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Preserving the Environment

Preserving the Environment

A healthy environment is an essential foundation for a strong country – and a strong economy. Our vision of building America involves protecting and strengthening this foundation.

Railroads are one of the most fuel efficient means of transportation, generating fewer carbon emissions than long haul trucks or air transport. Moving freight on trains also reduces traffic gridlock on America's overtaxed highways and carbon emissions from idling vehicles.

Union Pacific moves freight in an environmentally friendly way, enabling sustainable economic growth, but still recognizes the importance of not being complacent about our operations' impact. As the world seeks to improve environmental sustainability, we are doing our part to reduce our carbon footprint and help our customers do the same.

Highlights, Challenges and Opportunities

Freight trains are four times more fuel efficient than trucks on a ton-mile basis. On average, Union Pacific moved a ton of freight 452 miles on a gallon of diesel fuel in 2016, compared to long-haul trucks which move a ton of freight approximately 134 miles on a gallon of diesel fuel.

Union Pacific again earned an "A" rating on the Carbon Disclosure Project's (CDP) Climate Change Survey and inclusion on CDP's S&P Climate Disclosure Leadership Index in 2016. Leadership status recognizes companies demonstrating best practices, leadership efforts and understanding climate change risks and opportunities. We are proud of our achievements, resulting from the eighth consecutive year of submitting climate change data to CDP.

Green Ranking

Union Pacific ranked number 81 among all U.S. businesses in Newsweek's 2016 Green Ranking, an improvement from our position as number 121 in 2015.

Our Approach to Environmental Management

Union Pacific's goal is to be a leader in moving goods in a fuel-efficient and environmentally responsible manner. Environmental Management System policies and procedures provide a pathway for the company to meet or exceed applicable environmental laws and regulations. Our environmental management efforts are based on the following strategic pillars.

  • Prevention: Acting to reduce environmental damage from operations, including carbon emissions and climate impact.
  • Preparedness: Working with customers and communities to prepare an effective response to future environmental issues.
  • Response: Responding to emergencies involving environmentally sensitive materials to minimize health, environmental, operational and financial impact.
  • Recovery: Restoring the environment from contamination for which Union Pacific is responsible.

Union Pacific's Environmental Management System improves processes and tracks performance. We strive to improve our performance by investing in technology, maintaining track equipment and training employees in more environmentally friendly behaviors.

Every Union Pacific employee must commit to preventing pollution, continuously improving and complying with all regulations, according to the company's environmental policy signed by Chairman, President and CEO Lance Fritz.

Union Pacific's Environmental Management Group (EMG) oversees environmental compliance. It is integrated into daily operations. EMG rigorously plans, coordinates and communicates best environmental practices. It also engages employees in our environmental management mission and vision.

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Building America Report 2016 - UP 7861 leads a manifest train across a bridge at Keddie, California.

Environmental Risk Management

Union Pacific's vice president of safety is directly responsible for the progress of the company's environmental efforts. He reports to the chairman, president and CEO regarding environmental policy compliance. In addition, the vice president of safety reports directly to the board of directors at least once a year.

Continuous improvement in achieving the Company's fuel efficiency goals, which directly impact our emissions, is tied to compensation based on our performance review process.

Compliance

Union Pacific is subject to federal and state environmental statutes and regulations related to public health and environment, which are administered and monitored by the U.S. Environmental Protection Agency (EPA) and other federal and state agencies. Primary laws affecting rail operations are included below:

  • Resource Conservation and Recovery Act, regulating solid and hazardous waste management and disposal.
  • Comprehensive Environmental Response, Compensation and Liability Act, governing contaminated property cleanup.
  • Clean Air Act, regulating air emissions.
  • Clean Water Act, protecting the country's waters.

