Locomotive Efficiency

Our fleet includes locomotives with new technology to reduce fuel consumption and emissions.

Locomotive Shutdown Policy

Our policy calls for idling locomotives to be shut down when operationally feasible. Wireless technology helps us monitor compliance.

LEADER® (Locomotive Engineer Assist Display Event Recorder)

This onboard locomotive computer system calculates optimum train handling conditions and provides feedback to crews.

Propane Use

For our switch heaters, we have changed from kerosene to cleaner-burning propane fuel. Propane burns cleaner and eliminates the potential of oil getting into a waterway.

Norfolk Southern reuses or recycles:

• hydraulic oil
• crossties
• spent batteries and scrap metal
• paint and solvents
• office waste paper

Norfolk Southern uses alternative materials to minimize waste generation:

• enhanced railroad crosstie treating process to prolong useful life and reduce creosote consumption
• alternative end-uses for railroad crossties to minimize landfill volumes
• steel-reinforced plastic bridge ties
• coal bonding/crusting programs to minimize dust emissions

Norfolk Southern develops recycling and energy conservation materials, such as:

• longer lasting signal lamps and locomotive headlights
• rechargeable lantern batteries
• energy-efficient lighting in office buildings and shops

When cleaning machines and vehicles, we make sure run-off is contained and properly handled.

Locomotive Efficiency

Norfolk Southern works with partners to promote environmental stewardship.

EPA SmartWay Program — initiative to reduce emissions beyond regulatory requirements

CREATE — public / private partnership to improve the flow of freight and commuters through Chicago while reducing congestion and pollution for citizens

Heartland Corridor — public / private partnership to reduce transit times and fuel use by improving the nation’s critical rail transportation route between Norfolk, Va., and Columbus, Ohio

U.S. Dept. of the Interior — program to protect red cockaded woodpeckers at a forest preserve owned by NS

Responsible Care Initiative - chemical and rail industry partnership to safely handle chemical products through manufacture and distribution to disposal

TRANSCAER Program — outreach training program to assist communities and their emergency responders to be prepared for hazardous material transportation incidents

Environmental Hotlines — easy ways for citizens and railroad employees to relay environmental concerns and ideas

A letter from Norfolk Southern Corporation Chairman, President and Chief Executive Officer C.W. Moorman to Mr. Brent Blackwelder, President, Friends of the Earth:

December 21, 2007

Dear Mr. Blackwelder:

I welcome this opportunity to respond to your request regarding the transportation of chlorine and similar Toxic by Inhalation (collectively “TIH”) commodities on Norfolk Southern, and apologize for my delayed response. The issues surrounding TIH's are complex and involve manufacturers, buyers, and users of these commodities. Focusing exclusively on rail transportation misses the bigger picture. The issues of product substitution and geographic substitution are far more important because they are the only way to truly reduce or eliminate the risks associated with these commodities.

As you know, federal law requires railroads to transport these commodities. For our part, Norfolk Southern neither manufactures them nor transports them for its own use. Moreover, Norfolk Southern does not make enough money transporting these commodities to justify the risks the federal government requires us to take. Transporting TIH's by rail may be good public policy since rail is the safest mode of transportation for major commodities. However, Norfolk Southern believes it is simply not good public policy to force railroads to bear all the substantial risks associated with transporting these commodities. They are risks we would not take absent the common carrier obligation imposed by the federal government.

We would be delighted to work with your organization along with the shipping community, rail car builders, railroads, and federal regulators to both sharply reduce the general public's potential exposure to TIH's, and also remedy the inequity that arises from the railroad industry's common carrier obligation.

Norfolk Southern has gone to great lengths to ensure the safe transportation of these commodities. I would like to address a few of the many initiatives we have taken since September 11, 2001, to address potential threats posed by terrorists seeking to use TIH's to harm U.S. citizens. Then I will respond to as many of your questions as possible. However, I appreciate your recognition of the fact that our response to some of your questions is limited by concerns for security, antitrust law and commercial sensitivity.

First, Norfolk Southern Corporation and its railroad operating subsidiaries have developed and implemented a comprehensive security plan that is modeled on and was developed in conjunction with the security plan prepared by the Association of American Railroads (“AAR”) post September 11, 2001. Although security concerns preclude public disclosure of its contents, the Norfolk Southern plan addresses and complies with all applicable Department of Transportation security components and regulations as prescribed by 49 CFR Part 172 Subparts H and I under HM-232. Among the elements of the plan, security awareness training is given to all railroad employees who directly affect hazardous material transportation safety and is integrated into recurring hazardous material training and re-certification programs. Toward that end, Norfolk Southern, working closely with the National Transit Institute at Rutgers University, developed a four-module uniform national training program. More in-depth security training has been given to those select Norfolk Southern employees who have been given specific security responsibilities, and additional, location-specific security plans have been developed for certain metropolitan areas and each of six port facilities served by Norfolk Southern. With respect to the ports, each facility plan has been approved by the applicable Captain of the Port of the U.S. Coast Guard.

