GOOD MORNING, AND WELCOME TO THE BOARD ROOM OF THE NATIONAL TRANSPORTATION SAFETY BOARD. I AM DEBORAH HIRSCHMAN, AND IT IS MY PLEASURE TO SERVE AS THE CHAIRMAN OF THE NTSB. TODAY I AM JOINED BY MY FELLOW COLLEAGUES, VICE-CHAIRMAN CHRIS HART, MEMBER ROGER ZUMWALT, MEMBER ROGER ROSEKIND, AND MEMBER WEENER. I BELIEVE YOU HAVE A SPECIAL GUEST WITH US THIS MORNING.

>> I WOULD LIKE TO RECOGNIZE MY DAUGHTER AND SON-IN-LAW THAT ARE JOINING US FOR AT LEAST THE FIRST PART OF IT AND ARE TRYING TO REMAIN INVISIBLE, BUT SCOTCH YOU.

>> I THINK HAPPY BIRTHDAY WISHES ARE IN ORDER. THANK YOU FOR BEING WITH US TODAY. I WOULD ALSO LIKE TO TAKE THE OPPORTUNITY TO RECOGNIZE MR. MAN WELL OF THE TRANSPORTATION SAFETY BOARD OF CANADA. HE WILL BE JOINING OUR -- OUR TECHNICAL PANEL ON FEDERAL OVERSIGHT INITIATIVES TOMORROW. WE VERY MUCH APPRECIATE THE INTERNATIONAL COOPERATION ACROSS THE BORDER -- BORDER IN CANADA DURING THE INVESTIGATION OF MANY DIFFERENT CRUDE OIL ACCIDENTS. I HAVE TO SAY, I COULD NOT HAVE HAD MY -- A BETTER COLLEAGUE AND WE APPRECIATED ALL THE WORK WE HAVE BEEN ABLE TO DO WITH YOU. AND ALONGSIDE WITH YOU THE PAST FEW YEARS. THE UNITED STATES ECONOMY IS THE LARGEST ON EARTH. TO FUEL THE ECONOMY, THE U.S. USES MORE ENERGY THAN ANY OTHER NATION. TODAY MORE OF THE NEEDS ARE BEING MET CLOSER TO HOME. WYATT LEE IN 2011 THE U.S. BECAME A NET EXPORTER OF PETROLEUM FOR THE FIRST TIME -- PRIOR TO 2011, THE U.S. BECAME A NET EXPORTER OF PETROLEUM FOR THE FIRST TIME. AT THE END OF THE DAY MILLIONS OF DOLLARS ARE INVESTED TO SEEK OUT NEW OIL RESERVES. A COMMENSURATE INVESTMENT MUST BE MADE TO ENSURE SAFE TRANSPORTATION OF THOSE GOODS. THE ASSOCIATION OF THE AMERICAN RAILROADS STATED IN 2012 THAT CRUDE OIL TRAFFIC IS GROWN BY 400 33% -- 403 JERRY --33%. MOREOVER, SOME OF THE CRUDE OIL SUCH AS THAT ORIGINATING IN THE BALKAN FORMATION MAY HAVE MORE VOLATILE PROPERTIES, WHICH INCREASES THE LIKELIHOOD OF A VIOLENT FIRE IN THAT EVENT OF THE DERAILMENT. TRANSPORTATION BY ETHANOL BY RAIL HAS BOOMED AS WELL. GROWING 442% BETWEEN 2000 FIVE AND 2010. IN 2012 ON THE ETHANOL WAS THE MOST FREQUENTLY TRANSPORTED HAZARDOUS MATERIAL IN THE RAILWAY SYSTEM. WITH SO MUCH FLAMMABLE LIQUID CARRIED BY RAIL, IT IS INCUMBENT UPON THE RAIL INDUSTRY SHIPPERS AND REGULATORS TO ENSURE THAT THESE HAZARDOUS MATERIALS ARE BEING MOVED SAFELY. OUR OPENING PRESENTATION WILL DETAIL THE STATE OF RECENT ACCIDENTS IN THE UNITED STATES AND CANADA DEMONSTRATING FAR TOO OFTEN SAFETY HAS BEEN COMPROMISED. THE NAMES OF THE COMMUNITY ARE FOREVER ETCHED IN THE MINDS OF OUR INVESTIGATORS AND CALLED TO MIND THE DESTRUCTION OR EVACUATION OF TOWNS, THE LOSS OF LIFE, AND THE ENVIRONMENTAL AND ECONOMIC IMPACTS. Q BECK, CASTLETON, NORTH DAKOTA, CHERRY VALLEY ILLINOIS, AND THERE ARE OTHERS. WE ARE HERE TODAY TO ANSWER THE QUESTION -- QUESTIONS THAT THESE ACCIDENTS RAISE. HOW ARE TANK CARS DESIGNED AND CONSTRUCTED? WHAT IS THEIR VULNERABILITY TO FAILURE IN ACCIDENTS? WHAT RAILROAD OPERATIONS, RECOMMENDED PRACTICES, TRAINING AND SECURITY MEASURES MAY PREVENT AN ACCIDENT OR REDUCE THE SEVERITY AND CONSEQUENCES OF A FLAMMABLE LIQUID TANK CAR FAILURE? WHAT UNIQUE PROBLEMS TO FIRST RESPONDERS AND THE RAILROADS FACE WHEN DEALING WITH CRUDE OIL AND ETHANOL RELEASES FROM DERAILED TANK CARS? AND WHAT FEDERAL OVERSIGHT AND INDUSTRY INITIATIVES ADDRESS TANK CAR DESIGN? RISK REDUCTION AND EMERGENCY RESPONSE AND MITIGATION? THE NTSB HAS CALLED THE FORUM NOT TO LECTURE BUT TO LEARN. WE WELCOME THE POINTS OF VIEW AND OPINIONS OF TANK CAR BUILDERS, RAILROAD OPERATORS, TANK CAR OWNERS, SHIPPERS, EMERGENCY RESPONDERS, RESEARCHERS AND REGULATORS. IN A MOMENT, OUR FORUM COORDINATOR WILL EXPLAIN THE PANEL THAT WE HAVE CONVENED TO HELP US ANSWER THESE QUESTIONS. MOVING CRUDE OIL AND ETHANOL ACROSS NORTH AMERICA BY RAIL CARRIES UNIQUE SAFETY CHALLENGES. IT IS PRECISELY BECAUSE THESE PRODUCTS ARE SO ENERGY DENSE THAT THEY ARE BOTH VALUABLE AND HAZARDOUS. WITH THIS ENORMOUS GROWTH IN ENERGY PRODUCTION COMES A RESPONSIBILITY FOR THE SAFETY OF THE MEN AND WOMEN WHO TRANSPORTED, AND WHO RESPOND TO THE RELEASES, AS WELL AS THE PEOPLE WHO LIVE ALONGSIDE TRACKS ON WHICH THESE HAZARDOUS MATERIALS TRAVEL. I LOOK FORWARD TO PRODUCTIVE A'S, AND I WILL NOW TURN TO MATT NICHOLSON, WHO ALONG WITH HIS STAFF HAS BEEN AN EXCELLENT JOB IN ORGANIZING THIS FORUM.

>> THANK YOU, CHAIRMAN HERSMAN. WE APPRECIATE THE SPEAKERS OPERATION IN HELPING THE FOR THEM STAY ON SCHEDULE BECAUSE WE HAVE A FULL AGENDA. PLEASE RESPECT TIME LIMITS AND KEEP SUBJECTS FOCUSED ON THE TOPIC AT HAND. SAFETY FIRST OF COURSE. PLEASE NOTE THAT MAKE -- NEAREST EMERGENCY EXIT IN THE UNLIKELY EVENT OF AN EMERGENCY ALARM. YOU CAN USE THE REAR DOORS WHERE YOU ENTER THE CONFERENCE OR ANOTHER SET AND EMERGENCY DOORS IN THE FRONT. AS A COURTESY TO THE SPEAKER AND OH ATTENDING THE FORUM, IF YOU HAVE NOT ALREADY DONE SO, PLEASE SILENCE YOUR ELECTRONIC DEVICES. IN ADDITION TO THE MIDDAY HUNCH BREAK, THERE WILL BE TWO BREAKS, ONE IN THE MORNING AND ONE IN THE AFTERNOON. WE WILL KEEP TO THE POSTED SCHEDULE SO THE AGENDA CAN BE YOUR GUIDE. AS FOR LUNCH, THERE ARE PLENTY OF PLACES TO EAT IN THE FOOD COURT. GO UP THE ESCALATORS AND FOLLOW THE SIGNS. EARLY NEXT WEEK ALL OF THE PRESENTATIONS PROVIDED BY OUR SPEAKERS WILL BE AVAILABLE ON THE NTSB RAIL SAFETY FORMS WEBSITE AND A VIDEO ARCHIVE OF THE WEBCAST WILL BE AVAILABLE ON THE WEBCAST WEBPAGE, WHICH IS THE SAME PAGE YOU VIEW THE LIVE WEBCAST. THIS FORUM IS COMPOSED OF FOUR TOPICAL PANEL SCHEDULED OVER TWO DAYS. THE FIRST PANEL WILL INTRODUCE US TO TRAIL -- RANK OUR NOMENCLATURE AND DESIGN CRASHWORTHINESS. WE WILL HEAR FROM INDUSTRY AND RESEARCHERS ABOUT EFFORTS TO IMPROVE CRASHWORTHINESS AND PROPOSED CHANGES FOR THE NEXT GENERATION. OUR SECOND PANEL THIS AFTERNOON WILL EXAMINE OPERATIONAL PANELS AND RISK MITIGATION APPROACHES THAT CAN BE INCORPORATED INTO RAILROAD OPERATIONS TO PREVENT ACCIDENTS AND REDUCE CONSEQUENCES RESULTING FROM THE DERAILMENT OR ETHANOL TRAIN. THIS PANEL CONSISTS OF REGULATORS AM A RAILROADS AND RESEARCHERS DISCUSSING TOPICS THAT INCLUDE ROUTE PLANNING COME A RAIL INSPECTION, RISK ASSESSMENT, SPEED RESTRICTIONS AND BREAKING. WE WILL OPEN THE FORUM TOMORROW BY EXAMINING THE URGENT -- EMERGENCY RESPONSE TO TANK AND CRUDE OIL. WE WILL HEAR FROM EMERGENCY RESPONDERS AND REPRESENTATIVES OF THE RAILROAD ABOUT CONCERN SPECIFIC TO TANKS CARRYING FLAMMABLE LIQUIDS. IN ADDITION, WE WILL DISCUSS HOW THEY ARE TRAINED IN MAINTAIN PREPAREDNESS. THE SECOND PANEL WRAPS UP THE FORUM BY DISCUSSING THE WORK BEING CARRIED OUT BY FEDERAL REGULATORS, THE RAILROADS AND SHIPPERS TO ADDRESS THE ISSUES HIGHLIGHTED UNDER THE PREVIOUS PANELS. INDUSTRY ASSOCIATIONS AND FEDERAL AGENCIES FROM THE UNITED STATES AND CANADA WILL OFFER THEIR PERSPECTIVE ON CRITICAL SAFETY ISSUES AFFECTING CRUDE OIL AND ETHANOL TRANSPORTATION BY RAIL, AS WELL AS PROVIDE AN UPDATE ON WORK THAT ADDRESSES THESE AREAS OF CONCERN. TO START THE FORUM TODAY, MR. PAUL STANCIL OF THE OFFICE OF RAILROAD AND PIPELINE HAZARDOUS MATERIAL INVESTIGATION WILL PROVIDE AN OVERVIEW OF PAST RAILROAD ACCIDENTS THAT INVOLVED THE RELEASE OF CRUDE OIL AND ETHANOL. STIR STANCIL.

>> THANK YOU, MR. NICHOLSON. GOOD MORNING. I WOULD LIKE TO OPEN THE FORUM WITH AN OVERVIEW OF RECENT CRUDE OIL AND ETHANOL RAILROAD ACCIDENTS. THERE ARE CONSEQUENCES, SAFETY ISSUES AND SAFETY RECOMMENDATIONS. A SURGEON ETHANOL SHIPMENTS FOLLOW THE ENERGY POLICY ACT OF 2000 FIVE IN WHICH CONGRESS ESTABLISHED A PROGRAM FOR INCREMENTAL INCREASES IN THE PRODUCTION OF ETHANOL TO BLEND INTO MOTOR VEHICLE FUELS. CRUDE OIL PRODUCTION HAS SEEN ENORMOUS GROWTH OVER THE PAST FEW YEARS. RAILROADS HAVE EXPANDED THEIR SHARE OF THIS TRANSPORTATION MARKET WITH LONG TRAINS OF CARS TO MATCH THE DEMAND AND KEEP PACE WITH AGGRESSIVE PRODUCTION. THIS CHART SHOWS INDUSTRY FIGURES FOR THE ANNUAL NUMBER OF CRUDE OIL AND ETHANOL PAINT CAR ORIGINATIONS. -- TANK CAR ORIGINATIONS. THEY EXPANDED TO NEGLIGIBLE NUMBERS AND 2013. IN 2011, ETHANOL CARLOADS PEAK AT AROUND 341,000. ACCIDENTS INVOLVING LARGE NUMBERS OF TANK CARS TRANSPORTING FLAMMABLE ETHANOL AND CRUDE OIL HAVE BEEN INCREASING FREQUENCY AND CLOSELY FOLLOWED TRANSPORTATION TRENDS. THESE NEXT TWO SLIDES SHOW A TIMELINE OF THE MOST SIGNIFICANT RECENT ACCIDENTS BEGINNING WITH NEW BRIGHTON, PENNSYLVANIA, IN 2006. SEVEN OF THE EIGHT ACCIDENTS THAT OCCURRED BETWEEN 2006-2012 INVOLVED ETHANOL. SINCE 2013, THERE HAVE BEEN EIGHT ACCIDENTS, ALL INVOLVING CRUDE OIL. SOME OF THE ACCIDENT THAT OCCURRED HAVE INVOLVED THE ASSOCIATION OF AMERICAN RAILROADS NEW SPECIFICATIONS CPC 12-32 TANK CAR FOR CRUDE AND ETHANOL SERVICE. THERE HAVE BEEN SIX TEAM -- 16 SIGNIFICANT ACCIDENT SINCE 2000 SIX. NINE INVOLVED CRUDE OIL AND SEVEN INVOLVED ETHANOL. THERE HAVE BEEN 48 FATALITIES. 280 ONE DOT 111 TANK CARS HAD DERAILED RELEASING TWO POINT 8 MILLION GALLONS OF CRUDE OIL AND TWO POINT MILLION -- 2 MILLION GALLONS OF ETHANOL. THE WORST OF THESE ACCIDENTS IN LOCK THE GOTHIC, DAMAGES OF HAVE REPORTEDLY EXCEEDED ONE MILLION DOLLARS. INVESTIGATIONS HAVE IDENTIFIED THE FOLLOWING SAFETY ISSUES WITH RESPECT TO THE TANK CAR. INVESTIGATIONS HAVE IDENTIFIED CONCERNS WITH PUNCTURE RESISTANCE, THERMAL RESISTANCE, SURVIVABILITY IN FIRES, AND TOP AND BOTTOM FITTINGS PROTECTION. U.S. RAIL CARRIERS ARE CURRENTLY CONDUCTING ANNUAL RISK ANALYSES TO IDENTIFY THE SAFEST ROUTE FOR TOXIC INHALATION CHEMICALS, EXPLOSIVES, AND RADIOACTIVE MATERIALS. SUCH PROTECTIVE MEASURES ARE NOT REQUIRED IN THE U.S. OR CANADA FOR TRAINS TRANSPORTING LARGE AMOUNTS OF FLAMMABLE MATERIALS. INVESTIGATIONS HAVE ALSO FOUND CRUDE OIL MISCLASSIFICATION. PROPER CLASSIFICATION IS NECESSARY TO DETERMINE APPROPRIATE PACKAGING ON THE SAFETY AND SECURITY PLANNING REQUIREMENTS, AND COMMUNICATING HAZARDS TO EMERGENCY RESPONDERS. CARRIERS MUST BE CAPABLE OF MITIGATING WORST-CASE DISCHARGES FROM NOT JUST ONE PACKAGE BUT AN ENTIRE TRAIN. FOCUS SHOULD ALSO INCLUDE EMERGENCY RESPONDER AWARENESS AND TRAINING AND FLAMMABLE LIQUID TRANSPORTATION CORRIDORS. IN THIS FORUM, WE WILL HEAR ABOUT THE INDUSTRY AND REGULATORY INITIATIVES THAT HELP TO ADDRESS NOT ONLY A BETTER PERFORMING TANK CAR, BUT ALSO IMPROVE RAILROAD OPERATIONS, OVER ROBUST EMERGENCY RESPONSE CAPABILITY COME AND ADEQUATE REGULATORY OVERSIGHT. THE NTSB A LEAVES THAT THIS HOLISTIC APPROACH IS NEEDED TO IMPROVE THE SAFETY -- OR LEAVES THAT THIS HOLISTIC APPROACH IS NEEDED TO IMPROVE THE SAFETY OF PRODUCTS. TO PROVIDE BACKGROUND ABOUT THE CONSEQUENCES OF THESE ACCIDENTS I WILL FOCUS FOR A MINUTE ON INVESTIGATION FINDINGS ABOUT THE BEHAVIOR OF TANK CARS AND DERAILMENTS. I WILL BEGIN THE DISCUSSION ABOUT TANK CAR PERFORMANCE WITH HEAD CAR PROTECTION. THEY ARE NOT REQUIRED FOR GENERAL REGULATION FOR DOT-111 TANK CARS. WHEN THEY ARE PROVIDED, THEY HELP TO PROTECT THEM AND -- DAMAGE. THESE ARE EXAMPLES OF YOUNGSTERS IN UNPROTECTED THEIR HEADS. THE TANK CARS IN THESE IMAGES SUSTAINED IMPACTS TO THE HEADS INDICATED BY THE YELLOW CIRCLES. THE HEAD PUNCTURE IN THE RIGHT IMAGE IS NOTEWORTHY BECAUSE THE IMPACT OCCURRED IN THE UPPER HALF OF THE HEAD, IN THIS CASE A HALF HEIGHT HEAD SHIELD WOULD NOT HAVE BEEN AFFECTED. TANKS CAN BE IMPACTED BY OBJECTS SUCH AS RAILROAD TRACK AND DEBRIS. THIS IS THE MOST COMMON CAUSE FOR PRODUCT RELEASES AND DERAILMENTS. PREVIOUS INVESTIGATIONS HAVE CITED THIS AND MATERIALS USED TO CONSTRUCT DOT-111 TANK CARS. THE MINIMUM IS 7/16 INCH. TANK SHELL BREACHES CAN OCCUR FOR A VARIETY OF REASONS. IN THE LEFT IMAGE IS AN EXAMPLE OF SHELL CRACKING FOLLOWING A BLUNT IMPACT. THE RIGHT IMAGE SHOWS A VERY LARGE SHALE -- SHOW CRACKED THAT OCCURRED WHEN THEY WERE OF -- WELDED TO ATTACHMENTS. BOTH OF THESE ACCIDENTS CONTRIBUTED TO SIGNIFICANT FIRES. SUDDEN COMPRESSION OF PAINT WALLS FROM IMPACT CAN RUPTURE THE CAR. THE TOP IMAGE FROM QUEBEC IS AN EXTREME IT EXAMPLE OF SHELL CRUSHING WITH LOSS CONTAINMENT VOLUME. THE BOTTOM PHOTOGRAPH FROM NEW AUGUSTA, MISSISSIPPI, SHOWS THAT CRUDE OIL WAS RELEASED IN SUCH AN ACCIDENT FROM THE NEWEST VERSION OF THE DOT-111. THERE ARE NO REQUIREMENTS FOR A PAINT JACKET OR THERMAL PROTECTION OR CODING IN TANK CARS USED FOR ETHANOL AND CRUDE OIL TRANSPORTATION. IN THE LEFT PHOTOGRAPH WITHIN THE YELLOW CIRCLE IS A THERMAL USED SHELL PAIR THAT OCCURRED WHEN A TANK CAR INVOLVED IN THE COLUMBUS, OHIO, ACCIDENT WAS EXPOSED. THIS VIDEO CLIP SHOWS THE FIREBALL ERUPTION FROM THE CAR WHEN THE SHELL WAS SUDDENLY COMPROMISED. THE SURVIVAL TIME OF THE TANK CAR IN A FIRE IS A BALANCE BETWEEN THE DECREASING SHELL STRENGTH FROM HEAT EXPOSURE AND THE STRESS BY INCREASING INTERNAL PRESSURE. TANK JACKETS, THERMAL PROTECTION BLANKETS, AND PRESSURE RELIEF DEVICES ARE INTENDED TO PROVIDE SUFFICIENT TIME FOR EMERGENCY RESPONDERS TO EVACUATE AN AREA BEFORE THE PAIN SHELL THERMALLY VEILS AND RELEASES A FIREBALL. RECENT ACCIDENTS SUGGEST THE TIME REQUIRED FOR THE DOT-111 TANK CAR TO FAIL DOES NOT PROVIDE A SUFFICIENT MARGIN OF SAFETY SHOULD AN EVACUATION BE NECESSARY. IN CASES WHERE IT RUPTURES AND THE TANK SHELL IS ABOUT THE SIZE OF THE DIAMETER, THE FIREBALL RELEASED IS VIRTUALLY IDENTICAL TO A BOILING LIQUID VAPOR. THE ENTIRE CONTENTS OF THE TANK CAR OF THE 30,000 GALLONS IS INSTANTLY RELEASED HIM ALONG WITH THE POTENTIAL FOR ROCKETING CAR PART'S. HERE IS AN AERIAL VIEW OF THE ARCADIA, OHIO, ETHANOL ACCIDENT WHERE A TANK CAR SPLIT INTO TWO SECTIONS AS INDICATED WITHIN THE YELLOW CIRCLES. AN ENERGETIC FIREBALL YOU CORRUPTION IS SHOWN IN THE UPPER RIGHT. -- ERUPTION IS SHOWN IN THE UPPER RIGHT. FITTINGS THAT PROJECT FROM THE CAR ARE VULNERABLE TO IMPACT DAMAGE. THE LEFT PHOTOGRAPH SHOWS BROKEN LIQUID AND VAPOR BOWELS -- VALVES THAT CAN'T -- CAUSED 20,000 GALLONS OF ETHANOL TO RELEASE FROM THIS CAR. THE BOTTOM RIGHT SHOWS A COMMON VALVE DESIGN WITH A COMMON HANDLE INDICATED BY THE BOTTOM ARROW. HANDLES MANIPULATED BY ACCIDENT FORCES CAN OPEN THE VALVES. THE OUTLET NOZZLES ARE DESIGNED TO BREAK AWAY. THEREFORE, IT IS ESSENTIAL FOR THE VALVES TO REMAIN CLOSED TO RETAIN THE LIQUID. HINGED AND BOLTED MANWAYS SEEN IN THE LEFT IMAGE IS AN OPENING IN THE TANK THAT FACILITATES LOADING, TANK CLEANING AND INTERIOR INSPECTION. IN ACCIDENTS, SWING BOLTS THAT SECURE THE MAN WAY AND BECOME LOOSE OR FALL COMPLETELY OPEN. THE MANWAY GASKET WILL NOT WITHSTAND EXPOSURE TO FIRE. EITHER SITUATION COMPROMISES THE FIELD AND CAUSES IT TO LEAK. UNPROTECTED PROTRUDED FITTINGS SUCH AS THE PRESSURE RELIEF DEVICE ON THE RIGHT PICTURE CAN BREACHED THE TANK SHELL WHEN DAMAGED. OF THE 16 SIGNIFICANT RECENT CRUDE OIL AND ETHANOL ACCIDENTS, THE NTSB HAS OR IS INVESTIGATING SIX ACCIDENTS IN THE TRANSPORTATION SAFETY BOARD OF CANADA IS INVESTIGATING THREE ACCIDENTS. RECOGNIZING THE CROSS ORDER NATURE OF THE MATTERS, CANADIAN AND U.S. GOVERNMENTS HAVE BEEN WORKING CLOSELY TO ENSURE HARMONIZED SAFETY METHODS. THE FOLLOWING ARE OPEN NTSB SAFETY RECOMMENDATIONS PERTAINING TO CRUDE OIL AND ETHANOL TRANSPORTATION. THE SAFETY RECOMMENDATIONS WERE ISSUED AS A RESULT OF THE NEW BRIGHTON, PENNSYLVANIA, AND CHERRY VALLEY, ILLINOIS, ACCIDENT INVESTIGATIONS. A COUPLE OF THE NOTEWORTHY RECOMMENDATIONS FOR THIS FORUM ARE 12-5, THE PIPELINE AND HAZARDOUS MATERIAL REQUIRE ALL NEW AND EXISTING GENERAL SERVICE PAY -- TANK CARS AUTHORIZED FOR ETHANOL AND CRUDE OIL TO HAVE HEAD AND SHELL PUNCTURE RESISTANCE SYSTEMS AND TOP EDDINGS PROTECTION AND EXCEED EXISTING DESIGN REQUIREMENTS FOR DOT-111 TANK CARS. 12-6 RECOMMENDED BOTTOM DESIGNS TO ENSURE CLOSURE DURING AN ACCIDENT. THESE ADDITIONAL SAFETY RECOMMENDATIONS WERE ISSUED TO THE FEDERAL RAILROAD ADMINISTRATION AS A RESULT OF NTSB PARTICIPATION IN CANADA'S INVESTIGATION. THESE RECOMMENDATIONS FOCUS ON RAILROAD OPERATIONS. R-14 1 AND 4 RECOMMENDED SELECTION REQUIREMENTS BE EXPANDING -- BE EXPANDED TO INCLUDE KEY TRAINS TRANSPORTING FLAMMABLE LIQUIDS AND WERE TECHNICALLY FEASIBLE REQUIRE REROUTING TO AVOID POPULATED AND OTHER SENSITIVE AREAS. R-14-2 AND 5 THE FEDERAL SPILL RESPONSE PLANNING THRESHOLDS BE REVISED TO REQUIRE OVER O'GROATS TO DIVIDE RESPONSE TO WORST-CASE DISCHARGES OF PETROLEUM PRODUCTS AND TO PROVIDE -- AND THAT PLANS BE AUDITED TO ENSURE CARRIERS ARE PREPARED TO MITIGATE THE DISCHARGE. R-14-3 RECOMMENDED AUDIT SAFETY AND SECURITY PLANS. R-14-6 REQUIRED TO TEST AND ENSURE POSITIVE -- PROPER CLASSIFICATION AND PACKAGING. THE TRANSPORTATION SAFETY BOARD OF CANADA HAS THE FOLLOWING ACTIVE SAFETY RECOMMENDATIONS AND ADVISORIES THAT ARE APPLICABLE TO THIS AREA. AMONG THE MORE RECENT ARE R-14- 01 THAT THE DEPARTMENT OF TRANSPORT OF CANADA REQUIRE THAT ALL CLASS 111 TANK CARS USED TO TRANSPORT FLAMMABLE LIQUIDS MEET ENHANCED PROTECTION STANDARDS THAT SIGNIFICANTLY REDUCE THE RISK OF PRODUCT LOSS IN ACCIDENTS. R-14-02 THAT THE DEPARTMENT OF TRANSPORT SETS ENTRY CRITERIA FOR TRAINS CARRYING DANGEROUS GOODS. REQUIRE RAILWAY ANTHONY'S TO CONDUCT ROUTE PLANNING AND ANALYSIS AND PERFORM PERIODIC RISK ASSESSMENTS TO ENSURE RISK CONTROL MEASURES ARE WORKING AND R-14-03 THAT THE DEPARTMENT OF TRANSPORT REQUIRE EMERGENCY ASSISTANCE PLANS FOR THE TRANSPORTATION OF LARGE VOLUMES OF LIQUID HYDROCARBONS. THIS CONCLUDES MY PRESENTATION.

>> THANK YOU. CHAIRMAN HERSMAN, THIS CONCLUDES THE OPENING PRESENTATION.

>> THANK YOU, MR. NICHOLSON. THANK YOU, FOR YOUR PRESENTATION. WE ARE NOW READY TO HEAR FROM THE FIRST PANEL OF THE DAY THAT WILL DISCUSS THE DESIGN, CONSTRUCTION AND CRASHWORTHINESS OF DOT-111 TANK CARS.

>> THANK YOU, CHAIRMAN HERSMAN. JUST A NOTE YOU WILL NEED TO PUSH A BUTTON ON THE MICROPHONE. A GREEN LIGHT WILL INDICATE THE MICROPHONE IS ON. PLEASE BRING IT GOES TO YOU AND BE SURE TO TURN IT OFF WHEN YOU ARE DONE SPEAKING.

>> OUR FIRST PANEL WILL BEGIN WITH A DISCUSSION ON THE DESIGN AND CONSTRUCTION OF TANK CARS. OUR PANELISTS TODAY ARE MR. ROBERT FRONTENAC, ASSISTANT VICE PRESIDENT OF AND OUR MENTAL MATERIALS FOR THE INTERNATIONAL RAILROAD ASSOCIATION. VICE-CHAIRMAN OF THE RAILWAY SUPPLY INSTITUTE, COMMITTEE FOR TANK CARS. MR. TODD TRY COLE, DIRECTOR OF THE RSI AAR RESEARCH AND SAFETY TEST CAR CONDUCT. MR. GREGORY SAXTON, SENIOR VICE PRESIDENT AND CHIEF ENGINEER FOR THE GREENBRIER COMPANIES. MR. FRANCISCO GONZALEZ TO THIRD, HAZARDOUS MATERIALS AND TANK CAR PROJECT MANAGER FOR THE FEDERAL RAILROAD ADMINISTRATION. DR. DAVID JOHN, SENIOR ENGINEER AT THE MULTINATIONAL TRANSPORTATION SYSTEMS CENTER. OUR FIRST PANELIST IS MR. ROBERT FRONTENAC. PLEASE PROCEED.

>> I WOULD LIKE TO THANK YOU FOR THE OPPORTUNITY TO TALK ABOUT RAIL AND HAZARDOUS MATERIALS TRANSPORTATION SAFETY, SOMETHING OF A UPMOST IMPORTANCE TO THE MEMBERS. WHAT I PLAN TO TALK ABOUT IS THE QUESTIONS THE PANEL SUBMITTED TO US OR THE BOARD SUBMITTED TO US. JUST A HISTORY OF TANK CAR STANDARDS AND THE ROLE AAR PLAYS VERSUS TRANSPORT CANADA, THE ROLE OF THE TANK CAR COMMITTEE IN THE PROCESS. TANK CAR CHARACTERISTICS IN GENERAL. YOU HAD QUESTIONS ABOUT POLICE STATISTICS. THE LIFE OF THE TANK CAR CHANGES OVER TIME AND OUR POSITION ON CRUDE OIL AND ETHANOL TANK CARS AND RETROFITS. SO LET'S GET INTO THOSE ISSUES. WE HAVE BEEN DOING THIS FOR A LONG TIME. I AM SURE YOU ARE AWARE THAT THE MASTERCARD BUILDERS ASSOCIATION PROBABLY APPEARED BACK IN THE 19 -- 1800S TO SET STANDARDS. OBVIOUS THINGS. YOU HAVE TO HAVE SAME TRACK GAUGE AND HEIGHTS THAT MATCH UP IN ORDER TO INTERCHANGE CARS AND EQUIPMENT. WE REALIZE THEIR NEED TO BE. THAT DATES BACK TO TANK CAR COMMITTEE. ALTERNATELY WE HAVE RECOMMENDED PRACTICE -- PRACTICES UNTIL BEDTIME. 1910 THEY WERE ADOPTED AS STANDARDS. THEY WENT FROM MANDATORY TO THE INTERCHANGE. IN JULY 1, 1920 FIVE, THEY WENT TO THE INTERSTATE COMMERCE COMMITTEE. NOW WE HAVE SPECIFICATIONS FOR PACKAGE REGULATIONS. IN 1927, ALTERNATELY -- UL TIMATELY ICC DELEGATED TO THE TANK CAR COMMITTEE. UP UNTIL 1934 WHEN ARR WAS FORMED. TO APPROVE DESIGN FOR TANK CARS. ULTIMATELY THEY TOOK OVER SPECIFICATIONS. THE CLASSIFICATION FOR TANK CARS, YOU WILL SEE THE NUMBERS AND LETTERS ON ALL TANK CARS. THE FIRST SET OF LETTERS, DOT IS THE AUTHORIZING AGENCY. YOU COULD HAVE A DOT CAR, TRANSPORT CANADA OR AND AR CAR. THEY ARE AUTHORIZED TO APPROVE LOW HAZARDOUS OR NONHAZARDOUS CAR MATERIALS. 111 IS NON-PRESSURE. 105 ARE THE PRESSURE CARS COME IF THEY CARRY DORINE AND TOXIC INHALATION MATERIALS. NEXT IS A LETTER DESIGNATOR, COULD BE AN ST, T, OR J. STANDS FOR THERMAL PROTECTION OR J IS BOTH. NEXT IS TEST PRESSURE. 100 PSI TEST PRESSURE WITH A PRESSURE RELIEF SETTING OF 75% OF THAT. FOLLOWED BY ANOTHER LETTER, W, INDICATES IT IS A FUSION WELDED TANK CAR, FOLLOWED BY ANOTHER NUMBER, A DELINEATED FOR INSTALLATIONS, FITTINGS, TANK MATERIAL AND THAT SORT OF THING. AS FAR AS AAR'S ROLE GOES, DOT AND TRANSPORT CANADA HAVE THE REGULATIONS. THOSE ARE THE MINIMUM GUIDELINES. YOU HAVE TO MEET THOSE. ULTIMATELY AAR SET STANDARDS THAT EITHER MEETS OR EXCEEDS THE TRANSFER CANADA OR DOT REQUIREMENTS. IT TALKS ABOUT THAT. IF YOU HAVE AN AAR STANDARD IN GETS ADOPTED AS A TRANSPORT RULE, MEMBERS AGREE TO INTERCHANGE THOSE FREELY AS LONG AS THEY MEET THE STANDARDS. THE HAVE DELEGATED AUTHORITY. THAT CAME ALONG TIME AGO FROM THE ICC TO APPROVE APPLICATIONS FOR CONSTRUCTION ALTERATION REPAIR OR CONVERSION OF TANK CARS AND CERTIFY, AND IT SAYS REGISTER FACILITIES, YOU CAN TAKE THE REGISTER OUT NOWADAYS BECAUSE AS OF THIS YEAR WE ARE NO LONGER REGISTERING FACILITIES, BUT CERTIFYING ALL FACILITIES THAT DO WORK ON TANK CARS, INCLUDING RECONDITIONING REPAIR SERVICE, REMOVAL AND REPLACEMENT OF SERVICE EQUIPMENT, GAS -- GASKETS AND ALL OF THOSE THINGS. THAT IS A CHANGE OF JANUARY 1 THIS YEAR. OTHER RULES OF THE COMMITTEE. THEY PROVE -- APPROVE THE MODIFICATIONS TO TANK CAR STANDARDS. I THINK ONE OF THE ADVANTAGES OF THE TANK CAR COMMITTEE IS THE SPEED AT WHICH WE CAN OPERATE GENERALLY AS OPPOSED TO SOMETIMES IT TAKES THE GOVERNMENT A LONG TIME TO GET A REGULATION PASSED. WE CAN GENERALLY MOVE AT A FAIRLY RAPID ACE. THE OTHER THING, I GUESS ONE OF THE THING THE COMMITTEE TRIES TO DO IS CONTINUALLY IMPROVE TANK CAR STANDARDS. GENERALLY THAT HAPPENS FOR NEW CARS GOING FORWARD SO THAT WE ARE CONTINUOUSLY ACHING CARS SAFER FOR FUTURE GENERATIONS. ULTIMATELY WE DO MONITORING OF TANK CARS, AND IF THERE ARE CERTAIN ISSUES THAT ARE RAISED IN THE TANK CAR COMMITTEE HAS ACCESS TO THAT INFORMATION, WE MIGHT DO SOMETHING LIKE A CIRCULAR LETTER OR WE DO AN ANNOUNCEMENT. THE CIRCULAR LETTER SYSTEM IS LIKE THE FEDERAL REGISTER FOR THE GOVERNMENT. BASICALLY OUR WAY TO GET INFORMATION OUT TO PEOPLE WHO TRANSPORT BY WHAT AERIAL -- BY RIAAIL. THERE ARE MAINTENANCE ADVISORIES SO IF THERE ARE CERTAIN MAINTENANCE ISSUES THAT HAVE COME UP WE WILL PUBLISH A MAINTENANCE ADVISORY. EARLY WARNING WOULD BE SOMETHING MORE SERIOUS WHERE WE WOULD ELEVATE IT. WE MIGHT CALL FOR THAT CAR TO BE STOPPED AT THE NEXT UNLOADING AND INSPECTED FOR SOME CERTAIN ISSUE WE MIGHT HAVE IDENTIFIED. THEN WE ADDRESS OTHER PROBLEMS AS NECESSARY. A LOT OF THAT HAPPENS IN THE TANK CAR COMMITTEE UNDER A PRIVATE DOCKET. SO WE WOULD ONLY HAVE THE PARTY THAT IS SUBJECT TO THOSE RESTRICTIONS IN THE ROOM AT THAT TIME, AND ALL OF THE COMPETITORS WOULD BE OUT OF THE ROOM AT THAT TIME. NOW, YOU ASKED QUESTIONS ABOUT THE TANK CAR FLEET. THERE IS ROUGHLY 335 ROWS AND TANK CARS THAT OPERATE IN NORTH AMERICA. OF THOSE, 228,000 THAT ARE NONPRESSURE CARS OR DOT-111 CARS. I HAVE LISTED HERE, NON-JACKETED DOT-111'S 66,000. THEN YOU GET INTO THE CPC 1232 CARS, 11,000. TOTAL OF 90 7000 TRANSPORTING FLAMMABLE LIQUIDS. YOU CAN SEE THE BREAKDOWN THE CRUDE OIL, ETHANOL AND OTHER FLAMMABLE LIQUID. THIS IS JUST A SLIDE SHOWING IMPORTANT CHARACTERISTICS OF TANK CARS. YOU GET INTO THE TOP FITTINGS PROTECTION AND PAUL COVER SOME OF THIS IN HIS PRESENTATION. BOTTOM FITTINGS PROTECTION. THIS SLIDE ACTUALLY SHOWS THE COMPARISON BETWEENC CP232 AND POSITION FOR CRUDE OIL. AS FAR AS TOP FITTINGS PROTECTION WE REQUIRE IT AND IS THE SAME FOR OUR CURRENT POSITION. AS FAR AS THE BOTTOM FITTINGS AM IN NO REQUIREMENT FOR THE BOTTOM OUTLET HANDLE PROTECTION UNDER THE CURRENT STANDARD, BUT WE FEEL THAT IS IMPORTANT. THAT IS WHERE WE ARE AT TODAY. THOSE TWO THINGS GENERALLY V2 SMALLER RELEASES. IT IS WHEN YOU GET INTO THE HEAD AND SHELL PUNCTURE'S THAT YOU GET INTO THE LARGER QUANTITY RELEASES. AGAIN CPC 1232 REQUIRES A MINIMUM HALF HEIGHT HEAD SHIELD AND NOW ARE AT FULL HEIGHT AND ALSO ALLOWS 1/2 INCH BEAR TANK, WHICH WE DO NOT FEEL IS ADEQUATE ANY LONGER. WE FEEL A JACKETED AND THERMALLY PROTECTED CAR IS THE CURRENT STANDARD. THE THERMAL PROTECTION ALLOWS YOU LONGER PERFORMANCE IN A FIRE SO THAT IT WOULD PREVENT THE THERMAL TEARS THAT PAUL DESCRIBED EARLIER. THIS IS JUST A WAY TO SAY IT IN WORDS GENERALLY SPEAKING. CRUDE OIL 9/16 SHELL JACKETS THERMAL PROTECTION AND APPROPRIATELY SIZED PRESSURE RELIEF DEVICE. AGAIN, THAT ALLOWS THE CAR TO VENT THE PRODUCT AND BURN IT UP BEFORE YOU GET A THERMAL TEAR AND POTENTIAL OR TANK CAR PARTS FLYING AROUND. FOR ETHANOL MINIMUM 7/16 JACKETS THERMAL PROTECTION, TOP FITTINGS DETECTION AND BOTTOM FITTING AND APPROPRIATELY SIZED PRESSURE RELIEF DEVICE. OTHERS YOU ASKED ABOUT WERE SERVICE LIFE. GENERALLY A TANK CAR CAN OPERATE FOR 50 YEARS. GENERALLY SPEAKING THE ECONOMIC LIFE IS 30 TO 40 YEARS. IT JUST DEPENDS ON THE CONDITION OF THE CAR AND WHEN IT COMES OUT OF SERVICE. X FAR -- AS FAR AS EXPECTED FUTURE DEMAND, THAT IS MORE OF A SHIPPER ISSUE. RIGHT NOW WE UNDERSTAND THERE IF THE THOUSAND TANK CARS ON BACK ORDER AND WE DO NOT SEE CRUDE OIL TRANSPORTATION STOPPING OR SLOWING DOWN ANYTIME SOON, SO WE CONTINUE TO SEE AN INCREASE IN THE NUMBER OF TANK CARS BEING PRODUCED. AS FAR AS RETROFITS GO, OUR ORIGINAL POSITION WITH THE TANK CAR COMMITTEE WAS ONE OF CONSENSUS ACE APPROACH -- BASED APPROACH IN OUR LATEST COMMENTS FOR ADVANCED NOTICE, WE FEEL A RAPID RETROFIT/PHASEOUT OUT PROGRAM BE DONE IN CONJUNCTION WITH THE CAR BUILDERS AND SHOPOWNERS TO FIGURE OUT HOW WE CAN BEST DO THAT IN UTILIZE EXISTING SHOP CAPACITY. THAT IS MY PRESENTATION.

