norfolk Southern moves crude oil in unit trains and as carloads in mixed-freight trains. In 2014, Norfolk Southern had rail access to six primary crude oil refineries in the Pennsylvania, New Jersey, and Delaware area that have the capability to process and refine 1.4 million barrels per day. In addition, the railroad serves refineries in Ohio, Louisiana, Mississippi, and Alabama.

Most Norfolk Southern trains serving East Coast refineries travel strategic routes that have double and triple track lines, providing the rail capacity to serve the market safely, efficiently, and cost-effectively. In 2014, the railroad’s mix of traffic included heavy crude oil from western Canada and light crude from North Dakota’s Bakken oil field.

A derailment in Vandergrift, Pa., resulting in the release of about 4,550 gallons of Canadian heavy crude oil from four tank cars, was Norfolk Southern’s only crude-by-rail incident in 2014.

Proactive Approach to Crude-by-Rail Safety

In partnership with federal regulatory agencies, Norfolk Southern and the rail industry have taken extensive measures to ensure the safe transport of crude and to help communities prepare and respond to potential incidents. Through voluntary industry agreements or federal directives, following are some of the actions Norfolk Southern took in 2014:

Risk Analysis

Began performing route risk analyses to determine the safest and most secure routes for moving trains transporting 20 or more carloads of petroleum crude oil — so-called key crude trains. These assessments deploy an analytical tool developed by the industry and the federal government that uses 27 risk factors, including population density along a route, local emergency response capability, track quality, and signal systems. Based on results of these analyses, Norfolk Southern has diverted a number of these key crude trains to avoid certain metropolitan areas.

Speed Reduction

Reduced the maximum speed of key crude trains to 40 mph from 50 mph in places designated by Homeland Security officials as High Threat Urban Areas. In April 2015, the railroad reduced the maximum speed for all trains with 20 or more carloads of any flammable liquids, including crude oil or ethanol, to 40 mph in High Threat Urban Areas. The company routinely conducts operating rules checks to ensure continued compliance with this speed.

Track Inspections

Made at least one additional internal rail inspection above what is required by federal rules on main lines where key crude trains operate. In addition, the company conducts at least two inspections using a track geometry train to identify potential track safety issues.

Wayside Defect Detectors

Added rail car wheel bearing detectors to existing detectors that alert employees to potentially defective car wheels and help prevent derailments.

Advanced Braking Methods

Agreed to equip all key crude trains with either distributed locomotive power or two-way telemetry end-of-train devices. Distributing locomotives throughout the train improves braking times, and the two-way devices enable train crews to apply emergency brakes from both ends of the train to stop faster.

Preparedness Resources

Worked with the Association of American Railroads as the industry developed a shared inventory of emergency response resources that could be deployed if an incident occurred on a key crude train route. The inventory includes availability of things such as fire-fighting equipment and contractors that could respond to oil spills. In addition, the company purchased seven additional fire-fighting foam trailers and strategically placed them along crude routes.

Training Investment

Invested in enhancements to crude-by-rail training at the industry’s Security and Emergency Response Training Center in Colorado and provided tuition and travel expenses as part of ongoing efforts to help train first responders across our system.

Tank Cars

Continued to advocate for more robust tank car standards for flammable liquid commodities, including petroleum crude oil, with standards incorporating thicker tank shells, thermal protection, and better relief valves, among other specifications.