Railroads Roll with a Greener Approach

by Alex Roth

A new CSX Corp. radio ad declares that even the most fuel-efficient hybrid car can't compete with a train, which "can move a ton of freight 423 miles on a single gallon of fuel."

"Too bad we can't all drive a train," the announcer says before urging listeners to visit CSX's Web site to learn about the Jacksonville, Fla., company's "commitment to protecting the environment."

Railroad companies, long a target of environmentalists who blame them for everything from deforestation to toxic spills, are marketing themselves as the ultimate eco-friendly, low-fuel-consuming industry.

With fuel prices at record highs and worries about global warming reaching critical mass, U.S. companies of all stripes are touting their green credentials. That list includes plenty of businesses that wouldn't normally be associated with the environmental movement, like oil companies or mining outfits. But the juxtaposition for trains is among the starkest.

Early in the 20th century, steam-powered trains, fueled by coal, cast off trails of embers that often ignited and denuded the surrounding landscape. Train accidents and cargo spills still taint perceptions of railroad companies. Earlier this month, a Burlington Northern Santa Fe train partially derailed in Lafayette, La., and began leaking hydrochloric acid. Several thousand people were forced to evacuate. (Accidents involving trains carrying hazardous material have been declining slightly over the past decade, according to the U.S. Department of Transportation.)

Freight trains now use much cleaner and more fuel-efficient diesel engines, and railroad companies are testing new engines that the industry is touting as "ultralow-emission." Many environmentalists acknowledge that the railroads have a powerful argument, given that freight trains burn far less fuel than trucks and can help reduce highway congestion.

"In general, train transportation is much more fuel efficient than trucking, and we should be doing more of it," says Colin F. Peppard, transportation policy coordinator for Friends of the Earth, an environmental advocacy group.

Several rail companies are rolling out their own statistics to make the case that the switch to trains is good for the environment. Norfolk Southern Corp. is running a series of environmentally themed television spots and has a "carbon footprint analyzer" feature on its Web site that allows customers to measure the environmental advantages of shipping by freight rather than truck.

Union Pacific Corp.'s Web site touts the company's "cleaner and greener" fleet of locomotives and argues that if 25% of truck freight was diverted to rail, there would be "nearly 800,000 fewer tons of air pollution" by 2025.

Much rides on this approach. For the first time in decades, railroad stock prices have been rising, and business is booming. By one estimate, the railroad industry will need to expand its capacity by 88% in the next quarter-century, as highways get even more congested, fuel prices rise and more shippers decide to use trains to move their products. What's more, railroads -- which used to carry mainly raw materials such as coal and timber -- are now increasingly transporting consumer goods from ports to cities.

As the industry begins billions of dollars worth of system improvements, it is increasingly seeking public money to help pay for some of the expansion projects. Norfolk Southern, for example, is seeking public funding to help pay to upgrade the Crescent Corridor, a network of routes between the New York City area and New Orleans. The industry is also asking Congress to pass a proposed bill that would give railroads tax credits for money spent on track expansion.

The railroad industry is also trying to fend off calls for tougher federal regulations that would make it easier for shippers to challenge prices in areas where a railroad has a monopoly.

Some environmentalists say the industry hasn't done enough. In the Los Angeles/Long Beach area, environmental groups are battling Union Pacific and Burlington Northern Santa Fe Corp., which are seeking to expand and modernize their rail-yard operations in the neighborhoods surrounding the nation's busiest port system.

Last year, the South Coast Air Quality Management District, which monitors air quality in the Los Angeles region, released a statement accusing the railroads of "spew(ing) toxic diesel soot into neighborhoods, backyards and school yards, posing health risk to residents."

"From our viewpoint, it just seems that they've been extremely recalcitrant and stubborn in terms of being willing to adopt cost-effective measures that will reduce air pollution," said Sam G. Atwood, the district's spokesman.

Union Pacific Chief Executive James Young says that a certain amount of community resistance is inevitable whenever a business tries to expand. "You have the not-in-my-backyard mentality," he said.

Norfolk Southern executives say they first began to hone their eco-friendly message about three years ago with a television ad showing a tree lifting a freight container off a busy highway and placing it on a train.

Norfolk Southern's latest ads -- a campaign dubbed "The Lonely Gallon," showing a family of gas cans looking on forlornly as a train whizzes by -- will air roughly 400 times during the fall election season, the company said.

Article appeared in May 29, 2008 edition of the Wall Street Journal