Our Environmental Partnerships

Union Pacific collaborates with a range of partners to identify opportunities to reduce our environmental impact and manage our land responsibly. Information on organizations we work with is listed below:

  • Membership in the GreenBiz Executive Network, a peer-to-peer learning forum for sustainability executives from some of the world's largest companies.
  • The California Council for Environmental and Economic Balance, a nonprofit, non-partisan coalition of industry, labor and public leaders working to solve the most pressing environmental policy problems facing California.
  • The Association of American Railroads Sustainability Task Force, a rail industry forum sharing sustainability best practices. In 2016, Union Pacific partnered with other railroads to host the 6th Annual Railroad Sustainability Symposium at the University of Illinois at Urbana Champaign.
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Environmental Risks

Extreme weather results in harsh working environments for employees, increased rail maintenance costs and negative service impacts. Blizzards, floods and hurricanes can lead to slower train speeds, service interruptions, track damages and recovery costs.

Our company acts to strengthen our network's resiliency from potential effects of extreme weather events. We have established emergency response procedures, which include moving required resources to regions likely to be affected. We are pursuing improvements that further increase our infrastructure's resiliency, including mitigating the impact of potential sea level rise.

Renewable energy growth and other proactive measures tackling carbon emissions reductions change can result in opportunities. Union Pacific continues to support wind turbine and other clean energy technology shipments.

Union Pacific educates public and elected officials about the environmental benefits of moving goods by rail. We work closely with public agencies to advance emissions reduction technology, while delivering immediate benefits in improved air quality. As part of this collaboration, we strategically locate our lower-emitting locomotives in parts of the country where communities fail to meet federal and national air quality standards.

For additional information on how climate change could have a material adverse effect on operations results, financial condition and liquidity, see the risk factors in Union Pacific's Annual Report, Form 10-K and CDP filings.

Greenhouse Gas (Ghg) Emissions Performance

Union Pacific locomotives produced 9,913,870 metric tons of GHG emissions from fossil fuels in 2016, down from 10,834,984 metric tons in 2015 due primarily to decreased freight volumes. Biomass source emissions were 119,872 metric tons, including 34,026 from renewable fuels. This is a decrease from 129,600 metric tons in 2015, which included 35,534 from renewable fuels.

Scope 3 emissions from employee travel totaled 18,603 metric tons, a decrease from 19,803 metric tons in 2015. Employee travel includes rental car fuel and commercial air travel. We worked with suppliers to identify Scope 3 emissions generated on Union Pacific's behalf. Suppliers representing an estimated 27 percent of Scope 3 spend produced emissions totaling 269,386 metric tons in 2016, compared to 266,746 in 2015.

Scope 3 emissions from Union Pacific's largest fuel suppliers' extraction, production and transportation were 2,536,657 metric tons, down from 2,779,030 in 2015.

Fuel Efficiency

Fuel efficiency is a critical part of Union Pacific's sustainability approach. Diesel fuel accounts for more than 11 percent of Union Pacific's operating expenses. We strive to appropriately balance financial returns, environmental performance and social commitment.

Fuel efficiency and carbon emission reductions fluctuate based on business volumes and commodity mix. Fuel efficiency improves when trains move heavier shipments. We improved our fuel efficiency rate by 0.8 percent, compared to the 0.6 percent decrease in 2015. The improvement brings us closer to our goal of reducing locomotive fuel consumption rate by 0.5 percent annually from 2015 to 2017.

Working With Customers To Reduce And Measure Emissions

Customers seeking to reduce carbon emissions can calculate savings by choosing rail by using Union Pacific's online Carbon Emissions Estimator. Many customers also receive annual emissions savings estimates compared to moving goods with other transportation modes. In 2016, Union Pacific customers eliminated an estimated 29 million metric tons of GHG emissions by choosing rail over truck transportation.

Verification Of Union Pacific Ranking As Climate Change Leader

Union Pacific worked with independent organizations to ensure an accurate annual greenhouse gas inventory and emissions calculation. Trinity Consultants assists with methodology to accurately measure and calculate GHG inventory. GHD Limited verified our GHG emissions inventory.

Investing In New Locomotives

Union Pacific acquired 160 new locomotives that meet the EPA's stringent Tier 4 emissions standards in 2016, adding to the100 locomotives purchased in 2015. Tier 4 standards reduce particulate emissions from diesel locomotives by as much as 90 percent and nitrogen oxide emissions by as much as 80 percent. We plan to purchase additional Tier 4 locomotives in 2017.

Union Pacific has invested about $8.5 billion in purchasing more than 4,500 new locomotives since 2000. These locomotives all meet the EPA's Tier 0 to Tier 4 standards. We retired more than 3,200 older, less fuel efficient locomotives over the same period.

