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United States Department of Energy Quadrennial Energy Review
Rail’s Role in Energy Infrastructure and Utilization August 8, 2014
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Overview
What we burn: • Rail is a large energy consumer continually improving
efficiency
What we haul: • Rail is critical to the transportation of energy and energy
savings
Reliability of rail: • Rail investment to safely and efficiently meet existing and new
demand
What we burn: Rail is a large energy consumer
• BNSF uses 1.3 billion gallons of diesel per year • Second largest user behind U.S. Navy
• Newest locomotive fleet in industry with approximately 7600 units, improving fuel efficiency and lower emissions; in last 10 years:
• New: Over 3,300 units • Remanufactured: Over 2,800 units
• Increasing use of Automated Gate technology and electric wide-span cranes at BNSF intermodal facilities
• Reduces idling emissions and eliminates local emissions from cranes
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What we burn: Liquefied natural gas-- BNSF pilot • Burlington Northern successfully tested natural gas locomotives using LNG tenders in the early
1990s
• Current testing is “duel fuel” – optimizes fuel consumption and maximize operating range on parts, or all, of network
• BNSF is independently working with test locomotives from both of the primary domestic locomotive manufacturers—GE Transportation and EMD/Caterpillar
• Revenue service dynamic testing underway in Colorado and California utilizing diverse operating conditions
• Regulatory issues include siting and operating natural gas fuel infrastructure, locomotive and tender-specific regulatory issues, including Environmental Protection Agency (EPA) engine emission criteria, FRA rail operating rules, PHMSA tender design and Surface Transportation Board (STB) economic regulation
• Economic value based on diesel-LNG price spread
• Successful implementation not dependent on public incentives, and will lead surface transportation conversion
•
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Sources of BNSF Growth
2013 Units
What we haul: Traffic mix has changed 2006-2013
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(2,315) (2,535)
(2,230) (956)
(558)
(183)
(1,874)
Volume in Thousands
2006 Volumes = 10,637 2013 Volumes = 10,093
Domes&c Intermodal represents largest number of units and growing rapidly.
8/13/14 6
What we haul: Intermodal fuel efficiency
From an environmental, economic, congestion and safety perspective, rail is the best way to move goods – today and in the future *
One BNSF intermodal train removes more than 280 long-haul trucks from our nation’s highways
Each year BNSF’s customers reduce carbon emissions by 30 million metric tons vs. highway
Rail is over three times more fuel efficient than long-haul trucks
• US coal demand strong- Western coal pricing, natural gas pricing and economic demand up
• Coal generation up almost 7% year-over-year through May.
• BNSF has invested to ensure resilient and efficient coal network: $3.5 billion since 1996 to ensure reliability of coal network.
• Historic $9 billion capital plan (2013-14) provides capacity on key coal routes.
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What we haul: Growing coal demand
What we haul: Coal sets in service begin rise in mid-2013
Source: Internal BNSF data
300
350
400
450
500
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What we haul: Efficient transportation enables PRB coal use
Source: Ventyx
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What we haul: BNSF Ethanol Destination Franchise
Unit Train Destinations Existing Watson, CA Birmingham, AL East Coast – via Chicago Texas - Ft Worth & Texas Gulf
Manifest Lanes Northern California Pacific Northwest Mountain Zone – UT, NM, MT, CO IL / MO – Chicago, St Louis
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What we haul: North American oil production
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
Q1 - 2010
Q2 - 2010
Q3 - 2010
Q4 - 2010
Q1 - 2011
Q2 - 2011
Q3 - 2011
Q4 - 2011
Q1 - 2012
Q2 - 2012
Q3 - 2012
Q4 - 2012
Q1 - 2013
Q2 - 2013
Q3 - 2013
Q4 - 2013
US & Canada Oil Production US & Canada CBR Shipments
3,333
980
Total US & Canada oil production growth Kbls/d
US & Canada RR CBR growth Kbls/d CBR handled
about 1/3 of the increase in oil production
What we haul: Crude-by-rail origins & destinations
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1 Origin Facility 2009
1 Destination Facility
3 Origin Facilities 2011
5 Destination Facilities
9 Origin Facilities 2012
15 Destination Facilities
10 Origin Facilities 2013
10 Destination Facilities
7 Origin Facilities 2014
10 Destination Facilities
Reliability of rail: Rail is providing unique value
• Market Distribution Flexibility allows producers to ship in multiple constructs and to refineries throughout the U.S.
• Investments in infrastructure, people and process ensures Reliable Transportation Services for producers.
• Decades-long commitment to Safe Operating Practices helps prevent accidents in the first place.
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Reliability of rail: Investing in infrastructure to support demand
$ Billions
$2.3 $1.9
$2.1 $2.0
$2.6 $3.1
$3.8 $3.4
$3.4 $3.3
$2.7 $3.6
$3.6 $4.0
$5.0 $46.8
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F Total
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Capital Commitments 2000-2014 Total
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Reliability of rail: Ensures Capability and Dependability
46%
18%
32%
4%
Core Network and Related Assets Expansion and Efficiency Locomotive, Freight Car, and Other Equip PTC
BNSF’s 2014 Capital Commitment $5 Billion
$2.3 billion
Core Network and Related Assets
$1.6 billion
Loco, Freight Car & Other Equip
$900 million
Expansion & Efficiency
$200 million
PTC
Reliability of rail: North Dakota- expanding capacity to meet demand
363,601 Total Carloads
Over $600 million in infrastructure investment (2013-2014) 115 miles of new track
4 new sidings
0 10 20 30 40 50 60 70 80 90
100
2011 2012 2013 2014 2015 2016 2017 2018 2019
Line capacity and projected volume (trains per day)
Glasgow subdivision (Minot - Snowden)
Forecast
Capacity
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Reliability of rail: Continuous risk reduction
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BNSF vs. Industry Reportable Rail Equipment Incident Rate (Incidents per Million Train Miles)
3.4 3.6
3.5 3.3 3.3
3.2
2.6 2.6 2.7
2.2 1.9
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
BNSF RREI Rate
Source: FRA Ten Year Overview – 2013 Data Through October
Reliability of rail: Crude by rail safety
• 2013 and 2012 safest years on record, with record volumes
• Growing crude volumes delivered safely (99.997% shipped without incident)
• • Over 65,000 first
responders trained in their BNSF communities since 1996; 1,500 oil incident trainers trained by rail industry in 2014
DERAILMENT PREVENTION
MITIGATION: APPRIOPRIATE
TANK CAR
EMERGENCY RESPONSE
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Reliability of Rail: Industry leadership and careful regulation
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• Reasonable train speeds are essential to commerce
• Feasible and effective DP braking systems
• Crude fleet transition first priority
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What will ensure reliability?
What’s needed to fully capture the potential that rail holds for energy reliability:
! Tank car regulations that can be implemented creating certainty in the marketplace;
! Reasonable speed restrictions that enhance safety, but do not encumber 95% of the freight traffic on America’s freight rail network;
! Regulatory agencies to cooperatively work with us to facilitate the conversion to LNG.
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