>> THANK YOU. OUR NEXT WEEK OR WILL BE MR. BILL FINN OF THE RAILWAY SUPPLY INSTITUTE.

>> GOOD MORNING. I AM PLEASED TO BE HERE REPRESENTING THE ROADWAY SUPPLY INSTITUTE ON TANK CARS. BY WAY OF INTRODUCTION, YOU WILL SEE A SLIDE HERE THAT INDICATES WHO OUR MEMBER COMPANIES ARE. WHAT IS OF IMPORTANCE HERE IS THE TANK CAR COMMITTEE REPRESENTS 75% OF THE CARS THAT ARE CURRENTLY IN SERVICE. WE ALSO BUILD 95% OF THE TANK CARS IN THE NORTH AMERICA AND FLEET. ADDITIONALLY WE HAVE A NUMBER OF REPAIR SHOPS THAT ARE CAPABLE OF DOING A FULL RANGE OF REPAIRS INCLUDING A WIDE RANGE THAT ARE BEING DISCUSSED RELATIVE TO RETROFITTING THE EXISTING CARS. WE HAVE PRESENTED SEVERAL TIMES THAT WE HAVE HAD MEETINGS WITH TRANSPORT CANADA AND DOT AND FRA, AND WE HAVE PRESENTED WHAT WE FEEL IS A COMPREHENSIVE SET OF RECOMMENDATIONS TO THOSE ORGANIZATIONS TO ADDRESS THE TRANSPORTATION OF FLAMMABLE LIQUIDS, INCLUDING CRUDE OIL AND ETHANOL. OUR RECOMMENDATIONS INCLUDE RECOMMENDATIONS TO BE BUILT AND BOB PRESENTED THIS SLIDE EARLIER THAT SHOWS THE DIRECTION BEING TAKEN IN THE INDUSTRY IS TO PROVIDE ENHANCED SHOW AND HEAD PROTECTION THROUGH JACKETS AND FULL HEAD SHIELD. ALSO TOP FITTING PROTECTION TO THE BOTTOM OUTLET VALVE TO KEEP IT CLOSED DURING ACCIDENTS AND ALSO THERMAL PROTECTION ON THOSE CARS. IN ADDITION, THESE ARE ADDRESSING GOOD FAITH CARS. THESE WERE CARS OPEN WITHOUT REGULATORY CERTAINTY TO ADDRESS EPC 1232 STANDARD. BY WAY OF CARS, THERE WILL BE ROUGHLY 55 OUT THEM BUT WILL HAVE AN BUILT AND IN SERVICE. THERE ARE A LARGE NUMBER OF CARS THE INDUSTRY HAS INVESTED IN THAT WE FEEL DO SIGNIFICANTLY INCREASE SAFE TRANSPORTATION, PARTICULARLY OF CRUDE AND ETHANOL AND ALL FLAMMABLE LIQUIDS. THE BIGGER ISSUE AND ONE THAT HAS BEEN DISCUSSED AND HOPEFULLY WILL GET QUICK RESOLUTION TO IS WHAT TO DO WITH THE EXISTING LEGACY TANK CARS. BOB SHOWED A SLIDE EARLIER THAT SHOW THE OVERALL NUMBER OF CARS IN CRUDE OIL AND ETHANOL AND ALL FLAMMABLE LIQUID SERVICE. I KNOW THE INTENT OF THIS PARTICULAR FORUM IS TO DISCUSS ETHANOL AND CRUDE OIL CARS, BUT THERE IS A BROADER ISSUE OF HOW TO ADDRESS ALL FLAMMABLE LIQUID CARS. ONE OF THE ISSUES WE HAD TO COME TO GRIPS WITH IS THE LARGE NUMBER OF LEGACY CARS THAT WOULD HAVE TO BE RETROFITTED. A RETROFIT THAT IS CURRENTLY ON THE TABLE THAT WE ENDORSE, AND I BELIEVE BASED UPON THIS POINT IN TIME WE ARE VERY CLOSE TO ENDORSING AND ARE TAKING IT UNDER ADVISEMENT WOULD BE TO RETROFIT ETHANOL AND CRUDE OIL CARS WITH JACKETS, FULL HEAD SHIELDS, IMPROVE TOP FITTINGS PROTECTION AND IMPROVED SAFETY RELIEF VALVES AND THE BOTTOM VALVE MODIFICATION. THIS IS A SIGNIFICANT RETROFIT, AND IT WILL REQUIRE SEVERAL THINGS THAT NEED TO TAKE RACE TO GET IT DONE PROPERLY. FIRST OF ALL, WE NEED REGULATORY CERTAINTY. WE STILL DO NOT KNOW AT THIS POINT IN TIME WHAT TRANSPORT CANADA WILL EMBRACE IN THE WAY OF EXISTING LEGACY CAR RETROFITS. WE NEED SOME CERTAINTY ON WHAT THAT WILL BE ON THE AND WHEN WE HAVE THAT CERTAINTY, THEN WE CAN BEGIN TO PREPARE AND PUT TOGETHER PROGRAM FOR RETROFITTING CARS IN THE INDUSTRY. ADDITIONALLY WHAT WE NEED IS HARMONY. WE NEED SOME INDICATION THAT THE CANADIAN AND U.S. REGULATIONS FOR BOTH NEW CARS AND EXISTING CARS GOING FORWARD ARE GOING TO BE THE SAME, BECAUSE IN THE NATURE OF THESE CARS THAT TRANSPORT COMMODITY BETWEEN CANADA AND THE U.S. FREQUENTLY AND WE NEED ONE UNIFIED CODE THAT WE CAN DESIGN CARS TO AND RETROFIT CARS TOO. LASTLY, WE NEED PRIORITIES. THIS WILL BE A HUGE UNDERTAKING IN THE LEGACY FLEET OF CARS. JUST TO GIVE YOU AN IDEA, BY CARD NUMBERS. CARS THAT WOULD REQUIRE JACKETING AND THE RETROFITTING IN CRUDE OIL SERVICE ARE CURRENTLY ALMOST 23,000 CARS. IN ADDITION TO THAT IS IN ALL CARS WOULD REQUIRE THE SAME PACKAGE ARE ALMOST 29,000 CARS. WE HAVE 52,000 CARS HERE THAT WILL HAVE TO BE SOMEHOW WORK INTO A RETROFIT CYCLE. THE ISSUE HERE IS THAT IN ORDER TO ACCOMPLISH THAT WE HAVE TO SET PRIORITIES. IT IS OUR PROPOSAL TO ADDRESS CRUDE OIL CARS FIRST, ETHANOL CAR SECOND, AND LASTLY, THE FLAMMABLE LIQUID CARS. THE REASON THEY WILL THE GIVEN TOP PRIORITY IS THEY GENERALLY RUN LARGE BOXCARS. AS WE SAW EARLIER FROM THE PRESENTATION, THE INCREASE IN THE NUMBER OF ACCIDENTS HAS BEEN PRIMARILY DRIVEN I UNIT TRAIN CARS IS -- AND THE CONSEQUENCES IS MUCH GREATER IN THOSE CARS. OUR CLEAR PRIORITY WOULD BE TO ADDRESS THE ETHANOL AND CRUDE OIL CARS FIRST, GIVEN TOP PRIORITY TO CRUDE OIL. SOME OF THE THINGS THAT WE HAVE TO KEEP IN MIND AS WE DO A RETROFIT PROGRAM, HOW QUICKLY WE CAN GET UP TO SPEED IN DOING IT IS THE NATURE OF FIRST OF ALL WHAT THE RETROFIT IS GOING TO BE. CLEARLY THEY ARE NOT A LOT OF SHOPS AND THIS POINT AND TIME BOUND HAVE TO PASS THE CAPABILITY TO A FULL RANGE OF RETROFITS. SOME WOULD BE AS SIMPLE AS APPLYING THE BOTTOM OUTLET VALVE HANDLE MODIFICATION OR PUTTING ON A NEW PRESSURE RELIEF DEVICE. EVEN A PRESSURE RELIEF DEVICE, IN MANY CASES CARS WILL HAVE TO BE CLEANED BECAUSE YOU ARE DEALING WITH A FLAMMABLE LIQUID AND SHOP PROCEDURES WOULD NOT PERMIT YOU TO CHANGE OUT THE VALVE WITHOUT DOING THE CLEANING AND PURGING OF THE TANK. IN ADDITION, PUTTING ON JACKET, HEAD SHIELDS, APPLYING THERMAL PROTECTION WE FEEL CONFIDENT WOULD REMAIN IN PLACE OVER THE SERVICE LIFE OF THE CARS REQUIRE SOME CAPABILITY THAT NOT ALL SHOPS HAVE. IT IS NOT TO SAY SHOPS CANNOT BE BROUGHT UP TO SPEED TO DO THAT. SOME ARE CAPABLE OF DOING THAT AND OTHERS WOULD HAVE TO LEARN TO DO THAT AND PUT IN FACILITIES, BUT IT WILL JUST TAKE TIME FOR THOSE TO GET UP TO FULL SPEED AND GET A FULL RANGE OF SHOPS THAT ARE CAPABLE OF PERFORMING THE RETROFITS. AS YOU SEE ON THE SLIDES AND BOB INDICATED EARLIER, IN TOTAL LOOKING AT PERHAPS 95,000 CARS THAT REQUIRE SOME FORM OF RETROFIT ON THE INCLUDING THE CURRENT LEGACY FLEET AND GOOD FAITH CARS THAT ARE BEING PROPOSING WOULD HAVE THE BOTTOM VALVE MODIFICATION AND SOME FORM OF SAFETY RELIEF VALVE MODIFICATION. ONE OF THE ISSUES WE HAVE TO DEAL WITH A SHOP HAVE TO BE CERTIFIED. IF YOU DO NOT HAVE THE FACILITY ON A NEW SHOPS COMING ON BOARD REQUIRE CERTIFICATION FROM AAR AND THAT TAKES TIME. ISSUES THAT WE HAVE TO MAKE THE PROGRAM WORK IS WE HAVE TO HAVE REGULATORY CERTAINTY SO WE CAN BEGIN THE DESIGN SO WE CAN START TO PERFORM TOOLING AND SHOP MODIFICATIONS AS NECESSARY. GENERALLY GET THINGS UP AND RUNNING. WORK WITH THE SHIPPERS TO MAKE SURE ANY KIND OF A SCHEDULE WE PUT TOGETHER DOES NOT DISRUPT THEIR NEED FOR THE CARS AND THE COUNTRY'S NEED FOR THE FUEL THAT IS BEING TRANSPORTED IN THESE CARS. IN WAY OF CLOSING, I WOULD LIKE TO SAY THAT HIS STORE CLIQUE THERE HAS NEVER BEEN A RETROFIT PROGRAM AS BIG AS WHAT WE ARE PROPOSING. IF YOU GO BACK TO THE DAYS WHERE WE RETROFITTED COMPRESSED GAS CARS, THERE WERE ONLY 12,500 CARS THAT WERE RETROFITTED WITH FULL JACKETS. AND THERMAL PROTECTION. WE ARE TALKING A RETROFIT PROGRAM THAT IS OVER FOUR TIMES THE AMOUNT OF THOSE CARS, SO IT WILL BE A MAJOR UNDERTAKING. WE NEED A DIALOGUE WITH THE SHIPPERS, RAILROADS AND CAR OWNERS TO WORK OUT THE BEST RETROFIT SCHEDULE THAT TAKES INTO ACCOUNT SAFETY TO THE PUBLIC, AND ALSO ALLOWS US TO HAVE SOME SORT OF WHAT I WOULD CALL A PROGRAM THAT WILL OPERATE SMOOTHLY AND CAN GET CARS IN AND OUT OF THE SHOPS AS QUICKLY AS WE CAN AND GET THE RETROFITS APPLIED AND NOT DISRUPT SERVICE. THANK YOU.

>> THANK YOU MR. FIN. OUR NEXT SPEAKER WILL BE MR. TODD TRY COOL -- MR. TODD TREICHEL.

>> THANK YOU. BRIEFLY WHAT I WILL RUN THROUGH TODAY IS I WILL GIVE IDEAS AND HAVE ARTIE HEARD IN SOME DETAIL ABOUT THE DIFFERENT PROTECTION FEATURE OPTIONS THAT EXIST FOR THE TANK CARS WE ARE TALKING ABOUT, AND SOME OF THE APPROACHES THAT ARE ASSESSING THE DAMAGE RESISTANCE THAT EXISTING CARS AND THOSE PROTECT THE -- PROTECTIVE FEATURE OPTIONS OFFER. I WILL EXPLAIN WHAT THE TANK CAR SAFETY RESEARCH AND TEST CAR IS AND EXPLAIN THE DATA ON TANK CAR AND ACCIDENTS THAT WE COLLECT AND USE. I WILL DEFINE CONDITIONAL PROBABILITY OF RELEASE. TALK TO YOU A LITTLE BIT ABOUT WHAT SOME ESTIMATES OF THAT PERFORMANCE METRIC ARE FOR SOME OF THE TANK CARS OF INTEREST IN THIS DISCUSSION. WE WILL LOOK BRIEFLY AT OTHER ASPECTS OF ACCIDENT PERFORMANCE AND OTHER RESEARCH AREAS THAT ARE NOT AIMED PRIMARILY AT THESE PARTICULAR TYPES OF CARS IN CASE THERE IS INTEREST THERE. LET ME START OUT WITH HOW WE THINK ABOUT THE STRUCTURE OF THE CAR IN TERMS OF HOW IT RESISTS DAMAGE IN AN ACCIDENT. YOU HAVE SEEN SIMILAR DIAGRAMS TO THIS ONE ALREADY BUT WHAT IS IMPORTANT ON THIS DIAGRAM IS WE THINK IN TERMS OF THERE BEING FOUR COMPONENTS TO THE CAR THAT CAN POTENTIALLY RELEASE AND POTENTIALLY BE PROTECTED. TWO OF THEM MAKE UP THE TANK ITSELF. WHAT IS THE TANK SHELL, THE LONGITUDINAL CYLINDRICAL AND THE OTHER IS THE HEAD OF THE BOTTOM OF THE TANK. THERE ARE TWO KINDS OF FITTINGS. TOP FITTINGS WITH A VARIETY OF PURPOSES AND BOTTOM FITTINGS PRIMARILY FOR LOADING AND UNLOADING. WE CONSIDER THIS TO BE THE FRAMEWORK IN WHICH WE THINK ABOUT ALL OF THE SAFETY COMPARISON QUESTIONS. YOU WILL SEE THIS RECUR THROUGHOUT THE PRESENTATION. WHAT ARE SOME OF THE PROTECTIVE FEATURE OPTIONS AVAILABLE? I WILL SHOW SOME OF THOSE IN A MOMENT. FOR THE TANK HEADS, YOU CAN EITHER USE A SICKER TANK TO BEGIN WITH. THE ACTUAL MATERIAL IS THICKER. YOU CAN PLACE A JACKET AROUND THE TANK WITH OR WITHOUT OF IRMO PROTECTION SYSTEM IN PLACE. JUST THE JACKET OFFERS PUNCTURE -- PUNCTURE RESISTANCE. YOU CAN UTILIZE A DIFFERENT TANK OR A JACKET AROUND THE SHELL. THERE IS NOT AN EQUIVALENT TO THE HEAD SHIELD AVAILABLE FOR THE SHELL. FOR TOP FITTINGS, GENERALLY THE APPROACH IS TO PLACE FITTINGS THAT OTHERWISE MIGHT BE IN AN OPEN ARRANGEMENT ON TOP OF THE CAR INSIDE SOME FORM OF DETECTIVE HOUSING. FOR BOTTOM FITTINGS, BOTTOM FITTINGS ARE ARE READY PROTECT AND BY A PROGRAM PUT IN PLACE A WHILE AGO RIGHT THE TANK CAR COMMITTEE, BUT THE ONE ISSUE THEY ARE CURRENTLY LOOKING AT IS THE OPERATING HANDLES THAT TRAVEL ALONG WITH THE CAR. HE SAW AN ILLUSTRATION IN THE PRESENTATION WHERE IT IS POSSIBLE FOR THOSE TO BE INVOLVED IN THE ACCIDENT AND ESSENTIALLY OPERATE LIKE A CAR UNLOADER. SO THE TANK CAR COMMITTEE IS CONSIDERING OPTIONS FOR HOW THOSE HANDLES MIGHT BE SECURED TO MAKE THAT IMPOSSIBLE OR MUCH LESS LIKELY. HERE ARE SOME EXAMPLES AMONG MANY POSSIBILITIES. THE UPPER LEFT YOU SEE THE TOP FITTINGS HOUSING WHERE THE SIX OR EIGHT DIFFERENT FITTINGS THAT ARE UP THERE ARE ALL INSIDE THE HOUSING, WHICH WILL TAKE THE BRUNT OF ANY IMPACT AT THE CAR SHOULD ROLL OVER OR SOMETHING AIRBORNE SHOULD STRIKE A CAR. THE SMALL THE STRUCTURE TO THE RIGHT IS THE MANWAY WITHOUT FITTINGS ON TOP OF IT. BELOW THAT IS AN ILLUSTRATION OF WHAT A JACKET IS. IT IS A TEAR AWAY ILLUSTRATION ARE INSIDE THAT IS THE TANK ITSELF, AND THEN THERE IS A JACKET STRUCTURE OF VENDORS DEAL THE AROUND THAT WHOSE MAIN STRUCTURAL PURPOSE HISTORICALLY IS TO SIMPLY KEEP AN INSULATING BLANKET IN PLACE OR THERMAL PROTECTION BLANKETS AND PLACE. IT DOES HAVE ACCIDENT BENEFITS. ACCOUNTING FOR THOSE IN THE ANALYSES HAVE BEEN CRITICAL AS WE LOOK AT THE DIFFERENT OPTIONS. YOU CAN EITHER HAVE A HALF I'VE HEADS FIELD -- HEAD SHIELD OR FULL PIPE. IT IS A SEPARATE STRUCTURE STANDING AND PROTECTION. ON THE RIGHT YOU SEE A FULL RIGHT HEAD SHIELD INCORPORATED INTO THE REST OF THE STRUCTURE. THE RATIONALE FOR HAVING A HALF PIPE HEAD SHIELD IS IT TURNS OUT THAT THE MAJORITY OF IMPACTS AGAINST THE HEAD ARE PUT BELOW THE CENTERLINE. AND HISTORICALLY ONE OF THE MODES IS IF THEY COME APART AND THE COUPLER RISES UP AND STRIKES THE HEAD. IF IT ACCOMPLISHES MOST OF THE SAFETY BENEFITS, IT ALSO REDUCES THE WEIGHT. SO THE RELATIVE BENEFITS OF EXTRA WEIGHT GOING TO THE FULL HEAD SHIELD NEEDS TO BE COMPARED AGAINST OTHER PLACES YOU MIGHT ADD WAIT FOR SAFETY. GENERALLY WE THINK ABOUT A FAMILY OF THREE GENERAL APPROACHES TO ASSESSING HOW A TANK CAR RESISTS DAMAGE. YOU CAN DO TESTS. YOU CAN DO SIMULATIONS THROUGH MODELING, OR YOU COULD DO A STATISTICAL ANALYSIS OF EMPIRICAL DATA OR THE ACTUAL ACCIDENT RECORD. THEY ALL HAVE STRENGTHS AND WEAKNESSES. THE FIRST TWO YOU ARE LIMITED TO ONE IDEALIZED SCENARIO JUST TO SAY YOU CAN VERY IT BY DOING MULTIPLE RUNS BUT EACH ONE ONLY ACCOUNTS FOR ONE CERTAIN THING THAT CAN HAPPEN. THE STATISTICAL ANALYSIS INCORPORATES THE ENTIRE SPEC TERM OF ACTUAL SCENARIOS. THE COST DECLINES AS WE GO DOWN THE TABLE. THEY HAVE STRENGTHS AND WE THIS IS. TESTING AND MODELING ARE GOOD AT GETTING DETAILED INFORMATION ABOUT THE DESIGN ASPECT YOU ARE FOCUSING ON, AND ALSO BY THE DESIGN THAT IS IN CURRENTLY IN THE FLEET. ON THE OTHER HAND, THE STATISTICAL ANALYSIS IS THE ONLY ONE THAT CAN GIVE YOU A RESULT IN TERMS OF HOW MANY WE WILL HAVE WITH THE NEW DESIGN OR DESIGN WE ARE CONSIDERING. THE SAFETY PROJECT BRIEFLY HAD THEIR ORIGINS IN 1970. THE PROCESS OF FIGURING OUT WHAT THE SOLUTIONS WERE TO THE 1960'S FLAMMABLE GAS ACCIDENTS BILL REFERRED TO. COLLABORATIVE EFFORT LED TO SUCCESSFUL SOLUTIONS THAT WERE IMPLEMENTED IN HM-144 HEAD SHIELDS AND THERMAL IMPLEMENTATION PROTECTION AND SHELF COUPLERS. TO THIS DAY THE COFOUNDING AND CODIRECT THE RESEARCH PROJECT, WHICH IS DEDICATED TO PRODUCING RELIABLE AND OBJECTIVE RESEARCH FOR THE SPONSORS USE AND THAT OF OTHER STAKEHOLDERS. ONE OF THE MAIN MISSIONS OF THE SAFETY PROJECT IS TO COLLECT DATA ON TANK CARS AND ACCIDENTS. WE HAVE BEEN DOING THAT SINCE THE OUTSET AND NOW HAVE A LARGE NUMBER OF CARS IN ACCIDENTS IN THE DATABASE. WE HAVE A LARGE NUMBER OF FIELDS DESCRIBING WHAT WAS THE NATURE OF THE ACCIDENT THE CAR IT PERIODS, THE PROPERTIES OF THE CAR TO BEGIN WITH AND WHAT DAMAGE DID IT EXPERIENCE AND HOW DID IT PERFORM. THIS BUT DOES IN GOOD STEAD TO PROVIDE OBJECTIVE, QUANTITATIVE INFORMATION AND IN EFFECT, PUT THIS IN A BETTER POSITION THAN IN OTHER MODES WHEN THEY ARE NOT ABLE TO DRAW ON THAT INFORMATION. SO WHAT IS THE CONDITIONAL PROBABILITY OF RELEASED? I AM DEFINING IT HERE AND FOR MOST OF THE DISCUSSION YOU CAN SEE COMMENTS AND RESPONSES HERE YOU THE DEFINITION WOULD BE THE PROBABILITY THAT A SINGLE TANK CAR RELEASES SOME, ANY QUANTITY OF LADING, GIVEN THAT IT IS DERAILED AND IMPACTED IN AN FR-A A-REPORTABLE DATA. AS AN EXAMPLE, HERE IS A SUMMARY TABLE OF CARS OF INTEREST. THIS IS OUR CURRENT ASKED UNDERSTANDING OF ESTIMATES FOR CARS OF INTEREST. DOWN THE LEFT YOU WILL SEE DIFFERENT KINDS OF CARS. WHAT WE ARE CALLING THE LEGACY CARS, THESE ARE BEFORE 2000 11 AND ANY REQUIREMENTS FOR CARS AND CREWED ETHANOL SERVICE. THE THIRD AND FOURTH CARS ARE CARS FITTING THE REQUIREMENTS OF THE CIRCULAR LETTER 1232. THE BOTTOM IS THE PROPOSAL BOB WAS DESCRIBING. YOU WILL RECALL ARE -- RECALL THE FOUR CAR COMPONENT. WE WILL HEAR PARAMETERS DESCRIBING THEM IN TERMS. THE TANK THICKNESS, WHAT KIND OF HEAD SHIELD. IS THE TOP FITTINGS GROUP PROTECTED BY HOUSING, AND ON THE RIGHT SOME SPRCPR ESTIMATES. THAT MAKES 26.6% OF OURS ON AVERAGE THAT GET IN DERAILMENTS WILL RELEASE LEADING FROM SOME PART OF THE CAR. -- WILL REALLEASE LADING FROM SOME PART OF THE CAR. YOU CAN SEE THE DIFFERENT MIXES OF SAFETY IMPROVEMENT REDUCES INTO A LITTLE OVER FOUR PERCENT AND. W-- 4%. THE CPR IS WHETHER OR NOT WE HAVE A RELEASE. DIFFERENT DISTRIBUTIONS OF QUANTITY LOSS INCURRED FROM DIFFERENT PARTS OF THE CAR. DIFFERENT COMPONENTS. THEREFORE THE DIFFERENT PACKAGING IMPROVEMENT OPTIONS AFFECT THE QUANTITY LOSS IN DIFFERENT WAYS. THIS CAN BE IMPORTANT WHEN WE THINK ABOUT TRYING TO PREVENT A LARGE POOL FIRE AS COMPOSED TO FINALLY, WE TALK ABOUT FIRE SURVIVAL. FIRE INCREASES THE PRESSURE INTERNAL IN THE TANK AND CAN LEAD TO TANK FAILURE AND CAN ENCOMPASS THE PRESSURE RELIEF SYSTEMS. WE HAVE THE FIRE SIMULATION PROGRAM WHICH HAS BEEN POSITIONED TO TALK ABOUT COMPARATIVE SURVIVAL TIMES BETWEEN THE DIFFERENT OPTIONS. WE CAN SEE HOW MUCH TIME IS BROUGHT BEFORE TANK FAILURE IN ORDER TO THE FIRST RESPONDERS TO GET THERE. I THINK THAT IS MY -- OH, I'M SORRY, WE SHOW INFORMATION AND PHOTOGRAPHS OF THE NTSB. WE HAVE A RESEARCH PROGRAM THAT IS LOOKING AT A MUCH MORE ADVANCED ASSIGNMENT. -- ADVANCED ASSIGNMENT. WE HAVE A DATABASE OF INFORMATION. THAT IS MY PRESENTATION.

>> THANK YOU. OUR NEXT SPEAKER IS MR. GREGORY SEXTON.

>> GOOD MORNING. I'M CHIEF ENGINEER AT THE GREENBRIER COMPANIES. WE ARE ONE OF FOUR ESTABLISHED TANK CAR BUILDERS. THE QUESTIONS DIRECTED AT ME ARE OF THE SORT YOU MIGHT EXPECT. LET ME GET RIGHT INTO THEM IN MY PRESENTATION.

>> COULD YOU PULL THE MICROPHONE AND LITTLE BUT CLOSER?

>> I WOULD BE GLAD TO. HOW DOES THE MANUFACTURER DEMONSTRATE COMPLIANCE WITH REQUIREMENTS? THE DOT DELEGATES REVIEW AND APPROVAL. THE COMMITTEE HAS EXPERIENCED TANK CAR INDEPENDENT THIRD-PARTY ENGINEERS WHO REVIEW OUR DRAWINGS AND SPECIFICATIONS FOR DOT COMPLIANCE AND THEN ALL OF THE BUILDS HAVE TO BE REVIEWED AND APPROVED, AS WELL. THE AAR CONDUCTS VARIOUS AUDITS FOR TANK CAR DESIGN SPECIFICALLY. WHAT KINDS OF TANK CARS ARE BEING BUILT BY GREENBRIER? SPECIFICALLY, A LOT ARE THE CPC 1232 CONFIGURATION. WE ALSO BUILD PRESSURE CARS. THAT DOES NOT COME SO MUCH INTO PLAY. THE EUROPEANS HAVE A DIFFERENT WAY OF DEALING WITH TANK CAR SAFETY. NEVERTHELESS, WE DO HAVE A PRESENCE IN EUROPE. THREE QUARTERS OF TANK CARS BUILT IN NORTH AMERICA ARE NON-PRESSURE TYPE. WHAT TYPES OF CARS ARE BEING LOADED? FREIGHT CARS. TANK CARS ARE A BIG PART OF THE BACKLOG. THEY REPRESENT 50% OF WHAT IS BEING BUILT. MORE COMMONLY, THEY ARE 25% PER YEAR. TANK CARS ARE NOT EASY TO BUILD IN A CONVENTIONAL FREIGHT CAR PLANT. THEY ARE SPECIFIC TO TANK CAR PLANTS. TO BUILD ONE, YOU HAVE TO PUT IT IN A BIG STRESS RESISTOR. THAT IS THE ONLY FREIGHT CAR THAT HAS THAT REQUIREMENT. PRETTY MUCH COVERED THIS SLIDE . TWO THIRDS OF ALL CARS ARE NONPRESSURE ITD TYPE. WHAT IS THE TANK CAR CAPACITY? THAT IS A BIG DEAL. IN 2009, WE BUILD NEARLY 9000 OF THEM. IN 2010, NOT QUITE 5000. SKIPPING AHEAD TO LAST YEAR, OVER 28,000 CARS. THIS INDUSTRY IS PRETTY DYNAMIC. THIS IS MY OWN OPINION. IT IS MY COMPANY'S -- COMPANY'S OPINION, TOO. I THINK WE CAN INCREASE OUR PRODUCTION YEAR AFTER YEAR. IF WE BUILT 28,000 CARS LAST YEAR, I'M TALKING WE CAN GET UP TO ABOUT 38,000 CARS THIS YEAR AND THE FOLLOWING YEAR, WE CAN THROW 10,000 ON TOP OF THAT. RAW NUMBERS, YOU UNDERSTAND. THIS IS AN AMAZING ECONOMY. I AM THOROUGHLY IMPRESSED BY HOW WELL CAPITALISM WORKS WHEN THERE IS A NEED. THAT TOUCHES ON WHAT SOME OF MY FELLOW PRESENTERS HAVE MENTIONED EARLIER. WE NEED A GOOD UNDERSTANDING OF WHAT WILL BE ACCEPTABLE, SO THAT CAPITAL IS NOT AFRAID TO INVEST IN OUR FUTURE. THAT WOULD BE ONE OF OUR REAL PLEAS FOR THIS MORNING, MIND CERTAINLY. WHAT TYPES OF RETROFITTING FOR OLDER CARS? ON NEWER CARS, IT WILL BE POSSIBLE TO ADD HEAD SHIELDS, JACKETS, PROTECTION, AND OPERATING HANDLES CAN BE MODIFIED. IT IS NOT CERTAIN AS TO WHAT PERCENTAGE OF THE EXISTING FLEET CAN BE RETROFITTED THAT WAY. IN PART, THAT IS TRUE BECAUSE WE DO NOT UNDERSTAND TODAY EXACTLY WHAT THE DETAILS OF WHAT THOSE RETROFITTED QUALITIES WILL BE. THERE IS A LOT OF UNCERTAINTY. KEY TANK CARE RETROFIT AREAS. YOU HAVE SEEN SOMETHING LIKE THIS BEFORE. FOR THE RIGHT, YOU SEE A HEAD SHIELD. UP ON THE TOP, STRONGER HOUSING TO PROTECT THE TOP FITTINGS. AT THE BOTTOM, WE TALKED ABOUT OPERATING HANDLES. WE DO NOT TOUCH SO MUCH AT THE SHELL ITSELF. THIS IS A GOOD TIME TO TALK ABOUT IT. RIGHT NOW, THERE IS A BIT OF CONTROVERSY ABOUT HOW THICK SHOULD THE SHELL BE. I HAVE COME TO BELIEVE THAT GIVEN THE UNCERTAINTY OF EVENTS, THE UNCERTAINTY OF WHAT IT IS WE ARE HAULING, THAT WE NEED SOME EXTRA MARGIN OF SAFETY TO BE ABLE TO DEAL WITH THAT. THAT IS WHY WE ARE PROPONENTS OF A 9/16 SHELL. I WANT TO MAKE IT CLEAR THAT NOT EVERYBODY AGREES. THAT IS WHAT I WANT TO TELL YOU TODAY. ENGINEERS DEAL WITH UNCERTAINTY BY ADDING MARGIN OF SAFETY. I HAVE BEEN AN ENGINEER FOR A LOT OF YEARS NOW. I GUESS I GRADUATED FROM COLLEGE IN 1976. I HAVE WORKED AS A FREIGHT CAR ENGINEER SINCE THEN. THAT IS MY VIEW OF THE SITUATION. WHAT KINDS OF INSPECTIONS AND MAINTENANCE ARE NECESSARY AND HOW WAS MAINTENANCE PERFORMED? THE RAILROADS HAVE TO PERFORM A BASIC INSPECTION WHENEVER A CAR IS ASSEMBLED INTO A TRAIN. BEYOND THAT, REASSIGNMENT AND REQUALIFICATION TRIGGER INSPECTION AND MAINTENANCE REQUIREMENTS. FINALLY, TANK CAR MAINTENANCE MUST BE PERFORMED ONLY IN LICENSED FACILITIES. WE SAID THAT THE AAR PERFORMS THOSE INSPECTIONS OR LICENSES, AS I AM REFERRING TO THEM. YOU CAN SEE WE HAVE -- I CANNOT READ THAT -- 68,000 CREWED AND ETHANOL CARS. 100,000 NONHAZARDOUS CARS. WE ARE NOT HERE SPECIFICALLY TO TALK ABOUT THOSE CARS TODAY. I WOULD LEAVE THIS GROUP WITH THE THOUGHT THAT LONGER-TERM -- THE SIMPLE FACT, WE ARE CHASING AN EVER HIGHER STANDARD FOR SAFETY. I THINK THAT IS A GOOD THING. I THINK WE CAN ACHIEVE IT. I THINK WE CAN CONTINUE TO BUILD SAFER CARS AND OPERATE SAFER CARS. WE HAVE A TARGET FOR THE FUTURE. THAT CONCLUDES MY PRESENTATION.

>> THANK YOU. CHAIRMAN, THIS CONCLUDES OUR FIRST SET OF PANEL ONE HESITATIONS BEFORE THE MORNING BREAK.

>> THANK YOU. AND THANK YOU TO THE FIRST PRESENTERS. WE ARE SCHEDULED FOR A BREAK UNTIL 10:35. WE WILL RECONVENE TO HEAR THE REMAINING PRESENTATIONS AND MOVE TO QUESTIONS. WE ARE ADJOURNED UNTIL 10:35.

>> WELCOME BACK FROM THE BREAK. WE ARE READY TO HEAR FROM THE REMAINING TWO PANELISTS.

>> THANK YOU. OUR NEXT SPEAKER IS MR. FRANCISCO GONZALEZ III.