Since 2000, we overhauled or rebuilt more than 6,700 diesel engines with emissions control upgrades. As a result of new locomotive and refurbishment programs, more than 96 percent of Union Pacific locomotives meet Tier 0 to Tier 4 EPA emissions standards.

Building America Report 2016 - General Electric Tier 4 locomotive

Incorporating Technology

Technology plays a fundamental role in Union Pacific's fuel efficiency performance. The following technologies all help drive fuel efficiency across the system.

  • The LEADER (Locomotive Engineer Assist/Display and Event Recorder) system uses GPS maps to analyze train operations and prompt engineers when to accelerate and when to brake. During 2016, our 451 LEADER-enabled locomotives completed 9.2 million trip miles.
  • Trip Optimizer (TO) automatically controls a locomotive's throttle, which helps keep trains on schedule while minimizing fuel use. This system calculates the most efficient way of operating a locomotive by considering factors such as train length, weight, grade, track conditions, weather and locomotive performance. Our 987 TO locomotives made 9.8 million trip miles in 2016.
  • The Smart Consist system selects throttle notch combinations for the best fuel economy. We have deployed Smart Consist in 408 locomotives.

Process improvements reduce GHG emissions by optimizing maintenance work. Union Pacific's cross-functional Fuel Mizers Load Testing Reduction Team implemented an efficient process for locomotive tests that ensures engines and generators produce enough horsepower to pull loaded rail cars. The process reduced fuel consumption by more than 2.6 million gallons and improved reliability in 2016. Teams also use ultrasound technology to test underground conditions for steel pipes used for fuel. It allows us to identify irregularities without uncovering the pipes.

New Technology Solutions From A New Generation Of Engineers

Union Pacific and Brigham Young University's Capstone program gave students an opportunity to test new aerodynamic technologies that dramatically impact fuel efficiency. Students from the university tested Arrowedge, a device that reduces drag and improves freight container efficiency. Union Pacific deployed Arrowedge in 2014, and new generations of students helped us conduct wind tunnel testing. Arrowedge 3.0, is the latest version, which cuts manufacturing costs for the drag reduction system by 88 percent. We are manufacturing 50 devices to be deployed across our railroad.

Evaluating Alternative Fuels

Union Pacific has been at the forefront of testing alternative fuels for locomotives since 1952, when we launched a project to explore the use of gas turbines to power locomotives.

The company continues evaluating LNG-powered locomotives as a commercially reliable and economical option. In previous years we met with community leaders, first responders and employees along the test route to discuss the multi-year project details and safety precautions. We will continue to maintaining open lines of communication to update communities of progress and new developments.

Building America Report 2016 - Trip optimizer display

Trip Optimizer display.

Building America Report 2016 - Guided wave technology

Guided wave technology allows Union Pacific's fuel team to take a closer look at the railroad's underground assets.

National Council Of State Legislators Visit Proviso Yard

Union Pacific welcomed 80 legislators and state officials attending the National Conference of State Legislators' Annual Legislative Summit in Chicago at our Proviso Yard in November. They were briefed on Union Pacific's safety and environmental improvement efforts. The officials received an up-close look at Tier 4 and GenSet locomotives, PTC operations, Arrowedge and track inspection vehicles. Union Pacific's hazardous materials experts demonstrated tank cars and emergency equipment inside a box car converted into a classroom for emergency responder training sessions. The group also received a tour of the Union Pacific – Metra West Line.

Photo: Mike Iden, Union Pacific's general director of car and locomotive engineering, explains how Arrowedge reduces aerodynamic drag on trains and improves fuel efficiency.

Building America Report 2016 - State legistlators visit Proviso Yard

Energy Conservation

Union Pacific's utility conservation projects reduced energy consumption by more than 4 million kWh, which is enough to power approximately 370 U.S. homes annually. Many projects were simple, employee-driven solutions such as installing LED lighting, replacing compressors and turning equipment off at the end of the day.