Additionally, Norfolk Southern engages in close and regular coordination with numerous federal and state agencies, including the U.S. Department of Homeland Security (“DHS”), the Transportation Security Administration (“TSA”), the U.S. Department of Transportation (“DOT”), the Federal Bureau of Investigation (“FBI”), the Federal Railroad Administration (“FRA”), the U.S. Coast Guard, U.S. Customs and Border Protection, and various state Homeland Security offices. As one notable example, a Norfolk Southern Police Special Agent, under the auspices of the AAR, has been assigned to the National Joint Terrorism Task Force (“NJTTF”) operating out of FBI Headquarters in Washington, D.C. to represent and serve as liaison to the North American rail industry. This arrangement improves logistical flow of vital security and law enforcement information with respect to the rail industry as a whole, and because the post is filled by a Norfolk Southern Special Agent, Norfolk Southern and the FBI have fostered a strong working relationship.

Norfolk Southern is also a certified carrier member of the voluntary Customs-Trade Partnership Against Terrorism (“C-TPAT”) program sponsored by U.S. Customs. Norfolk Southern has implemented procedures to meet all currently applicable rail security recommendations made by U.S. Customs to help ensure the integrity of freight shipments moving on Norfolk Southern, particularly those moving to or from a foreign country. These measures include, among others, the vetting of new railroad customers to verify their legitimacy.

Similarly, Norfolk Southern is guided in its operations by: (1) a voluntary initiative called the “Recommended Security Action Items for the Rail Transportation of Toxic Inhalation Hazard Materials,” which was jointly issued by DHS and DOT based on extensive collaboration among TSA, DOT, and the freight railroads; (2) certain supplemental security action items thereto, which were also issued by DHS and DOT, pertaining specifically to TIH products; and (3) the U.S. Coast Guard Maritime Security requirements of 33 CFR Part 105.

In addition, as you noted in your letter, Norfolk Southern is one of the Class I railroads participating in a conference convened by the FRA Administrator pursuant to 49 U.S.C. Section 333 to explore potential coordination projects designed to minimize security and safety risks flowing from the rail transportation of TIH materials (“333 Conference”).

Norfolk Southern also strongly supported the AAR Tank Car Committee's adoption of new design requirements for tank cars in anhydrous ammonia and chlorine service. If railroads are required to transport TIH's, then the common denominator in any release of a TIH is the tank car. While other factors that affect the safety of transporting these goods, such as track, security, etc., are also important, a strong and safe tank car provides the best protection from accidental releases whatever the accident cause may be. Norfolk Southern continues to advocate a tank car standard that provides significant safety improvements for the transport of not only TIH's but all highly hazardous materials (“HHM's”). The new tank car specifications, which were issued under the authority of the AAR interchange standards for cars interchanged between the railroads, are intended to reduce the probability of product release from the tank car in the event of a derailment, and are a step in the right direction, although certainly not the final answer in the advancement of tank car design and construction. The new specifications were scheduled to go into effect for newly constructed tank cars on January 1, 2008, but that date has been delayed until April 1, 2008, at the express request of DOT. The existing fleet, which is owned and/or leased by chemical shippers, will still have to be retrofitted in accordance with the AAR's new tank car specifications by the end of 2018.

With the foregoing as a backdrop to these critical matters, I now turn to your questions.

Your first question asks about distances and route lengths of TIH shipments. Our TIH traffic can originate on Norfolk Southern or can be received in interchange as joint line moves with other carriers. The majority of our TIH shipments consist of one interstate move (meaning transporting material from one state to a neighboring state.) These moves typically are 150 miles or less. On average, Norfolk Southern transports TIH shipments 479 miles, with a range from one mile to 1,313 miles.

In your second question, you have asked whether we have identified preferred routes for TIH shipments, whether those shipments traverse major cities, and if any such routes are varied periodically. In the first instance, of course, shippers determine whether or not to move their product by rail. It should also be noted that the shipper determines the origins and destinations.

TIH shipments moving long distances on Norfolk Southern, including those which travel through major urban areas, are transported over routes which meet the operating standards of the AAR Circular OT-55-1. These routes represent the routes that are the most optimally suited to handle TIH traffic in a safe manner and are selected based on many factors, including but not limited to length of haul, potential transit times, other traffic flows, population centers, and the locations of the shippers and the receivers. For rail movements that are moved in interline service with another carrier, the location of the gateways where the traffic is interchanged with another railroad is an important factor in determining the general route over which the shipment is transported. Selection of the precise route from the gateway to its next destination is left to the carrier receiving this traffic at the gateway. Finally, as you are probably aware, DOT (through the Pipeline and Hazardous Materials Safety Administration) has issued a proposed rulemaking in HM-232E which, if finalized, will mandate routing risk assessments of TIH and certain other hazmat traffic on an annual basis as well as impose other new security measures.

Your third question requests volumes and frequency of shipments, presumably TIH shipments. Our federal common carrier obligation means that on any given day we may be engaged in the transportation of hazardous materials, including TIH's. Norfolk Southern transports approximately 23,300 TIH carloads annually, an average of 64 carloads per day.