>> THANK YOU. GOOD MORNING. THIS IS THE MISSION AND GOAL OF THE RESEARCH AND DEVELOPMENT. SIMILAR MISSIONS AND GOALS FOR FRA. TANK CARS TRANSPORTING HAZARDOUS MATERIALS UNDER NORMAL CONDITIONS AND ACCIDENT CONDITIONS. ONE OF OUR GOALS IS TO PROVIDE ALL OF THE INFORMATION TO FRA TO DEVELOP REGULATIONS WITH PERFORMANCE STANDARDS FOR FUTURE TANK CAR DESIGN. THE INTERACTION IS THAT THEY DO TWO OF THE BIGGEST CONTRACTORS IS THAT THEY ARE -- THAT DO RESEARCH FOR US. WE CONTRACT OTHER ENTITIES AND AGENCIES TO CONDUCT THEIR RESEARCH. FOR EXAMPLE, IF WE CONTACT ANOTHER AGENCY, WE DO AN INTERAGENCY AGREEMENT. WE WILL TALK A LITTLE BIT MORE ABOUT WHAT SOME OF THE RESEARCH IS. THE NATIONAL INSTITUTE OF TECHNOLOGY. OTHERWISE, THE MORE CONVENTIONAL WAY IS THE CONTRACT. THAT IS HOW WE DO A LOT OF THE TESTING YOU WERE GOING TOSEE. WE ALSO HAVE GRANTS AND SEVERAL COOPERATIVE AGREEMENTS. ONE OF THE THINGS WE HAVE DONE LATELY TO GET MORE IDEAS AND NEW INNOVATIONS ARE NEW PROJECTS IS WHAT IS CALLED A BROAD AGENCY ANNOUNCEMENT. WE PUT AN ANNOUNCEMENT ON OUR WEBSITE AND WE LOOK FOR IDEAS AND WAYS TO IMPROVE THE CRASH ABILITY OF THE TANK OR THE RESEARCH IDEAS THAT ARE FLOATING AROUND IN THE U.S. OR OTHER COUNTRIES. SOMETIMES WE GET PETITIONS OR PAPERS FOR AGENCIES OR INDUSTRIES THAT ARE NOT RELATED TO THE RAILROAD. BOEING, NASA, THEY MAY HAVE SOME KIND OF A SOLUTION, BUT IT IS NOT QUITE RELATED TO THE RAILROADS, BUT WE CAN EVALUATED TO SEE IF WE CAN APPLY IT TO THE RESEARCH. HERE IS A LIST OF SOME OF THE RESEARCH PROGRAMS WE HAVE, THAT WE SPONSOR. I DO NOT WANT TO READ ALL OF THEM. THIS IS MOSTLY OF THE THINGS THAT WE DO. WE HAVE THREE AREAS OF RESEARCH. TANK CAR STRUCTURE AND TAILORING. ACCIDENT INFORMATION OR MITIGATION. RISK ANALYSIS. HERE ARE SOME OF THE EXAMPLES OF THE RESEARCH. OVER HERE IS A MAP OR IDEAS OF THE WAY WE DO OUR RESEARCH. WE HAVE RESOURCES FROM INDUSTRIES AND AGENCIES. WE HAVE PROGRAM AREAS, LIKE I MENTIONED. WE HAVE INITIAL OUTPUTS. WE HAVE INTERMEDIATE OUTCOMES. ONCE WE DO THE RESEARCH, WE DO TESTING, MODELING. WE EVALUATE THOSE MODELS. WE HAVE ON-SITE MEETINGS, COMMITTEE MEETINGS, ADVANCED NOTICED PROPOSAL MAKING. LATER ON, WE HAVE THE FINAL RULES. THROUGH THAT PROCESS, WE HAVE OTHER AGENCIES AND INDUSTRIES COMMENT AND HAVE AN INPUT ON RESEARCH AND REGULATIONS. THE LONG-TERM OUTCOMES WE LOOK INTO FOR NEW TANK CAR DESIGN IS A REDUCTION IN HAZARDOUS MATERIAL RELEASES AND THE IMPLEMENTATION OF THOSE REGULATIONS. HERE IS A LOOK AT THE STRUCTURAL INTEGRITY AND THE NEXT STEPS. WE WILL SHOW A VIDEO OF SOME OF THE TESTS WE HAVE DONE IN THE LAST FEW MONTHS. CURRENTLY, WE HAVE A FULL-SCALE SIDE IMPACT TESTING. WE PERFORMED THESE TWO TESTS. WE ARE STILL LOOKING TO DO SOME OF THE TESTS ON THE DOT-115 AND DOT-105. I MENTIONED ABOUT THE RESOURCES TO DO THE TESTING. WE DO THE MODELING. WE DO THE CRASH WALL TESTING. THEY DO THE ACTUAL TESTING WE DO IN COLORADO. THEN WE GO BACK AND EVALUATE THOSE MODELS. MOST OF THE TANKERS WE USED FOR THE TESTING ARE DONATED BY THE INDUSTRY. SOME FROM THE TANKER INDUSTRY. THEY GIVE THOSE CARS SO WE CAN PERFORM THESE TESTS. WE DO A LOT OF COMPUTER MODELING TO EVALUATE THE TESTS. WE DO THE ACTUAL TESTING. AFTER THAT, WE TAKE THAT DATA AND EVALUATE THOSE MODELS. WE CALIBRATE THOSE MODELS TO LOOK AT THE PREDICTION AND YOU CAN SEE THE GRAPH THAT SHOWS SOME OF THE PREDICTORS ON THE TANKER TEST. RIGHT NOW WE WANT TO SHOW YOU A VIDEO OF THE TESTS PERFORMED IN DECEMBER AND FEBRUARY. THERE ARE TWO DIFFERENT TANKERS. ONE OF THE MAIN POINTS OF THESE TESTS IS TO DO A REPEATABLE TEST. THERE, YOU CAN SEE THE TWO TANKERS, IT IS PRETTY MUCH THE SAME TEST, THE SAME PROCEDURE TO DO THE TEST. THE TANKER ON THE TOP IS THE DOT-112. ON THE BOTTOM, WE HAVE THE DOT-111, THE CURRENT TANK CAR. DOT 111 WITH A JACKET. IN THIS CASE, IT HAD EXTENDED HEATER COILS. BOTH HAD A JACKET. THE DDOT-111 IS A GENERAL PURPOSE CAR. THE DOT-112J IS USED TO CARRY DANGEROUS OR HAZARDOUS MATERIALS. THE 111 IS 11/16. IT IS ASTM 515 MATERIAL. THE DOT-112, THE THICKNESS IS 6/16. BOTH CARS HAVE JACKETS AND INSULATION. THE DIFFERENCE IS THAT THE 111 -- 112 HAS HALF AN INCH OF INSULATION. LIKE I MENTIONED, ONCE WE GET THE RESULTS, WE PROVIDE THE RESULTS AND THEN WE HAVE ON-SITE MEETINGS, WE HAVE AN ADVANCED NOTICE PROPOSAL MAKING. ONCE WE RECEIVE A COMMENT FROM THE INDUSTRY, SUGGESTIONS, IDEAS, THEN WE COME WITH PERFORMANCE STANDARDS AND PROCEDURES TO TEST THOSE TANKERS UNDER NEW DESIGNS. WE LOOK FOR INDUSTRY AND INPUT TO DEVELOP THE REGULATIONS. HERE IS MY INFORMATION. WE PUBLISH ALL OF THE RESEARCH WE DO. YOU CAN GO TO THAT WEBSITE AND LOOK FOR ALL OF THE RESEARCH THAT WE HAVE DONE. THANK YOU.

>> THANK YOU, MR. GONZALES. OUR FINAL SPEAKER IS FROM THE NATIONAL TRANSPORTATION SYSTEM CENTER. PLEASE BRING THE MICROPHONE CLOSE WHEN YOU SPEAK, JUST A REMINDER.

>> THANK YOU. I HOPE THIS IS CLOSE ENOUGH. CLOSER?

>> DON'T BITE IT. [LAUGHTER]

>> THANK YOU. I WILL TALK ABOUT HOW THE CENTER SUPPORTS DFFRA, ESPECIALLY IN THE TANK CAR PROJECT. WE ARE IN CAMBRIDGE, MASSACHUSETTS. WE ARE A FEDERAL AGENCY. WHAT I WOULD LIKE TO POINT OUT IS THAT NOT ONLY DO WE HELP OUT FRA IN TANK CARS, BUT THERE ARE OTHER AREAS THAT WE SUPPORT THEM WITH. VEHICLES, EQUIPMENT, TRACK SYSTEMS. THOSE ARE TWO AREAS I AM INTIMATE WITH. WE LOOK AT GRADE CROSSINGS, VEHICLE TRAFFIC AND DIRECTION. FROM TIME TO TIME OUR PATHS DO CROSS WITH THE NTSB. THREE ACCIDENTS HAPPENED IN THE LAST YEAR WERE SOME OF MY COLLEAGUES HAVE HELPED. THE BRIDGEPORT ACCIDENT. THAT WAS ALMOST ONE YEAR AGO. I SHOULD MENTION THE COLUMBUS ACCIDENT. THAT INVOLVED AN ETHANOL TANK CAR. IT ALSO INVOLVED A BROKEN RAIL, WHICH MY COLLEAGUES AND I HAVE BEEN LOOKING INTO. THIS LAST ACCIDENT HAPPENED IN THE BRONX AND IT IS QUITE INTERESTING. IT ACTUALLY INVOLVES A LOT OF THE THINGS WE DO, EXCEPT FOR TANK CARS AND RAIL. IN TERMS OF WHAT WE DO FOR TANK CAR SUPPORT TO THE FRA, THIS LIST TO MIMICS WHAT FRANCISCO WAS SHOWING EARLIER. WE DO TRY TO SUPPORT THE BROAD AREA OR BROAD NUMBER OF TOPICS THAT ARE SPONSORED BY FRA. BY THE TIME THIS STARTED IN 1980 , IF YOU GO TO OUR WEBSITE, THE OLDEST PUBLICATION YOU CAN DOWNLOAD COMES FROM 1980. WHAT IS IN BLACK AND BOLDED IN THIS LIST ALL RELEVANT TOPICS FOR THIS PARTICULAR FORUM. 2001 WAS ABOUT THE TIME THAT I STARTED WORKING ON THE TANK CAR PROJECT. BEFORE THAT, THERE WAS EXTENSIVE HEAD TESTING THAT WAS DONE IN THE JOINT EFFORT BY THE GOVERNMENT AND THE INDUSTRY. ONE THING THAT HAPPENED WAS THAT AROUND 2004, THERE WAS ANOTHER MAJOR, HIGH-PROFILE ACCIDENT THAT OCCURRED IN NORTH DAKOTA. FROM THAT, THERE WERE NTSB RECOMMENDATIONS THAT CAME WITH THAT. WE TRY TO HELP FRA ADDRESS SOME OF THESE RECOMMENDATIONS. THERE WERE A SERIES OF HIGH-PROFILE ACCIDENTS THAT INVOLVED TIA, WERE TOXIC INHALATION HAZARD MATERIALS. SINCE 2007, THERE HAVE BEEN OTHER ACCIDENTS INVOLVING CRUDE OIL AND ETHANOL, WHICH IS WHY WE ARE HERE TODAY. 2007 IS WHEN WE STARTED DOING FULL-SCALE TESTING AND ANALYSIS TO LOOK AT THESE KINDS OF SHELL IMPACTS, WHICH IS WHAT I WILL TALK ABOUT FOR MOST OF THE PRESENTATION. THE THING I WANT TO POINT OUT ALSO IS THAT ONE OF THE COMMON THEMES FOR WHAT WE DO IS THAT WE TRY TO DO TESTING AND ANALYSIS. THE TESTING ALLOWS US TO VALIDATE OR VERIFY OR CONFIRM OR REFUTE WHAT WE FIND IN OUR ANALYSES. AS I MENTIONED, IN THE 1970'S AND 1980'S, THERE WAS TESTING THAT WAS DONE AND THAT LED TO SOME OF THE REGULATIONS FOR HEAD SHIELDS. I THINK WE MAY HAVE MENTIONED SOME OF THESE EARLIER IN PRESENTATIONS. THIS KIND OF REQUIREMENT OR REGULATION WAS PART OF THE FEDERAL REGULATION. THE REST IS ABOUT SHELL IMPACT. WE SHOW THE VIDEO OF THE 111 AND THE 112. HOW DID WE COME UP WITH THIS KIND OF SHELL IMPACT SCENARIO?

>> WE LOOKED AT SOME OF THE ACCIDENT DERAILMENTS. YOU SEE THE DERAILMENT PILEUP ON THE RIGHT-HAND CORNER. THAT IS FROM ANOTHER TIH RELEASE. YOU CAN SEE THAT THERE IS A WALL OF TANK CARS IN THE DERAILMENT PILEUP. THERE IS A KIND OF T-BONE, TANK ARE TRYING TO HIT THE SIDE, BROADSIDE. THIS GIVES YOU SOME IDEA OF WHAT COULD POSSIBLY HAPPEN IN AN ACCIDENT. WE ALSO WANT TO TRY TO MAKE SURE THAT THIS IS AN IDEALIZED CASE, WHERE IT IS REPEATABLE, WE CAN ANALYZE IT, AND IT ALSO CAPTURES A LOT OF WHAT WE SEE IN THE ACCIDENTS. HOPEFULLY, THIS PROVIDES US A WAY THAT WE CAN COMPARE DIFFERENT DESIGNS, QUALIFIED DIFFERENT DESIGNS. IT ALSO PARALLELS WHAT HAS BEEN DONE IN THE AUTOMOBILE INDUSTRY. THERE YOU CAN SEE THE PICTURE OF A SIDE IMPACT ON A CAR. FRANCISCO SHOULD YOU THE VIDEO OF THE TWO CARS THAT WE HAVE DONE -- ACTUALLY THERE HAVE BEEN SIX OVERALL, IF YOU COUNT THEM. WHAT IS BEING SHOWN HERE IS A LIMITED SET OF DATA THAT WE HAVE. THESE TWO TANK CARS ACTUALLY PUNCTURED. I WILL SHOW YOU THESE TWP TESTS -- TWO TESTS. THE FIRST FOUR TESTS WERE DPME ONE ON DOT-105 CARS. I WILL SHOW YOU THIS ONE ON THE 105 THAT PUNCTURED. YOU CAN START THAT. THIS WAS IN 2007. YOU SEE THE SPEED IS 15.1 MILES PER HOUR. THIS IS NOT AS VIOLENT OR SPECTACULAR. WHAT IS BEING RELEASED THERE IS CLAY SLURRY. IT IS SUPPOSED TO APPROXIMATE LIQUID CHLORINE. IT HAS THE CONSISTENCY OF PAINT, IF YOU WILL. IT CREATES QUITE A MESS, AS FAR AS CLEANING UP THE TEST. WHAT IS GOING TO BE SHOWN NEXT -- YOU GET ANOTHER VIEW. I WOULD LIKE TO ASK TO PAUSE THIS IF POSSIBLE. WHAT IS BEING SHOWN IN THE UPPER RIGHT -- YOU ARE LOOKING FROM INSIDE THE TANK CAR. IT APPEARS THAT THERE IS THIS BLUE PATCH. IT IS NOT A SENSE IN THE FACT THAT IT IS REPAIRING ANYTHING, BUT IT SHOWS THAT THERE ARE SPECIAL ELEMENTS THAT ARE VERY DENSE IN THIS AREA. THE BLUE AND THE GRAY HAVE THE SAME THICKNESS. IF YOU CAN ROLL IT FORWARD. YOU WILL SEE IT AS A RED OUTER JACKET WHICH WILL BE PENETRATED FIRST. THIS IS A SIMULATION THAT WILL SHOW HOW WE BELIEVE PUNCTURE OCCURS. YOU CAN ADVANCE THIS. YES. OK. SO, WHAT OUR ANALYSIS SHOWS US IS THAT THE INTENSITY AT THE CORNERS OF THE INDENTURE ARE VERY LOCALIZED AND VERY HIGH. THIS IS WHERE WE WOULD EXPECT CRACKING TO OCCUR. TO INITIATE THIS PUNCTURE. THEN THE CRACKS WILL START RUNNING ALONG THE PERIMETER OF THE INDENTURE. THE OTHER THING MY ANALYSIS CAN DO FOR US IS THAT IF WE BELIEVE THE MODEL IS CREDIBLE AND WE HAVE CONFIDENCE IN IT, WE CAN DO THESE KINDS OF HYPOTHETICAL CALCULATIONS. WHAT I AM TRYING TO SHOW HERE IS WHAT HAPPENS IF YOU CHANGE ANY OF THESE PARAMETERS. I THINK TODD HAD SHOWN US A SLIDE ON WHAT FEATURES ARE POSSIBLE ON TANK CARS. AS YOU GO DOWN ON THE LIST, THE INDENTOR SIDE AND THE WEIGHT, THOSE OF THE TWO MOST IMPORTANT FACTORS THAT AFFECT THE PUNCTURE. AS THOSE THINGS INCREASE, THEY WILL DECREASE THE PUNCTURE SPEED. THE FACTORS ON THE RIGHT-HAND SIDE, AS THOSE THINGS GET LARGER, LARGER INDENTOR SIZE, YOU MAKE THIS DEAL BETTER, YOU ADD THICKNESS, YOU AT A JACKET, THE TANK GETS BIGGER -- AS THOSE GETS BIGGER, THE PUNCTURE SPEED INCREASES. THE INDENTOR SIZE -- AS IT GETS SMALLER, THESE OTHER FACTORS, THEIR RELATIVE IMPORTANCE SHRINKS. IF YOU GET A VERY SMALL INDENTOR , IT BECOMES ALL ABOUT IT. I WILL SHOW A VIDEO OF HOW WE TRY TO LOOK AT DOING SOME IMPROVEMENT ON PROTECTING THE TANK AND THIS BRINGS TO MIND SOME KIND OF SHIELDING FOR THE SIDE. THIS IS ACTUALLY THE FASTEST SPEED WE HAVE EVER RUN ONE OF THESE TESTS. THIS IS BY NO MEANS ANY KIND OF PANACEA. THIS IS A PROVEN COMPACT. IT IS ABLE TO MAINTAIN THE INTEGRITY OF THE TANK. WITH THAT, I WOULD LIKE TO SUMMARIZE WHAT WE DO. WE SUPPORT ALL OF THE DIFFERENT MODES OF TRANSPORTATION IS IN THE DEPARTMENT OF TRANSPORTATION. -- WITHIN THE DEPARTMENT OF TRANSPORTATION. WE PROVIDE AD HOC SUPPORT. THAT CONCLUDES WHAT I HAVE TO SAY.

>> THANK YOU. CHAIRMAN COME THIS CONCLUDES THE PRESENTATIONS FOR THIS PANEL.

>> WHY DOESN'T THE TECHNICAL PANEL GO AHEAD AND PROCEED WITH THEIR QUESTIONS. THANK YOU TO THE LAST TWO PRESENTERS. THE VIDEOS WERE HELPFUL FOR EVERYONE TO VISUALIZE SOME OF YOUR TESTS. WE LOOK FORWARD TO TECH PANEL QUESTIONS.

>> THE CHAIR OF THIS TECHNICAL PANEL WILL BE JOINED. I WILL NOW TURN THINGS OVER TO THE CHAIR.

>> THANK YOU. I WOULD LIKE TO START BY TALKING ABOUT THE CURRENT STATUS OF TANK CAR STANDARDS. SINCE 2011, YOU HAVE IMPLEMENTED THE CPC 1232 STANDARD. IS THAT CORRECT?

>> THAT IS CORRECT.

>> THAT WAS PRIMARILY AN INDUSTRY CONSENSUS STANDARD, IS THAT RIGHT?

>> YES. I GUESS I AM PLIGHTED MY PRESENTATION THAT THE TANK CAR COMMITTEE SET STANDARDS, BUT THEY ARE CONSENSUS STANDARDS. WE HAVE TO GET EVERYBODY TO AGREE. WHAT WE DID IN 2011WE DID NOT GET CONSENSUS TO PASS A STANDARD. SO WHAT WE DID IS WE GOT CONSENSUS TO DO RULEMAKING. SO IN MARCH OF 2011 WE DID THAT. THAT WAS FOR ALL PATENT GROUP ONE AND TWO COMMODITIES. THAT INCLUDES NOT ONLY FLAMMABLE LIQUIDS BUT OTHER COMMODITIES OF THOSE TYPE. LATER THAT YEAR WE FIGURED THAT DOT WAS NOT GOING TO BE ACTING FAST ENOUGH. WE FELT TO GET CERTAINTY ON CRUDE OIL AND ETHANOL WE PASSED A STANDARD IN THE MIDDLE OF 2011. ALL CARS ORDERED AFTER OCTOBER 1

>> RECENTLY YOU HAVE PUT FORWARD A PROPOSAL TO IMPROVE THE STANDARDS FURTHER.

>> THAT IS CORRECT. WHAT WE FEEL HAS TO DO WITH THE CHARACTERISTICS OF THE SEMI-CRUDE OIL WE ARE CARRYING. THE FIRE STARTED IMMEDIATELY AND WHAT WE ARE IS THERE IS SICK SICK SICK OF -- SIGNIFICANT AMOUNT OF DISSOLVED GAS IN THE CRUDE OIL. THE QUESTION IS, IS THERE ENOUGH DISSOLVED GAS TO KICK IT INTO A PRESSURE CAR.

>> YOU HAVE MADE THE PROPOSAL BUT AAR CANNOT IMPLEMENT UNILATERALLY, CORRECT? SO YOU NEED INDUSTRY CONSENSUS OR ACTION TO MAKE THAT STANDARD IN PLACE. WHAT HAS BEEN THE RESPONSE OF THE INDUSTRY TO YOUR PROPOSAL?

>> I THINK AT THIS POINT IN TIME YOU WOULD BE BEST TO ASK THEM. I THINK THAT WE HAD A TANKER COMMITTEE MEETING LAST WEEK AND WHAT WE HEARD IS THAT WE ARE LOOKING INTO IT. WE ARE TRYING TO CHARACTERIZE CRUDE OIL CAMERA --, AND UNTIL WE GET A BETTER IDEA OF WHAT IT IS, AND THEY DO NOT FEEL LIKE ACTION SHOULD BE TAKEN.

>> WE'RE IN AGREEMENT WITH REGARD TO THE SHELLS THICKNESS. THEY ARE PROPOSING 9/16. WE CONTINUE TO PROPOSE 7/16 UNTIL SUCH TIME AS THE CLEARLY UNDERSTAND THE ISSUES WE'RE ARE DEALING WITH THE CRUDE OIL. ONE THING WITH ALL WITH DAVID'S PRESENTATION WAS YOU DO NOT GET BY TIME OR STEEL, YOU DO NOT GET WHAT YOU'RE LOOKING FOR. WE ARE DEALING WITH PRESSURE, THAT IS A FACTOR YOU HAVE TO DEAL WITH IN AN EXISTING CARS.

>> YOU SAID GREENBRIER HAS BOUGHT INTO THE 9/16?

>> THAT'S CORRECT. WE HAVE. I WOULD LIKE TO CHANGE GEARS AND TALK ABOUT THE RESEARCH ASPECT OF THINGS. YOU HAD THE DIFFERENT APPROACHES THE ANALYSIS. TESTING THAT MIGHT BE DONE. IS THERE ANY WAY TO CONNECT THOSE TWO APPROACHES. I THINK WHAT HAS BEEN DONE IS TO UNDERSTAND THEM AND A COMPLEMENTARY FASHION TO FIND OUT WHAT MIGHT LIE BEHIND THE STATISTICAL FINDINGS OR UNDERSTAND THE BEST TO TEST AND STIMULATE AND SO ON. LOOKING FORWARD WE WOULD LIKE TO BUILD A MOUSE MONOCLE -- BUILD A MATHEMATICAL SOLUTION BETWEEN THOSE THINGS THAT DOES NOT CURRENTLY EXIST.

>> YOU ALSO INDICATE BECAUSE WHAT YOU'RE LOOKING AT IS THIS IS JUST TO GO ANALYSIS OF THE CARS ON THE RAIL THAT THERE IS NOT AN EASY WAY TO EXTRAPOLATE OR PREDICT BEHAVIOR OF THINGS THAT HAVE NOT BEEN TESTED AT THAT YOU WERE WORKING ON METHODOLOGY TO DO THAT. COULD YOU TALK ABOUT THAT A LITTLE BIT?

>> TO CLARIFY I WOULD SAY THINGS THAT DID NOT EXIST IN THE FLEET YET. IF YOU RECONFIGURE SYSTEMS THAT ARE ALREADY IN THE FLEET, WE CAN STILL ADDRESSED THAT WITH STATISTICS BY USING THE COMPONENT BY COMPONENT APPROACH. NOT COMMON IN THE FLEET TODAY BUT EACH OF THOSE CHARACTERISTICS IS SO WE CAN TAKE IT APART AND ANALYZE IT. IF IT IS A RADICALLY NEW DESIGN THAT IS NOT IN THE FLEET AND IS NOT IN THE ACCIDENT DATA, THAT IS WHERE THE EMPIRICAL STATISTICS QUICKLY BECOME LIMITED IN THE ABILITY TO TELL YOU SOMETHING. YOU CAN MAKE CERTAIN ASSUMPTIONS, BUT BY AND LARGE TO GET TO THE BOTTOM OF IT YOU ARE OFTEN LEFT WITH TESTING SIMULATION AND OPTIONS FOR A NEW DESIGN.

>> YOU ARE ABLE TO DO PREDICTIONS USING THE NUMERICAL MODELING YOU HAVE. DO YOU FEEL THAT THAT IS A NUMERICAL MODEL THAT IS VALIDATED AND VERIFIED WELL ENOUGH TO MAKE GOOD PREDICTIONS GOING FORWARD?

>> AS YOU SAW, WE HAVE SIX TESTS . I THINK THAT IS A LIMITED SAMPLE SIZE, BUT I THINK FOR NOW THE MODELS WE HAVE DEVELOPED, I FEEL CONFIDENT THEY ARE DOING EVERYTHING THAT WE ARE EXPECTING THEM TO DO.

>> THANK YOU VERY MUCH. I WOULD LIKE TO TURN THE QUESTIONING TO DR. FOX, PLEASE.

>> I WILL CONTINUE ALONG THE LINES OF RESEARCH PROGRAMS. FIRST, MR. SAXTON, WHERE DO YOU SEE RESEARCH PROGRAMS SUCH AS THE SPONSORED RESEARCH INTEGRATED INTO THE TANK CAR DESIGNS YOU ARE BUILDING?

>> WELL, THOSE ARE LONGER-TERM ISSUES. THE TYPE OF WORK THAT FRA IS DOING, AT LEAST THE WAY I SEE IT, THE QUESTIONS WE ARE ATTEMPTING TO ANSWER RIGHT NOW I THINK OUR BETTER SERVED BY LOOKING AT SOME OF THE OTHER METHODS. GETTING BACK TO THE STATISTICAL ISSUE, I LOOK AT THIS ARGUING WITH THE STATISTICAL RESULTS WOULD BE --

>> COULD YOU OR YOUR MICROPHONE CLOSER?

>> I SEE ARGUING WITH THE STATISTICAL RESULTS AKIN TO ARGUING WITH THE STOCK MARKET. THERE ARE A LOT OF THINGS THAT GO INTO WHAT MAKE -- WHAT MAKES THE STOCK MARKET GO UP AND DOWN BUT AT THE END OF THE DAY THE S&P 500 REFLECTS THE MARKET. SO I THINK WE ARE INCREDIBLY BLESSED TO HAVE THIS 30 PLUS YEARS OF INFORMATION WE CAN LOOK AT. WHEN YOU THINK ABOUT SOME OF THE THEORETICAL BASIS YOU MIGHT LOOK AT, SURE, YOU COULD POSTULATE NEW MATERIAL AND MODEL IT, BUT YOU REALLY DO NOT KNOW THE ACCIDENT ENVIRONMENT THAT WELL. NO ONE KNOWS THE ACCIDENT ENVIRONMENT EXCEPT FOR THE DATABASE WE HAVE.

>> I GUESS THAT LEADS INTO THE TEST PROGRAMS. THE TESTS SHOWN ARE AN IDEALIZED IMPACT, DIRECT IMPACT. WOULD YOU EXPECT AN IMPACT OR DESIGN THAT PERFORMS WELL UNDER THOSE TYPES OF CONDITIONS WOULD ALSO TEND TO PERFORM WELL UNDER NON-IDEAL SITUATIONS OR LIKE AN OBLIQUE IMPACT?

>> YES. I THINK AS A RELATIVE COMPARISON BETWEEN DIFFERENT DESIGNS, I THINK THIS IS WHAT IT IS A DESIGN FOR, SURE.

>> THANK YOU. MR. GONZALES, A LOT OF THE RESEARCH THAT IS BEING PUT FORTH IS TOWARDS DEVELOPING MORE OF A PERFORMANCE STANDARD FOR THE TANK CAR REGULATIONS. WOULD IT THOSE TYPES OF -- DO YOU REQUIRE A FULL-SCALE TEST TO MEET THE PERFORMANCE STANDARD OR COULD THERE BE OTHER MEANS OF UNDERSTANDING THE PERFORMANCE, EITHER THROUGH COMPONENT TESTING OR MODELING?

>> ONE QUESTION. THAT IS PART OF THE PROGRAM WE DO IN THE STRUCTURAL INTEGRITY. WE EVALUATE THE PERFORMANCE STANDARD AND THE TESTING PROCEDURES. ONE THING WE DO IS A FULL-SCALE TEST. WE WANT TO DEVELOP THE TESTING PROCEDURES. IT COULD BE A DIFFERENT WAY EITHER --. EITHER A FULL-SCALE TEST OR A MODEL OR I COULD PUT IN TESTING. AT THIS POINT WE ARE DEVELOPING THOSE. SO AT THE MOMENT WE DO NOT KNOW YET. THAT IS THE GOAL, TO COME OUT WITH A TESTING PROCEDURE.

>> THANK YOU. I WILL PASS THE MIC TO DR. MUELLER. I BELIEVE HE HAS QUESTIONS. CERTAINLY. IN RESPONSE TO DR. THE DOCK -- THE DOCTORS QUESTION I'M A NO DOUBT THE CRASH TESTING THEY ARE DOING IS SOMETHING THAT YOU CAN QUANTIFY AND MODEL. IT GIVES YOU A GENERAL IDEA OF HOW THE TANK CAR PERFORMS IN THAT SPECIFIC INSTANCE, IN THE SCENARIO OF THE IMPACT SIZE OR SPEED. THE QUESTION WE FEEL IS IMPORTANT IS HOW DOES THAT TANK CAR PERFORMED IN ALL CIRCUMSTANCES? THAT IS HOW YOU GET IN CONDITIONAL PROBABILITY OF RELEASE. THAT IS YOUR EXPOSURE TO THE PUBLIC. AS THE IDEA OF TRANSPORT CANADA, ULTIMATELY AREN'T YOU TRYING TO PROTECT THE PUBLIC AND WANT TO REDUCE THE EXPOSURE. I THINK YOU NEED TO UNDERSTAND THAT. THAT IS WHAT TODD WAS TALKING ABOUT, BRINGING THE CONCEPT TOGETHER FOR NEW DESIGNS. WE CAN PREDICT DID VERY WELL WITH CURRENT DATA THAT FIGURING OUT HOW A NEW TYPE OF DESIGN MIGHT PERFORM. WE FEEL THAT IS IMPORTANT TO DO ULTIMATE RISK ASSESSMENT.

>> THANK YOU.

>> THANK YOU. I WOULD LIKE TO ASK A FEW QUESTIONS ON RETROFITTING OF LEGACY CARS. MY FIRST QUESTION IS MR. FROM ZACH. -- FRONZAC. THEY WANT TO SEE A PHASEOUT PROGRAM FOR CARS THAT CANNOT MEET THE REQUIREMENTS. HOW WOULD THAT PROGRAM BE IMPLEMENTED VOLUNTARILY BY INDUSTRY OR NECESSARY TO HAVE FEDERAL OR REGULATORY REGULATIONS POST FIRST?

>> I DO NOT THINK YOU NEED REGULATIONS. WHAT YOU WOULD NEED IS CONSENSUS OF THE TANK CAR COMMITTEE, AND WE DO NOT HAVE THAT RIGHT NOW ON THOSE ISSUES. I THINK WE'RE FIGURING IT IS LIKELY THAT WE WILL NEED DOT STANDARDS TO IMPOSE REQUIREMENTS. WE DO FEEL WE COULD DO IT ON OUR OWN IF WE COULD AGREE TO WHAT IT IS.

>> ARE THERE SUBSETS RIGHT NOW THAT THE COMMITTEE CURRENTLY AGREES ON THAT COULD POSSIBLY BEGIN AT THIS POINT WITHOUT WAITING FOR THE FULL CONSENSUS ON THE WHOLE COMMITTEE?

>> THERE ARE A FEW MINOR THINGS WE ALL AGREE ON. THAT IS THE INCREASED CAPACITY PRESSURE RELEASE VALVE. THE REASON FOR THAT IS TO GET ALL OF THE MATERIAL OUT OF THE CAR BEFORE IT THERMALLY TEARS. THAT IS ONE THING. THE OTHER THING IS THE BOTTOM OUTLET HANDLE PROTECTION. I THINK IF YOU LOOK AT THE POSITIONS OF THE VARIOUS INDUSTRY ASSOCIATIONS OF THIS POINT IN TIME, THEY ALL AGREE ON THAT. WE ALL AGREE ON THE THICKNESS OF IT.

>> I THINK BOB IS RIGHT ON WHEN HE TALKED ABOUT AN OUTLET VALVES MODIFICATION OR THE NEW TWO-STAGE TO SHIRLEY VALVE. GOING TO THE MORE EXPENSIVE RETROFIT, PARTICULARLY THE JACKETING OF THE CARS AND FULL HEAD SHIELDS, WE FEEL, AND I AM TALKING ABOUT RSI AND I BELIEVE THE SHIPPER SPEAKING FOR THEM ARE BEHIND THIS THAT WE HAVE TO HAVE REGULATORY CERTAINTY ON THAT. WE HAVE STEPPED UP TO THE PLATE IN 2011, VOLUNTARILY AND WILL CONTINUE TO BUILD IN THE STANDARD. HOWEVER, EVEN AT THIS TIME WE DO NOT HAVE REGULATORY CERTAINTY ABOUT WHETHER THAT WILL BE THE FINAL DESIGN. SO WE ARE UNWILLING TO REALLY GO FORWARD UNTIL THERE IS OPEN DIALOGUE WITH TRANSPORT CANADA ON WHAT THE FINAL REGULATIONS ARE GOING TO BE.

>> I WOULD LIKE TO ADD THAT I AGREE WITH THAT. I DEFINITELY THINK FOR THE BIGGER RETROFIT PROGRAMS THAT REGULATORY CERTAINTY WOULD BE A REALLY GOOD THING. I THINK CAPITAL WILL AVOID THE UNCERTAINTY. YOU ARE TALKING REAL CAPITAL HERE.

>> I UNDERSTAND. ON THAT SAME LINE OF THINKING, DOES GREENBRIER HAVE THE ABILITY TO AND THE FACILITY AVAILABLE FOR LOOKING FORWARD FOR THESE KINDS OF -- IF IT BECAME REGULATIONS, DOES IT HAVE THE FACILITIES TO BE COMPLIANT WITH THESE?

>> WE DO OWN TANK CAR REPAIR FACILITIES THAT COULD DO SOME RETROFIT WORK. ALTHOUGH WE ARE NOT THE BIG PLAYER IN THAT BUSINESS. THE INDUSTRY IN GENERAL CAN DEAL WITH IT. IT IS A MATTER OF TIMING. THE SOONER IT BECOMES CERTAIN THE WORK WILL BE REQUIRED, THE SOONER PEOPLE WILL INVEST IN GETTING THIS WORK DONE.

>> NEW REGULATIONS AND REGULATORY AGENCIES RESPECT ONLY, AT WHAT TIME IN THE PROCESS DOES GREENBRIER BEGIN TO ADJUST PRODUCTION REPAIR FACILITIES TO BEGIN IMPLEMENTING THEM? WHEN PEOPLE ASK WE HAVE THIS NEED AND THEN WE BEGIN TO ADJUST . THAT IS THE AMAZING THING ABOUT THE ECONOMY. OUR ECONOMY WILL DO AMAZING THINGS IF YOU JUST GIVE IT CERTAINTY.

>> DO YOU FORESEE ANY CHANGES IN THE DESIGN THAT FUTURE TANK CARS COULD HAVE ANY PRODUCTION OF ANY TANKER FREIGHT CARS THAT GREENBRIER PRODUCES?

>> SURE.

>> WHEN THE NEW DESIGNS WHEN THEY BECOME REGULATIONS ARE IMPLEMENTED TO IMPROVE SAFETY, DO WE EXPECT A LOWER LEVEL OF RISK BY ALLOWING LEGACY CARS THAT HAVE NOT BEEN RETROFITTED TO REMAIN IN THE FLEET?

>> YOU ARE ASKING WHETHER ALLOWING LEGACY CARS TO CONTINUE TO OPERATE WOULD ACT AGAINST THE DEGREE OF IMPROVEMENT -- DEGREE OF IMPROVEMENT?

>> THAT IS CORRECT. THIS WOULD INCREASE THE AVERAGE. ALREADY THE AVERAGE CPR OF THE FLEET IS GOING DOWN. THAT TREND WOULD CONTINUE AS OLDER CARS RETIRE. WE ARE TALKING HYPOTHETICAL ABOUT WHAT THE SET OF IMPROVEMENT IS. THAT WOULD BE ACTING ON LEGACY CARS AT SOME RATE. WHAT AVERAGE -- WHATEVER THE AVERAGE IS, IT WOULD BE DRIVEN DOWN, WHATEVER ACTION YOU TOOK ON LEGACY CARS OR DID NOT TAKE.

>> THANK YOU.

>> THE LAST QUESTION IS FOR THE DOCTOR. DO YOU SEE UNINTENDED RISKS ASSOCIATED WITH RETROFITTING TANK CARS TO MEET THE NEW STANDARDS?

>> DO I FOR SEE A RISK WITH WHICH ARE FITTING?

>> ANY UNINTENDED CONSEQUENCES ASSOCIATED WITH RETROFITTING?

>> I AM NOT SURE HOW TO ANSWER THAT. I CANNOT PREDICT THE FUTURE.

>> I MIGHT BE ABLE TO HELP.

>> THE ISSUE OF RETROFITTING, PARTICULARLY THE EXISTING LEGACY FLEET THOMAS THE PROPOSAL, I THINK THAT IS ON THE TABLE IS TO ADDRESS A LEGACY CAUSE. AT SOME POINT THEY WOULD ALL BE MODIFIED TO THE NEW STANDARDS. THE ISSUE IS THE QUALITY AND CAPABILITY OF THE ORGANIZATIONS THAT DO THE RETROFITS. AGAIN, I WILL GO BACK TO HM014 -144. WE HAD ISSUES AT THE TIME OF INSULATION FALLING OFF THE CARS AND INSULATION CAUSING EROSION BECAUSE IT WAS NOT APPLIED PROPERLY. WE FOUND HEAD SHIELDS ON TRACKS. THEY WERE GOING THROUGH CARS AND WE EVENTUALLY ADDRESSED AT ALL. AND WE HAVE LEARNED FROM IT. WE HAVE ALSO LEARNED THAT GOING FORWARD WE HAVE TO HAVE CAPABLE DESIGNS AND FACILITIES TO DO THIS TYPE OF RETROFIT. THE RISK WOULD BE IF WE RUSHED INTO THIS THING AND EVERYONE STARTED THROWING CONDUCT OUT THE DOOR AND FOUND OUT LATER WE HAD A PROBLEM WITH RETROFITTING.

>> THANK YOU, GENTLEMEN.

>> ONE FOLLOW-UP ON YOUR QUESTION. THERE IS NO DOUBT IN MY OPINION THAT TAKING DOT-111'S OUT OF THE FLEET WILL REDUCE RISK. THEY HAVE A HIGHER CONDITIONAL PROBABILITY RELEASE. THE QUESTION IS, DO YOU WANT TO ALLOW THEM TO GO OUT BY ATTRITION, WHICH WOULD BE HAPPENING OR DO YOU TRY TO ACCELERATE THAT WITH A RETROFIT PROGRAM IN A SHORTER TIMEFRAME? THE FASTER YOU ACCELERATE THAT, THE FASTER YOU WILL REDUCE RISK.

>> THANK YOU, GENTLEMEN.

>> MR. SAXTON, THERE IS CONCERN AMONG SHIPPERS IN THE INDUSTRY THAT BUILDING THIS CAR OR THE HEAVIER TANK CARS WOULD RESULT IN A CERTAIN AMOUNT OF LOSS POTENTIAL. COULD YOU GIVE US A FEEL FOR THE CAPACITY BETWEEN THE LEGACY TANK CAR AND THE PROPOSED 9/16 INCH CAR?