Energy Consumption*201420152016
Diesel1,171.2 gallons1,071.3 gallons979.9 gallons
Gasoline12.7 gallons11.9 gallons11.5 gallons
Other fuel13.6 gallons17.7 gallons11.4 gallons
Electricity627.1 kilowatt hours669.4 kilowatt hours648.9 kilowatt hours
Natural gas720.4 standard cubic feet1,145.5 standard cubic feet573.6 standard cubic feet

*Estimated in millions

Leveraging Solar Power

Solar power provides a ready source of energy in remote locations that can help Union Pacific reduce exposure to fluctuating energy markets. Union Pacific's solar power use includes the following initiatives.

  • Solar-powered active warning signals, which consume approximately 2.8 million kWh of electricity each year.
  • The Joliet Intermodal Terminal is powered by solar and wind energy, featuring 273 solar panels generating 72,000 kWh annually.
  • Our Santa Teresa facility draws 40 percent of its power from on-site solar panels.
  • Solar panels for refrigerated rail cars provide electricity to maintain battery charge, ensuring the cars are ready to move at all times.
Building America Report 2016 - Joliet Intermodal Terminal solar grids

Solar grids at the Joliet Intermodal Terminal near Chicago.

Waste Management

Union Pacific generated an estimated 1.1 million tons of waste in 2016, and diverted approximately 67 percent of this waste from landfills. Our multi-year efforts reduced federal large-quantity hazardous waste generator sites from 35 to three.

Extending Railroad Tie Lifecycle

Union Pacific continued testing durable materials to increase railroad tie lifecycles, expanding its ability to stabilize the track and reducing waste. We seek a sustainable rail tie with commercial and environmental benefits. Tests are currently focused on new composite materials and a new two-step wood tie treatment process.

Disposing E-Waste

Union Pacific recycles electronics no longer in use, commonly known as e-waste. We recycled or distributed more than 270,000 pounds of electronic equipment and more than 1.6 million pounds of signal batteries in 2016. In November, we invited employees to drop off obsolete and unwanted electronics at our headquarters in Omaha, to mark America Recycles Day.

Recycling Fuel And Oil

We recycled more than 3.3 million gallons of oil and fuel at our facilities. Union Pacific facilities have systems to catch spills, extract engine oil from wastewater and use fuel nozzles to shut off automatically, preventing locomotive fuel tank overflow.

Building America Report 2016 - Stack of replaced ties

Union Pacific replaces millions of ties each year and seeks to expand their life cycle.

Water Management

Managing thousands of utility accounts across our network can be challenging. We analyzed the accounts and researched irregularities and identified opportunities to conserve thousands of gallons. We made changes and repairs that eliminated unnecessary water use. A solution in Commerce, California, was as simple as addressing an underground water leak, which reduced water consumption by an estimated 120,000 gallons a year.

Union Pacific used an estimated 1.25 billion gallons of water in 2016, a reduction from 1.54 billion gallons in 2015. We continue exploring ways to conserve water. We help protect water resources from our operations through spill prevention controls and countermeasure plans at 136 facilities. Ninety wastewater treatment facilities capture and treat water from equipment washing and maintenance. We also treat captured wastewater to comply with government regulations and wastewater discharge permits.

Reporting Water to CDP

Union Pacific was the only Class 1 railroad to report water consumption to CDP, which we submitted for the third consecutive year in 2016. The company's "C" rating reflects Union Pacific's awareness of the impacts of business activities on the environment, people, ecosystems and vice versa. The CDP results help Union Pacific's efforts to measure, monitor and report water consumption. We remain committed to evaluating the situation and exploring steps to reduce water use.

Giving The Great Salt Lake Freedom To Flow

A causeway built to support railroad tracks over Utah's Great Salt Lake has divided the Western Hemisphere's largest saltwater lake since 1957. While it enabled waters of the north and south ends of the lake to mix, it changed the surface level and salt content. The northern end of the lake became lower and saltier, due to a lack of fresh water.

In 2016, Union Pacific engineers constructed a 180-foot bridge, increasing the flow of water between the north and south ends. The increased flow improved conditions for tiny crustaceans and brine shrimp, which cannot survive in water that is too salty. Brine shrimp eggs are used in aquaculture to feed some types of fish and baby shrimp that don't survive well on artificial feed.

