Union Pacific and the Environment Armour Yellow Outside -- Green Inside ORULE Meeting – October 2, 2008

22 Portland Oakland LA Calexico Nogales El Paso Seattle Eagle Pass Laredo Brownsville Dallas Houston New Orleans KC Memphis St. Louis Chicago Omaha SLC Eastport Twin Cities Duluth Denver System Fast Facts Commodity Revenue $15.5 B Route Miles32,200 in 23 States Employees49,000 Annual Payroll$3.9 B Customers25,000 Locomotives 8,700 Oregon Fast Facts Route Miles1,054 Employees1,609 Annual Payroll$104 M Purchases Made$42 M Union Pacific System

3 Rail Efficiency U. S. Freight Ton-Miles by Mode* 2005 Rail 40% Truck 30% Water 15% Pipeline 15% Rail 8% Truck 65% Water 18% Pipeline 9% Energy Consumption by Mode** 2005 *Source: U. S. Bureau of Transportation Statistics **Source: U. S. Department of Transportation

4 Environmental “Fast Facts” Since 1994, UP... –Improved Fuel Efficiency 20% –Reduced Greenhouse Gas 20% Since 2000, UP... –Reduced NOx 60% –Reduced Particulate Matter Emissions 40%

5 Armour Yellow Outside -- Green Inside Rail Transportation Is Three Times More Fuel Efficient Than Trucks One Intermodal Train Takes up to 280 Trucks off the Highway UP Can Haul One Ton 790 Miles on One Gallon of Diesel Fuel UP “Green Goat” Hybrid Locomotive

6 790 Miles Per Gallon and a Lot More Leg Room

7 Reduced Locomotive Idling

8 Oxidation Catalyst Device

9 Diesel Particulate Filters

10 Genset Yard Locomotives

11 Green Goat Hybrid Yard Locomotives

12 Fuel Master Program What Is It? –An employee driven conservation program that rewards fuel saving efforts of locomotive engineers –More than 6,800 UP engineers on over 130 routes are participating How it works –Engineers compete against fellow engineers in the same territory –Individual average consumption rates are calculated over a 2 month period –The top performing engineers receive monetary awards for personal use

13 Communications Based Train Control (CBTC) UP Pilot Test Objectives Improve safety and efficiency of railroad operations –Provide collision avoidance between trains and between trains and MofW forces and equipment –Provide speed enforcement of trains –Improve fuel consumption and asset utilization through real time tracking with on board energy management Meet federal regulatory requirements for production deployment Railway Safety Program Plan (RSPP), Product Safety Plan (PSP Support industry interoperability initiatives

14 Track Warrant Authority Limits Authority: Dispatcher –Verbal or Written Collision Avoidance: Train Dispatcher and Train Crew Authority: Wayside Signals –Signal Spacing Based on Safe Braking Distance Collision Avoidance: Signal System and Train Crew Dark Territory Signaled Territory Current Train Control Methods

15 Braking CurveWarning Curve Authority: Wayside Signals Collision Avoidance: On-board Systems (Predictive Enforcement) –Braking Distances Calculated Based on Train Speed Communication Based Train Control Next Generation Train Control Method

16 CBTC – System Overview Initialization Track Database Speed Restrictions Work Zones Train Consist Movement Authorities Braking Curve Warning Curve Predictive Braking Speed Restrictions Work Zones

17 CBTC On Board Equipment – Human-Machine Interface Display Terminal – On-Board Computer – Location Determination System – Digital radio (voice & data) Computer-Aided Dispatching Data Link Position Reference GPS CBTC Server Location Reports Authorities Communications Based Train Control

18 CP Canada Washington Nampa Seattle Spokane Eastport Portland Cranbrook Spokane Sub 140 miles dark territory 7 trains per day 15 UP SD9043 locomotives and 15 CP C44AC locomotives ~55 Employees to train Communications Based Train Control Dark Territory Pilot

19 North Platte S.Morrill Bill KC Green River Cheyenne Denver St. Louis Chicago Boone South Morrill Sub 193 miles multiple track signaled track 75+ trains per day 50 C44AC locomotives to equip ~ 300 Employees to train Communications Based Train Control Signal Territory

20 CBTC Challenges Ensuring enough radio spectrum is available Need software algorithms to predict braking distances Making the system interoperable across railroads

21 Reduce, Recycle, Renew Crossties Fuel and Oil E-waste

22 Prevention and Inspections Spill Prevention Wastewater Monitoring and Inspections

23 Vision Statement Union Pacific will be recognized as being environmentally responsible and the transportation leader in the safe movement of hazardous materials. Mission Statement Prevention: Prevent the causes of environmental damage that result from railroad operations or that of our lessees. Preparedness:Develop partnership with internal and external customers to prepare for effective emergency response. Response: Respond to emergencies involving hazardous and other environmentally sensitive materials to minimize health, environmental, operational, and financial impact to Union Pacific. Recovery: Cleanup contamination for which Union Pacific is responsible.

Union Pacific and the Environment Armour Yellow Outside -- Green Inside