>> I WISH I HAD PREPARED FOR THAT. IT IS NOT A LOT OF THOUSANDS OF POUNDS. IT WILL BE A FEW THOUSAND POUNDS. IF YOU WANT, AFTER LUNCH I WILL HAVE AN ANSWER FOR YOU. LEX IN TERMS OF PERCENT, CAN YOU ANSWER THAT QUESTION?

>> I CAN ANSWER IT RELATIVE TO THE LEGACY CARS. THIS HAS BEEN DISCUSSED WITH THE SHIPPERS AND CALCULATIONS THEY HAVE PERFORMED. ESTIMATED 10-12%.

>> OK. NOW, THE CPC-1232 CAR IS BUILT TO A HEAVIER WEIGHT, CORRECT?

>> WELL, I THINK EVERYONE IS ORDERING 200 36,000 GROSS RAIL AT THIS POINT IN TIME. IT GOES BACK TO THE PREVIOUS QUESTION. WHAT IS THE CAPACITY LOSS. PART OF THAT DEPENDS ON THE STARTING POINT. A LOT OF THESE ARE 263. GOING TO A JACKETED CAR, OUR NUMBERS SAY THAT YOU ARE ONLY LOSING 1.3% FROM OF THEIR TANK 111 ALL THE WAY UP TO 9/16. BUT IF YOU START FROM 286 AND ADD EXTRA WEIGHT, YOU WILL USE -- LOSE MORE. ALONG THOSE LINES TALKING ABOUT THE CPC 1232 DESIGN.

>> I WOULD SAY ALL VIRTUALLY 280 SIX.

>> DOES ANYONE HAVE AN OPINION AS TO WHETHER THE ADDED WEIGHT OF THE CP232 CAR, HOW DOES THAT AFFECT THE SURVIVABILITY OF AND -- IN AN ACCIDENT COMPARED TO THE LEGACY CARS?

>> IS A POSSIBLE TO BRING THE SLIDE BACK UP?

>> FLIGHT NUMBER 10. COULD WE BRING THAT UP THESE?

>> THE TOP TWO ROWS ARE THE VARIETIES OF LEGACY CAR DESCRIBED SIMPLY, A PAIR TANK CAR, NO JACKET, AND A JACKETED CAR. THOSE ARE THE ONLY VARIETY BECAUSE THEY ARE ONLY LIGANDS THIS -- BECAUSE THE LEGACY CARS DO NOT HAVE HEAD SHIELDS. VIRTUALLY NONE OF THEM HAVE TANK PROTECTION. SO THERE IS A VARIANCE IN PERFORMANCE BETWEEN THOSE TWO BETWEEN THE JACKET. REMEMBER THE WAY TO INTERPRET THAT CPR ON THE RIGHT IS A MAINLINE ACCIDENT YOU WOULD EXPECT 26.6% OF THE LEGACY BEAR TANK CARS TO SLATING. OVER A LARGE NUMBER OF ACCIDENTS. THOSE ARE THE TWO KINDS OF CARS THAT ARE ALLOWED BY CP239/ 8. THE OPTION TO IMPLEMENT A SICKER TANK WITH NO JACKET, OR YOU CAN GO WITH THE STANDARD TANK AND ADD A JACKET IN FULL HEIGHT SHIELD. YOU WILL SEE THE RELATIVE PERFORMANCE OF THOSE TWO, THE PAIR TANK OPTION IS.

>> THESE ARE ALL ESTIMATES. THESE ARE ALL ESTIMATES. WE WANT TO CONCENTRATE ON THE RELATIVE PERFORMANCE HERE. THE SECOND OPTION WITH THE JACKET IS 6.4%. ROUGHLY HALF OF THE LEGACY JACKETED CAR OR CHOSEN A PLACE OF A BEAR LEGACY TANK CAR, A LITTLE BETTER. FINALLY, YOU SEE AAR 9/16 HAS 4.3% PROBABILITY OF LOSING LADING, LOWER THAN ANY OTHER CARS IN THE TABLE OBVIOUSLY.

>> I THINK WHAT YOUR QUESTION GETS TO IS THERE A DIFFERENCE BETWEEN THEM IT?

>> YES. LEX THERE IS A DIFFERENCE IN DERAILMENT.

>> IN ONE OF YOUR SLIDES, I BELIEVE SLIDE NUMBER SEVEN WERE USED SO THE TANK CAR IMAGE, WHERE YOU MARK ON THE CAR THAT IT WAS AN 85% IMPROVEMENT IN SAFETY. CAN YOU DISCUSS HOW THAT WAS MEASURED?

>> EXACTLY WHAT TODD TALKED ABOUT. IN OTHER WORDS, THE CONDITIONAL PROBABILITY OF RELEASE VERSUS 9 /16 FULLY HEAD SHIELDED CAR.

>> 85% REDUCTION IN CPR?

>> THAT IS EXACTLY WHAT I AM SAYING. YOUR POSITION WITH RESPECT TO CRUDE OIL AND ETHANOL IS DIFFERENT. THE CRUDE OIL CAR YOU ARE PROPOSING 9'/16 AND ETHANOL, 7/16. COULD YOU DISCUSS THE BASIS.

>> AS THE TANK CAR COMMITTEE HAS TO REACH CONSENSUS OF THE MEMBERS, AND AT THIS POINT IN TIME WE HAVE CONSENSUS ON THE CRUDE OIL CAR. WHERE WE ARE CURRENTLY AT WITH THE ETHANOL CAR IS OUR COMMENTS ARE BASICALLY IT IS 7/16'S THERMAL JACKET PROTECTED IT -- PROTECTED CAR THAT THERE IS NOT TOTAL CONSENSUS. WE WILL EITHER REACH CONSENSUS OR THE MEMBERS COULD COMMENT SEPARATELY ON THAT ISSUE.

>> MY QUESTION IS IS THERE TECH TO GO BASIS FOR THE DIFFERENCE?

>> I BELIEVE THERE IS. THE CRUDE OIL WE ARE SEEING IS A LOT OF DISSOLVED GAS. FAIRLY HIGH DEGREE VAPOR PRESSURE COMPARED TO ETHANOL. IT IS WELL UNDERSTOOD. YOU WILL NOT GET DIFFERENT ETHANOL'S COMING OUT OF DIFFERENT ETHANOL MANUFACTURING PLANTS.

>> I THINK THAT CONSUMES MY TIME. THANK YOU.

>> THAT COMPLETES THE QUESTIONING FROM THE TECHNICAL PANEL FOR THE SESSION.

>> THANK YOU. ENQUEUED TO THE TECHNICAL PANEL FOR YOUR EXCELLENT PREPARATION AND COORDINATION IN ADVANCE. WE ARE KEEPING THINGS RUNNING ON TIME. THANK YOU ALL TO THE PANELISTS OR YOUR PRESENTATIONS, FOR PROVIDING THEM FOR THE RECORD FOR THE DOCKET, AND WE WILL BE BACK AFTER LUNCH TO CONTINUE WITH QUESTIONS. YOU WILL HAVE QUESTIONS FROM THE BOARD MEMBERS AFTER LUNCH. WE WILL TAKE A BREAK UNTIL 1:00. WE WILL RECONVENE AT 1:00 FOR ADDITIONAL WESTERNS FROM THE FIRST PANEL. -- QUESTIONS FROM THE FIRST PANEL. WELCOME BACK PURSUED WITH QUESTIONS FROM THE BOARD MEMBERS FOR THE FIRST PANEL. WE WILL BEGIN WITH MEMBER SUMWALT.

>> I'D LIKE TO ASK YOU A QUESTION I'VE BEEN WONDERING ABOUT. AAR, OUR CHAIRMAN CITED IT THIS MORNING. THE REPORT THAT SHIPMENTS OF CRUDE OIL HAVE INCREASED BY 443% SINCE 2005. I WAS NEVER A MATH WHIZ, BUT IF YOU HAD 9500 CARLOADS IN 2005 AND NEARLY 400,000 LAST YEAR, AND THAT IS MORE LIKE 4000%. HOW IS THAT FIGURE DERIVED?

>> LAST YEAR, 2013, IN THE U.S. THERE WERE JUST OVER 400,000 SHIPMENTS. IN NORTH AMERICA, 500,000 SHIPMENTS.

>> I NEVER TRIED DEMONSTRATING MY MATH PROWESS, BUT THAT IS ABOUT A 4000% INCREASE, WOULD THAT BE RIGHT?

>> I TRUST YOU.

>> MY MATH TEACHERS WOULD NEVER TRUST ME. WHAT I WOULD LIKE FOR THE AAR TO DO, AS I SEE A LETTER HERE FROM THE FRA, THEY HAVE CITED THE FIGURE, WE HAVE CITED THE FIGURE. I HAVE SEEN THE MEDIA SITE THAT FIGURE THAT WE MENTIONED BEFORE, THE 443% INCREASE. FOR THE RECORD, I'D LIKE FOR YOU TO SUBMIT WHAT THE PERCENTAGE IS AND LET'S JUST VERIFY THE NUMBER. AS YOU POINTED OUT, THE AAR, ADOPTED IN 2011, THE STANDARD ALSO KNOWN AS THE PETITION CAR, ALSO KNOWN AS THE GOOD FAITH CAR, ALSO KNOWN AS THE P1577 CAR, OTHER THAN NOT BEING ABLE TO DECIDE ON A NAME FOR WHAT IT IS, WHY IS THE AAR NOW CONVINCED THAT EVEN THAT STANDARD THAT THE INDUSTRY DEGREE UPON IT IS NOT SUFFICIENT?

>> AGAIN, I THINK I ADDRESSED THAT WITH THE QUESTIONS FROM STAFF BUT THAT WAS SHIPPED AS A PACKING COMMODITY. IT TURNS OUT IT WAS A PACKING GROUP TWO. WE ARE FINDING THERE IS A FAIRLY SIGNIFICANT AMOUNT OF DISSOLVED GAS IN SOME OF THE CRUDE OIL. DEPENDING ON THE VAPOR PRESSURE OF THAT GAS, IT WOULD HAVE KICKED THOSE CARS INTO A PRESSURE CAR REQUIREMENT UNDER OLD REGULATORY REQUIREMENTS. SINCE WE CANNOT BE 100% CERTAIN WHAT THE CRUDE OIL IS WE ARE HAULING, WE FEEL 9/16 IS A MORE APPROPRIATE STANDARD.

>> I DO NOT FEEL THAT ADDRESSES MY QUESTION. THE CANADIANS ARE INVESTIGATING BUT I DO NOT THINK THOSE WERE THE SAME CARS. IS THAT CORRECT?

>> THAT IS CORRECT. AGAIN, THERE IS NOTHING ILLEGAL OF WHAT HAPPENED. THOSE CARS WERE ILLEGAL. CP232 CALLS FOR NEW CARS GOING FORWARD. THAT IS WHY WE ARE NOW LOOKING AT A PHASEOUT IN A REASONABLE TIMEFRAME, RAPID PHASEOUT, SO WE CAN GET THE OLD DOT 111'S OUT OF SERVICE.

>> WE SHOULD NOT BE TALKING ABOUT THIS, BUT THEY STILL WOULD HAVE BEEN SHIPPED, IF THEY WERE IN PACKING GROUP TWO, AS THEY SHOULD HAVE BEEN, THEY STILL WOULD HAVE BEEN IN THOSE IDENTICAL CARS. SO AGAIN, WHY DOES THE AAR FEEL AFTER THE STANDARD THEY ADOPTED IN 2011, THAT THAT STANDARD IS NOT SUFFICIENT? WHAT EVIDENCE DO YOU HAVE TO SHOW THAT THAT CARD IS NOT SUFFICIENT. YOU MAY FEEL YOU JUST ANSWER IT, BUT IN MY WAY OF LOOKING AT IT, WE ARE TALKING ABOUT TWO DIFFERENT THINGS.

>> I DO NOT KNOW HOW ELSE TO ANSWER IT.

>> THIS WOULD NOT BE A GOOD EXAMPLE TO EXPLAIN WHY THE CAR IS NOT ROBUST ENOUGH SINCE THE ACCIDENT DID NOT HAVE THE CPC 1232'S.

>> IT HAD A 9/16 JACKET. IT HAD A LIKELIHOOD OF ALL THE CARS DERAILING AND RELEASING WOULD HAVE BEEN QUITE A BIT LESS. 85% LESS BASED ON CONDITIONAL PROBABILITY RELEASE. AND THE LIKELIHOOD OF SEEING THE THERMAL TEARS IN THE MUSHROOM CLOUDS GOING UP INTO THE SKY WOULD ALSO BE LESS BECAUSE IT WOULD ALSO HAVE THERMAL PROTECTION IN A HIGH-CAPACITY RELEASE DEVICE, SO THAT YOU WOULD BET THAT MATERIAL PRIOR TO THE IGNITING IT IN THE CAR.

>> IT LOOK LIKE I'M OUT OF TIME, BUT I MAY COME BACK LATER. THANK YOU.

>> MEMBER WEENER.

>> LET ME FOLLOW UP ON THAT. CPC 1232 STANDARDS WERE DEVELOPED IN 2011. HOW RAPIDLY DO THOSE CARS APPEAR IN THE FLEET?

>> I AM TRYING TO REMEMBER. GREG OR BILL MANY FACT -- REFERENCED THE MANUFACTURING CAPACITY. IN A TYPICAL YEAR, IT IS 10,000 CARS. WE HEARD EARLIER THE CURRENT CAPACITY IS 28,000 CARS PER YEAR . IT IS JUST A MATTER OF HOW FAST CAN YOU BUILD THEM.

>> WE HAVE 3000 OF THESE AT USE AT THE MOMENT?

>> THERE ARE 330 FIVE TOTAL TANK CARS IN NORTH AMERICA. THERE ARE 228,000 DOT 111'S IN THE FLEET. OF THAT, 97,000 CARRYING FLAMMABLE LIQUIDS.

>> OF THE ACCIDENT WE HAVE HAD AS OF LATE WITH CRUDE OIL, WE SAW THE FIGURE, HAVE 1232 CARS BEEN ASSOCIATED IN THOSE ACCIDENTS?

>> YES, I BELIEVE WE SHOWED A FEW ACCIDENTS THAT HAD THOSE CARS. THERE WAS A RELEASE FROM MORE THAN ONE OF THOSE 1232 CARS, AS I RECALL. WE ARE NOT SAYING THERE IS A 100% CHANCE THAT YOU WILL PREVENT A RELEASE. WE ARE SAYING THERE IS A FIVE PERCENT BETTER CHANCE -- 85% BETTER CHANCE THAT YOU WILL PREVENT A RELEASE.

>> HAVE THE ACCIDENT WERE THESE CARS HAVE BEEN INVOLVED, THEN LOOKED AT FROM THE PERSPECTIVE OF CONFIRMING THE CONDITIONAL PROBABILITIES THAT HAVE BEEN CALCULATED? ARE THE CARS DOING WHAT YOU EXPECTED THEM TO DO?

>> ONE OF THE ISSUES ASSOCIATED WITH PROBABILITY RELEASE IS THAT THOSE NUMBERS ARE BASED ON A LARGE STATISTICAL DATABASE. WE HAVE OVER 40,000 TANK CARS THAT HAVE BEEN DAMAGED SINCE THE 1960'S IN OUR DATABASE. YOU CANNOT JUST THROW IN A HANDFUL OF CARS AND EXPECT TO HAVE ANY RELATIONSHIP TO CONDITIONAL PROBABILITY RELEASE BECAUSE IT IS NOT A STATISTICALLY SIGNIFICANT SAMPLE. BUT WE KNOW, BASED ON HOW CARS PERFORM TODAY, ALL THE VARIOUS CONFIGURATIONS, HOW THESE CARS SHOULD PERFORM, AND ONCE WE GET ANOTHER OF THESE CPC 1232 CARS INVOLVED IN ACCIDENTS, HOPEFULLY WE DO NOT HAVE A LOT, BUT YOU WILL BE ABLE TO DEVELOP THAT STATISTICAL CONFIDENCE THAT THOSE NUMBERS ARE RIGHT.

>> SO AT THE PRESENT TIME WE DO NOT HAVE MUCH CONFIDENCE THAT THOSE NUMBERS ARE CORRECT?

>> WE HAVE A LOT OF CONFIDENCE THEY ARE CORRECT. THAT IS REALLY TODD'S QUESTION. THE STATISTICAL ANALYSIS THAT WE DO IS VERY ROBUST. I DO NOT KNOW IF YOU WANT TO EXPAND ON THAT, TODD.

>> I AGREE WITH BOB. OUR ESTIMATES OF HOW A CPC 1232 OR ANY OTHER CAR WOULD PERFORM IN ACCIDENTS IS BASED ON A VERY LARGE AMOUNT OF DATA THAT GIVES US A LOT OF CONFIDENCE ABOUT THE ASSESSMENTS OF THIS FEATURE VERSUS THAT ONE AND SO ON. THE CPC 1232 CARS IN PARTICULAR REMAIN FAIRLY SCARCE IN OUR DATA. SO THE SPECIFIC QUESTION OF HOW THEY PERFORM IN ACCIDENTS SO FAR DOES NOT REALLY CONFIRM OR DISPUTE OUR ESTIMATES. UNTIL THERE ARE MANY MORE CARS THAT HAD DERAILED IN ACCIDENTS.

>> YOU HAD A 6-1 RATIO BETWEEN THE BEST AND THE WORST. IN SOME OF THESE ACCIDENT THAT YOU LOOK AT, WHETHER YOU HAVE SEEN THAT SORT OF RELATIONSHIP BETWEEN CARS THAT WERE DAMAGED AND RELEASED PRODUCT, AND THOSE THAT WERE NOT DAMAGED AND RELEASED PRODUCT.

>> THERE ARE SOME CARS THAT WERE IMPACTED ON FEATURES THAT WERE FEATURED ON THE CPC 1232 AND SURVIVED. SO FROM A QUALITATIVE STANCE, YOU MAY SEE THE FUTURE DID IT JOB. THE TROUBLE WITH LOOKING AT ONE PARTICULAR ACCIDENT OR ONE CAR IN AN ACCIDENT IS WE DO NOT KNOW HOW SEVERE ITS EXPERIENCE WAS AND WHETHER IT WAS TYPICAL OR ATYPICAL EVEN SO WE WANT A LARGE AMOUNT OF INFORMATION SO WE CAN LOOK AT THE GENERAL TRENDS OF BEHAVIOR. THAT IS WHAT HAS BEEN DONE IN COMPUTING THE ESTIMATES. UNTIL WE HAVE A LOT OF THESE CARS DERAILED, IT WILL BE HARD TO MAKE A FIRM STATEMENT THAT THEY PERFORMED EXACTLY AS EXPECTED. THERE IS NO REASON TO THINK THAT THEY WON'T. WE HAVE A LOT OF EXPERIENCE WITH JACKETS. WE ARE ABLE TO SEE EACH OF THESE THINGS FORMS THIS WAY. WHEN WE COMBINED THEM INTO ONE CAR THERE IS NO REASON TO THINK THEY WOULD BEHAVE DIFFERENTLY. THEY SHOULD BEHAVE THE WAY WE EXPECT BUT IT IS TOO EARLY TO GIVE YOU A STATEMENT. THESE ACCIDENTS CONFIRM THE ESTIMATES.

>> FIRST, I'D AGREE WITH THE GENTLEMAN WHO SPOKE BEFORE ME, BUT I'D LIKE TO POINT OUT, THE CPC IS BASED ON THE AVERAGE ACCIDENT. THE AVERAGE ACCIDENT OCCURS AT 26 MILES PER HOUR. LAC-MEGANTIC OCCURRED AT 64 MILES PER HOUR. THEREFORE, YOU CANNOT USE THOSE NUMBERS, GOING FORWARD. SOMETHING ELSE I WANTED TO SAY ABOUT LAC-MEGANTIC. IF YOU WANT TO STOP AN ACCIDENT FROM HAPPENING, YOU HAVE TO SECURE THE TRAIN ON THE HILL. YOU HAVE TO SET IT UP AND BREAKS. EVERYTHING THAT EVERYONE TALKS ABOUT, WHETHER THEY HAVE AN AX TO GRIND ABOUT ELECTRO PNEUMATIC BRAKES, POSITIVE TRAIN CONTROL, CREW SIZE, NONE OF THAT STOPS YOU FROM GETTING CASUALTIES ONCE YOU ROLL A TRAIN INTO TOWN AT 64 MILES PER HOUR RELATED WITH CRUDE. THAT HAS BEEN A DISAPPOINTING THING TO ME, PERSONALLY. WE WANT TO SECURE THAT TRAINED ON THE HILL. HAVING SAID ALL THAT, CPC, I MENTIONED EARLIER, IT IS LIKE ARGUING WITH THE STOCK MARKET. IT IS SMARTER THAN ANYONE COULD HOPE TO BE. IT KNOWS THINGS -- IF I CAN USE THAT WORD -- THAT WE CANNOT HOPE TO KNOW, BECAUSE IT HAS THE BREADTH OF EXPERIENCE FOR THE PAST 30-PLUS YEARS.

>> THANK YOU.

>> MEMBER ROSEKIND.

>> I WANT TO COME BACK TO THAT. WHEN YOU LOOK AT THESE ACCIDENTS, IT IS NOT JUST ONE THING, WE ARE ALWAYS FIND A COMPLEX SERIES OF ISSUES THAT HAVE TO BE ADDRESSED. I KNOW WE ARE FOCUSING ON ONE THING ON THIS PANEL BUT YOU HAVE RAISED THE OTHER PART OF THAT. ONE THING THAT HAS BEEN INTERESTING, I HEARD YOU SAY, PANEL, REGULATORY CERTAINTY. REMEMBER THAT? WHAT IS INTERESTING ABOUT THAT IS THAT THE NTSB DOES NOT REGULATE OR ENFORCE. I CANNOT TELL YOU HOW MANY PEOPLE COME TO A PANEL AND THEY SAY WE FULLY UNDERSTAND OMAR REGULATIONS, PLEASE. HOWEVER, YOU ARE TALKING ABOUT A SITUATION WHERE REGULATORY CERTAINTY WAS A WAY TO KNOW WHERE YOU WERE MOVING FORWARD. I'M INTERESTED -- WE ALSO HAVE CROWDS TELLING US IF YOU REGULATE AND CONSTRAINED AS WE WILL NEVER HAVE INNOVATION AGAIN. SO GET US UNSTUCK. WHERE ARE YOU NOW? CLEARLY THINGS ARE NOT WHERE THEY NEED TO BE. THERE ARE DISCUSSIONS THE DIFFERENT COMMITTEES. I HEAR YOU TALK ABOUT THE CERTAINTY THAT COULD COME FROM REGULATION. WHAT WILL TAKE THE BUNCH OFF OF WHERE WE ARE TO ACTUALLY SEE SOME CHANGE, THAT WE WILL SEE THE SAFETY ENHANCEMENTS IN THE FLEET? I DO NOT NEED TO HEAR FROM ALL OF YOU, BUT JUST ONE OR TWO OF YOU.

>> I USE THAT TERM EARLIER, REGULATORY CERTAINTY. THERE HAS BEEN AN ONGOING DIALOGUE WITHIN THE COMMITTEE WHICH REPRESENTS THE SHIPPERS, CAR OWNERS, AND RAILROADS, TO COME TO A SICK -- CONSENSUS. IT HAS BEEN AN EFFORT THAT HAS BEEN GOING ON SINCE 2009. WE CONTINUE TO HAVE THAT DIALOGUE. HOWEVER, I BELIEVE, AS I SAID EARLIER, WE, AS AN INDUSTRY, WILL HAVE BUILT OVER 55,000 OF THESE WHAT WE CALL GOOD FAITH CARS, CPC 1232 CARS, WITHOUT A REGULATION, AND WE ARE READY TO EMBARK ON A RETROFIT PROGRAM. WE ARE CONCERNED THAT WE NEED TO KNOW WHERE THE GOVERNMENT IS RELATIVE TO WHAT WE NEED TO DO WITH THE RETROFITS. THERE CERTAINLY HAS BEEN A COLLABORATIVE EFFORT IN THE INDUSTRY TO TRY TO GET THINGS DONE. WE HAVE ALSO TALKED TO ROB RED ASH REGULATORY PEOPLE IN THE U.S. AND CANADA, AND WE BELIEVE THEY ARE MOVING ALONG, BUT THE REGULATORY PROCESS IS SLOW. IT IS SOMEWHAT STYMIED BECAUSE OF THE INABILITY TO HAVE AN OPEN DISCUSSION WITH THE REGULATORS ONCE THERE IS RULE-MAKING IN PROGRESS. WE DO WHAT WE CAN AND WE KEEP PUSHING ALONG, BUT AGAIN, FROM OUR PERSPECTIVE, WE ARE READY TO GO. WE JUST NEED TO UNDERSTAND WHAT THOSE ISSUES ARE GOING TO BE THAT WE HAVE TO ADDRESS IN THE WAY OF RETROFIT, AND THEN WE WILL GET MOVING.

>> I THINK THERE IS OFTEN A DISCUSSION ABOUT INDUSTRY BEST LIEBERT -- INDUSTRY BEST LEADING PRACTICES. WE COULD GET STUCK HERE FOR A LONG TIME AND WE COULD HAVE THE ENTIRE FLEET TURNED OVER BEFORE REGULATION IS AS CERTAIN AS YOU'D LIKE, BUT WE HAVE TO BE CAREFUL [NO AUDIO] THAT IS AN ONGOING DISCUSSION. WHAT IS DIFFERENT HERE, OF COURSE, IS THE VISIBILITY OF TRANSPORTING ETHANOL AND CRUDE OIL AND SOME VERY HIGH-PROFILE ACCIDENTS.

>> I'M CURIOUS ABOUT THE BALANCE BETWEEN REACTOR CHANGES IN THE INDUSTRY, SUCH AS DESIGN FEATURES WE ARE TALKING ABOUT HERE. VERY OFTEN IT IS THOSE HIGH VISIBILITY ACCIDENTS THAT DRIVE CHANGES, VERSUS ONGOING EVOLUTION OF THE CARS OR ANY OTHER PIECE OF TECHNOLOGY. YOU WERE ALLUDING TO THE FACT THAT THERE IS ONGOING DESIGN AND REVIEW THE RING GIVE ME SOME BALANCE. WE HAVE A VIABLE PROGRAM GOING ON FOR YEARS, BUT WE HAVE TO REACT WHEN SOMETHING ELSE IS THERE, OR WHAT?

>> WE HAVE ONGOING DOCKETS ON A PERFORMING STEELS FOR TANKS. THERE IS A TECHNICAL SIDE OF IT BUT THERE IS ALSO THE PRACTICALITY OF WHETHER YOU CONFORM THE STEEL, WELD THE STEEL. THAT IS AN ONGOING DIALOGUE. WE HAVE BEEN ONGOING DOCKETS ON PRESSURE RELEASED DEVICES, NON-ACCIDENT RELEASES, HOW TO EQUIP CARS SO THAT WE HAVE LESS RELEASES IN NON-ACCIDENT SITUATIONS. THOSE ARE EXAMPLES OF ONGOING DOCKETS THAT ARE DISCUSSED AND CHANGES ARE MADE ALL THE TIME. THE ISSUE WE ARE TALKING ABOUT HERE WAS INITIATED ACTUALLY BECAUSE OF THE CHERRY VALLEY ACCIDENT. AT THAT TIME, WE BEGAN ON OUR OWN INITIATIVES, A DISCUSSION OF WHAT WE CAN DO TO IMPROVE THE CARS. IT WAS A RACE TO THE NEXT LEVEL WHEN WE WERE INVITED IN BY THE FRA TO DISCUSS THEIR CONCERNS ABOUT THE CRUDE OIL CARS BECAUSE OF WHAT THEY HAD SEEN WITH ETHANOL. AT THAT TIME WE'VE INITIATED THE VOLUNTARY ACTION, THINKING IT WOULD BE SOON TO WORK THROUGH THE REGULATORY PROCESS.

>> VICE-CHAIRMAN.

>> EXCUSE MY IGNORANCE BUT I WILL TAKE THIS BACK TO BASICS. I HEARD SOMEONE SAY THAT THE DOT 111 CAR WAS NOT DESIGNED TO CARRY HAZMAT MATERIALS OR CRUDE OIL. DID I HEAR THAT CORRECTLY?

>> I THINK THE IMPLICATION PROBABLY CAME FROM ME. IN OTHER WORDS, WE ARE FINDING THIS CRUDE OIL THAT HAS A SIGNIFICANT AMOUNT OF DISSOLVED GAS AND HIGHER VAPOR PRESSURE. THAT WOULD HAVE REQUIRED -- THOSE TYPES OF COMMODITIES COULD BE CLASSIFIED AS A FLAMMABLE GAS INSTEAD OF A FLAMMABLE LIQUID, WHICH WOULD REQUIRE A PRESSURE VALVE. SO THE QUESTION IS, WE ARE JUST NOT SURE WHAT WE ARE HANDLING. WE HAVE DONE SOME MINOR SAMPLING THAT INDICATES THE CRUDE OIL DOES HAVE A HIGH BEEPER PRESSURE , A FAIRLY HIGH AMOUNT OF DISSOLVED GAS. SO WE FEEL A PRESSURE CAR IS MORE APPROPRIATE.

>> THAT IS HELPFUL. SO DOT 111 IS NOT A PRESSURE CAR. IT IS THE 1232 DESIGNED TO CARRY THE SAME CRUDE?

>> THE 1232 AGAIN IS A NON-PRESSURE CAR. WE DID NOT HAVE THAT INFORMATION WHEN WE DEVELOPED THAT STANDARD. THAT IS WHY WE HAVE MOVED FORWARD WITH WHAT WE FEEL IS REQUIRED, AT THIS POINT.

>> IS THAT WHY THERE IS MOVING BEYOND THE 1232?

>> FROM THE RAIL INDUSTRY STANDPOINT, YES.

>> WHAT OTHER ACTIVITY IS THERE TO GO BEYOND THE 1232?

>> THE BNSF CAR IS ABOUT THE SAME ONE THAT I WAS TALKING ABOUT. IT HAS A 9/16 SHELL, INSTEAD OF A 7/16, PLU SUS A JACKET. THE COMMITTEE TRIES TO WORK BY CONSENSUS. WE HAVE NOT BEEN ABLE TO REACH CONSENSUS ON THIS ISSUE. DOT IS NOT BEEN TRAINED BY CONSENSUS.

>> I'M STILL TRYING TO GET MY HANDS AROUND WHETHER THE 1232 AND THE 1232-PLUS ARE DESIGNED TO TAKE HIGH-PRESSURE.

>> THE BNSF CAR WOULD BE DESIGNED TO TAKE THE HIGHER PRESSURE.

>> THERE IS APPARENTLY A REGULATORY DISCONNECT. THE FACT THAT THESE CARS WERE NOT DESIGNED FOR THIS APPARENTLY DOES NOT MEAN THAT IT IS NOT UNLAWFUL TO CARRY THOSE HAZMAT IN THOSE CARS. APPARENTLY IT IS NOT ILLEGAL TO CARRY EVEN THOUGH THE CAR WAS NOT DESIGNED FOR IT.

>> UNDER THE CURRENT ENVIRONMENT, THERE IS NO REGULATION TO TRANSFER THIS IN A PRESSURE CAR.

>> IF I MIGHT ADD, WE HAVE USE THESE FOR YEARS. HAS CHANGED IS THE INTRODUCTION OF THE UNIT TRAIN. AS FAR AS THE INJURED -- INDUSTRY BUYING INTO THE BNSF CAR OR THE AAR CAR, WE ARE THERE WITH THE THICKNESS OF THE TAP. WE WANT TO GET THE CLASSIFICATION COMPLETED SO WE KNOW WHAT WE ARE DEALING WITH. IF WE ARE GOING TO MAKE THE CHANGE, MAKE IT ONE TIME. THE OTHER ISSUES, THE ADVANCE OF THE 1232 CAR, ADVANCED ARE ALL PROTECTION. HIGH-CAPACITY SAFETY RELEASE VALVES, WHICH ARE BEING DEVELOPED AND WILL BE PUT ON ALL THE CARS. I THINK THE INDUSTRY HAS JELLED AROUND THE NEW SPECS, WITH RESPECT TO THE THICKNESS OF THE CARS.

>> DOES THE REGULATORY UNCERTAINTY RELATE TO THE FACT THAT YOU ARE CONCERNED THAT PEOPLE ARE PUTTING A LOT OF MONEY INTO A DIRECTION AND THEY ARE NOT SURE THAT THE REGULATION WILL SUPPORT THAT, SO ONCE IT COMES OUT, IT MAY MAKE THAT MONEY, NOT WORTHLESS, BUT IN HINDSIGHT THEY WOULD NOT HAVE SPENT THE MONEY THAT WAY.

>> LET'S BE CAREFUL ABOUT THE MONEY SPENT. IT IS GOING TO REQUIRE MONEY, NO QUESTION ABOUT IT, BUT THE REGULATORY AUTHORITY IS CONCERNED ABOUT GEARING UP, PUTTING FACILITIES IN, GETTING GOING, AND FINDING OUT LATER THAT THAT IS NOT GOING TO FIX THE PROBLEM. NOW WE HAVE TO SOLVE THE ISSUE OF RETROFITTING THESE LEGACY CARS AND GETTING THEM INTO SERVICE AS QUICKLY AS WE CAN.

>> THAT IS HELPFUL. THANK YOU VERY MUCH.

>> STEPHANIE, COULD YOU PULL UP SLIDE 10 PLEASE? I WANT TO MAKE SURE I'M UNDERSTANDING. THE DATA REPRESENTED IN THE SLIDE WITH RESPECT TO THE CPR RISK, IS THAT REFLECTIVE OF THE INFORMATION THAT HAS BEEN COLLECTED SINCE 1974 46,000 CARS DAMAGED AND 29,000 ACCIDENTS?

>> YES.

>> WHAT CONSTITUTES AND FRA REPORTABLE?

>> FRA SETS A DAMAGE THRESHOLD IN TERMS OF DOLLARS EACH YEAR. IF A TRAIN ACCIDENT CAUSES MORE DAMAGE THAN THAT TO EQUIPMENT STRUCTURES AND RIGHT-OF-WAY, THEN THAT REQUIRES THE RAILROAD TO REPORT.

>> IT IS NOT NECESSARILY SPECIFIC DAMAGE TO THE TANK CAR THAT ENDS UP GETTING THEM IN THE DATABASE. IT IS AN EVENT THAT COULD OR COULD NOT, MAY OR MAY NOT HAVE AFFECTED THE ACTUAL TAKE CAR, OR MULTIPLE TANK CARS.

>> YES, THE FRA DEFINITION DOES NOT SINGLE OUT TANK CARS.

>> BUT YOU WILL PUT ALL THE TANK CARS INVOLVED IN AN EFFORT A REPORTABLE EVENT IN THIS DATABASE, WHETHER THEY RUPTURED OR NOT.

>> ALL THE TANK CARS, WHETHER OR PORTABLE FOR AN ACCIDENT OR NOT. WHEN IT BECOMES PART OF A RISK CALCULATION, WHICH YOU WILL SEE MORE OF OTHER PANELS, THE UNITS WORK TOGETHER CORRECTLY IN THE RISK CALCULATIONS.

>> LET'S TALK ABOUT THE SPEEDS OF THE DERAILMENTS. MR. SAXTON, THERE WERE QUESTIONS BEFORE ABOUT LAC-MEGANTIC. THE SPEED IN THIS DATABASE ARE ABOUT 25 MILES PER HOUR. EXPLAIN WHAT THAT MEANS.

>> THE AVERAGE SPEED IN AN EFFORT A REPORTABLE DERAILMENT IS 26 MILES PER HOUR. THESE CPR'S ARE CALCULATED ASSUMING THAT SPEED. IF WE HAVE A DIFFERENT SPEED, WE WOULD GET A DIFFERENT RESULT. MR. SAXTON'S POINT IS THAT WE WOULD NOT EXPECT ANYONE ACCIDENT TO CONFORM TO THESE FIGURES, ESPECIALLY ONE AS IS EXTREME AS THAT ONE.

>> WE DO NOT HAVE ANY OF THE AAR 2014 PROPOSED CARS IN THE FLEET.

>> THEY ARE SO, TOO, AND PRESSURE CARS WE HAVE QUITE A FEW.

>> ARE YOU USING DATA FROM THE COMMON PRESSURE CARS TO REPRESENT THE RISK YOU ARE ASSIGNING TO THE 2014 AAR CAR?

>> IN CALCULATING THESE CPR'S, UNDERSTANDING IS DRAWN FROM WHAT IS CALLED AN AGGRESSION PROCESS. UNDERSTANDING THE CURVE VERSUS TANK THICKNESS OR SOMETHING LIKE THAT, IT IS DRAWN FROM ARE ALL THOSE CARS LIE ON THE CURVE. THE PRESSURE CARS CONTRIBUTE STRONGLY TO UNDERSTANDING, AS WOULD CARS WITH SIMILAR THICKNESS ALL AROUND.

>> WE HAD AN EXCHANGE ABOUT WHAT IS DIFFERENT WITH TRANSPORTING CRUDE NOW VERSUS 5, 10 YEARS AGO. WHEN YOU LOOK AT THE DATA, DOES THE DATA TELL YOU SOMETHING DIFFERENT, WHEN YOU LOOK AT THE RISK BASED ON UNIT TRAINS? WHEN WE LOOK AT THE DATA BACK TO 1970, IT IS A VERY DIFFERENT DATA SET. YOU MIGHT HAVE ONE OR TWO CARS. IF YOU HAVE 100, AND YOU LOOK AT UNIT TRAINS, DOES THE RISK NEVER CHANGE?

>> UNFORTUNATELY, I CANNOT ANSWER THAT. WE HAVE ONLY BEGUN TRYING TO ANSWER THAT. YOU ARE RIGHT, THE NUMBER OF UNIT TRAINS REFLECTED IN OUR DATABASE FROM 10 YEARS AGO IS MUCH SMALLER THAN WE EXPECT TO HAVE NOW IN THE CURRENT YEARS. THEY ARE IN THERE, BUT NOT IN THE KINDS OF NUMBERS WE WOULD EXPECT TO SEE IN TODAY'S ACCIDENTS. WE ARE NOT QUITE SURE [NO AUDIO] I WOULD LIKE TO SEE VIDEO. IN YOUR SLIDES, YOU TALK ABOUT THE TEST SPEEDS, WHERE THESE EVENTS ARE TAKING PLACE. THE TEST SPEEDS RANGE FROM 10 MILES PER HOUR TO 17.8 MILES PER HOUR. DO YOU THINK THIS REPRESENTS REAL WORLD CONDITIONS THAT THESE TANK CARS MIGHT BE FACED WITH?