Utah supplies one-third of the world's brine shrimp supply, which contributes $57 million annually to its economy. Brine shrimp popu.lation declines in the Great Salt Lake could negatively impact world-wide seafood prices.

Brine shrimp are important to the Great Salt Lake's unique ecological system. Along with brine flies, they are the main food source for migratory birds. The lake is a massive refueling station for birds completing migrations from places like South America, Russia and Mexico. The Eared Grebe, a water bird, actually doubles its weight eating the Great Salt Lake's brine shrimp before completing its migration south for the winter.

Adjustable earthen control berms enable Union Pacific to respond to changing ecological requirements. Scientists will monitor the bridge's impact over the next five years. Models predict water levels at the south end will drop, stabilizing the Great Salt Lake's waters mix more freely.

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Building America Report 2016 - Salt Lake causeway

Union Pacific's rock-fill railroad causeway stretches 20 miles across the Great Salt Lake, the largest salt water lake in the Western Hemisphere.

Bridging The Gap To Freshwater Supplies In Louisiana

Union Pacific constructed a 102-foot steel bridge spanning the Bayou Lafourche in Louisiana in a project led by Bayou Lafourche Fresh Water District in 2016. The new bridge does more than support two rail lines crossing wetlands. Replacing a previous box-culvert structure allows far greater freshwater flow from the Mississippi River.

Improved freshwater flow helps prevent saltwater incursion while providing freshwater supplies for approximately 300,000 businesses and residents near the bayou. It also prevents wetland loss, which protects shores from wave action, reduces flood impacts and absorbs pollutants. Bayou Lafourche's water quality provides a habitat for plants and animals found nowhere else.

Union Pacific reduced water consumption by 290 million gallons in 2016.
Building America Report 2016 - Bayou Lafourche

The 106-mile Bayou Lafourche in southwest Louisiana stretches from the Mississippi River in Donaldsonville to the Gulf of Mexico in southern Lafourche Parish. Photo courtesy of Bayou Lafourche Fresh Water District.

Land Preservation

A healthy environment supports healthy, vibrant local communities – and their economies. Union Pacific is committed to being a responsible steward of the land we own. We work to preserve our ecosystems, improve our resiliency and reduce our impacts.

Union Pacific implements Habitat Conservation Plans to protect ecosystems and endangered species in various locations. Plans in the western half of our network included the desert tortoise, endangered southwestern willow flycatcher and valley elderberry longhorn beetle.

We also manage 30 miles of trees to control sand from blowing across the track in the Mojave Desert and actively manage several wetland areas.

Using Our Network To Establish Habitat Corridors

Union Pacific's vast rail network provides an opportunity to establish ecologically significant habitat corridors across wide areas of the central and western United States. In 2015, we joined the Wildlife Habitat Council (WHC) to leverage this potential for preserving and improving pollinator habitats. Starting with lands on which we do not run railroad operations, we are working with the WHC to establish a suitable habitat to support migrating species such as the Monarch butterfly to travel between winter and summer territories. Union Pacific also joined the Rights of Way Habitat working group, supported by the University of Illinois at Chicago to enhance our efforts.

Investing in Future Environmental Stewards

Union Pacific awarded Daisy Lazcon from Beach Park, Illinois, a $500 conservation project scholarship for her volunteer efforts to reestablish native plants under the Center for Conservation Leadership Program's guidance. Daisy removed invasive plants from nature preserves and planted seeds to improve biologic diversity and practice environmental stewardship.

Building America Report 2016 - Environmental steward.

Compliance

Union Pacific is committed to following applicable laws and regulations in all areas of our operations. From time to time, we are involved in legal proceedings, claims and litigation that occur in connection with our business. For example, we received notices from the EPA and state environmental agencies alleging that we are or may be liable under federal or state environmental laws for remediation costs at various sites throughout the United States, including sites on the Superfund National Priorities List or state superfund lists. We cannot predict the ultimate impact of these proceedings and suits because of the number of potentially responsible parties involved, the degree of contamination by various wastes, the scarcity and quality of volumetric data related to many of the sites, and the speculative nature of remediation costs. Where we are found in violation of specific rules or regulations, we seek remedy through the appropriate channels.