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Union Pacific on Track to
Save Fuel Despite Increased Traffic

by Staff, May 3, 2006

OMAHA, Neb. - Despite rising fuel costs, Union Pacific says that it has reduced fuel costs despite hauling 4% more materials than one year ago.

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, the largest U.S. railroad, fuels nearly 8,000 4,000-horsepower locomotives every day -- each with a 4,900-gallon tank -- has embarked on an ambitious energy-efficiency effort. The result is that 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.

Among the railroad's initiatives:

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.

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:

"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."

Jonathan Nelson, Staff Writer
Union Pacific on Track to Save Fuel Despite Increased Traffic, May 3, 2006

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