>> THAT IS A VERY GOOD QUESTION. THE CHOICE OF THE SPEEDS WAS BASED UPON WHAT WE EXPECTED THE OUTCOME OF THE PARTICULAR TEST TO BE. FOR EXAMPLE, THE FIRST COUPLE, WE WANTED TO MAKE SURE THAT WE JUST DENTED IT AND NOT PUNCTURE. HOW THESE SPEEDS ACTUALLY RELATE TO WHAT HAPPENS IN A DERAILMENT, THAT IS A MUCH MORE DIFFICULT QUESTION TO ANSWER. WE HAVE TRIED TO DO SOME KINDS OF ANALYSES TO MAKE THAT KIND OF COMPARISON OR CORRELATION, IF YOU WILL. THE CONDITIONS OF THIS PARTICULAR SHELL TEST ARE EXTREMELY SEVERE IN THAT ANY PARTICULAR ACCIDENT THAT OCCURS -- AND YOU MAY FIND SOMETHING THAT -- THIS IS HARSH -- BUT I DO NOT THINK THERE WILL BE ANYTHING HARSHER. ANYTHING THAT HAPPENED IN AN ACTUAL ACCIDENT, IT WILL NOT BE ANY WORSE THAN THIS. HOW THAT RELATES TO THE ACTUAL SPEED IN A DERAILMENT, WE HAVE TRIED TO COME UP WITH RULES OF THUMB BASED ON OUR ANALYSES WE HAVE DONE TRYING TO SIMULATE WHAT HAPPENS IN A DERAILMENT. FOR EXAMPLE, DOING SOME DERAILMENT DYNAMICS SIMULATIONS TO MATCH UP WHAT WAS THE PILEUP WOULD LOOK LIKE. SOME OF THOSE THE NEW -- SIMULATIONS WE HAVE SEEN SECONDARY CAR TO CAR IMPACTS ARE ABOUT HALF OF WHAT THE DERAILMENT SPEED WOULD BE. IF A TRAIN IS TRAVELING AT 50 MILES PER HOUR, AND IN SOME CASES, YOU MAY SEE INDIVIDUAL CARS IMPACTING EACH OTHER AT HALF THAT SPEED.

>> I CAN SEE YOU WANT TO JUMP IN, MR. SAXTON.

>> ON MAMA BULK, I AGREE WITH THAT, BUT ON ANOTHER, WHEN YOU SEE A RAIL CAR SPEARING THE END OF THE TANK CAR HEAD BECAUSE IT WAS FLOODING ALONG THE RAIL ON THE GROUND, THAT IS MORE SEVERE, I THINK, THAN THE 12 BY 12 IMPACT. ANOTHER COMMENT ABOUT THE COLLISIONS YOU JUST SAW. THAT NEVER HAPPENS. I CANNOT EVER RECALL SEEING ONE CARD T-BONES ANOTHER WITH A 12 BY 12 IMPACT HER. YES, IT IS A SEVERE CASE THAT HE HAS POSTULATED, BUT TO THINK IT IS TYPICAL, OR FOR US JUST TO BASE OUR DESIGN ON THOSE RESULTS, WOULD BE A MISTAKE.

>> WHAT SHOULD WE BASE OUR DESIGNS ON?

>> I THINK WE SHOULD BE BASING OUR DESIGNS BASED ON OUR BODY OF EXPERIENCE WITH ACCIDENTS. I THINK THE WORK HE HAS DONE, THAT WE HAVE DONE AS AN INDUSTRY WITH THESE 12 BY 12 IMPACTORS, WHATEVER SIZE WE WERE USING, IS VERY WORTHWHILE. DON'T GET ME WRONG. BUT IT IS NOT -- IT DOESN'T HAVE THE BREADTH OF THE CHAOTIC EVENTS THAT OCCUR.

>> WE WILL COME BACK TO THIS REMEMBER SOMEWHAT.

>> MAY I RESPOND? AS FAR AS BEING HIT BY A RAIL, THE CONDITIONS OF THIS PARTICULAR TEST, WE ARE ALREADY HITTING AT A RAIL CAR THAT IS THE MAXIMUM WEIGHT THAT YOU WOULD EXPECT. IF YOU ARE HITTING IT WITH A RAIL, I DOUBT THAT YOU WOULD BE ABLE TO GET THAT FULL AMOUNT OF WEIGHT BEHIND IT. THE RAIL IS MORE LIKELY TO BUCKLE IN THAT CASE VAN SPEARING RIGHT THROUGH. IT MAY HAPPEN, BUT AS I SAY, THIS IS A VERY EXTREME TEST CONDITION.

>> WE VERY MUCH APPRECIATE ALL THE DIFFERENT VIEWPOINTS. I WANT TO ENCOURAGE ALL OF YOU TO SPEAK UP IF YOU HAVE DIFFERENCES. THAT IS WHY YOU ARE HERE TODAY, BECAUSE OF YOUR THE KEYS. MEMBER SUMWALT.

>> THANK YOU. WE ARE GOING TO CONTINUE TO TALK ABOUT THE CRASH TEST THAT WE WERE JUST TALKING ABOUT. WHEN I SAW THE 12 BY 12 BEING RAMMED INTO THE SIDE OF THE TANK CAR, IT MADE ME WONDER, IF THE TANK CAR DOES NOT RUPTURE, AS IN ONE OF THE CASES, DO YOU INCREASE THE CHANCES OF A HYDRAULIC RUPTURE? DO YOU UNDERSTAND WHAT I'M ASKING? PASSING THE BUCK.

>> TO CLARIFY, ARE YOU REFERRING TO THE SHELF FULL, WHERE THE AMOUNT IS TAKEN DOWN BY THE DENT, IF YOU WILL?

>> CORRECT.

>> THAT IS A GOOD QUESTION AND SOMETHING THAT WE NEED TO LOOK INTO AS FAR AS OUR ANALYSES. I DO NOT KNOW IF THAT REALLY INCREASES THE CHANCE ALL THAT MUCH.

>> I WAS JUST WONDERING BECAUSE YOU ARE COMPROMISINGINSIDE OF THE TANK CAR. YOU PROBABLY HAS ABOUT THREE PERCENT OUTAGE. I WAS NOT SURE. I WAS WONDERING ABOUT THAT.

>> IF I MAY, I DO NOT KNOW IF WE CAN SHOW THE VIDEO AGAIN, BUT IN THE O111 TEST, THERE WAS THE PRESSURE RELEASE VALVE THAT WAS SENT OFF TWICE. THAT MAY MITIGATE THE SHELF FULL.

>> THANK YOU. THE INDUSTRY HAS UPGRADED THE PRESSURE RELEASE VALVES OVER THE PAST FEW YEARS. I CAME FROM AN AIRLINE BACKGROUND AND WEIGHT WAS KING THERE. YOU WANTED TO DO EVERYTHING YOU COULD TO REDUCE WEIGHT. CERTAINLY, IF WE ARE TALKING ABOUT BEEFING UP THESE TANK CARS, WE WILL POTENTIALLY ADD 10% TO 13% OF WEIGHT, WHICH MEANS WE HAD TO ADD 10% TO 13% MORE TANK CARS TO ACCOMMODATE WHAT WE COULD NOT CARRY BEFORE. LET ME ASK YOU THIS EERIE KIND OF A DUMB QUESTION. HOW MUCH HAS THE INDUSTRY LOOKED AT GOING OUTSIDE OF STEEL AND USING COMPOSITES? I DO NOT EVEN KNOW WHAT IS OUT THERE, SOMETHING LIGHTER, BUT STILL VERY ROBUST.

>> WE HAVE A PROJECT GOING RIGHT NOW, A COLLABORATIVE PROJECT WITH THE FRA, SHIPPERS, AND ALSO RSI, CALLED THE ADVANCED TANK CAR COLLABORATIVE PROJECT. WE ARE LOOKING AT THE NEXT GENERATION CARS. AS PART OF THAT WE ARE LOOKING AT COMPOSITES. DIFFERENT WHAT WE WOULD CALL NONCONVENTIONAL TYPES OF APPROACHES THAT WE MIGHT TAKE TO IMPROVE THE PUNCTURE RESISTANCE, PERFORMANCE OF THESE CARS. THE EARLY TESTS ON THE COMPOSITES HAVE NOT SHOWN A SIGNIFICANT INCREASE. THERE IS WORK CONTINUING. ONE OF THE ISSUES, PARTICULARLY WITH COMPOSITES, THAT WE HAVE HAD IN THE PAST, WE HAVE NOT HAD THEM ON TANK CARS, BUT WE HAVE TRIED THE KNOB ON HOPPER CARS. GENERALLY, THE INDUSTRY IS NOT GEARED TO REPAIR THESE TYPES OF CARS. YOU PUT THREE CARS IN SERVICE AND WE RAN UNSUCCESSFULLY UNTIL THEY DAMAGED, AND THEN WE HAD TO RETIRE THE BECAUSE WE COULD NOT FIND ANYBODY TO REPAIR THEM. THAT DOES NOT SAY THAT WE CANNOT DO SOMETHING OUT-OF-THE-BOX. AT THE SAME TIME, WE HAVE TO LOOK AT AN INDUSTRY THAT IS RUN ON STEEL ON STEEL AND SAY, HOW FAR CAN GO TO THE LEADING EDGE AND MAKE IT WORK IN A TANK CAR, RAILROAD ENVIRONMENT?

>> IT IS GOOD TO KNOW THAT YOU ARE LOOKING OUTSIDE THE BOX. I POINT OUT A LOT OF THE JETLINER THAT ARE BEING PRODUCED THESE DAYS ARE PRETTY MUCH MADE OUT OF PLASTIC. SOMEBODY HAD TO THINK OUTSIDE OF THE BOX THERE. I HAD A FEW MORE QUESTIONS BUT I AM GOING TO --

>> COULD I COMMENT? BILL MENTIONED THE PROJECT THAT WE HAVE, COLLABORATIVE RESEARCH PROJECT THAT WE HAVE. I MENTIONED BEFORE, THE THING THAT WE LOOK AT, IN OTHER INDUSTRIES, AS YOU SAY, THE AIRLINES, NASA, THEY HAVE A SOLUTION FOR THEIR PRODUCTS OF HOW TO PROTECT IT, AND SEEING HOW WE CAN USE IT IN OUR INDUSTRY. WE MENTIONED SOME OF THE DIFFERENT COMPOSITE MATERIALS, STEEL MATERIALS. LOOKING AT THESE SANDWICH PANELS THAT WE MADE, IT WAS DEAL ONLY, -- STEEL ONLY, BUT LOOKING AT THE OTHER MATERIALS THAT WE COULD DO. ONE OF THE ANNOUNCEMENTS WE HAD WAS LOOKING AT THIS. IF ANYBODY HAS ANY DESIGNS OR ANY PRODUCTS OUTSIDE OF THE BOX, THEY CAN BRING IT TO US AND WE CAN EVALUATE THEM. WE HAVE SEVERAL OF THOSE THAT WE ARE IN THE PROCESS OF EVALUATING THOSE CONCEPTS.

>> THANK YOU VERY MUCH.

>> MEMBER WEENER.

>> I WANT TO FOLLOW UP A BIT ON THE EARLIER LINE I WAS THINKING ABOUT. IN TERMS OF THE ANALYSIS OF HOW TO DETERMINE THE VERACITY OF THE CARS, YOU HAVE A LIMITED NUMBER OF FAILURE MODES. PUNCTURES TO THE END, PUNCTURES TO THE SIDE, THE FITTINGS TAKEN OFF THE TOP, FITTINGS OFF THE BOTTOM, OR OPENING THE VALVE ON THE BOTTOM. THEN YOU HAVE THE HYDRAULIC RUPTURE. ARE THESE THE FIVE MAJOR FAILURE MODES?

>> IF WE ARE TALKING ABOUT THE KINDS OF FAILURES THAT CAN HAPPEN AT THE MOMENT OF IMPACT, IT IN A GENERAL WAY, THAT ENCOMPASSES THEM. WHEN WE SAY PUNCTURE, WE MEAN A SPECIFIC THING. YOU CAN ALSO HAVE CRACKS AND OTHER RELATED FAILURE, BUT IF WE ARE TALKING ABOUT WHERE ON THE CAR IT CAN TELL, THAT IS RIGHT.

>> WE ARE TALKING ABOUT AN ACCIDENT SCENARIO HERE.

>> OF THE OTHER KINDS OF FAILURE MODES WOULD BE, WHAT HAPPENS IF IT SITS IN A FIRE OR COUPLE OF HOURS AFTER THE ACCIDENT? THAT IS A DIFFERENT SET OF CIRCUMSTANCES THAT IS UNRELATED TO PUNCTURE PERFORMANCE, AT LEAST DIRECTLY.

>> I CERTAINLY RECOGNIZE THERE IS NO AVERAGE ACCIDENT. EVERY ACCIDENT IS UNIQUE, JUST LIKE EVERY OTHER ACCIDENT. SET ASIDE THE OPERATIONAL ASPECT OF IT THAT MR. SAXTON HAD GONE INTO. PREVENTION IS MUCH BETTER THAN TRYING TO FIX THINGS TO KEEP THEM FROM BREAKING WHEN YOU HAVE AN ACCIDENT, BUT THAT IS A DIFFERENT PANEL FROM WHAT WE ARE TALKING ABOUT NOW. WHAT I'M REALLY WONDERING ABOUT IS IF THERE ARE ENOUGH CARS INVOLVED IN ENOUGH ACCIDENTS WHERE YOU CAN LOOK AT, DID THE FAILURE FALL WITHIN THE BOUNDS THAT YOU GET WHEN YOU DO BASICALLY A DATA COLLECTION? DOES A DATA POINT FALL WITHIN WHAT YOU WOULD EXPECT TO SEE, GIVEN THE ANALYSIS OF THE CPC?

>> ANY ONE DATA POINT MAY OR MAY NOT OVER TIME, BUT THEY ADD UP. OVER TIME --

>> AT LEAST THEY SHOULD FALL IN THE RANGE OF THE OTHER DATA POINTS THAT YOU WOULD EXPECT. YOU HAVE A BUDGET OF OTHER DATA POINTS. 40,000 DATA POINTS IN DIFFERENT MODES.

>> LET'S TAKE AN EXTREME EXAMPLE, LAC-MEGANTIC OR EVEN CASTLETON. IT WOULD SUGGEST THAT 111'S ARE LIKELY TO FAIL. WE KNOW THAT IS NOT THE CASE. WE KNOW THAT IT IS NO SPECIFIC KINDS OF ACCIDENTS THAT CAUSE THOSE PERFORMANCES. HOW MANY ACCIDENTS IS ENOUGH UNTIL YOU HAVE THE CONFIDENCE THAT YOU HAVE A MORE GENERAL SENSE OF OVERALL PERFORMANCE? ONE OR TWO IS NOT ENOUGH, BUT AT SOME POINT YOU REACH THAT POINT. SO I WOULD NOT SAY THAT EVEN THE ACCIDENT EXPERIENCE OF THE LAST YEARS IS NECESSARILY SOMETHING TO DRAW A FIRM CONCLUSION ON IN COMPARISON TO THE CPR'S.

>> MY CONCERN IS YOU CAN RATIONALIZE AWAY ANY REMOTE OR RARE OCCURRENCE. JUST TRYING TO SEE IF THAT IS PART OF THE PROCESS HERE. ARE WE RATIONALIZING THINGS BECAUSE LAC-MEGANTIC OCCURRED AT A HIGHER SPEED? BUT AGAIN THERE IS NO AVERAGE ACCIDENT.

>> THAT IS A GOOD WAY TO PUT IT. LAC-MEGANTIC WILL BE A PART OF SUBSEQUENT ANALYSES AND SO FORTH, BUT IT WILL ONLY BE IN THERE ONCE, I'M FAIRLY CONFIDENT. WE HAVE NEVER HAD A DAY RELEVANT OF THAT MANY CARS AT THAT SPEED IN THE HISTORY OF DERAILMENTS BEFORE. IT WILL BE REPRESENTED IN THE RIGHT KIND OF FREQUENCY. THOSE CARS WILL MATTER TO SUBSEQUENT ANALYSES, BUT WILL NOT DOMINATE THE MANY, MANY CARS THAT ARE INVOLVED IN ACCIDENTS OF A MORE TYPICAL NATURE, AT LEAST CLOSER TO A SENSE OF AVERAGE.

>> I'M TRYING TO UNDERSTAND IF THE 1232 CAR IS TURNING OUT TO BE AS GOOD AS WHAT THE ANALYSIS SUGGESTS IT SHOULD BE.

>> ALL I CAN SAY IS WE BARELY HAVE DOUBLE FIGURES OF THESE CARS IN THE DATA SO FAR. I WOULD NOT RECOMMEND FIGURING OUT WHAT PERCENTAGE OF THOSE WEAK AND SAY -- IT IS NOT WILDLY OFF FROM THE CPR'S WE HAVE, BUT I WOULD NOT RECOMMEND DRAWING CONCLUSIONS FROM THIS VERY SMALL NUMBER OF CARS. I CANNOT FIRMLY ANSWER YES, WE HAVE PROOF, I WOULD ABSOLUTELY ASSURE YOU -- I'M NOT WILLING TO GO THAT FAR.

>> SO AT THIS POINT IT IS ALL ANALYTICAL.

>> UNDERSTAND THAT NOTHING ABOUT A CPC 1232 CAR IS RADICAL IN ANY WAY. IT IS THE COMBINATION OF FEATURES THAT IS NEW AND DIFFERENT. WE HAVE HAD SEVEN/16 TANKS IN THE FLEET FOR A LONG TIME, WE HAVE HAD HALF INCH TANKS FOR A LONG TIME, JACKETS, TOP FITTINGS, HOUSING. WHERE WE BREAK THE CAR DOWN INTO ITS COMPONENTS AND ANALYZE EACH ONE OF THOSE AND PUT THE CAR BACK TOGETHER, I'M PRETTY CONFIDENT WE KNOW HOW EACH ONE OF THOSE THINGS BEHAVES IN ITS OWN PART OF THE CAR. WHEN WE COMBINE IT, I HAVE NO REASON TO THINK THAT THE COMBINATION WILL GIVE US SOME MINOR HE DIFFERENT PERFORMANCE IN CPR, THEN WHAT WE EXPECT FROM ADDING THE COMPONENTS TOGETHER. ADDING IS A LOOSE TERM. RECOMBINING THEM NOT MEDICALLY.

>> THANK YOU.

>> MEMBER ROSEKIND.

>> I DO NOT THINK WE SHOULD LET MEMBER WEENER OFF THE HOOK SO EASILY. ONE OF THE CHALLENGES WE HAVE IS NOT JUST LOOKING TO BUILD CURVES. WE ARE LOOKING AT THE OUTLIERS. YOU TALK ABOUT THE SWISS CHEESE MODEL. YOU HAVE TO FIGURE OUT WHAT HAPPENED WHEN ALL OF THOSE HOLES LINE UP IF THAT IS NOT THE BELL CURVE FOR SOME REASON. IF WE ALSO JUST KEEP FOCUSING ON THE BELL CURVE, WE WILL MISS, THEY WERE GOING TOO FAST. THEN THE CHALLENGE IS, WE CAN DISMISS THAT BECAUSE THAT WAS AN ANOMALY. IT WILL NOT HAPPEN. BUT THOSE ARE THE THINGS WE ARE TRYING TO FIGURE OUT AND THAT IS PART OF THE CHALLENGE, HOW TO ADDRESS THOSE, QUANTITATIVELY, FROM A MATHEMATICAL STANDPOINT, WHERE WE HAVE TO DEAL WITH THE BELL CURVE, BUT AT THE SAME TIME, THE UNKNOWN UNKNOWNS. WHEN AN ACCIDENT HAPPENS, IT DESERVES REAL ATTENTION BECAUSE IT IS ONE OF THOSE TIMES WHERE THE HOLES HAVE LINED UP. THAT IS THE CHALLENGE HERE, FROM AN ANALYTICS STANDPOINT, HOW DO WE KEEP THAT ALEX? WE CAN MAKE SURE EVERYONE IS INCLUDED. MEMBER WEENER ALWAYS TALKS AMONG GOING TO WHERE THE HIGHEST BAR IS, GOING TO THE MIDDLE OF THE BARUCH -- BELL CURVE, BUT OFTENTIMES THERE ARE OUTLIERS. THERE SHOULD HAVE BEEN SPEED CONTROLS. THIS IS THE PROBLEM OF MODELING HYPOTHETICALS AND CONCEPTUAL'S WITH THE REALITY OF WHAT HAPPENS IN THE REAL WORLD. SO, ENGINEER DESIGNERS, HOW DO YOU MANAGE THAT CONUNDRUM? AND I LOVE WHEN THERE IS A PAUSE BECAUSE IT MEANS SOMEONE IS THINKING. THIS IS A CHALLENGE IN ALL MODES, ESPECIALLY IN THE MODELING CONCEPTION PART. WE HAVE GOT TO PAY ATTENTION. THE OUTLIERS ARE ACCIDENTS WHERE BAD THINGS HAPPENS. WE CANNOT JUST CALL THEM LESSONS LEARNED. WE HAVE TO FIND OUT HOW WE CAN CHANGE OUR DESIGNS AND OPERATIONS, ETC.. IF THE A SENSE OF WHERE THAT FITS. -- GIVE ME A SENSE OF WHERE THAT FITS.

>> THE REAL CHALLENGE HERE IS THAT THIS IS EVOLVING. WE HAVE CARS GOING INTO THE FLEET, 12332 CARS. AS THAT INCREASES, THE CHANCE OF THESE CARS BEING INVOLVED IN A DERAILMENT INCREASES. GETTING THE FEEDBACK FROM THESE IS IMPORTANT. WE ARE WORKING WITH THE NTSB TO A LOWER OUR ENGINEERS TO GET ON SITE RIGHT AWAY SO THAT WE CAN SEE THE DAMAGE UPFRONT RIGHT AWAY AND CORRELATE BACK TO THE SAFETY ENHANCEMENTS THAT WE HAVE PUT ON THE CAR. SO IT IS SOMETHING THAT HAS TO BE REAL TIME AND HAS TO HAPPEN. HOPEFULLY, THERE WILL NOT BE A LOT OF DERAILMENTS TO DRAW THE INCIDENTS FROM, BUT IF THERE IS, WE NEED TO HAVE QUICK FEEDBACK TO SEE HOW IT IS PERFORMING. IN THE MEANTIME, WE MAY BE PLACING A LOT MORE VALUE THAN THERE SHOULD BE ON THE NUMERICAL DIFFERENCES OF THE CPR. THEY ARE SIMPLY A RELATIVE RANKING OF WHAT WE KNOW HISTORICALLY HAS WORKED ON THE COMPRESSED GAS CARS ARE MERRILY. WE DO HAVE A GOOD DATABASE TO DRAW THAT FROM. WE KNOW THAT INCIDENTS THAT WERE OCCURRING IN THE 1970'S WERE PRETTY MUCH STOPPED BY WHAT WE DID TO THE CARS. GRANTED, ETHANOL AND CRUDE OIL IS A DIFFERENT CHALLENGE. UNDERSTANDING DIFFERENCES, HOW THE CAR IS PERFORMING, TWEAKING IF WE HAVE TO TO GET BETTER THAN WHAT WE HAD.

>> EVEN THOUGH YOU HAVE A SMALL SUBSET OF THE NEWER CARS, THAT QUICK LOOK, THE ACCOUNTED FOR BY WHICH ARE CONCEPTUALLY PREDICTED, IS IMPORTANT DATA. EVEN THOUGH IT IS SMALL AND YOU DO NOT EXPECT IT TO MOVE THE BIG NUMBER, THERE IS TOW IMPORTANT INFORMATION, TO KNOW WHETHER THE DESIGN CHANGES HAVE APPLIED TO THAT SUBSET AS WELL. ANY OTHER THOUGHTS?

>> I AGREE WITH YOUR LAST STATEMENT, FOR WHAT IT'S WORTH. IT SOUNDS LIKE I WILL CONTRADICT MYSELF FROM MY ANSWER FOR MEMBER WEENER, BUT I MEAN TO SAY IS IT IS TOO EARLY FOR US TO MAKE FIRM STATEMENTS. I ABSOLUTELY BELIEVE THERE IS VALUE IN TRACKING IT FROM DAY ONE.

>> GREAT. THANK YOU.

>> VICE-CHAIRMAN. THE VICE-CHAIRMAN ASKED EARLIER ABOUT THE COMMODITIES THAT WERE TRANSPORTED IN A DOT 111 TO 1232'S AND WHERE THE ISSUE IS OF WHAT SHOULD NOT BE TRANSPORTED IN THOSE CARS. STEPHANIE, CAN YOU BRING UP MR. SAXTON'S SLIDE? THE DOT 111 DAYS CAR, A CATCHALL VEHICLE TO TRANSPORT THINGS. HOW DO PEOPLE NOT CLASSIFIED TO BE DOT 111? DO THEY HAVE TO BE PULLED OUT IN ORDER TO BE TRANSPORTED TO ANOTHER CAR? WE ARE LOOKING AT THE 68,000 CREWED AND ETHANOL THAT MAYBE SHOULD BE TRANSPORTED IN SOMETHING ROBUST THAN THE ORIGINAL DOT 111. HOW DO WE MOVE TO AN ENVIRONMENT WHERE COMMODITIES ARE CLASSIFIED IN THE RIGHT CONTAINERS FROM THE GET-GO, AND NOT JUST PUT IN UNTIL WE FIGURE OUT THERE IS A PROBLEM? IS THERE A PROCESS FOR THAT?

>> THAT IS WHAT THE DOT REGULATIONS ARE ALL ABOUT. IF YOU LOOK AT TOXIC INHALATION HAZARDS, FLAMMABLE GASES, THOSE ALL REQUIRE PRESSURE CARS, WHICH REFLECT THE NATURE OF THE COMMODITY THEY ARE TRANSPORTING. THE DOT 111 IS TRANSPORTING LESS HAZARDOUS, BUT THERE IS A PROCESS THAT DOT USED TO DEVELOP THE STANDARD FOR ALL COMMODITIES . SPENT NUCLEAR FUEL IS ON THE OTHER END --

>> MY QUESTION IS, HOW DID IT GET MISSED? WHETHER THIS WAS A 4000% INCREASE, ARE WE NOW ONLY REALIZING THAT THIS COMMODITY SHOULD NOT BE TRANSFERRED IN THIS CONTAINER AFTER WE HAVE FAILED CONTAINERS? CLEARLY I THINK MOST IN THE PANEL AGREED, THE OLD DOT 111, THE BASE, IS NOT WHERE WE WANT TO BE WITH CREWED AND ETHANOL. SO EITHER WE ARE LOOKING AT THE 1232 OR THE AAR 2014, OR A NEW STANDARD FOR TRANSPORT COMMODITY. HOW DID IT GET MISSED FOR THE LAST 10 YEARS? DID IT TAKE DERAILMENTS AND BODY COUNT FOR US TO UNDERSTAND THAT THERE WAS A CLASSIFICATION ISSUE WITH RESPECT TO THE COMMODITY IN THE CONTAINER?

>> I WOULD SAY, NO, IT DID NOT TAKE BODY COUNT. WE HAVE KNOWN ABOUT THIS LONG BEFORE LAC-MEGANTIC. THAT IS WHY WE INITIATED TANK CAR ACTIVITY AND PAST CPC 1232 IN 2011. -- PASSED CPC 1232 IN 2011. IF YOU WANT TO KNOW WHY DOT PASS THOUGH STANDARDS, YOU WOULD HAVE TO ASK THEM.

>> BUT THE 1232 WAS NOT RIGHT EITHER. IT WAS BETTER THAN THE 111. HOW DO WE KNOW, BEFORE WE GET TO THE POINT WHERE WE HAVE THE ACCIDENTS TO PILEUP, TO SHOW WE HAVE A PROBLEM? MR. SAXTON, THE REASON I ASKED FOR THIS CHART TO BE PULLED UP, YOU SAID WE NEED TO BE CONCERNED ABOUT THE 104,000 OTHER CARLOADS OUT THERE. WHAT SHOULD WE BE CONCERNED ABOUT?

>> TO ADDRESS YOUR EARLIER QUESTION, ONE OF THE THINGS, THE CREW WE ARE MOVING TODAY, WE THINK IT IS DIFFERENT THAN WHAT WE WERE MOVING FIVE OR 10 YEARS AGO. WHO WOULD'VE THOUGHT THAT? WE MISSED THAT, ALL OF US DID. I THINK IT PROBABLY BEHOOVES US TO LOOK AT THESE OTHER SUBSTANCES THAT WE ARE MOVING RIGHT NOW AND ASK OURSELVES, HAVE THEY CHANGED? MOST OF THESE ARE MANUFACTURED PRODUCTS. THE MANUFACTURED PRODUCTS HAVE A TENDENCY TO BE MORE CONSISTENT. IF WE ARE MOVING ANYWHERE ON THE TO REAL IN THESE 111 CARS, I THINK THAT IS A FLAG THAT WE OUGHT TO BE THINKING MORE ABOUT IT. EVEN SO, IT MAY WELL BE THAT SOME OF THE OTHER MANUFACTURED GOODS, I WILL CALL THEM, ARE DIFFERENT, TOO, BUT THAT IS WHERE I WOULD START.

>> DID WE GET IT RIGHT ON ETHANOL, THAT IS A MANUFACTURED PRODUCT?

>> I THINK IT BEHOOVES US TO THE PACKAGE, TO IMPROVE THE PACKAGE, MY PERSONAL OPINION. ONE THING ABOUT IT, WHEN WE ORIGINALLY MADE OUR DECISIONS WITH ETHANOL MANY YEARS AGO, WE WERE NOT MOVING SO MANY UNIT TRAINS. I THINK THE UNIT TRAINS CHANGED THE GAME. THEY REALLY DO.

>> JUST TO BE CERTAIN, WE HAVE UPPED THE PACKAGE ON ETHANOL. IT IS THE SAME 1232 CARS FOR NEW PRODUCTION. WE ARE PROPOSING THE SAME ENHANCEMENTS TO THOSE CARS THAT WE ARE FOR CRUDE. WE ARE ALSO INCLUDING THOSE IN THE LEGACY RETROFIT FLEET.

>> EXCEPT FOR THE SEVEN/16, 9/16.

>> THAT IS FOR NEW CAR PRODUCTION. THERE IS NOTHING YOU CAN DO WITH THE EXISTING CARS. ALL THE OTHER FEATURES IS PART OF THE RETROFIT, INCLUDING PROTECTION FOR THE EXISTING FLEET CARS.

>> FOR NEW CARS, THERE IS STILL A DISCONNECT FOR ETHANOL VERSUS CRUDE.

>> WE ARE IN AGREEMENT ON ETHANOL ON 71/16 BEING THE THICKNESS OF THE TANK. FOR CRUDE OIL, 9/16. FOR THE RAILROAD AND REST OF THE INDUSTRIES, 7/16.

>> THE RAILROADS ARE NOT ALTOGETHER, BUT WE ARE WITH CRUDE OIL.

>> THANK YOU FOR THAT CLARIFICATION. ONE FINAL ISSUE WITH SPEED. I WANT TO GO BACK TO THAT. HOW MUCH OF AN ISSUE IS THE SPEED IN A DERAILMENT THAT INVOLVES TANK CARS? YOU TALKED ABOUT LAC-MEGANTIC AT 60 MILES PER HOUR. WOULD THERE BE NO TANK CAR THAT COULD SURVIVE AN EVENT LIKE THAT?

>> I GUESS I'D LIKE TO POINT OUT , KINETIC ENERGY IS RELATED TO THE SQUARE OF VELOCITY. SO IF YOU DOUBLE THE SPEED, YOU HAVE FOUR TIMES AS MUCH ENERGY TO DEAL WITH. SPEED IS A BIG DEAL. IS THERE NO CAR THAT WOULD SURVIVE LAC-MEGANTIC? I THINK IT IS FAIR TO SAY THAT IF YOU MADE LAC-MEGANTIC TRAINS UNDER PRESSURE CARS AND RAN THE SAME SCENARIO, 64 MILES PER HOUR, YOU WOULD SPILL A LOT OF OIL, AND I BELIEVE, UNFORTUNATELY, THERE WOULD BE CASUALTIES.

>> OBVIOUSLY, WE HAVE SOME SCIENTISTS ON THE PANEL THAT WORK WITH THIS ISSUE EVERY DAY. HOW BIG OF A FACTOR IS SPEED IN THE FAILURES OF TANK CARS? I KNOW YOU HAVE A SLIDE, A THERMOMETER OF SORTS.

>> YES, BACKUP SLIDE NUMBER 25. BUT YES, THAT WOULD BE --

>> THAT WOULD BE ON MY BACK UP SLIDE, NUMBER 25.

>> MAYBE YOU COULD BEGIN TO EXPLAIN WHILE THEY PULL IT UP.

>> FOR THE DIFFERENCE IN KINETIC ENERGY AND THE DIFFERENT SIZE OF THE RAMS, IF YOU WILL COME HOME AT THE SPEED CHANGES -- IF YOU WILL, HOW MUCH THE SPEED CHANGES. FOR OUR RAM CARD, 10.1 MILES PER HOUR IS EQUAL TO ONE MILLION FOOT-POUNDS OF KINETIC ENERGY. IF YOU HAVE A FULLY LOADED PASSENGER CAR, THAT NUMBER GETS BUMPED UP TO -- I CANNOT READ IT BECAUSE IT IS TOO SMALL. 13.7. IF YOU HIT IT WITH AN EMPTY TANK CAR OR A SEMI TRAILER TRUCK , THE NUMBERS ARE ABOUT THE SAME . THOSE NUMBERS GO UP TO 19. IT IS ALSO EQUIVALENT TO HITTING IT WITH THREE SUV AUTOMOBILES.

>> I GUESS, THE QUESTION THAT I HAD IS WE ARE ASSUMING A UNIT TRAIN WITH TANK CARS IN IT IN EITHER A HEAD-ON COLLISION, OR A DERAILMENT AT A CERTAIN SPEED. SPEED IS HOW MUCH OF A FACTOR AS FAR AS THE EVENT? IS REDUCING SPEED IMPORTANT FOR THE SURVIVABILITY OF THE TANK CAR?

>> I WOULD SAY, YES. THE MONITOR -- THERMOMETER THAT WAS SHOWING UP FOR MY PRESENTATION, I WOULD INCLUDE THAT. IT HAS AN EFFECT AS FAR AS PUNCTURE.

>> OK. WE HAVE ANOTHER PANEL COMING UP AND WE WILL HAVE AN OPPORTUNITY TO TALK ABOUT SPEED WHEN IT COMES TO RAIL OPERATIONS. I WOULD LIKE TO THANK THIS FIRST PANEL FOR YOUR PRESENTATIONS AND FOR YOUR CANDID ANSWERS. I EXPECT WE WILL HAVE QUESTIONS THAT WILL BE FOLLOW-UP QUESTIONS THAT ARE TECHNICAL PANEL WILL WANT TO PROVIDE TO YOU. THANK YOU FOR BEING HERE BEFORE US.

>> CHAIRMAN HERSMAN, BEFORE YOU ARE DONE, THIS PANEL IS AWARE OF A RUMOR THAT AT THE END OF THE WEEK YOU WILL NO LONGER BE THE CHAIRMAN. AND ACCORDINGLY, -- WELL, FIRST, WE WANTED TO IT KNOWLEDGE WHAT A GOOD JOB WE THINK YOU HAVE DONE AND HOW ADMIRABLE IT IS OF YOU TO BE WORKING RIGHT TO THE AND. AND WE WANT TO THANK YOU FOR YOUR PUBLIC SERVICE.

>> YOU ALL MUST HAVE COME UP WITH THAT RESOLUTION BEFORE THE QUESTIONS. THANK YOU ALL. [APPLAUSE]

>> DO YOU ACTUALLY HAVE CONSENSUS ON THAT, THOUGH? OK, GREAT PHOTO

>> THANK YOU ALL VERY MUCH AND THANK YOU FOR YOUR ANSWERS. MR. NICHOLSON, WOULD YOU PLEASE CALL THE SECOND PANEL NOW ? THANK YOU. .

>> AS EVERYONE GETS SEATED I WILL JUST REMIND OUR PANELISTS THAT YOU WILL NEED TO PUSH THE BUTTON ON THE MICROPHONE AND A GREEN LIGHT WILL INDICATE THAT THE MICROPHONE IS ON. MAKE SURE IT IS TURNED ON WHEN YOU SPEAK AND TURNED OFF WHEN YOU FINISH. THE LIGHT AT THE TABLE WILL LET YOU KNOW YOUR REMAINING TIME. OUR NEXT PANEL DISCUSSES OPERATIONAL MEASURES AND APPROACHES TO PREVENT ACCIDENTS AND REDUCE THE SEVERITY OF TANK CAR RELEASES. OUR PANELISTS TODAY ARE MR. RICH CONNOR, RAILROAD SAFETY SPECIALIST FOR THE FEDERAL RAILROAD ADMINISTRATION, MR. SKIP ELLIOTT, VICE PRESIDENT OF PUBLIC SAFETY, HEALTH, AND ENVIRONMENT FOR C ACCESS TRANSPORTATION AM A MR. LEE JOHNSON, LOGISTICS SUPERVISOR FOR HESS CORPORATION REPRESENTING THE AMERICAN PETROLEUM INSTITUTE, MR. BOB GRIMAILA, CHIEF SAFETY OFFERED -- OFFICER FOR UNION PACIFIC RAILROAD, DR. CHRISTOPHER BA RKAN, FROM THE UNIVERSITY OF ILLINOIS, AND ANAND PRABHAKARAN. GO AHEAD.

