1. 1 Update on Efforts to Reduce Emissions and Risks at High Risk Railyards February 25, 2010 BNSF San Bernardino California Environmental Protection Agency Air Resources Board Air Resources Board UP Commerce

2. 2 September 2009 Board Meeting Presented general recommendations to further reduce emissions and risks from locomotives and at railyards Presented general recommendations to further reduce emissions and risks from locomotives and at railyards Discussed emerging locomotive technologies that can further reduce emissions Discussed emerging locomotive technologies that can further reduce emissions Highlighted the benefits of existing ARB and U.S. EPA actions Highlighted the benefits of existing ARB and U.S. EPA actions

3. 3 ARB and U.S. EPA Actions Already Reducing Emissions and Risks ARB Regulations ARB Regulations Drayage trucks Transport refrigeration units Cargo handling equipment Clean fuels for intrastate locomotives ARB/Railroad Agreements South Coast locomotive fleet average Idle reduction devices on intrastate locomotives Clean fuels for all locomotives U.S. EPA Locomotive Standards Federal and State Incentive Funding Carl Moyer Incentive Funds Proposition 1B Bond Funds ARRA-DERA Incentive Funds

4. 4 Significant Diesel PM Emission Reductions Already Occurring at the 18 Major Railyards * Locomotives 85% of remaining railyard diesel PM emissions (37%) (55%) (66%) * Based on existing U.S. EPA and ARB regulations and agreements.

5. 5 September 2009 Board Direction Develop approach for railroads to prepare and implement risk reduction plans for high- risk railyards Develop approach for railroads to prepare and implement risk reduction plans for high- risk railyards Use San Bernardino railyard as a template Use San Bernardino railyard as a template Investigate potential enforcement provision that would trigger ARB regulatory action Investigate potential enforcement provision that would trigger ARB regulatory action Coordinate with stakeholders Coordinate with stakeholders Report back to Board with recommendations Report back to Board with recommendations

6. 6 Actions Taken Since September Discussed possible approaches with key stakeholders Discussed possible approaches with key stakeholders Collected technical information on railyards Collected technical information on railyards   Diesel PM emissions assessment   Potential cancer risks   Projected changes in growth   Potential applicable control measures Solicited input from stakeholders on a possible enforceable provision Solicited input from stakeholders on a possible enforceable provision

7. 7 Summary of Proposal Obtain commitment from railroads to reduce emissions/risks from high risk railyards Obtain commitment from railroads to reduce emissions/risks from high risk railyards Work with interested stakeholders to establish specific provisions for the railroad commitment Work with interested stakeholders to establish specific provisions for the railroad commitment Implement through exchange of letters between ARB and the railroads after public consultation process Implement through exchange of letters between ARB and the railroads after public consultation process

8. 8 Locomotive Emission Reduction Measures MeasuresTimeframe Emission Reductions PMNOx Switcher Locomotives (Pre-Tier 0 to Tier 3) 2010-201290%90% Med HP Locomotives (Pre-Tier 0 to Tier 3) 2012-201480%80% Interstate Locomotives (Tier 2 to Tier 2+/Tier 3) 2012-202050%N/A

9. 9 Additional Measures Operational measures (e.g. gate relocations) Operational measures (e.g. gate relocations) Accelerated turnover of cargo handling equipment, drayage trucks, transport refrigeration units, etc. Accelerated turnover of cargo handling equipment, drayage trucks, transport refrigeration units, etc. Alternative fuel/electrification of equipment Alternative fuel/electrification of equipment Stationary collection systems for locomotive maintenance (“Hood Technology”)

10. 10 Summary of Key Provisions Identify high-risk railyards Identify high-risk railyards Establish railyard-specific targets for reductions over time Establish railyard-specific targets for reductions over time Routinely assess and report emissions, risks, and compliance with targets Routinely assess and report emissions, risks, and compliance with targets Include public participation and outreach Include public participation and outreach Establish enforceable provisions that “keeps ARB’s feet to the fire!” Establish enforceable provisions that “keeps ARB’s feet to the fire!” Identify specific ARB actions to be taken if commitments not met Identify specific ARB actions to be taken if commitments not met

11. 11 Possible ARB Actions if Commitments Not Met Adopt the following regulations: Control non-preempted locomotives Impose risk reduction program, with periodic reporting Evaluate the following possible regulations: Hood technology for locomotive maintenance Electrification of cargo handling equipment, TRUs, or other equipment Pursue greater authority from new federal legislation and regulations

12. 12 Next Steps Discuss specific provisions of the commitment letters with stakeholders Discuss specific provisions of the commitment letters with stakeholders Release draft commitment letters for public comment Release draft commitment letters for public comment Revise commitment letters as appropriate Revise commitment letters as appropriate Present final commitment letters to Board for concurrence Present final commitment letters to Board for concurrence Railroads release detailed railyard-specific plans for meeting commitments Railroads release detailed railyard-specific plans for meeting commitments

13. 13 Proposed Timing March/AprilPrepare draft letters and hold public workshops April/MayPresent letters to the Board May/JuneExchange signed letters JulyRailroads release details of how commitments to be met August/SeptemberHold community meetings

14. 14 Benefits of the Proposal Achieves greater emission reductions than existing measures Achieves greater emission reductions than existing measures Covers both preempted and non-preempted locomotives Covers both preempted and non-preempted locomotives Quick implementation schedule Quick implementation schedule Facilitates dialogue between the railroads and the local communities Facilitates dialogue between the railroads and the local communities

15. 15 Staff Recommendations Pursue commitment with railroads to reduce emissions and risk at high risk railyards Pursue commitment with railroads to reduce emissions and risk at high risk railyards Direct staff to: Direct staff to:  Initiate detailed discussions of key provisions with interested stakeholders and to conduct public meetings  Return to the Board in April/May with final commitment letters