Your fourth question asks for information pertaining to travel times for shipments and average dwell times in major urban areas. Given the sensitive nature of this information from a security standpoint, we have not disclosed information regarding the average travel and dwell times for TIH shipments. However, as you may be aware, there are already legal limitations imposed by the DOT on dwell times for hazardous materials and for expediting hazardous materials shipments, with which we comply. We continue to evaluate and reduce dwell times in high threat urban areas (“HTUA's”) in accordance with Norfolk Southern's voluntary adoption of the TSAIDOT Supplemental Security Action Item No. 1 issued on November 21, 2006, which specifically addresses actions to reduce risks of TIH's in HTUA's relating to dwell time. TSA has also issued its own proposed rulemaking at Docket No. TSA-2006-26514 that will impose certain chain of custody, attendance and other security requirements applicable to loaded TIH cars, particularly those in or destined to travel to or through HTUA's.

With respect to your fifth question regarding which party selects routes, we believe we have provided this information above in connection with our response to your second question.

In your sixth question you ask for information about our interchanges with other railroads, specifically requesting an annual total number of interchanges for all Class I railroads. Norfolk Southern interchanges approximately 5.5 million cars with the other railroads. As you can see, TIH traffic represents a very small portion of these interchanges.

Turning to your seventh question, which asks whether we have taken any special security precautions for TIH shipments, Norfolk Southern has undertaken many efforts and supports many initiatives addressed at making the transportation of TIH's by rail safer and more secure. In addition to those discussed throughout this letter, examples of such measures include the erection of physical barriers and new access control measures at certain locations, issuance of employee photo ID cards to all NS employees, security-specific employee training, security drills, increased patrol frequency by NS police and certain infrastructure hardening and access countermeasures that will remain confidential.

In your eighth question, you ask whether we have notified public officials and citizens in communities through which TIH shipments pass on the potential for releases from tank cars. Information pertaining to TIH shipments is provided to certain legitimate governmental agencies. Further, upon request we provide local emergency response agencies with a list of the top 25 hazardous materials transported through their communities in order to aid in their emergency response preparedness, consistent with the community flow information requirements of AAR Circular OT-55-1.

Your ninth question asks whether we have arranged drills for local emergency responders that involve a release of a TIH tank car. Through the Transportation Community Awareness and Emergency Response Program (“TRANSCAER”), Norfolk Southern provides emergency response training, including TIH response, to many communities located along our rail network. To date for 2007, Norfolk Southern has provided hazardous materials training to nearly 4,800 emergency responders and has conducted 15 drills (including table-top and full-scale exercises.) In 2007, Norfolk Southern did coordinate a major table-top exercise involving the “staged” release of a TIH shipment. This drill was a regional exercise and involved local, state and federal agencies. In addition, we routinely sponsor the attendance of local emergency responders at tank car emergency response training conducted at the AAR's Transportation Technology Center in Pueblo, Colorado.

Your tenth question refers to “market swaps.” Railroads are merely transporters, as required by law, of the TIH products that are transported in bulk and which pose safety and security issues. Your question would be better addressed to the manufacturers, buyers, and users of these commodities.

In your eleventh question, you ask whether Norfolk Southern is aware of any previous customers that have switched to a system of on-site generation and immediate use of TIH's, thus eliminating the need for transportation. While we do not track this kind of information about our customers, we're certainly aware that this does happen and does reduce the transportation of TIH. Again we would suggest that this question be directed to the manufacturers, buyers, and users of these commodities.

Your twelfth question asks if Norfolk Southern believes it has adequate terrorism and accident insurance in arranging for chlorine and other TIH shipments. First, our insurance costs are largely driven by the risks we face from complying with our common carrier obligation to transport TIH's. At this time, Norfolk Southern has acquired as much insurance coverage as is reasonably available to us. Norfolk Southern can attempt to minimize the risks of transporting TIH's, but no level of effort and no federal regulations on safety and security can eliminate those risks — so long as railroads continue to have a common carrier obligation to transport them. Unless railroads are relieved of the common carrier obligation to transport TIH's, we believe statutory caps on liability, a risk sharing mechanism similar to that established by the Price-Anderson Act, or both, are needed and appropriate to maintain the financial vitality of our nation's rail system.

Your last question asks Norfolk Southern to identify public officials with whom it has shared information that responds to your questions. As you can imagine, Norfolk Southern works with so many federal, state, and local government officials on safety and security matters that they are too numerous to mention. Chief among these, however, would be the Department of Homeland Security, its Transportation Security Administration, and within the Department of Transportation, both the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration.

In sum, Norfolk Southern shares your concern about the transportation of TIH's and the risks they present to the public, the environment, our employees, our shareholders, and all other stakeholders. Recognizing that the transportation of TIH's mandated by our common carrier obligation is inherently risky, Norfolk Southern will continue to work to transport TIH's safely even while pursuing policies that reduce and properly allocate those risks.

I would be pleased to meet with you at your convenience for a fuller discussion of any of these issues that are not commercially sensitive or that must remain confidential in accord with federal law or regulation.

Very truly yours,
C. W. Moorman