>> WHAT WE ARE TALKING ABOUT TODAY ARE OPERATING THOSE TRAINS THAT ARE MORE HAZARDOUS, WITH MORE HAZARDOUS MATERIALS WITH THE UNIT OIL TRAIN AND ETHANOL. WHAT WE HAVE DONE IS IMPROVED BRAKING CAPABILITIES, REDUCED TRAIN SPEED, AND ESTABLISHED TRAINING REQUIREMENTS FOR THOSE TYPES OF HAZARDOUS TRAINS OUT THERE THAT ARE UP FOR ESCUTCHEON TO DATE. THIS CAME OUT RIGHT AFTER LAC-MEGANTIC. WE TOOK A LOOK AT THE CURRENT REQUIREMENTS UNDER CFR IT TO 32 -- A 232 FOR SECURING TRAINS. WE TOOK A LOOK AT THE FLAMMABLE LIQUID TYPE TRAINS, YOUR OIL TRAINED AND YOUR ETHANOL. WITH EO-28, THE RAILROADS BASICALLY HAVE TO COME UP WITH A PLAN ON HOW THEY SECURE THOSE TERMINALS OUTSIDE THE YARD LOCATION. THEY HAVE TO HAVE A PLAN FOR LEAVING THEM UNATTENDED AND THEY HAVE TO HAVE A PROCESS FOR SECURING THE UNINTENDED TRAINS OUT THERE THAT MEANS THE LOCOMOTIVE CAP HAS TO BE LOCKED THROUGH REVERSAL ARE BEING REMOVED. IT ALSO REQUIRES A JOB BRIEFING WITH ANOTHER QUALIFIED INDIVIDUAL TO ENSURE THOSE PROCESSES ARE BEING FOLLOWED THAT THOSE NEW PROCESSES ARE BEING FOLLOWED FOR THE SECURITY MEANT OF THE TRAINS BEING LEFT OUT THERE. ALONG WITH THAT, BASICALLY, THE RAILROADS REVIEW OF THEIR SECUREMENT PROCESSES IMPLEMENTED RULES FOR THE JOB BRIEFING PORTIONS OF EO-28, AND THIS NEXT BULLET, DEVELOP PROCEDURES. AS WE ALL KNOW, AT LAC-MEGANTIC WE HAD EMERGENCY RESPONDERS THAT RAN AWAY WITH THAT TRAIN A DEAL -- THAT DERAILED, CAUSING CATASTROPHIC EVENTS. ANYTIME EMERGENCY RESPONDERS ARE AT ONE OF THOSE SECURED TYPE OF HAZARDOUS TRAINS, THERE HAS TO BE A IN -- A RAILROAD EMPLOYEE OUT THERE TO READ AND SURE THAT NOTHING HAS BEEN TAMPERED WITH -- TO MAKE SURE THAT NOTHING HAS BEEN TEMPERED WITH AS IT ROLLS AWAY. AND OF COURSE, MAKING SURE YOU TRAIN YOUR PEOPLE. THAT GETS INTO THE NEXT ASPECT, OPERATIONAL CONSIDERATIONS FOR THESE TYPES OF HAZARDOUS TYPE TRAINS THAT WE ARE DISCUSSING TODAY. LOOKING AT IMPROVEMENTS FOR THAT. AND THE TOPIC OF ELECTRONICALLY PNEUMATIC CONTROLLED BRAKES COMES UP. I'M NOT SURE IF YOU ALL UNDERSTAND HOW THE CURRENT AIRBRAKE SYSTEMS ON FREIGHT TRAINS OFFER EIGHT TODAY. IT IS BASICALLY -- ON FREIGHT TRAINS TODAY. IT IS BASICALLY 19TH CENTURY TECHNOLOGY. YOU HAVE AN ERROR PIPE ON THE LOCOMOTIVE AND YOU HAVE A BRAKE PIPE THAT RUNS THE ENTIRE LENGTH OF THE TRAIN AND FOR EACH CAR THERE IS A RESERVOIR ON THE CAR. FOR THE LOCOMOTIVE TO APPLY THE BRAKES, BASICALLY HE REDUCES THE BREAK PIPE PRESSURE AND THAT REDUCTION IN THE BRAKE PIPE, THAT IS BASICALLY A SIGNAL TO THE VALVE ON EACH CAR TO APPLY THE BRAKES. THAT SIGNAL, THAT REDUCTION OF THE BRAKE PIPE IS VERY SLOW. BASICALLY, A REGULAR REDUCTION IS GOING ABOUT 500 FEET PER SECOND. IF YOU GO TO AN EMERGENCY, I HAVE TO GET ALL MY BREAKS RIGHT NOW, IT IS AN EMERGENCY SITUATION. THE ENGINEER PUTS THE TRAIN INTO AN EMERGENCY, THAT IS TRAVELING ABOUT 1000 FEET PER SECOND. IT IS A BIT QUICKER, BUT PAINFULLY SLOW. WITH THAT IN MIND, ECP BRAKES, ONE OF THE BIGGEST ADVANTAGES OF THAT IS IT IS NOT GOING AT 1000 FEET PER SECOND. IT IS AN ELECTRIC SIGNAL GOING TO EACH CAR TO APPLY THOSE BRAKES. IT IS A MUCH QUICKER SIGNAL BACK THERE. ALSO, IT IS A SIGNAL THAT ALL OF THE BRAKES ARE BASICALLY SETTING AT THE SAME TIME. WITH THIS 19TH CENTURY TECHNOLOGY, CLEARLY, IF I AM APPLYING THE AIR FROM THE HEAD TO THE REAR OF THE PLOT -- OF THE TRAIN AND IT IS TRAVELING AT 1000 FEET PER SECOND, THE HEAD END OF MY TRAIN IS SETTING UP FIRST AND NOW AT 1000 FEET PER SECOND, A SEVEN CARD TRAIN, IT TAKES SEVEN EXTRA SECONDS TO APPLY ALL OF THE BRAKES. FOR THE PURPOSE -- THIS IS THE ADVANTAGE OF ECP BRAKES. WE WOULD WANT ECP BRAKES ON TRAINS LIKE THIS TO REDUCE THE IMPACT OF THE DERAILMENT, OR REDUCE THE DAMAGES CAUSED BY DERAILMENT IN THESE TYPES OF TRAINS AS YOU GET A MUCH QUICKER TYPE OF APPLICATION AND YOU REDUCE THE ENERGY INVOLVED WITH THE MANAGEMENT OF THAT TRAIN. THAT IS THE ADVANTAGE OF ECP. DISTRIBUTIVE POWER, I'M A BIG FAN OF DISTURBED IT POWER. IT HAS -- DISTRIBUTED POWER. IT HAS BEEN OUT FOR A LONG TIME. I THINK THE SOUTHERN PACIFIC CAME OUT WITH IT IN THE EARLY 1990'S, I THINK 1995, 1996. THEY STARTED USING IT ON THEIR COAL OPERATIONS. IT WAS BASICALLY DEVELOPED FOR THEIR COAL TRAIN. YOU PB --UPB PICKED UP ON IT AND IT IS USED WIDELY THROUGHOUT DISTRIBUTED POWER. WITH THESE OIL TRAINED, AGAIN, LIKE ECP, BECAUSE NOW YOU'RE BRAKES ARE BEING SET NOT ONLY FROM THE HEAD END, BUT IF YOU HAVE A DISTRIBUTIVE UNIT NOT ONLY AT THE REAR OF THE TRAIN, THEN IT IS BEING DISTURBED IT FROM THE REAR OF THE TRAIN. YOU CUT THAT TIME IN HALF BECAUSE THE BRAKES ARE BEING APPLIED ALSO FROM THE REAR. SO INSTEAD OF SEVEN SECOND, IT IS NOW ABOUT 3.5 SECONDS, THE DISTRIBUTIVE POWER THE ENGINEER HAS TO PUT THAT TRAIN INTO AN EMERGENCY. THAT IS WHAT WE ARE LOOKING AT DOING NOW FOR THESE TYPES OF HAZARDOUS TRAINS. THIS GRAPH DEALS WITH KINETIC ENERGY FOR A DERAILMENT. IT WAS CREATED AS A MODEL TO LOOK AT HOW QUICKLY WILL EACH ONE OF THESE BRAKING SYSTEMS WILL REDUCE THE ENERGY -- THE KINETIC ENERGY IN EACH ONE OF THESE TRAINS. A 6000 FOOT TRAIN -- IF YOU LOOK UP THERE, YOU HAVE THE CONVENTIONAL TRAIN IN PURPLE. AND THEN YOU HAVE DP-2 WITH THE DISTRIBUTED POWER AT THE HEAD AM A AND THEN THE DP-3 WITH DISTRIBUTE IT POWER ON THE REAR. I AM THE ENGINEER AND I'M GOING ALONG AND I EXPERIENCE A DERAILMENT. I PUT THE TRAIN INTO EMERGENCY. HOW QUICKLY WILL EACH ONE OF THESE BRAKING PIPE SYSTEMS DISSIPATE OR REDUCE THAT KINETIC ENERGY ECHO -- THAT KINETIC ENERGY? AND AS YOU CAN SEE BEHIND THE SEVENTH CAR AS A LOCOMOTIVE, THEY STAY FAIRLY CONSTANT. IF YOU UNDERSTAND HOW A BRAKING SYSTEM WORKS ON A TRAIN, IT'S NOT LIKE A CAR. YOU DO NOT STEP ON A PEDAL AND INSTANTLY HAVE BRAKING. THE VALVE OPENS, AND AIRFLOWS FROM THE RESERVOIRS INTO A BRAKE CYLINDER. A PISTON EXTENDS AND APPLIES YOUR BRAKES TO A STEEL WILL -- WHEEL AND IT BECOMES A LITTLE BIT OF TIME TO BECOME EFFICIENT. THERE IS A LAG OF ABOUT 10 SECONDS IF YOU DID THE MATH. THAT IS WHY YOU SEE THAT LAGGED THERE UNTIL ABOUT THE SEVEN CAR. AND THEN YOU CAN SEE FROM THE SEVEN CAR ON, THE ECP IS MORE EFFECTIVE OF -- WITH DISTRICTING THAT ENERGY -- WITH DISTRIBUTING THAT ENERGY MORE EFFECTIVELY. ANYONE THAT HAS BEEN TO A TRAIN DERAILMENT, YOU SEE THIS HUGE PILE OF CARS, RIGHT? THEY STACK UP ON EACH OTHER. AS THOSE CARS COME IN, YOU WOULD HAVE LESS OF A PILE, A STACKED UP PILE OF CARS THERE WITH AN ECP, AS OPPOSED TO A CONVENTIONAL TRAIN. THAT IS WHAT THIS GRAPH IS DESIGNED TO SHOW YOU. WITH MORE EFFICIENT BRAKING, YOU WOULD HAVE LESS DAMAGE FROM THESE TYPES OF TRAINS IF YOU WENT INTO EMERGENCY UNDER THOSE TYPES OF CIRCUMSTANCES. THIS IS AT 40 MILES PER HOUR. THIS IS THE SAME GRAPH AT 60 MILES PER HOUR. AND IF YOU DID THE POPULATIONS ALSO, BASICALLY IT IS CONSTANT UP TO ABOUT THE 10TH CAR. AND THEN YOU CAN SEE THE ECP IS MUCH BETTER THAN THE OTHERS. OK, TRAIN SPEED, REDUCED TRAIN SPEED. YOU CAN SEE THIS IN THE SAME TYPE OF GRAPH. YOU CAN SEE THE MODELING GOING WITH THE CARS IN YOUR TRAIN, GOING FROM THE FIFTH BACK TO THE 50TH CAR. AND YOU CAN SEE YOUR KINETIC ENERGY IS MUCH LESS AT 40 MILES PER HOUR AS OPPOSED TO 50 MILES PER HOUR. AND EVEN AS YOU ARE SLOWING, THE DIFFERENCE BETWEEN THE KINETIC ENERGY BETWEEN 40 MILES PER HOUR AND 50 ACTUALLY GET GREATER. THE KINETIC ENERGY IS GREATLY RELEASED ON THAT 40 MILE PER HOUR TRAIN. AND ANYBODY WHO KNOWS THE EQUATION FOR KINETIC ENERGY, VELOCITY SQUARED IS THE KEY. IF YOU HAVE PROBLEMS CONTROLLING YOUR TRAIN AT A HIGHER SPEED, YOU JUST BRING THAT SPEED DOWN 10 MILES PER HOUR AND THE BRAKES ARE MORE EFFECTIVE BECAUSE YOU ARE CONTROLLING A LOT LESS KINETIC ENERGY. BECAUSE IT IS EXPONENTIAL WITH VELOCITY. WHAT DOES ALL THIS MEAN? A CHANGE IN OPERATIONS WITH THESE HAZARDOUS TRAINS. TRAINS THAT ARE MORE AND RISK CREATE MORE PROBLEMS. ESTABLISHED SPEED RESTRICTIONS ON THESE TYPES OF TRAINS. CONVENTIONAL TRAINS, A MORE REDUCED SPEED, DISTRIBUTED POWER , LESS RESTRICTED WITH ECP, AND THEN POSSIBLY NO RESTRICTIONS. THAT IS HOW YOU ARE LOOKING AT A DIFFERENT REDUCTION WITH THAT KINETIC ENERGY OF THE DIFFERENT TYPES. AND ALSO SHOWING THE DIFFERENCE IN KINETIC ENERGY BETWEEN 50 TO 40, TO EVEN 30. THE DAMAGE CAUSED BY THE HIGHER SPEED TRAIN WILL CLEARLY BE GREATER THAN THE SLOWER SPEED TRAIN. MINIMUM CREW REQUIREMENTS. THIS WAS SOMETHING THAT WAS BROUGHT UP WITH LAC-MEGANTIC. IF YOU DON'T KNOW, THERE WAS ONE ENGINEER ON THAT TRAIN THAT RUNWAY AT LAC-MEGANTIC. HE WALKED BACK, SECURITIES TRAIN, AND LEFT IT. THE ARGUMENT WAS I SOME GROUPS THAT THIS POSSIBLY WOULD NOT HAVE HAPPENED IF HE HAD A SECOND CREW MEMBER CONDUCTOR THAT HAD ACTUALLY WALKED BACK AND SECURED THE TRAIN. MANY OF YOU KNOW OUR WORKING GROUP WAS CREATED TO TAKE A LOOK AT THAT. I DON'T THINK THERE HAS BEEN ANY CONSENSUS ON THAT YET AND WE ARE WAITING FOR AN MPR AM -- AN MPRM ON THAT. BASICALLY, WE ARE LOOKING AT THESE TYPES OF OPERATIONS ON THESE TRAINS.

>> THANK YOU, MR. CONNOR. OUR NEXT SPEAKER IS SKIP ELLIOTT.

>> THANK YOU. I WOULD LIKE TO THANK THE BOARD AND THE PANEL FOR THE OPPORTUNITY TO SPEAK TODAY. THE QUESTIONS THAT WERE OFFERED -- AS WELL AS THE QUESTIONS THAT WERE OFFERED BEFORE TODAY AS PART OF MY PRESENTATION. ONE OF OUR CORE VALUES AT CSX IS THAT SAFETY IS A WAY OF LIFE. AND WHILE THE WORDS MAYBE DIFFERENT, IT IS A BELIEF SHARED THROUGHOUT OUR INDUSTRY. WE HAVE A LONG HISTORY OF EVALUATING TRANSPORTATION AND RAIL SAFETY. IN FACT, U.S. RAILWAYS HAVE BEEN OPERATING HAZARDOUS MATERIALS FOR 150 YEARS OF ITS MOST 190 YOUR HISTORY. OUR FIRST PRIORITY IS THE SAFETY OF OUR EMPLOYEES AND ACUITIES IN WHICH WE OPERATE. THE FREIGHT RAIL INDUSTRY OVERALL, AND CSX SPECIFICALLY HAS MADE -- HAVE MADE SIGNIFICANT STRIDES IN THE INDUSTRY. THE RAILROAD EMPLOYEE INJURY RATE HAS FALLEN 85%, AND THE COLLISION RATE HAS FALLEN 82%. AND WHILE WE ARE PROUD OF THESE IMPROVEMENTS IN SAFETY, WE CONTINUE TO IMPLEMENT ADDITIONAL STEPS TO ENHANCE SAFETY AND REDUCE RISK, BECAUSE WE KNOW THAT EVEN ONE ACCIDENT IS ONE TOO MANY. TRANSPORTATION SAFETY IS A HOLISTIC SYSTEM THAT STARTS WITH AN APPROPRIATELY SAFE TANK CAR, AND RIGOROUS LOADING PROCEDURES, AND NUMEROUS OTHER THINGS DURING TRANSIT. THE VARIOUS PARTIES GO BEYOND WHAT IS REQUIRED TO MAXIMIZE THE SAFETY REQUIRED BY OUR OPERATIONS. ONE EXAMPLE IS THE RECOMMENDED OPERATING PRACTICES FOR THE TRANSPORTATION OF HAZARDOUS MATERIALS, WHICH I WILL DISCUSS IN MORE DETAIL SHORTLY. THE PRIMARY FOCUS OF THE U.S. FREIGHT RAILROADS IS TO SAFELY TRANSPORT ALL FREIGHT TO DESTINATION, REGARDLESS OF THE COMMODITY. CSX REINVEST HEAVILY IN ITS TRACK AND INFRASTRUCTURE AND IN TRAINING AND TECHNOLOGY IMPROVEMENTS TO ENSURE A SAFE, RELIABLE, AND EFFICIENT RAIL NETWORK. IN FACT, THE U.S. FREIGHT RAILROADS HAVE INVESTED $525 BILLION AKIN TO THEIR OWN FREIGHT RAIL NETWORKS SINCE 1980. -- BACK INTO THEIR OWN FREIGHT RAIL NETWORKS SINCE 1980. COMMITTEES AT THEAAR ALSO READ IT -- REGULARLY EVALUATE RISKS WITH OUR OWN MATERIAL. OTHER COMMITTEES THAT REGULARLY EVALUATING RISK AS PART OF THEIR CHARTERS INCLUDE THE AAR HAZARDOUS MATERIALS COMMITTEE AND THE AAR RISK MANAGEMENT COMMITTEE. AT CSX, WE HAVE A COMPREHENSIVE BUSINESS RICH MAN -- RISK MANAGEMENT STRUCTURE AND OUR CORPORATE RISK MANAGEMENT PROCESS LINKS CORE GROUPS WITH ACCOUNTABILITY FOR EVALUATING COMPLIANCE ON AN ONGOING BASIS. WE RECOGNIZE THE TOTAL ELIMINATION OF RISK IS NOT ALWAYS POSSIBLE. IMPORTING -- TRANSPORTING SUCH HIGH HAZARD PRODUCTS, -- CSX DOES NOT SEEK TO TRANSPORT HIGHLY HAZARDOUS PRODUCTS, BUT WE UNDERSTAND OUR COMMITMENT UNDER THE LAW. WE FOCUS ON THE SAFE AND SECURE TRANSPORTATION OF THESE COMMODITIES WHENEVER WE ARE REQUIRED TO TRANSPORT THEM. AS I MENTIONED EARLIER, THE EFFECTIVE AND SUCCESSFUL MANAGEMENT OF RISK MANAGEMENT OF HAZARDOUS TRANSPORTATION IS MULTIFACETED AND REQUIRES COORDINATION ACROSS THE SUPPLY CHAIN. FOR MANY YEARS, CSX AND FREIGHT RAILROADS HAVE WORKED WITH FEDERAL REGULATORS, AS FIRST RESPONDERS, ENERGY PRODUCERS, RAIL CAR MANUFACTURERS, CUSTOMERS, AND COMMUNITIES TO MAKE THE TRANSPORTATION OF HAZARDOUS MATERIALS EVEN SAFER. AND WE WILL WORK ACROSS THE INDUSTRY SPECTRUM TO FURTHER ENHANCE SAFETY OF TRANSPORTING HAZARDOUS MATERIALS BY RAIL. CHEMICAL SHIPPERS AND OIL PRODUCERS HAVE THE RESPONSIBILITY TO CLASSIFY THE PRODUCT PROPERLY AND SELECT THE CORRECT SHIPPING CONTAINER AND FOLLOW LOADING AND SECURING PROCEDURES. WE CONDUCT COMPREHENSIVE STRUCTURE TRACK AND RAIL CAR INSPECTIONS AND WE PROVIDE TRAINING TO ENHANCE OPERATING RULES AND ENSURE MATERIALS ARRIVE SAFELY. ALTHOUGH THERE ARE SAFETY MEASURES, INHERENT RISKS ARE THERE. THE FIRST INCLUDES ESTABLISHED OPERATING PRACTICES AND ADHERENCE TO RULES. WELL TRAINED EMPLOYEES ARE IMPORTANT. CONFERENCE OF TECHNOLOGY AND REAL-TIME SOLUTIONS ARE AS WELL. A NETWORK OF SPECIALIZED PREPAREDNESS CONTRACTORS AND STATE-OF-THE-ART TRAINING FACILITIES AS WELL. AND COORDINATED RESPONSE PREPARATION IS CRITICAL. THE U.S. RAILROAD HAS A HISTORY OF WORKING WITH FIRST RESPONDERS AND EMERGENCY RESPONDERS IN A REAL EMERGENCY. CSX HAS PROUDLY PREPARED ITS TRAINING AND OUTREACH PROGRAMS AND REMAINS DEDICATED TO EDUCATING OUR COMMUNITIES AND FIRST RESPONDERS THROUGH PROVIDING STATE-OF-THE-ART TECHNOLOGY PLANNING, SITUATIONAL AWARENESS, AND RESPONSE TOOLS. U.S. RAILROADS HAVE BEEN APPLYING MITIGATION PRACTICES TO THE TRANSPORTATION OF HAZARDOUS MATERIALS FOR MANY YEARS. THE RECOMMENDED RAILROAD OPERATING PRACTICES FOR THE TRANSPORTATION OF HAZARDOUS MATERIALS, OTHERWISE KNOWN AS OT55, HAS BEEN IN PLACE FOR 50 YEARS. THE TASK FORCE WAS ORIGINATED TO LOOK AT THE SUPPLY AND SAFETY OF HAZARDOUS MATERIALS. IT INCLUDES THOSE THAT FOCUS ON REDUCTION OF NON-ACCESS TO HAZARDOUS MATERIALS, SECURE -- SECURING TANK CARS PROPERLY, AND PREVENTION OF OVERFILLING AS WELL AS THE USE OF PROPER SHIPPING DOCUMENTS. WE APPLY SHIPPING PRACTICES FOR MANY YEARS. INCLUDED ARE THE HAZMAT KEY TRAINS AND Q ROUTES, WITH EACH PROVIDING SPECIFIC OPERATING AND SAFETY HAZARDS FOR SECURING LARGE QUANTITIES OF HAZARDOUS MATERIALS. OT-55 ALSO SET UP A SAFETY PROCEDURES FOR HANDLING AND STORAGE OF HAZARDOUS MATERIALS, AS WELL AS COMMUNITY AWARENESS AND EMERGENCY RESPONSE PROGRAMS, AND CARRIER RESPONSIBILITIES AFTER A HAZMAT RAIL CAR IS INVOLVED IN A DERAILMENT. OT-55 ALSO HAS PROVISIONS FOR MONITORING AND NOTIFYING CUSTOMERS OF HAZARDOUS MATERIALS , AND PROCEDURES FOR NUCLEAR FUEL AND HIGH-LEVEL RADIOACTIVE MATERIALS MOVING THROUGH. IN MAY, 2013, THE FREIGHT RAIL INDUSTRY VOLUNTARILY ENHANCED ITS LONG-STANDING RECOMMENDED PRACTICES FOR THE TRANSPORTATION OF HAZARDOUS MATERIALS IN OT--55N AM A FOR THE MOVING OF MATERIALS SUCH AS CRUDE OIL AND ETHANOL. THERE IS A 50 MILE PER HOUR MAXIMUM SPEED RESTRICTION AND REQUIREMENTS FOR INSPECTING ANY RAIL WILL CAR -- RAILCAR WITH A SIDE TRIGGERING DETECTOR. THE RECENT AGREEMENT BETWEEN THE RAILROAD INDUSTRY AND THE U.S. DOT ALSO FURTHER REDUCE THE MAXIMUM SPEED OF CREWED BY RAIL UNIT TRAINS TO 40 MILES PER HOUR IN HIGH THREAT URBAN AREAS. THE RAIL CORRIDOR RISK MANAGEMENT SYSTEM IS USED TO COMPLY WITH THE ANNUAL REQUIREMENT TO PERFORM A COMPREHENSIVE RISK ANALYSIS FOR TRANSPORTING TOXIC AND HAZARDOUS MATERIALS, BOTH LOADS AND RESIDUES, CERTAIN EXPLOSIVES, AND BULK SHIPMENTS OF RADIOACTIVE MATERIALS. THIS TOOL CONSIDERS 25 FACTORS THAT ARE EQUALLY RATED FOR SAFETY AND SECURITY. AS PART OF THE AGREEMENT WITH U.S. DOT, CSX AND OTHER RAILROADS HAVE AGREED TO APPLY THE ROUTE ANALYSIS REQUIREMENTS TO CRUDE OIL AND -- CRUDE OIL ROUTES. IT WILL ENSURE THEY WILL CONTINUE TO BE TRANSPORTED OVER THE SAFEST ROUTES. WE ARE IN THE PROCESS OF PERFORMING AN ANALYSIS, WHICH WHICH -- WHICH WE MUST HAVE COMPLETED BY JULY 1. CSX HAS ACHIEVED A 99.996% SUCCESS RATE FOR TRANSPORTING HAZARDOUS MATERIALS THROUGH OUR NETWORK WITHOUT INCIDENT. BUT WE UNDERSTAND THERE IS MORE TO DO. WE WILL CONTINUE TO WORK COLLABORATIVELY WITH OUR CONTINUE -- COMMUNITY PARTNERS, STATE AND LOCAL OFFICIALS, AS WELL AS OUR PEERS, TO CONTINUE TO MAKE THE TRANSPORT OF HAZARDOUS MATERIALS EVEN SAFER. WE WILL CONTINUE TO WORK TO ENSURE FURTHER IMPROVEMENTS TO TRANSPORTATION SAFETY. THIS CONCLUDES MY COMMENTS. THANK YOU.

>> THANK YOU, MR. ELLIOTT. OUR NEXT PRESENTER FOR THE PANEL IS MR. LEE JOHNSON OF THE AMERICAN PETROLEUM INSTITUTE.

>> GOOD AFTERNOON. THANKS, ONCE AGAIN, TO THE BOARD AND THE PANEL FOR YOUR HELP IN THE MEETING TODAY. API REPRESENTS A LARGE AND DIVERSE SPECTRUM OF OIL AND GAS INTERESTS, A LARGE MAJORITY OF OIL TANK CARS USED IN THE TRANSPORTATION OF CRUDE OIL ARE OWNED BY THE INDUSTRY. AS SUCH, API HAS A MAJOR ROLE IN THE DESIGN AND USE OF TANK CARS. THE OIL INDUSTRY ALSO HAS A MANIACAL FOCUS ON SAFETY. SAFETY IS A CORE VALUE AND HIGHEST PRIORITY THAT WE SHARE WITH THIS BOARD AM A U.S. DOT, THE RAILROADS THAT TRANSPORT OUR PRODUCTS TO MARKET, AND THOSE WHO SUPPLY THE CARS TO US. ACCORDING TO THE AAR, AND YOU HAVE HEARD IT SEVERAL TIMES TODAY, THERE WERE ABOUT 550 THOUSAND LOADS OF CRUDE OIL SHIPPED IN NORTH AMERICA IN 2013 AND 99.99% ARRIVED WITHOUT INCIDENT. THAT SAID, THERE HAS BEEN A GREAT DEAL OF FOCUS ON THE ETHANOL AND CREWED INCIDENTS, AND THE FOCUS HAS BEEN PLACED VERY MUCH ON THE TANK CARS. WE LIKE THE COMMENT THAT ADMINISTRATOR QUARTERMAN MADE IN FRONT OF A HOUSE COMMITTEE IN FEBRUARY WHEN SHE SAID, GETTING A NEW TANK CAR IS NOT A SILVER BULLET. FIRST, WE NEED TO PREVENT DERAILMENTS. AND WE CERTAINLY AGREE THAT IMPROVEMENTS IN THE TANK CAR ARE IMPORTANT, BUT A MORE HOLISTIC VIEW OF PREVENTION AS A FIRST GOAL TO ILLUMINATE THE INCIDENT, MITIGATION AS A SECOND GOAL TO REDUCE THE RISK WHEN AN INCIDENT OCCURS, AND THE THIRD GOAL OF RESPONSE AND TRAINING RESPONDERS AND PROTECTING THE PUBLIC AND THEMSELVES IN THE EVENT OF AN INCIDENT ARE IMPORTANT. GUIDING FACTORS IN THIS, WE BELIEVE, ARE THE COUNTERMEASURES IMPLEMENTED MUST BE SCIENCE AND DATABASE, YIELDING MEASURABLE IMPROVEMENTS TO SAFETY. ALSO, STEPS SHOULD BE TAKEN TO AVOID THE UNINTENDED CONSEQUENCES OF SHIPPING RISKS FROM ONE AREA TO ANOTHER, INSTEAD OF MITIGATING THEM. IN THIS REGARD, API HAS IMPLEMENTED AN INTEGRATED A RISK ASSESSMENT PROCESS AS PART OF ITS HOLISTIC VIEW AS A TOOL TO LOOK AT THE ENTIRE SUPPLY CHAIN, AS OPPOSED TO JUST THE TANK CARS. THIS IS SOMETHING THAT IS DONE REGULARLY IN THE OIL BUSINESS, AND JUST AS AN EXAMPLE, IF WE WERE GOING TO DO A NEW FIELD OF OFFSHORE DRILLING, WE WOULD LOOK NOT ONLY AT THE PLAN OF HOW WE WOULD DO IT, BUT ALL OF THE RISKS INVOLVED. GETTING THE PERSONNEL TO AND FROM THE OIL RIG, BY AIR, BY WATER, RESUPPLY, INCIDENTS, SAFETY -- YOU LOOK AT THE ENTIRE SUPPLY CHAIN. AND WE ARE PROPOSING TO DO THE ENTIRE SAME THING FOR CREWED BY RAIL. WE ARE IMPLEMENTING THIS WITH A THIRD-PARTY EXPERT CONSULTING FIRM THAT WILL LEAD THE EFFORT. WE WILL HAVE API MEMBERS VERY ACTIVELY INVOLVED IN THIS, AND WE HAVE INVITED THE AAR, RSI, AND OTHER GROUPS TO PARTICIPATE IF THEY WOULD LIKE. THE FEELING BEING, THE MORE INFORMATION WE CAN GET FROM MORE ELEMENTS IN THE SUPPLY SOURCE -- THE SUPPLY STREAM, THE MORE SUCCESSFUL THE INTEGRATED RISK ASSESSMENT WILL BE. THIS IS VERY HARD TO SEE. THIS IS THE SCHEMATIC THAT DEPICTS THE ENTIRE SUPPLY CHAIN FROM THE WELL HEAD TO THE POINT OF SALE GAS STATION. -- TO THE POINT OF SALE, BASICALLY A GAS STATION. WE FEEL WE ARE UNIQUELY QUALIFIED TO PULL TOGETHER A GROUP TO DO THIS INTEGRATED RISK ASSESSMENT. WE WOULD ALSO MENTION THAT OUR FOCUS IS GOING TO BE ON THE LEFT HALF OF THAT, LOOKING FROM THE WELLHEAD, THE HEATER TREATERS, THE TANKS AT THE WELL SITE, TO THE TRUCK THAT GOES TO THE PIPELINE, TO THE TERMINAL DIRECT TO THE RAILCAR, OR TO A TERMINAL TO THE RAILCAR. BASICALLY, EVERYTHING THAT OCCURS FROM THE GATHERING OF THE OIL UNTIL THE TANKER -- TANK CAR IS UNLOADED AT ITS DESTINATION. THERE WERE ALSO QUESTIONS ABOUT CRUDE OIL TESTING, AND THERE IS A GOOD DEAL OF SAMPLING AND TESTING GOING ON WITHIN THE MARKET PLACE TODAY. SINCE BEGAN ITS CLASSIFICATION IN AUGUST, 2013, TO SAMPLE OIL PRODUCED IN VARIOUS U.S. AREAS. NOT ONLY WHERE THERE SEEMS TO BE A LOT OF FOCUS, BUT OTHERS. AND API LOOKS FORWARD TO REVIEWING THE RESULTS OF THAT TESTING. ALSO, INDIVIDUAL API MEMBERS HAVE INSTITUTED RIGOROUS CRUDE OIL SAMPLING AND TESTING REGIMEN AND ARE SHARING THE RESULTS ROUTINELY WITH PHMSA AND WITH API. THEY ARE STRONGLY ENCOURAGING ALL OF THEIR MEMBERS WHO DO SHIP CREWED BY RAIL TO SHARE THEIR INFORMATION WITH PHMSA AND THE ASSOCIATION. THE THIRD MAJOR, AND THIS IS A FAIRLY NEW INITIATIVE, THE NORTH PETROLEUM COUNCIL HAS CONTRACTED WITH TURNER MASON TO USE RAIL SITES AND TERMINALS IN NORTH DAKOTA. THIS IS A LARGE NUMBER OF WELLS AND SITES, AND THEY WILL SHARE THEIR DATA WITH PHMSA AND THE API CLASSIFICATION STANDARDS WORKING GROUP, WHICH I WILL TALK ABOUT NEXT. WHAT API SPECIFICALLY IS DOING, IS LEADING A CRUDE OIL CLASSIFICATION STANDARD DEVELOPMENT WORKING GROUP. THE OBJECTIVE IS TO CREATE A TECHNICAL STANDARD THAT PROVIDES GUIDANCE ON THE CHARACTERIZATION, CLASSIFICATION, AND LOADING OF CRUDE OIL INTO TANK CARS, AS WELL AS THE UNLOADING OF AT MARINE PIPELINE AND TRANSIT -- TRANSIT TERMINALS. ONCE AGAIN, API IS WELL-SUITED FOR THIS. API MAINTAINED OVER 600 STANDARDS AND IS CERTIFIED BY THE AMERICAN NATIONAL STANDARD INSTITUTE, ANSI. THE PROCESS WE ARE GOING THROUGH IS TRANSPARENT AND IS OPEN TO NON-API MEMBERS. THE ONLY REQUIREMENT IS THAT ALL MEMBERS MUST HAVE A TECHNICAL CONTRIBUTION TO MAKE. IT IS NOT A ROOMFUL OF LAWYERS. IT IS A ROOMFUL OF TECHNICAL EXPERTS, WHO ARE TRYING TO ADDRESS THE TOPIC AT HAND. THIS IS TYPICALLY A TWO-YEAR PROCESS AT API. DUE TO THE URGENCY THAT BRINGS US ALL HERE, WE ARE ATTEMPTING TO COMPLETE THIS IN SIX MONTHS. AND I AM A COCHAIR OF THAT GROUP TAKING CARE OF THE CLASSIFICATION PART. IT IS A SIGNIFICANT COMMITMENT OF TIME. WE MEET FOR TWO DAYS EVERY TWO WEEKS. WE HAVE A LOT OF SUBGROUPS WORKING BETWEEN THE MEETINGS. WE ARE IN THE PROCESS OF DRAFTING. IT HAS BEEN A HUGE COMMITMENT OF TIME FOR A LOT OF PLAYERS. TYPICALLY, THESE TYPES OF STANDARDS ARE DEVELOPED WITH A WORKING GROUP OF ABOUT TELL -- 12 PEOPLE, SO IT IS MANAGEABLE. WE HAVE 60 PEOPLE ON THIS WORKING GROUP, AND API STAFF IS TRULY HERDING CATS AND DOING VERY WELL. A BUNCH OF PEOPLE ARE COMING TO CONSENSUS. VERY BRIEFLY, THIS IS THE STRUCTURE THAT WE HAVE. I WANT TO POINT OUT THE WORKING GROUP COMMITTEE WITHIN THE HA SHED AREA IS WORKING TO ANSI STANDARDS AND THEY ARE DIVIDED INTO TWO GROUPS WITH SOME OVERLAP. ALSO, DUE TO THE CONCERNS ABOUT CHEMISTRY OF THE OIL AND ITS PHYSICAL PROPERTIES, WE HAVE AN AD HOC GROUP THAT HAS BEEN ESTABLISHED, REFERRED TO AS THE CHEMISTRY NERDS. THEY ARE PHYSICAL CHEMISTS LOOKING AT THE PHYSICAL PROPERTIES OF THE CRUDE OIL TO GIVE US THE ANSWERS WE NEED IN THAT REGARD. WHILE THIS IS NOT THE TANK CAR PANEL, WE DO HAVE A LOT OF TANK CARS AND ABOUT 30% OF THEM ARE OWNED BY THE SHIPPERS. AND WE DO HAVE A POSITION ON THE TANK CARS. API CONTINUES TO SUPPORT THE DESIGN IMPROVEMENTS INCORPORATED INTO AAR PETITION 1577, THE CPC 12 ENHANCEMENT CAR, AND THE PRESSURE RELIEF DEVICES AND VALVE HANDLES. AS HAS BEEN MENTIONED BEFORE, THEY SPENT 18 MONTHS AFTER THE CHERRY VALLEY INCIDENT, AND IT, NEEDED INTO A CONSENSUS DESIGN OF THE 1577 CAR. THE FIRST POSITION -- PETITION RESPONSE TO ONE OF THE BOARDS QUESTIONS TO THE PANEL -- WHEN DID PEOPLE START BUYING THESE CARS? THE FIRST PETITION CARS WERE ORDERED TWO MONTHS BEFORE THE PETITION WAS FILED, AND THE FIRST PETITION CAR WAS ACTUALLY DELIVERED IN JUNE, 2011, SEVERAL MONTHS BEFORE CBC 1232 MADE IT RIG -- A REQUIREMENT FOR THE CARS TO BE ORDERED. PHMSA THEN ASKED THE INDUSTRY TO REVISIT THIS. WE LOOKED AT THE T-87.6. THE DIFFERENCE WAS, WE LOOKED AT BOTH DESIGN AND OPERATIONS. THERE WERE TWO DIFFERENT WORKING GROUPS IN THE DESIGN OF T-87.6. THE REPORT RECOMMENDED ENHANCE DETECTION TO DETECT DERAILMENTS, AND ALSO DETECTION IN THE PRESSURE RELIEF DEVICE. THE RESULTS WERE AN INDUSTRYWIDE CONSENSUS AND THEY WERE BASED ON SEVERAL SETS OF DATA. WE HEARD IN THE PRIOR PANEL THAT THERE IS A LOT OF RELIANCE NOW ON CONDITIONAL PROBABILITY OF RELEASE, CPR. THE AAR AND RSI WERE KIND ENOUGH TO HAVE A PEER REVIEW WITH US AS AN INDUSTRY ON APRIL 10. UNFORTUNATELY, THE CPR DATA THEY ARE RELYING ON IS STILL PRELIMINARY AND THE SPONSORS OF THE STUDY HAVE NOT YET REVIEWED THE FINDINGS, SO WE DID NOT GET TO SEE THE CALCULATIONS AND UNDERSTAND EXACTLY HOW THE SAMPLE OF 40,000 OR MORE INCIDENTS WERE REDUCED TO A SMALLER SAMPLE FOR THE MATHEMATICAL STUDY THAT RESULTED IN THE CPR. WE BELIEVE THAT PEER REVIEW IS NECESSARY. WE BROUGHT OUR STATISTICIANS TO THE MEETING AND WE DON'T COUNTER THEIR FINDINGS. WE JUST DON'T UNDERSTAND THEIR FINDINGS AND THE OTHER THING I WOULD MENTION FROM THE CONSENSUS IS IN ADDITION TO THE CPR THAT WAS PROVIDED FROM SHARMA AND E.R.A., THERE WAS INFORMATION FROM BULK PACK MODELING. I BELIEVE DIFFERENT PEOPLE IN THE TASK FORCE RELIED ON DIFFERENT DATA SETS TO COME TO THE CONCLUSION, AND IT WAS THAT THE TWO VERSIONS BEFORE YOU, THE JACKETED AND NON-JACKETED, WERE THE STATE OF THE ART AND THEY WERE EQUIVALENT AND I'M REALLY RUNNING OVER, SO THIS IS MY LAST SLIDE. I WILL CLOSE QUICKLY BY SAYING BOTH THE PETITION COMPLIANT AND LEGACY CARS ARE NEEDED AT THIS TIME TO MOVE THE INCREASING PRODUCTION. THERE ARE NOT ENOUGH OF THE PETITION CARS AVAILABLE. API SUPPORT A VIGOROUS AND DRIVEN DATA FOR THE LEGACY FLEET TO DETERMINE WHAT SHOULD BE MANDATED. API MEMBERS NEED FOR THE ABILITY TO MOVE THEIR TANK CARS FROM ONE SERVICE TO ANOTHER. WE HAVE MULTIPLE PRODUCTS WHEN MARKETS CHANGE AND API CONTINUES TO SUPPORT APPROVAL FOR THE PETITION CARS FOR CLASS THREE PACKING GROUP ONE AND TWO CRUDE OIL AND ETHANOL. THANK YOU.

>> WE ARE RUNNING A LITTLE BIT KIND SCHEDULE. WE'RE GOING TO TAKE A BREAK. I'M NOT TRYING TO ICE THE KICKER. WE WILL GET BACK TO YOU RIGHT AFTER THE BREAK. WE WILL BE BACK RIGHT AFTER 3:05 P.M. .

>> IF EVERYONE COULD TAKE THEIR SEATS, WE ARE ABOUT TO BEGIN. WELCOME BACK. NOW WE WILL PROCEED WITH THE REST OF THE PANEL AND WE WILL START WITH MR. FOR MOLLY A. -- MR. VERMALIA.

>> THANK YOU VERY MUCH. EARLIER THIS YEAR, DOD DISCUSSED A MEASURE TO ENHANCE SAFETY MEASURES FOR CRUDE OIL. ACTIVITIES WERE ALL DIRECTED AT RISK REDUCTION. THE SUBSCRIBER RAILROADS BEGAN TO IMPLEMENT, UPON RECEIPT OF THE LETTER FROM SECRETARY FOX, AND CURRENTLY ON THE UNION PACIFIC WE ARE IMPLEMENTING EACH OF THESE THINGS OR FULLY UNDERWAY. SKIP MENTIONED A JULY 1 DATE FOR SOME OF THESE. ITEM NUMBER ONE, ROUTE ANALYSIS. IN BRIEF, THE CURRENT REGULATION REQUIRES ANALYSIS OF SAFETY AND SECURITY RISKS ON AND ALONG THE RSS HIM RAIL ROUTES. ANALYSIS INCLUDES EXAMINATION OF 27 RISK FACTORS, THINGS LIKE THE CLASSIC TRACK, THE NUMBER OF SWITCHES ON THE ROUTE, THE NUMBER OF ROAD CROSSINGS ON THE ROUTE AND THE POPULATION THE ROUTE GOES THROUGH. THE SYSTEM TOOL WE ALL USE IS CALLED RCRMS. EARLY ON, FOR THE RSSM WORK WE DECIDED WE WANTED CONSISTENT PROGRAM WITH ROADS, SO WE GOT SIMILAR RESULTS USING THE SAME INPUTS. THE RESULTS ARE NOW IMPROVED. EACH OF US ARE UNDERWAY LOOKING AT THESE FACTORS. THE RESULTS SHOWED AN OPPORTUNITY TO ADJUST OUR ROOTS, AND WE DID JUST THAT. WE ENDED UP SELECTING ROUTES FOR LOWER RISK CHARACTERISTICS. THE DOT AUDIT RESULTS, AND WE HAVE UNDERGONE TO INTENSIVE AUDITS, ARE BASICALLY POSITIVE. I WOULD SAY THE SUGGESTIONS WERE DIRECTED AT IMPROVING THE DOCUMENTATION OF THE PROCESS, WHICH WE HAVE FOLLOWED TO THIS DAY, AND EXPLAINING THE DECISIONS WE MADE AND RECORDING THAT FOR POSTERITY. WE EXPECT WE WILL FOLLOW THE SAME PATH AS WE RUN THE CRUDE OIL ROUTES. WE HAVE COMPLETED THE WORK FOR THE UNIT TRAINS AND ARE NOW WORKING ON THE MANIFEST MOVES OF CRUDE OIL. THESE EIGHT ELEMENTS ON THE PREVIOUS SLIDE ARE JUST ONLY PART OF THE RECENT RISK REDUCTION ACTIVITIES. THE APPROACH INCLUDES THESE ELEMENTS, AND IT STARTS WITH ORGANIZATION. THE INDUSTRY IS ORGANIZED WITH RAILROADS, SHIPPERS, SUPPLIERS WORKING TOGETHER. THERE ARE SEVERAL OTHER SUBCOMMITTEES INVOLVED. WE HAVE ENGAGED SUPPLY CHAIN, SO IT IS NOT JUST MEETINGS AND DOCKETS AND NUMBERS, BUT WE ACTUALLY GET OUT ON THE GROUND AS A GROUP. WE HAVE PEOPLE OUT DOING TANK CAR INSPECTIONS TO WORK TOGETHER, BUILD RELATIONSHIPS, AND FOCUS ON THE ISSUES. WE HAVE REGULATORS, CONTRACTORS AND LOCAL COMMUNITY RESPONDERS INVOLVED IN THOSE TANK CAR INSPECTIONS. THIRD IS COMMUNITY OUTREACH. ON THE UNION PACIFIC OVER THE PAST FOUR YEARS WE HAVE TRAINED AROUND 17,000 INDIVIDUAL TYPE OF EMERGENCY RESPONDERS WITH HAZMAT TRAINING IN GENERAL. THE PICTURES ON THE RIGHT, THE UPPER ONE, THOUGH IT IS A LITTLE DARK, THIS IS A PICTURE OF A GROUP OF FIREMEN IN EAST TEXAS ATTENDING ONE OF OUR TRAININGS. THEY ARE HUDDLED OVER A TRAINING TRAILER. IT HAS EXAMPLES OF THE DIFFERENT VALVES AND FITTINGS OF A TANK CAR. THE PICTURE JUST BELOW THAT IS ONE OF TWO TANK CARS. SIMILARLY, WE LET THEM GO UP ON THE CARS AND SEE WHAT IS INVOLVED. THEY ARE TRAINED ON THE PROPER RESPONSE. ALSO, THE INTERIOR OF THIS CAR AND THE BROTHER CAR ARE HOLLOWED OUT. IT IS A CLASSROOM TO DISPLAY THE VALVES AND FITTINGS WE USE FOR TRAINING. ADDITIONALLY ON THE LIST OF THE RISK MITIGATION USED FOR INFRASTRUCTURE INVESTMENT, WE HAVE ALREADY TALKED ABOUT IT, IN ADDITION TO THE NUMBERS YOU HEARD ABOUT THE AMOUNT OF MONEY GOING BACK INTO REPLACING RAIL, BRIDGES AND STRUCTURES, THE FOCUS HERE IS ON BRIDGE INSPECTION TECHNOLOGY. WE HAVE CARS THAT LOOK AT THE RAIL AS IT MOVES OVER TRACK SPEED, TRYING TO DOCUMENT AND DETECT EFFECTS IN THE RAIL. OTHER RAILROADS ALSO USE THIS. VTI'S LOOK AT TRACK INPUTS. WE ARE TRYING TO DETECT ALIGNMENT AND OTHER PROBLEMS IN THE RAIL BEFORE THEY GROW. WE DOCUMENT THIS DATA AND TRACK IT. WE ALSO HAVE A SYSTEM OF WAYSIDE DEFECT DETECTORS. THAT'S OVER 62 HUNDRED UNIQUE DETECTORS ACROSS THE SYSTEM AND ABOUT 1600 OF THOSE ARE HOTBOX DETECTORS THAT LOOK FOR TEMPERATURE VARIATIONS IN THE JOURNALS OF THE CARS AS THEY GO BY. OPERATIONS MANAGEMENT, YOU HEARD EARLIER THE DETAILS WE HAVE ALL SUBSCRIBE TO ABOUT EQUIPMENT SECUREMENT. HER PAIRED NESSON RESPONSE STARTS WITH ORGANIZATION. -- PREPAREDNESS AND RESPONSE STARTS WITH ORGANIZATION. WE HAVE A DEDICATED TEAM, AS MOST LARGE RAILROADS DO. WE HAVE INCIDENT MANAGEMENT TRAINING. WE MESH NICELY WITH THE EMERGENCY RESPONDERS IN THE COMMUNITIES. TRACKING TOOLS INCLUDE NOT JUST WHERE THE CAR CZAR, BUT THE HISTORY WE HEARD EARLIER -- WHERE THE CARS ARE, BUT THE HISTORY WE HEARD EARLIER. ONE OF OUR 12 FIREFIGHTING TRAILERS IS ESSENTIALLY A FIRE TRUCK ON A TRAILER WITH 10,000 GALLONS OF WATER, 300 GALLONS OF A FOAM CONCENTRATE AND ALL OF THE THINGS YOU WOULD NEED TO MOVE TO AN INCIDENT. THE LOWER PICTURE IS ONE OF OUR TO TRANSFER TRUCKS. THERE ARE ALSO THREE TRANSFER TRAILERS EQUIPPED TO MOVE PRODUCTS OUT OF RAIL CARS IF NECESSARY. ENGAGEMENT IS THE KEY THING HERE WITH NOT ONLY OUR INTERNAL OPERATORS, BUT ALSO THE EMERGENCY RESPONSE AGENCIES. JUST RECENTLY, WE HAVE MADE OFFERS TO ABOUT 1400 INDIVIDUALS TO PARTICIPATE IN CRUDE RESPONSE TRAINING. EVERY SINGLE RELEASE OR NOT NON-ACTUAL RELEASE IS STUDIED FOR IMPROVEMENT OPPORTUNITIES. FINALLY, I WAS ASKED TO COMMENT ON CHANGES IN INFRASTRUCTURE DUE TO THE CRUDE OIL SYSTEM. WHILE WE HAVE NOT BUILT ANY NEW RAIL LINES DUE TO CRUDE OIL TRAFFIC, WE HAVE INVESTED IN TRAPS AND TERMINALS, MAINLY FOR INTERCHANGE WITH OTHER ROADS, ADDITIONAL SIGHTINGS TO REDUCE CONGESTION AND SIGNAL IMPROVEMENTS TO IMPROVE THE OVERALL FLUIDITY IN THOSE ROUTES, SO IT IS NOT ALL THAT DIFFERENT FROM OTHER TRAFFIC IN DIFFERENT PARTS OF THE RAILROAD THAT WE EXAMINED TO IMPROVE THE INFRASTRUCTURE AND KEEP THE PRODUCT MOVING. THANK YOU. THAT IS MY COMMENTS.

>> THANK YOU. OUR NEXT SPEAKER PANEL INCLUDES DR. CHRISTOPHER BARKIN FROM THE UNIVERSITY OF ILLINOIS. -- INCLUDES DR. CHRISSTOPHER BARKAN FROM THE UNIVERSITY OF ILLINOIS.

>> THANK YOU. I JUST WANT TO SAY FROM THE OUTSET, I HAVE SPENT MY ENTIRE 26 YEAR PROFESSIONAL CAREER DEVOTED TO RESEARCH ON HOW TO BEST IMPROVE RARE AND HAZARDOUS MATERIALS AND TRANSPORTATION SAFETY. IN THAT CONTEXT, I CERTAINLY APPRECIATE THE ROLE OF THE NTSB AND IT IS AN HONOR FOR ME TO BE INVITED TO PARTICIPATE IN THIS FORUM. I WANT TO THANK THE BOARD FOR THE OPPORTUNITY. WHAT I AM GOING TO BE TALKING ABOUT TODAY IS CERTAINLY NOT JUST MY OWN WORK. I HAVE TWO EXCELLENT COLLEAGUES WITH WHOM I AM COLLABORATING, ALONG WITH OUR STUDENTS. FOR YEARS WE HAVE BEEN DEVELOPING A VISION WE HAVE FOR A COMPREHENSIVE, INNOVATIVE RISK ANALYSIS AND RISK MANAGEMENT APPROACH TO UNDERSTANDING HAZARDOUS MATERIALS AND TRANSPORTATION SAFETY BY RAIL. DOING THAT REQUIRES UNDERSTANDING ALL OF THE SUBS AS WELL. WE ARE VERY FORTUNATE TO HAVE A NUMBER OF ORGANIZATIONS AND INDIVIDUALS IN BOTH THE PUBLIC AND PRIVATE SECTOR WHO SHARE THIS VISION WITH US. I TAKE IT AS A GIVEN THAT WE ALL SHARE THE CONVICTION THAT RISK REDUCTION IS AN IMPORTANT GOAL. IT IS ESSENTIAL TO INVEST OUR SAFETY RESOURCES AS WISELY AS POSSIBLE. IN THE CONTEXT OF IMPROVING HAZARDOUS MATERIALS, THIS MEANS IDENTIFYING CHALLENGES. I THINK THE CONSTRAINTS TO ACHIEVE IN THIS -- ACHIEVING THIS ARE KNOWLEDGE-BASED -- MEANING WE NEED TO DEVELOP ANALYTICAL TOOLS AND DATA, AND UNDERSTANDING THE PHYSICAL AND RELATIONAL UNCERTAINTIES ASSOCIATED WITH ANY SPECIFIC ELEMENT OF RAIL SAFETY. WE ALSO HAVE INSTITUTIONAL GOALS , OPERATIONAL PRACTICALITIES, LITIGATION CONCERNS, AND THE ABILITY TO APPLY KNOWLEDGE. SO BASICALLY, WE NEED TO UNDERSTAND WHAT NEEDS TO BE DONE AND HOW TO DO IT MORE EFFECTIVELY. IN THE CONTEXT OF RAIL TRANSPORTATION AND HAZARDOUS MATERIALS, THERE ARE FOUR BROAD AREAS WE CAN BE CONCERNED WITH. INFRASTRUCTURE DESIGN AND CONDITION, OPERATION PRACTICES, AND HOW WE ROUTE TRAFFIC. ALL OF THESE HAVE BEEN TOUCHED UPON IN PRIOR SPEAKERS PRESENTATIONS. THE POINT IS THAT MODIFICATIONS TO ANY OF THESE, EITHER ALONE OR IN COMBINATION, MAY OFFER THE BEST SAFETY INVESTMENT IN THIS PARTICULAR CONTEXT. AGAIN, THE CHALLENGE IS TO UNDERSTAND WHEN AND HOW THAT APPLIES. SO, LET'S TAKE A CLOSER LOOK AT THE EVENTS LEADING TO WHERE HAZARDOUS MATERIALS RELEASE. WE START WITH AN ACCIDENT, WHICH MAY BE CAUSED BY A DEFECT IN EQUIPMENT OR SOME OTHER ERROR. THERE ARE A VARIETY OF INFLUENCING FACTORS, WHETHER IT IS TRACK QUALITY, METHOD OF OPERATION OR VARIOUS OTHER FACTORS. WE ARE ALSO CONCERNED WITH HOW MANY CARS ARE DERAILED, THE ENERGY OF THE ACCIDENT AS WELL AS THE LIKELIHOOD IT WILL INVOLVE A HAZARDOUS MATERIAL CAR. THAT IN TURN IS AFFECTED BY HOW MANY HAZARDOUS MATERIALS CARS ARE ACTUALLY DERAILED. LASTLY, WHAT HAS OCCURRED HAS BEEN A DISCUSSION OF THE FIRST PANEL, WHICH IS DOES THE CAR RELEASE HAZARDOUS CONTENT? NOW, TO STATE THIS IN A MORE FORMAL CONTEXT, WE HAVE THIS SIMPLE RISK MODEL WHERE RISK IS A PRODUCT OF THE CARD ROOM AND RATE, THE NUMBER OF CAR MILES IT TRAVELS, THE EXPOSURE TO POTENTIAL FOR AN ACCIDENT, CONDITIONAL PROBABILITY OF RELEASE OF A DERAILED CAR GIVEN ITS INVOLVEMENT IN AN ACCIDENT, AND THE CONSEQUENCES OF THAT RELEASE, WHETHER THERE ARE CASUALTIES, PROPERTY DAMAGE, OR HARM TO THE ENVIRONMENT. IN THE CONTEXT OF TRYING TO REDUCE THIS RISK, WE CAN ORGANIZE OUR THINKING A LITTLE BIT USING THIS CHART. IF WE WANT TO REDUCE RISK, WE CAN EITHER REDUCE THE RELEASE PROBABILITY OR THE RELEASE CONSEQUENCE. MOST OF OUR DISCUSSION TODAY WILL BE ON THE LEFT-HAND SIDE, AND THAT IS WHAT I WILL BE TALKING ABOUT. IN THE CONTEXT OF REDUCING RELEASE PROBABILITY, WE CAN EITHER REDUCE THE LIKELIHOOD OF THE DERAILMENT OR WE CAN CASUALLY RELEASE POSSIBILITY OF THE TANK CAR IS INVOLVED IN A DERAILMENT. -- HAL KILLY RELEASE POSSIBILITY IF THE TANK CAR IS INVOLVED -- CALCULATE RELEASE POSSIBILITY IF THE TANK CAR IS INVOLVED IN AN ACCIDENT. WHAT I WOULD LIKE TO ASK YOU TO DO IS LOOK AT THESE TWO AXES. WE HAVE CORR IS ON TILL -- RISK ON THE VERTICAL. EACH OF THESE SITUATIONS WOULD POTENTIALLY REDUCE RISK. EACH HAS AN ASSOCIATED COST AND RISK. THE ONES THAT ARE HIGH ON THIS CHART HAVE HIGH RISK. THE ONES THAT ARE HIGH ON THE RIGHT HAVE HIGH COST. WE ARE LOOKING FOR THE ONES THAT HAVE THE BEST COMBINATION OF THE GREATEST REDUCTION OF RISK AT THE LOWEST COST. THESE WOULD BE CALLED NON-DOMINATED SOLUTIONS AND THEY REPRESENT WHAT IS CALLED A PRIDEAUX OPTIMAL SET. IT REPRESENTS THE BEST COMBINATION OF SOLUTIONS FOR ANY GIVEN LEVEL OF INVESTMENT. WE HAVE BEEN USING THAT AS AN APPROACH TO UNDERSTAND SOME OF THE PROBLEMS FACED WITH HOPE -- WITH HOW TO REDUCE -- HOW TO IMPROVE RAIL SAFETY. HERE, THE HORIZONTAL ACCESS -- AXIS REPRESENTS THE WEIGHT OF THE TANK CAR. THE VERTICAL AXIS IS THE CONDITIONAL PROBABILITY OF RELEASE. THESE ARE OLDER PUBLISHED RESULTS. THEY ARE NOT THE LATEST RESULTS THAT TODD TALKED ABOUT THIS MORNING. BUT FOR ALL INTENTS AND PURPOSES FOR THIS DISCUSSION, IT SATISFACTORY TO USE THESE OLDER FIGURES. WHAT WE HAVE IS -- THINK OF EACH OF THESE DATA POINTS, AGAIN, AS A DESIGN COMBINATION THAT IS WHERE WE CAN ESTIMATE WHAT THE CPR IS BASED ON PHYSICAL CARE TOURISTIC STOOD DISCUSSED PREVIOUSLY TODAY. YOU CAN SEE THERE ARE LITERALLY THOUSANDS OF POSSIBLE COMBINATIONS. WE ARE INTERESTED IN THE OPTIMAL SET. WHAT I WANT TO EXPLAIN IS THAT IN FACT THIS PROCESS OF OPTIMIZING WAS USED BY THE COMMITTEE IN ITS DELIBERATIONS IN IDENTIFYING WHAT WOULD BE THE MOST EFFECTIVE SOLUTIONS. WHAT WE ARE LOOKING AT HERE ARE SEVERAL. TANK CARS ARE CURRENTLY UNDER CONSIDERATION. YOU CAN SEE THEY ALL FALL ON OR NEAR THAT OPTIMAL SET. I HAVE BEEN TALKING ABOUT TANK CARS, BUT THE OTHER PART OF THIS IS DERAILMENT AND ACCIDENT PREVENTION. THIS IS PART OF THE WHOLE STORY. THIS IS A CHART WE DEVELOPED A NUMBER OF YEARS AGO TO HELP US UNDERSTAND THE PROBLEM. THE AVERAGE NUMBER OF CARS DERAILED AND THE SEVERITY OF THE ACCIDENT. WHAT IS QUITE NOTICEABLE IN THIS CHART IS ON THE FAR RIGHT-HAND SIDE. WE DO HAVE THE CAUSE, BROKEN RAILS AND WELDS. WHAT BROKEN RAILS AND WELDS ARE IS THE ACCIDENT CAUSE THAT MOST FREQUENTLY LEADS TO HIGH CONSEQUENCE DERAILMENT. IN FACT, IF YOU LOOK OVER IN THE UPPER LEFT-HAND CORNER, THOSE ARE LESS FREQUENT CAUSES BUT WITH HIGH SEVERITY, AND THOSE ARE ALSO TYPICALLY RAIL DEFECTS. THE POINT IS THERE IS A SUGGESTION THAT WE NEED TO BE FOCUSING ON THE US -- ON THIS ASPECT OF THE PROBLEM. THIS IS ANOTHER WAY OF LOOKING AT THE SAME DATA. WHAT WE HAVE, SOMEWHAT ILLEGIBLY, ARE A LARGE NUMBER OF ACCIDENT CAUSES IN THE DATABASE. AND WHAT YOU CAN SEE -- WHAT YOU CAN'T SEE IS THAT THE FAR LEFT-HAND CORNER, THE ONE THAT IS OR TIMES HIGHER -- FOUR TIMES HIGHER, IS BROKEN RAILS AND WELDS. THIS IS THE LEADING CAUSE OF DERAILMENT IN NORTH AMERICA. JUST AS A POINT OF REFERENCE, I WANT TO POINT TO THE GREEN BAR, WHICH IS CARS DERAILED BECAUSE OF SO-CALLED PREVENTABLE ACCIDENTS. THIS KIND OF PUTS THIS IN SOME CONTEXT FOR YOU. IF WE ARE CONCERNED ABOUT BROKEN RAIL DERAILMENTS, WE WANT TO UNDERSTAND HOW WE CAN PREVENT THEM. THERE ARE TWO BASIC FAMILIES OF APPROACHES. ONE IS DEFECT PREVENTION. THE OTHER IS DEFECT DETECTION. THERE HAS BEEN A LOT OF ATTENTION ON RAIL STEALS THAT HAVE FEWER INCIPIENT FLAWS. YOU CAN ALSO DO THINGS TO REDUCE LOAD FREQUENCY AND SEVERITY. IF YOU DO HAVE A DEFECT, THEN YOU WANT TO BE CONCERNED WITH TO TEXTING IT BEFORE THE RAIL FAILS. -- DETECTING IT BEFORE THE RAIL FAILS. THERE IS A NEED FOR INSPECTION TECHNOLOGY, INSPECTION FREQUENCY, AND I THINK WE CAN DO THINGS TO OPTIMIZE OUR INSPECTION SCHEDULING. FRANKLY, WE DO NOT HAVE THE SORT OF DATA FOR THIS SIDE OF THE EQUATION AS WE DO FOR THE TANK CARS. THE TANK CARS HAVE BEEN TALKED ABOUT QUITE A BIT TODAY. THEY ARE FRANKLY UNPARALLELED IN THE WORLD. I HAVE BEEN STUDYING THAT ASPECT OF THE QUESTION FOR SOME TIME. THERE IS NOBODY IN THE WORLD WHO HAS ANYTHING LIKE THAT AS A BASIS OF DECISION-MAKING. HERE IS AN EXAMPLE OF THE WORK WE HAVE DONE IN TERMS OF ASKING QUESTIONS. CAN WE IMPROVE OUR SCHEDULING OF DEFECTION DETECTION. THERE ARE BETTER AND WORSE WAYS IN TERMS OF EFFICIENT SEE THAT YOU COULD SCHEDULE INSPECTION. WE THINK THIS IS AN OPPORTUNITY TO TAKE BEDARD VANTAGE OF INSPECTION RESOURCES. MOHAMMED SAID YOU WOULD BE DISAPPOINTED -- TAKE BETTER ADVANTAGE OF INSPECTION RESOURCES. MOHAMMED SAID YOU WOULD BE DISAPPOINTED IF I DID NOT SHOW YOU AN EQUATION, SO HERE IT IS. WHAT IS BEHIND ALL THIS IS AN EXTENSIVE SERIES OF RISK ANALYSIS AND OPTIMIZATION MODELS. IN PARTICULAR, WHAT WE ARE STARTING TO DELVE INTO IS NOT ONLY CONSIDERING WHICH OF THESE OPTIONS BY THEMSELVES, BUT BY LOOKING AT THEM TOGETHER, BECAUSE EACH OF THEM HAS ITS OWN ASSOCIATED SETS OF COSTS AND BENEFITS IN TERMS OF RISK REDUCTION, AND THERE MAY BE INTERACTIVE EFFECTS AS WELL. NOW, I THINK FOR SOME OF THE PROBLEMS THAT WE ARE FACING AT HAND, AS YOU HAVE ALREADY SEEN WE HAVE IDENTIFIED WHAT WE THINK ARE SOME OF THE MOST EFFICIENT TANK CAR DESIGN SOLUTIONS. I SHOULD SAY THAT WHAT I SHOWED YOU BEFORE, GIVEN A PARTICULAR LEVEL OF INVESTMENT, THAT IS THE MOST EFFICIENT TANK DESIGN, BUT IT DOES NOT SPEAK TO THE QUESTION OF HOW SAFE IS SAFE ENOUGH, WHICH I THINK IS A BROADER QUESTION. IT DOES ARRIVE AT ANSWERS TO THAT QUESTION, BUT IT ALSO REQUIRES SOME POLICY DECISIONS, AS WELL. THE OTHER THING -- AND AGAIN, IT HAS ALREADY BEEN DISCUSSED TODAY AND I AM QUITE CONFIDENT IT COULD BE DONE WITHOUT TOO MUCH TIME, IS THE QUESTION OF HOW TO APPROACH RETROFITS AND REPLACEMENT. THERE IS NO DOUBT IN MY MIND THAT AN OPTIMIZATION PROCESS COULD BE USED THAT WOULD ALLOW US TO MOST RAPIDLY REDUCE THE RISK. WE WILL BE DEALING WITH LEGACY CARS FOR SOME TIME AT LEAST. THE QUESTION IS HOW DO WE OPTIMIZE OUR APPROACH TO SAFETY PER TORMENTS -- SAFETY PERFORMANCE SO THAT WE CAN REDUCE RISK IN THE MOST RAPID AND EFFICIENT MANNER FEASIBLE. IN CONCLUSION, I THINK QUANTITATIVE ANALYTICAL TOOLS CAN HELP US MAXIMIZE EFFICIENT USE OF RESOURCES TO IMPROVE SAFETY IN THE MOST EFFECTIVE MANNER. THEY CAN BE APPLIED AT VARIOUS LEVELS RANGING FROM MACRO TO MICRO. OUR LONG-RANGE GOAL IS COMPLETE INTEGRATION. THE TANK CAR SAFETY DESIGN PROCESS HAS BENEFITED FROM THE USE OF THIS OPTIMIZATION PROCESS IN PART BECAUSE OF EXTENSIVE DATA AVAILABILITY. FINALLY, I WANT TO CONCLUDE BY SAYING I THINK WE REALLY NEED TO LOOK CAREFULLY AT OPPORTUNITIES TO SUBSTANTIALLY REDUCE BROKEN RAIL PROBLEMS. THERE ARE TECHNICAL AND INSTITUTIONAL BARRIERS THAT MUST THE OVERCOME. FIRST OF ALL, I THINK WE NEED SUBSTANTIAL INVESTMENT IN RESEARCH TO DEVELOP NEW AND IMPROVED TECHNOLOGY TO DETECT EFFECTS. IT IS MY UNDERSTANDING THAT WE DON'T HAVE THE TECHNOLOGIES WE WOULD DESIRE. WHEN YOU CONSIDER HOW SERIOUS AND HOW MANY JARRELL MEN'S ARE CAUSED BY THIS, I WOULD LIKE TO SEE A LOT -- HOW MANY DERAILMENTS ARE CAUSED BY THIS, I WOULD LIKE TO SEE A LOT MORE RESOURCES DIRECTED AT IT. THERE ARE A LOT OF COMPANIES AND ORGANIZATIONS THAT COULD HELP US WITH THAT. THE OTHER HALF OF THIS IS THAT I THINK OUR REGULATORY PHILOSOPHY NEEDS TO DO MUCH MORE TO SUPPORT CONTINUOUS TESTING INSTEAD OF OUR CURRENT REGIME WHERE YOU TEST AT ONLY A PERIODIC LEVEL. I THINK WE COULD TEST OUR RAIL EVERY SINGLE DAY IF OUR REGULATORY STRUCTURE WAS DIFFERENT AND THAT WOULD RESULT IN NOT THE KIND OF EVOLUTIONARY CHANGE WE HAVE SEEN IN SOME OF THE RECENT RULEMAKING, BUT A REVOLUTIONARY CHANGE THAT WOULD SUBSTANTIALLY IMPROVE RAIL SAFETY. WITH THAT I WILL CONCLUDE. THANK YOU.

>> THANK YOU DR.. OUR LAST PANELIST IS MR. ANAND PRABHAKARAN. PLEASE PROCEED.

>> THANK YOU, AND MANY THANKS TO THE BOARD FOR GIVING ME THE OPPORTUNITY TO PRESENT THE WORK WE ARE DOING. WE HEARD A LITTLE BIT THIS MORNING ABOUT HOW YOU CAN REDUCE THE DERAILMENT SITUATION AND IMPROVE CONSEQUENCES IF YOU HAVE AN ACCIDENT. ONE WOULD BE TO IMPROVE THE DESIGN OF THE CARS. THE SECOND WOULD BE TO USE KINETIC ENERGY, REDUCE THE OPERATING SPEED AND POTENTIALLY IMPLEMENT NEW SYSTEMS. THE OTHER THING I WANT TO TALK ABOUT IS THE BENEFITS OF MITIGATING ANY STRATEGY. HOW DO WE QUANTIFY THE BENEFITS? I WILL SHOW BRIEFLY SOME TRAIN OPERATIONS AND BRAKING SITUATIONS THAT WERE DONE. A LITTLE BIT INTO OTHER RESEARCH THAT IS RELATED. SO, ONE DIFFERENCE IS REDUCING THE SPEED. WHAT IS THE DIFFERENCE OF 18 OF AN INCH GOING TO MAKE? WE HAVE AN APPROACH HERE THAT I WILL REPRESENT. THE HOPE IS THAT THIS WILL GIVE YOU A MECHANISM BY WHICH YOU CAN EVALUATE DIFFERENT STRATEGIES. SO, YOU HAVE HEARD SEVERAL TIMES TODAY THAT ACCIDENTS ARE CHAOTIC. ACCIDENTS ARE UNPREDICTABLE. THERE HAS BEEN A LOT OF DISCUSSION ABOUT HOW LITTLE CAN BE DONE TO HELP THINGS IN AN ACCIDENT. WE TALK ABOUT MULTIPLE DERAILMENT SCENARIOS, MULTIPLE CAR POSSIBILITIES. DISTRIBUTION. WHAT WE HAVE PRESENTED HERE IS A MECHANISM BY WHICH WE CAN TAKE ALL OF THESE VARIABLES AND TRY TO COMBINE THEM INTO APPROACH BY WHICH WE CAN PREDICT THE NUMBER OF CARS THAT MIGHT BE INVOLVED IN AN ACCIDENT. WE HAVE SOME VALIDATION OF THE PROCESS. IF YOU HAVE TIME, MAYBE DURING THE QUESTIONS, WE CAN GO INTO A LITTLE BIT OF THAT. FOR NOW, WE'RE GOING TO REFLECT ON THE DEVELOPMENT SCENARIOS. THIS IS A SAMPLE ANIMATION WE HAVE DONE. THIS IS A 30 MILE PER HOUR DERAILMENT. CERTAINLY NOT AN AVERAGE DERAILMENT, JUST ONE OF SEVERAL POSSIBILITIES. WE HAVE USED SIMULATIONS LIKE THIS TO FORM THE BASIS FOR THE DISTRIBUTION OF FORCES THAT MIGHT BE AVAILABLE. SOMEBODY MIGHT ASK, IF IT IS JUST ONE DERAILMENT, HOW DOES IT REPRESENT ANYTHING? WHAT WE DID WAS WE LOOKED AT DEVELOPMENT FROM DERAILMENTS THAT RESULT IN VARIOUS THINGS. FOR EXAMPLE, IS THE CAR SLIDING ON HARD GROUND OR SOFT GROUND? DID THE DERAILMENT HAPPENED IN NORTH TO CODE OR SOMEWHERE IN ALABAMA? WHAT IS THE DIFFERENCE IN THE TRACK THE CAR WAS TRAVELING ON? FROM THERE, WE CAN START TRYING TO ESTIMATE FORCES. I AM NOT SAYING 12 IS A MAGIC NUMBER HERE, BUT THAT IS A START. WHAT DO WE NEED TO DO TO MAKE SURE WE HAVE A REPRESENTATIVE EXAMPLE OF DERAILMENTS? WE HAVE PUT 40 MILES PER HOUR AND 30 MILES PER HOUR. SO, COMING BACK TO THIS, WHAT WE DID BY LOOKING AT THOSE SEVERAL DERAILMENTS THAT HAPPENED, WE CALCULATED A LOW SPECTRUM OF WHAT YOU COULD EXPECT IN AN AVERAGE -- I AM USING THAT WORD AGAIN -- 30 MILE PER HOUR DERAILMENT OR 40 MILE PER HOUR DERAILMENT. WE COMBINED THAT WITH CARS STRENGTH CAPACITIES. A LOT OF RESEARCH HAS ALREADY BEEN DONE ON DIFFERENT CARS STRENGTHS. THE INDUSTRY HAS DONE A LOT OF WORK ON THAT TOO. WE ARE ACTUALLY WORKING OFF OF RESEARCH THAT HAS BEEN DONE BY OTHERS AND COMBINING THAT WITH WHAT PERCENTAGE OF IMPACT IS LESS THAN THREE INCHES. WHAT PERCENTAGE IS 3-5 INCHES, SIX INCHES. A 12 INCH IMPACT MIGHT BE A FULL HEAD OF A COUPLER. SIX INCH MIGHT BE A RAIL. WE ARE COMBINING DISTRIBUTION OF IMPACT WITH DISTRIBUTION OF FORCES. WE HAVE DONE A LITTLE BIT OF VALIDATION TO MAKE SURE THE NUMBERS MAKE SENSE. HERE ARE SOME EXAMPLES. YOU CAN SEE THAT WE HAD A BASE CASE. IF YOU HAD A 30 MILE PER HOUR DERAILMENT, IT WOULD AFFECT ABOUT EIGHT CARS. 40 MILES PER HOUR, 11 CARS. JUST GOING FROM 30 MILES PER HOUR TO 40 MILES PER HOUR, YOU HAVE ABOUT A 29% IMPROVEMENT IN PERFORMANCE. SIMILARLY, IF YOU WENT TO A FIVE GAUGE TANK WITH AN 11 GAUGE JACKET, YOU DROP THOSE NUMBERS TO ALMOST HALF OF WHAT THEY ARE FOR THE NON-JACKETED BASE CASE. SO THIS GIVES YOU A SENSE OF WHAT MITIGATING STRATEGY THAT MIGHT HAVE. HOPEFULLY THIS WILL HELP REGULATORS AND THE INDUSTRY MAKE SOME DECISIONS ON WHICH WAY THEY NEED TO GO. LETTING MR. CONNOR HAS ALREADY GONE THROUGH THIS AND QUITE A BIT OF DETAIL, SO I WON'T DWELL ON IT TOO MUCH. IN ADDITION TO THE POTENTIAL FOR HAVING LOWER CONNECTICUT ENERGY WHEN THE CAR REACHES THE POINT OF DERAILMENT, YOU ALSO HAVE THE TRAIN ITSELF IS SLIGHTLY MORE STABLE. AS OPPOSED TO A CONDITION WHERE THERE ARE FORCES THROUGHOUT THE TRAIN THAT LEND A LITTLE MORE CHAOS TO THE SITUATION. THAT IS ANOTHER BENEFIT. THERE ARE TOO MANY GRAPHS HERE, BUT ALL CARS START BUILDING A BRAKES UNDER PRESSURE. IF YOU LOOK AT THE DISTRIBUTED POWER, THE FIRST AND LAST CAR START BUILDING AT THE SAME TIME. IF YOU LOOK AT THE PREVENTION ALL POWERS, THE RED GRAPHS, YOU SEE THAT THE TIME ON THE FIRST CAR IS QUITE A BIT EARLIER. [INAUDIBLE] [INDISCERNIBLE] [NO AUDIO] NOW, 18 MILES PER HOUR. THAT IS A BIG DIFFERENCE IN KINETIC ENERGY. OTHER RESEARCH WE ARE DOING, WE TALKED ABOUT ECP, BUT WE KNOW THAT HAS HAD A HARD TIME CATCHING ON. WE KNOW THERE ARE A LOT OF POTENTIAL BENEFITS, BETTER STOPPING DISTANCES, BETTER CONTROL, MORE SAFETY. GIVEN ALL THESE BENEFITS, WHY IS IT THAT IT HAS BEEN SO DIFFICULT FOR THEM TO GAIN ACCEPTANCE? WE ARE WORKING ON SEVERAL STUDIES RELATED TO THIS, BOTH ADDRESSING TECHNICAL CHALLENGES AND FINANCIAL. I WOULD BE HAPPY TO TALK ABOUT IT IN DETAIL LATER. THE OTHER ONE WE ARE WORKING ON IS AN ELECTRIC LEVER HANDBRAKE. THIS IS ESSENTIALLY A PUSHBUTTON APPLICATION. IT ELIMINATES A LOT OF THE ISSUES ASSOCIATED WITH LADDERS AND HANDBRAKE'S. THREE OR FOUR ARE IN TESTING RIGHT NOW. THE FIRST QUESTION THAT COMES UP IS WHERE DO YOU GET THE POWER FOR THIS. THAT IS ANOTHER ASPECT WE ARE WORKING ON. THIS UNIT HAS BEEN INSTALLED ON SOME TEST CARS. ANOTHER PRODUCT WE ARE WORKING ON IS A FIRE TEST AND MODEL VALIDATION. WE ARE IN THE PROCESS OF DEVELOPING SOME SCALE MODEL CARS FOR FIRE TESTING. THE DATA FROM THAT TEST WILL BE USED FOR THE INDUSTRY STANDARD. THESE ARE PICTURES FROM FIRE TESTS THAT WORD DESIGNED EARLIER. I ANTICIPATE WE WILL HAVE SOME COMBINATION OF WHAT YOU ARE SEEING THERE. IT CAN THEN BE USED TO DECIDE WHETHER OR NOT [INDISCERNIBLE] WE HAVE ALSO HELPED WITH SOME FITTING RESEARCH AM A DEVELOPING SOME CONCEPT MODELS AND SOME TESTING TO SEE IF THE CONCEPTS ARE WORKING TO IMPROVE FITTING PROTECTION. HERE ARE TWO EXAMPLES WE HAVE TESTED. THE FIRST ONE IS FAIRLY HEAVY AND GOES ON TOP OF THE CAR. THE ONE BELOW THAT IS SLIGHTLY LIGHTER, ABOUT 1000 POUNDS OF WEIGHT. WE HAVE TESTED THAT AS WELL. THAT IS A BRIEF OVERVIEW IN TERMS OF FOR WE ARE DOING IN TANK RESEARCH. ONCE AGAIN, THANK YOU EVERYONE FOR YOUR TIME.

>> THANK YOU, ANAND PRABHAKARAN. THIS CONCLUDES THE PRESENTATIONS FOR THIS PANEL.

>> PLEASE CONTINUE WITH THE TECH PANEL.

>> THANK YOU. I WILL NOW TURN THINGS OVER.

>> THANK YOU. WE DON'T HAVE A LOT OF TIME SO WE ARE GOING TO CUT SOME OF OUR QUESTIONS SHORT, BUT FIRST OF ALL, ANAND PRABHAKARAN, YOU ANSWERED MANY OF MY QUESTIONS ABOUT BRAKING SYSTEMS AND HAD A NUMBER OF SLIDES THAT SHOWED CHALLENGES. CAN YOU SUMMARIZE IN A SENTENCE OR TWO HOW WOULD ECP BRAKING SYSTEMS IMPROVE THE CRASHWORTHINESS, IF YOU WILL, OR PREVENT THE RELEASE FROM A CRUDE OIL TANK?

>> ECP BRAKES ARE NOT GOING TO PREVENT A DERAILMENT IF THE DERAILMENT IS CAUSED BY A RAIL BRAKE. BUT IF YOU HAVE 15 CARS IN A PILEUP OR 20 CARS IN A PILEUP, IF THOSE CARS GET THERE WITH A LITTLE BIT LESS SPEED ATTACHED TO THEM, THAT REDUCES THE CASUALTIES WITHIN THE PILEUP ITSELF AND THE HOPE IS THAT WILL MAKE A DIFFERENCE. I SHOWED YOU THE DERAILMENTS AT 30 MILES PER HOUR, FOR EXAMPLE. WE ARE STILL LOOKING AT MODELS THAT INCLUDE ECP BUT WE DON'T HAVE THE RESULTS YET. MY SENSE IS YOU MIGHT BE LOOKING AT A FIVE MILE PER HOUR ADVANTAGE IN SPEED. IN OTHER WORDS, IF YOU ARE LOOKING AT RUNNING YOUR CONVENTIONAL TRAINS OF 40 MILES PER HOUR, RUNNING ECP OF 45 WOULD GIVE YOU ABOUT THE SAME LEVEL OF RISK EXPOSURE.

>> THANK YOU. WHAT IS THE RAIL INDUSTRY'S ATTITUDE TOWARD MOVING TO ECP BRAKING SYSTEMS?

>> I BELIEVE YOU WOULD HAVE TO ASK EACH OF US INDIVIDUALLY BECAUSE I BELIEVE WE WOULD HAVE SLIGHTLY DIFFERENT VIEWS. DIRECTIONALLY, THE RESULTS ARE VERY MUCH WHAT YOU HAVE HEARD IN THESE PRESENTATIONS. DISTRIBUTED POWER TECHNOLOGY CAME TO BE. BASED ON TIMING AND MATURITY, THERE ARE OTHER BENEFITS FOR DISTRIBUTED POWER. WE INVESTED HEAVILY IN THAT AS DID SOME OTHER WESTERN RAILROADS. AS YOU SAW ON THE CHARTS, DP USE PROVIDES A SIGNIFICANT PERCENTAGE OF THE BENEFIT CLAIM FOR ECP ALSO.

>> I MIGHT JUST ADD THAT I THINK THE ISSUE OF DISTRIBUTED POWER AND ECP AS WELL AS FRONT REAR TELEMETRY IS SOMETHING THAT NOT ONLY GETS A LOT OF DISCUSSION, BUT IT IS ALSO SOMETHING THAT GETS REGULARLY TALKED ABOUT AT THE COMMITTEE LEVEL ABOUT THE VALUES THAT WE INDIVIDUALLY EACH SEE IN THE WORK WE ARE DOING INDEPENDENTLY IN THOSE APPLICATIONS.

>> THANK YOU. ONE QUESTION. [NO AUDIO]

>> IT IS MY UNDERSTANDING THE GASOLINE IS TRANSPORTED IN T 111 CARS, CORRECT?

>> THAT IS CORRECT.

>> IT IS ALSO MY UNDERSTANDING THAT GASOLINE HAS SIMILAR PROPERTIES, ALTHOUGH IT IS PRODUCED COMING OUT OF THE GROUND, IT'S VOLATILITY, FLAMMABLE CHARACTERISTICS, VAPOR PRESSURES AND ALL OF THAT ARE QUITE SIMILAR TO WHAT WE ARE SEEING IN CREWED. I HEARD ONE PANELIST THIS MORNING SUGGEST WE OUGHT TO BE USING PRESSURE CARS FOR CRUDE. THEN WHY WOULDN'T WE BE DOING IT FOR GASOLINE, OR WHY IS GASOLINE SAFER TO TRANSPORT?

>> FIRST I WILL SAY THAT I AM NOT A CHEMIST. I WILL SHARE WITH YOU WHAT I AM COMFORTABLE SHARING, WHICH IS PRIMARILY THAT THE REALLY SMART PEOPLE ON THIS WORKING GROUP ARE CHEMISTS. THEY ARE FROM ALL THE MAJOR OIL COMPANIES, AND THEY'RE LOOKING AT ALL THESE PROPERTIES. ANECDOTALLY, WHAT I AM HEARING, AND WE ARE REALLY FOR BID IN BY THE PROCESS OF DOING PRELIMINARY RESULTS BECAUSE AS WE GO THROUGH THE PROCESS OF COMING TO A CONSENSUS ON A STANDARD, IT CHANGES EVERY TIME WE MEET. BUT I WILL TELL YOU WE HAVE NOT SEEN ANY VAPOR PRESSURES THAT WERE DESCRIBED IN THE MORNING PRESENTATION, AND NOTHING THAT WOULD BE OUT OF THE ORDER OF WHAT YOU WOULD SEE IN GASOLINE. WE ARE VERY ANXIOUS TO SEE THE FEMMES THE RESULTS BECAUSE -- THE [INDISCERNIBLE] -- THE PHMSA RESULTS BECAUSE WE ARE ALL TRYING TO UNDERSTAND EXACTLY WHAT IT IS THAT IS BEING IMPLIED WE ARE NOT DOING IN THE TANK CARS. THE SHIPPER IS RESPONSIBLE TO PROPERLY CLASSIFY MATERIAL. AND WE ARE DOING THAT. THE HAZMAT

>> WILL DIRECT THIS TO A SPECIFIC PACKAGE WHICH IN THIS CASE GOES IN A DOT 111 CAR BY REGULATION. WE AS AN INDUSTRY ADOPTED THE 1232 BECAUSE WE THOUGHT IT WAS A GOOD IMPROVEMENT GOING FORWARD. BUT WE HAVE NOT SEEN ANY SCIENCE YET TO HAVE US CHANGE OUR POSITION THAT THAT IS STILL THE APPROPRIATE PACKAGE.

>> THANK YOU VERY MUCH. MR. TURPIN, I WILL TURN THE QUESTION OVER TO YOU.

>> THANK YOU. JUST A COUPLE. YOU MENTIONED THERE IS A TRADE-OFF BETWEEN DISTRIBUTED POWER AND ECP BRAKES. ARE YOUR UNIT TRAINS EQUIPPED WITH DISTRIBUTED POWER OR IS THERE A PERCENTAGE?

>> I DID NOT MEAN TO APPLY A TRADE-OFF. THERE ARE SIMILAR BENEFITS TO DIFFERENT DEGREES IN TERMS OF THE BRAKING CAPACITY. MOST OF OUR UNIT TRAINS ARE A LARGE PERCENTAGE OF THE TOTAL TONNAGE. THAT'S UNIT TRAINS THAT INCLUDE COAL, ORE, GREEN, CRUDE OIL, ETHANOL, EVEN INDETERMINABLE TRAINS. THERE ARE BENEFITS IN TERMS OF THE TRAIN HANDLING, THE BRAKING DISTANCE AND THE OVERALL CONTROL OF THE TRAIN.

>> OK. MR. ELLIOTT?

>> WE DO NOT IN OUR CRUDE AND ETHANOL UNIT TRAINS USE DISTRIBUTED POWER NEARLY AS MUCH AS OUR WESTERN COLLEAGUES. AS A MATTER OF FACT, I WOULD SAY THE VERY FEW OF OUR TRAINS ACTUALLY OPERATE WITH DISTRIBUTED POWER.

>> CHANGING SUBJECTS, THE RAIL CORRIDOR RISK ANALYSIS, BUILT INTO THE PROCESS, THE FRA IS SUPPOSED TO DO AUDITS. IS THAT USEFUL? DOES THAT WORK WELL FOR EVERYBODY?

>> FROM MY POINT OF VIEW, IT IS VERY USEFUL. ANYTIME YOU DO A SELF-EXAMINATION OF PROCESS ADHERENCE OR HAVE A THIRD-PARTY KNOWLEDGEABLE ON THE SUBJECT COME IN AND EXAMINE WHETHER OR NOT YOU HAVE A PLAN AND ARE FOLLOWING A PLAN, YOU ALWAYS COULD GET GOOD FEEDBACK ON THAT. IT IS TO MY BENEFIT AS WELL IS THERE SO WE UNDERSTAND THE DECISION-MAKING PROCESS THAT CAME AS A RESULT OF THE ANALYSIS.

>> SOMETIMES THEY ARE SHORT OF RESOURCES, SO HAVE THEY BEEN ABLE TO DO THE AUDITS?

>> LIKE CLOCKWORK EVERY TWO YEARS. WE ARE PREPARING FOR THE NEXT ONE NOW.

>> WE HAVE TAKEN GREAT VALUE FROM OUR COLLEAGUES IN THE FRA WHEN THEY COME TO JACKSONVILLE AND TYPICALLY SPEND THREE TO FOUR DAYS GOING THROUGH THE RESULTS. WE TYPICALLY WILL SEND THEM IN ADVANCE A SAMPLING THEY PARTICULARLY ASK FOR. I THINK, TOO, WE HAVE COME AWAY WITH SOME VALUABLE INSIGHT. WE HAVE GONE THROUGH TO AUDITS AND OUR NEXT IS SCHEDULED FOR NEXT MONTH.

>> THANK YOU VERY MUCH. REGULATIONS REQUIRE A RAILROAD TO IDENTIFY PRACTICABLE ALTERNATIVE ROUTES BEFORE ANALYZING SAFETY AND SECURITY RISKS FOR THESE ROUTES. HOW DOES YOUR RAILROAD IDENTIFY THESE PRACTICABLE ROUTES AND WHAT FACTORS ARE INVOLVED IN THAT DECISION? HOW MUCH DO BUSINESS FACTORS SUCH AS COST, TIME AND TRANSPORTATION PLAY IN THAT DECISION?

>> I WILL GIVE YOU A HIGH-LEVEL ANSWER. COST IS NOT ONE OF THE 27 FACTORS BUT EACH OF THOSE ELEMENTS COULD STAND AS A C SURROGATE FOR COST IN ONE WAY OR ANOTHER. THE APPROACH OF LOOKING AT ALTERNATE ROUTES COMES FROM THERE BEING A FINITE NUMBER OF WAYS TO GET FROM A-Z. FROM CHICAGO TO NEW ORLEANS THERE IS MORE THAN ONE WAY TO DO IT, BUT PROBABLY THE ONE THAT GOES THROUGH SACRAMENTO IS NOT THE BEST ROUTE. THOSE GET ELIMINATED FOR PRACTICALITY AND REASONABLENESS. THEN WE GO ON DOWN LOOKING AT THOSE FACTORS AND THE WEIGHTS AND COME WITH AN ANSWER WITH SOME OPPORTUNITIES. IF IN SOME CASES THE ROUTES ARE WITHIN ONE PERCENT-THREE PERCENT OF EACH OTHER IN THE RISK FACTORS, THEN WE APPLY SOME BASIC KNOWLEDGE. THE PROCESS ALLOWS FOR THE FACT THAT NOT ALL OF THESE HAVE DISCRETE NUMERIC VALUES, BUT WE HAVE TO APPLY SOME INDUSTRY KNOWLEDGE TO MAKE THOSE DECISIONS. AS I MENTIONED, THERE ARE SOME WHERE WE ACTUALLY CHANGED THE ROUTES. THOSE WERE ONES WHERE THE RISK INDEXES WERE QUITE LARGE AND THEN WE LOOKED FOR ALTERNATIVES AND APPLIED THEM.

>> A FOLLOW-ON TO THAT. CAN YOU DESCRIBE YOUR RAILROAD'S MECHANISM TO ACCOMPLISH THE REQUIRED CONSULTATIONS WITH STATE AND LOCAL OFFICIALS DURING THAT ANALYSIS?

>> AS PART OF THE PROCESS WE WILL SEND LETTERS OUT TO ALL OF THE COMMUNITIES ALONG THE ROUTES ADVISING THEM THAT THE ROUTE ASSESSMENT HAS BEEN COMPLETED. IT HAS BEEN, IN MANY CASES, REVIEWED BY THE FRA AND ASK FOR ANY COMMENTS OR CONCERNS. IN THE YEAR WE HAVE BEEN DOING IT, I THINK IT IS FAIR TO SAY WE HAVE LESS THAN A DOZEN INQUIRIES FROM LOCAL COMMUNITIES AND TO THE BEST OF MY RECOLLECTION ALL OF THOSE HAVE BEEN RESOLVED WITH DISCUSSION WITH THE COMMUNITY.

>> THAT ALSO MATCHES OUR EXPERIENCE.

>> MR. WATSON. DID YOU QUESTION?

>> THANK YOU. OPERATIONALLY, WE GET CHALLENGED BY LOTS OF THINGS. SEASON, IF YOU'RE GOING TO HAUL GRAIN, IF YOU'RE GOING TO HAUL TRANSCONTINENTAL SHIPMENTS, THINGS LIKE THAT. WE HAVE HEARD ABOUT THE TREMENDOUS INCREASE IN THE VOLUME OF CRUDE AND ETHANOL THAT HAS BEEN EXPERIENCED IN THE LAST FEW YEARS. I AM INTERESTED IN THE TRANSITION OF THE FLOW OF THAT TRAFFIC INTO THE OTHER THINGS YOU'RE MOVING OVER YOUR RAILROAD.

>> THE TRANSITION HAS BEEN SMOOTH. IT IS NOT DIFFERENT FROM ANY OTHER GROWTH AND TRAFFIC OPPORTUNITIES IN A PARTICULAR CORRIDOR, ALTHOUGH THE VOLUME HAS BEEN SIGNIFICANT. SO OUR REACTION HAS BEEN PROPORTIONAL IN TERMS OF INVESTMENT. AS A MENTIONED, WE HAVE NOT BUILT ANY NEW RAIL LINES, BUT WE HAVE INVESTED IN SIGNAL IMPROVEMENTS AND TERMINAL TRAFFIC FOR STAGING. THOSE TOOLS ALLOW US TO KEEP THE FLUIDITY OF THOSE COURT ORDERS GOING, SO THAT INVESTMENT IS ONGOING AS WE SPEAK. IT IS NOT FOR CRUDE OIL IN GENERAL, BUT SOME OF THIS TRAFFIC IS GROWING, SO IT IS HARD TO PICK HOW MANY DOLLARS HERE AND HOW MANY THERE. WE DO KNOW THAT RAPID GROWTH HAS BEEN RESPONDED TO BY EQUALLY RAPID INVESTMENT FOR THAT CAPACITY.

>> A FOLLOW-UP TO THAT. THE OPERATIONAL PRIORITIZATION OF CRUDE OIL AND ETHANOL. IS IT GREATER OR LESS THAN INTERMODAL OR AUTOMOBILE CARRIERS OR OTHER TYPES OF TRANSIT?

>> ALL CUSTOMERS BUSINESS IS HIGH PRIORITY. KEY CRUDE OIL TRAINS HAVE A SPEED RESTRICTION OF 50 MILES PER HOUR OR LESS. THEY WORK WITH THE OTHER MANIFEST TRAINS IN THIS PARTICULAR CORRIDOR AND THEY HOLD THEIR PLACE AND PEOPLE TO THE OTHER MANIFEST BUSINESS AND CUSTOMERS.

>> MR. ELLIOTT, IS THAT HOW YOUR EXPERIENCE HAS BEEN ON THE CSX?

>> THE ANSWER IS YES. IN OUR CASE, CSX IS PROBABLY ONE OF THE SMALLEST TRANSPORTERS OF CRUDE OIL, MAKING UP LESS THAN TWO PERCENT OF OUR DAILY TRAIN VOLUME. FOR US, THE PHASING OF CRUDE OIL HAS BEEN SMOOTH PARTIALLY BECAUSE OF THE DECLINE OF DOMESTIC ALL. WE HAVE SEEN THE DECREASE IN ONE COMMODITY IN THE INCREASE IN OTHERS SO OUR OPERATING FOLKS HAVE BEEN ABLE TO HANDLE IT WITHOUT ANY INTERRUPTION. THE SAME HOLDS TRUE FOR THE INSPECTION PROCESS. WE HAD BEEN GEARED UP FOR THE VOLUMES WE HAD SEEN OVER THE YEARS AND WE TRANSFER THAT OVER TO WHAT WE SEE NOW WITH CRUDE OIL.

>> THE SUPPLY IS ALWAYS OF CONCERN AT ANY PARTICULAR TIME. HAS UNION PACIFIC HAD AN ADEQUATE SUPPLY OF TANK CARS FOR THE PRODUCT THAT YOU ARE ASKED TO SHIP?

>> AS YOU KNOW, THE RAILROAD IN OUR RAILROAD CURRENTLY DOES NOT OWN ANY CARS FOR THAT TYPE OF SERVICE, THOUGH WE ARE WATCHING CLOSELY WHAT OUR OTHER PARTNERS IN THE INDUSTRY ARE DOING. IT IS IMPORTANT FOR US TO BE ON TIME, YES.

>> I THINK MY TIME IS UP. THANK YOU.

>> THANK YOU VERY MUCH, GENTLEMEN. CHAIRMAN, THAT CONCLUDES OUR QUESTIONING FROM THE PANEL. NOW I TURN IT OVER TO YOU.

>> THANK YOU.

>> JUST A QUICK QUESTION. IN YOUR RISK VERSUS COST CHART, WHAT IS DOMINATED VERSUS NON-DOMINATED MEAN?

>> I'M SORRY, I SHOULD'VE HAVE DONE A BETTER JOB EXPLAINING THAT. I WAS TRYING TO STAY WITHIN MY TIME LIMIT, WHICH I OBVIOUSLY FAILED. IT WOULD BE HELPFUL TO PUT THE CHART BACK UP AGAIN. IT WAS SLIDE EIGHT . THE BLUE DOTS, THE NON-DOMINATED DOTS, BASICALLY WITH THAT IS SAYING IS THAT THERE IS NO COMBINATION OF ELEMENTS THAT PROVIDES A LOWER RISK FOR THAT AMOUNT OF COST, SO. IS THAT CLEAR YOUR -- DOES THAT CLEAR IT UP?

>> IT DOES. I WILL YIELD THE BALANCE OF MY TIME.

>> SINCE WE ARE PUTTING UP SLIDES, THE SLIDE SHOWING THE VARIETY OF CAUSES OF DERAILMENT.

>> SLIDE 10.

>> WELL, MAYBE IT IS 11, BUT WE WILL GET THERE. THIS ONE OR THE NEXT ONE?

>> I THINK IT IS THE NEXT ONE. YES. IF I NOT TO BE VERY STRIKING. I HAVE ALWAYS -- I FIND THAT TO BE VERY STRIKING. I HAVE ALWAYS BEEN AN ADVOCATE OF WORKING ON BIG BARS UNTIL THE BIG BARS BECOME LITTLE BARS AND THEN THE NEXT ONES START TO SHOW UP. UNFORTUNATELY, I CANNOT READ ALL OF THE LEGEND ON MY MONITOR HERE, BUT THIS NUMBER ONE BAR IS BROKEN RAILS, CORRECT?

>> CORRECT.

>> WOULD THAT BE, BY FAR, THE DOMINANT ACCIDENT CAUSE? WHAT IS BEING DONE TO ADDRESS THAT WITH THE KIND OF URGENCY THAT ONE WOULD GUESS, BASED ON THE FACT THAT IT IS FOUR TIMES BIGGER THAN ANY ONE OF THE OTHER CAUSES?

>> THERE IS NO QUESTION THE RAIL INDUSTRY AND THE REGULATORS RECOGNIZE THIS AS A VERY IMPORTANT PROBLEM. IT REQUIRES VERY ACTIVE RAIL INSPECTION PROGRAMS. THERE ARE EXTENSIVE RESOURCES DEVOTED TO INSPECTION OF RAIL TO COMPLY WITH THE REQUIREMENTS OF THE FEDERAL RAILROAD ADMINISTRATION. THERE IS ALSO RESEARCH GOING ON AT A RESEARCH SUBSIDIARY ON NEW TECHNOLOGIES TO DETECT RAIL DEFECTS. IF WE GO, I THINK, TO THE NEXT SLIDE -- AND I WILL COME BACK IF YOU WANT ME TO. THE THINGS SHOWN HERE, ESPECIALLY ON THE LEFT-HAND SIDE , THEY ARE DOING A LOT OF PREVENTATIVE GRINDING TO ACTUALLY REMOVE THE INCIPIENT CAUSE BEFORE THEY CAN GROW AND CAUSE A PROBLEM. THEY ARE DOING A LOT OF THINGS TO REDUCE THE LOAD FREQUENCY SEVERITY, BOTH IN TERMS OF ROLLING STOCK AND INFRASTRUCTURE. I CAN SAY WITH SOME CONFIDENCE THAT THIS IS A HIGH-PRIORITY ACTIVITY FOR THE RAIL INDUSTRY. LETS YOU TALKED ABOUT CONTINUOUS TESTING?

>> IT IS NOT SPECIFIC TECHNOLOGY, IT IS A PHILOSOPHY.

>> A PHILOSOPHY THAT CAN BE MADE INTO A TECHNOLOGY?

>> I THINK THERE'S A TECHNOLOGY ELEMENT TO THE SOLUTION. THE VISION THAT I HAVE HEARD PEOPLE ARTICULATE IS THAT WE WOULD RUN MANY TRAINS -- THEY WOULD BE EQUIPPED WITH DEFECT ATTENTION TECHNOLOGY. THEY MIGHT EVEN BE LOCATED ON THE LOCOMOTIVES THEMSELVES. THEY WOULD TELL US THE CONDITION OF OUR RAILS. CURRENT REGULATIONS -- CURRENT TECHNOLOGY DOES NOT ALLOW US TO DO THAT RELIABLY. THERE ARE PROMISING OPTIONS BEING EXPLORED. REGULATIONS DO NOT PERMIT THAT TYPE OF OPERATION. THE FRA REQUIRES THAT A DEFECT MUST BE REMOVED FOR REPAIR OR MITIGATED. THIS --

>> DO REGULATIONS GET IN THE WAY?

>> THAT IS MY OPINION, YES.

>> THANK YOU.

>> I WOULD LIKE TO HEAR -- MAYBE YOU COULD TELL US -- TOMORROW WE HAVE A PANEL ABOUT FIRST RESPONDERS. I AM CURIOUS, CAN YOU TELL US A BIT ABOUT HOW YOU EVALUATE COMMUNICATION PROCEDURES EFFECTIVENESS? DO THAT A COUPLE OF ACCIDENTS IN SAN BRUNO. WE HAD A PIPELINE WHERE THEY SHOWED US WHERE THE SUPPLIES WERE AND THEY WERE THE WRONG ONES. THEY WERE COMING FROM A DIFFERENT STATE. HOW DO YOU FIGURE OUT -- 17,000 IS GREAT. HOW DO YOU MAKE SURE IT IS THE RIGHT COMMUNICATIONS AND IT IS WORKING THE WAY YOU WANT IT TO? WE WILL HEAR ABOUT THAT TOMORROW MORNING. FROM YOUR SIDE, TELL US WHAT YOU ARE WORKING ON.

>> I WILL START HERE. EACH STATE IS A LITTLE DIFFERENT. EACH LOCALITY IS DIFFERENT. THE ONE THING THAT IS STANDARD IS THE ACCIDENT MANAGEMENT SYSTEM. YOU ALL SPEAK THE SAME LANGUAGE. PEOPLE'S -- PEOPLE STICK TO THAT. THERE IS A COMMON STRUCTURE TO ANY RESPONSE. WE ADVOCATE THAT. IF PEOPLE ARE NOT DOING IT, WE SPEAK IN THOSE TERMS. TRAINING ITSELF IS A FAMILIARIZATION WITH RAIL EQUIPMENT. WE DO A RAILROAD 101 SAFETY. PEOPLE UNDERSTAND THE ISSUES WORKING IN A RAILROAD ENVIRONMENT. WE GIVE THEM OPERATIONAL TRAINING AND BRING THEM INTO THE FOLD. WE DO THAT BEFORE PROCEEDING WITH THE PRODUCTS AND SPECIFIC MATERIALS. WE WORK AS AN INDUSTRY TO STANDARDIZE THE ELEMENTS. IN TERMS OF SAFETY, ALL OF THIS IS OPEN TO SHARING. THERE IS NOTHING PROPRIETARY ABOUT IT. WE WORKED TOGETHER WHEN WE DO THESE OUTREACH ACTIVITIES.

>> CAN I JUST ASK -- DO YOU RUN SCENARIOS? DO YOU EVALUATE HANDS-ON PRACTICE?

>> GIVEN THE TIME YES. THEY SUIT UP, THEY SELECT PROPER EQUIPMENT WITH WHICH TO SUIT UP, AND THEY ARE GIVEN FEEDBACK ON THEIR RESPONSE, WHICH TOOLS TO USE, WHAT IS THE PROPER SEQUENCE OF EVENTS, HOW TO GET TO THE PARTNER WHO CAN PROTECT YOU.

>> THANK YOU FOR THE QUESTION. I HAVE BEEN ON THE RAILROAD FOR 37 YEARS. FOR ALL OF THOSE YEARS, AND PROBABLY MORE, WE HAVE BEEN WORKING AND TRAINING WITH EMERGENCY RESPONDERS. BOB HIT IT ON THE HEAD. WE ARE PROUD OF THAT INTERACTION. A LOT THE SUCCESS COMES FROM OFFICE TAKING TIME TO REACH OUT AND GET TO KNOW THE EMERGENCY RESPONDERS. WE UNDERSTAND WITH CURRENT CONCERNS ABOUT CRUDE OIL, WE HAVE TO FOCUS ON NEW THREATS AND RISKS. WE ARE PREPARING NEXT MONTH TO START A CRUDE OIL HAZMAT TRAINING PROGRAM. WE CAN GO IN AND FOCUS SPECIFICALLY ON NEW CONCERNS THAT THE EMERGENCY RESPONDERS ALONG OUR PRIMARY ROUTE HAVE ABOUT CRUDE OIL. BOB HIT ON IN IMPORTANT TOPIC. THE TRAINING THAT THE EMERGENCY RESPONDERS GO THROUGH COMES IN A NUMBER OF FORMS. EVERY YEAR THE RAILROAD HIT THOUSANDS AND THOUSANDS OF FIREHOUSES. WE DO THAT FACE-TO-FACE TRAINING. WE DO DRILLS AND EXERCISES AT ALL LEVELS. WE ALSO PROVIDE TRAINING CAPABILITIES FOR THOSE THAT MAY NOT BE ABLE TO ATTEND STOP WE DO COMPUTER-BASED TRAINING. WE ARE TRYING TO STAY CURRENT WITH TECHNOLOGY AND ABILITIES OF EMERGENCY RESPONDERS. WE TRIED TO COVER ALL OF OUR BASES AND MEET THE NEEDS. ONE LAST THING THAT BOB SAID. WE HAVE LEARNED HOW WE NEED TO FIT INTO THAT UNIFIED COMMANDS WHEN WE RESPOND TO A CRISIS.

>> THANK YOU. YOU HAVE ONE MINUTE. THERE IS DISCUSSION ABOUT MINIMUM CREW. WE HAVE SEEN THIS A LOT. LET'S STORE MORE PEOPLE ADDED. -- FROM MORE PEOPLE ADDED. YOU HAVE MULTIPLE PEOPLE DISTRACTED FROM FATIGUE. WITHIN THIS CONTEXT, AND A DISCUSSION OF JOB RESPONSIBILITY. HOW IS THAT BEING ADDRESSED? I KNOW THINGS MIGHT BE IN THE WORK. BEYOND ADDING PEOPLE, WHAT IS THERE TO HELP?

>> THERE ARE DIFFERENT ASPECTS OF HAVING TO CREW MEMBERS. ESPECIALLY DURING HOURS BETWEEN MIDNIGHT AND 6:00 A.M. YOU HAVE FATIGUE PEOPLE. BEING A CREW MEMBER IN DIFFERENT ENVIRONMENTS, I CAN SAY THAT HAVING SOMEONE THERE WITH YOU TO HELP YOU STAY AWAKE IS BENEFICIAL. ANOTHER PART OF THAT IS IT IS ALWAYS BENEFICIAL TO OF TWO SETS OF EYES. ONE PERSON MIGHT MISS THE SIGNAL. ANOTHER PERSON MAY SEE IT. I HAVE ALSO BEEN A STRONG ADVOCATE OF A SECOND CREW MEMBER ON THE TRAIN, ESPECIALLY DURING CRITICAL TIMES OF THE DAY. MIDNIGHT AND 6 A.M.. THE FAA IS ADDRESSING THESE ISSUES. THERE IS CURRENT RULEMAKING ON HOW LONG A PERSON CAN BE UP THERE. THAT IS SOMETHING THAT THE FRA HAS NOT DONE. THAT IS A CONCERN.

>> THANK YOU.

>> VICE-CHAIRMAN?

>> THANK YOU FOR AN INFORMATIVE PANEL. WE HAVE HEARD MANY THINGS THAT ARE HAPPENING. MANY ARE VOLUNTARY. THE THREE LEGS OF THE STOOL. I WOULD BE INTERESTED TO KNOW IF ANY OF YOU HAVE ANY THOUGHTS ON OTHER AREAS OF IMPROVEMENT THAT ARE NOT BEING ADEQUATELY PURSUED AND YOU WOULD RECOMMEND HIM.

>> I THINK IT IS PRETTY CLEAR FROM SOME OF THE DISCUSSION EARLIER THAT PUTTING THINGS OUT IN THE OPEN, THERE'S A LOT OF RUSTLING GOING ON. THERE ARE APPROACH IS BASED ON SCIENCE AND BEST PRACTICES THAT WE ARE TRYING TO LEARN QUICKLY AND APPLY TO SOME OF THESE PROBLEMS. WE BELIEVE THAT WE HAVE THE TERRITORY COVERED. THAT IS BASED ON THE AGENDA YOU SEE FOR THIS FORM. WHAT YOU ARE SAYING IS A WORK IN PROGRESS. YOU ARE SEEING SOME COORDINATION AND APPROACHES. IF YOU ARE ASKING IF WE HAVE TOTALLY MISSED SOMETHING, IT IS NOT CLEAR TO US THAT WE HAVE. I'M CONFIDENT THAT WE WILL DISCOVER THINGS AS WE GO ALONG. THAT IS PART OF THE WORK.

>> THANK YOU. DOES ANYONE ELSE HAVE ANY THOUGHTS?

>> THANK YOU VERY MUCH.

>> LET'S GO BACK TO THE TECH PANEL FOR SOME FINAL QUESTIONS.

>> THIS MAY BE A SIMPLE QUESTION, BUT WHAT KIND OF STUDIES -- AND THIS IS PROBABLY TO DR. BARKIN -- WHAT KIND OF STUDIES HAVE BEEN DONE TO EVALUATE -- AND I WILL USE THE WORD SURVIVABILITY -- HOW FAR BACK DO THEY SURVIVE BETTER? IS IT UP IN THE AIR?

>> THERE ARE DIFFERENT PARTS OF THAT QUESTION THAT I CAN ANSWER IN DIFFERING DEGREES. THERE HAS BEEN WORK DONE TO UNDERSTAND THE EXPOSURE -- THE DIFFERENTIAL EXPOSURE OF CARS DEPENDING ON WHERE THEY ARE IN THE TRAIN. MORE RECENTLY, WORK IS BEING DONE BY A PROJECT TO DID -- ADDRESS THAT. RIGHT NOW, THE DATA IS INCOMPLETE ON THAT ANALYSIS. IT IS NOT YET FINISHED. WOULD YOU AGREE THAT?

>> I AM JUST TALKING ABOUT POSITION AND DERAILMENT AND TRAINED CPR. OUR UNDERSTANDING OF THAT IS INCOMPLETE. WE RECOGNIZE THAT IT IS IMPORTANT. WE ARE INTERESTED IN UNDERSTANDING THAT OTHER STOP

>> DO YOU HAVE ANY OBSERVATIONS THAT YOU WOULD LIKE TO ADD?

>> BESIDE THE FACT THAT PARTS OF THE FRONT TEND TO GET HURT THE MOST. THE LIKELIHOOD OF PUNCTURE GOES DOWN AS YOU TRAVEL FURTHER DOWN THE TRAIN. WE HAVE NOT OBSERVED ANYTHING THAT YOU WOULD NOT EXPECT.

>> IN LIGHT OF THAT, AND PERHAPS SOMEWHAT ANECDOTALLY, THERE IS NOT A LOT OF DETAILED DATA, BUT HOW DIFFICULT WOULD IT BE FOR THE RAILROAD TO ARRANGE THE CARS SO THAT THE DOT-111 CARS ARE IN THE REAR AND THE BETTER PERFORMING CARS COULD BE MOVED FORWARD BECAUSE OF THE TIME, OF REPLACING -- THE DILEMMA OF REPLACING ALL THE MANY DOT-111S THAT HAVE TO REMAIN IN SERVICE. IS THAT POSSIBLE?

>> THAT MIGHT BE TOUGH. CONCEPTUALLY, WE SEGREGATE THE CARS NOW BASED ON WHAT TYPES OF CARS SHOULD NOT BE NEXT EACH OTHER. I THINK IT WOULD BE REALLY INTERESTING TO SEE THE RESULTS OF THE STUDIES THAT ARE REFERRED TO AND UNDERSTAND THE RELATIVE IMPORTANCE BEFORE WE DIVE INTO IT. COULD BE DONE?

>> -- YES. BUT SEE WITH THE STUDIES SHOW US.

>> IF I COULD ADD TO THAT, THIS IS A TOPIC THAT WE HAVE STUDIED BEFORE. THERE ARE ADDITIONAL COMPLICATIONS RELATED TO IT. THERE ARE TRAIN DYNAMICS. IF YOU PRELOADED CARS IN THE REAR OF THE TRAIN AND EMPTY CARS IN THE FRONT, YOU'LL POTENTIALLY CREATED AN UNSTABLE TRAIN. I WILL NOT HIT ALL OF THESE POINTS. ANOTHER ELEMENT IS THAT IF IT REQUIRES EXTRA SHUNTING IN THE CLASSIFICATION YARDS, THAT IS AFTER EXPOSURE. IT SOMETIMES SOUNDS SIMPLE TO SAY, LET'S DO THIS. IF YOU INVESTIGATED, THERE ARE OTHER FACTORS TO CONSIDER.

>> THANK YOU.

>> MR. TURPIN, DO YOU HAVE ADDITIONAL QUESTIONS?

>> MR. BARKAN MENTIONED THAT HE FELT THE REGULATIONS MIGHT BE A DISINCENTIVE TO INCREASE YOUR INSPECTIONS. DID YOU FEEL THAT WAY?

>> I BELIEVE HE WAS REFERRING TO THE FACT THAT IF A DEFECT IS FOUND DURING ONE OF THESE INVESTIGATIONS, IT MUST BE ADDRESSED AND REMOVED RIGHT AWAY. WE HAVE THE EAR OF THE FRA ON THIS. THEY HAVE GRANTED TEMPORARY WAIVERS TO TRY A DIFFERENT APPROACH TO THIS. THERE IS MOVEMENT IN A POSITIVE DIRECTION. I DO NOT THINK IT HAS HELD UP. WE ARE GOING. THE HEAD.

>> I WOULD AGREE WITH MY COLLEAGUE.

>> YOU MENTIONED THAT THERE WAS A MONITORING DEVICE THAT YOU ARE ADDING TO THE LOCOMOTIVES. IS THAT MORE FOR ALIGNMENT?

>> WE DECIDED TO PUT THEM ON AND LOOK AT THE VERTICAL ISSUES. THEY WOULD DETECT THOSE THAT ARE IN EXCESS OF A CERTAIN LIMIT AND MARKET LOCATION. WE WOULD WATCH THEM OVER TIME AND ADDRESS THAT WITH MAINTENANCE OR REPAIR. CONCEPTUALLY, WE HAVE DIPPED OUR TOES IN THE WATER. YOU HAVE HEARD ABOUT THE CONCEPT OF HAVING THESE DEVICES ON ALL LOCOMOTIVES.

>> THAT IS A SOFT SPOT.

>> THERE COULD BE RAIL PER TURBINE SAYS. CROSSINGS MAY BE OUT OF ALIGNMENT.

>> NOT INTERNAL DEFECTS?

>> THIS IS A LINE IN A RAIL SERVICE.

>> GO AHEAD.

>> MR. JOHNSON, WHAT KIND OF PROCESSING AND TESTING IS PERFORMED ON CRUDE OIL BEFORE SHIPMENT? IS IT DEGASSED?

>> HAZMAT REQUIRES ADDITIONAL FLASH POINT FOR CLASSIFICATION OF CRUDE. YOU HAVE TO GO THROUGH THE WHOLE PROCESS OF DETERMINING WHAT IT IS AND. THAT IS WHAT REQUIRES -- IS REQUIRED BY THE HAZMAT RIGS. IN TODAY'S ENVIRONMENT, MANY OF THE PRODUCERS IN THE TERMINALS ARE DOING ADDITIONAL TESTING. IT IS A REGIMEN BASIS. THE CLASSIFICATION WILL COME UP WITH THE STANDARD. THEY WILL SAY WHAT TESTS YOU SHOULD TAKE AND SAMPLING TECHNIQUES AND LAB TECHNIQUES. IT WILL BE A VERY COMPREHENSIVE STANDARD. THERE IS NO INDUSTRY STANDARD. EACH OF THE SHIVERS AND PRODUCERS IS DOING WHAT THEY NEED TO DO AS THEIR OWN BEST PRACTICE TO PROPERLY CLASSIFY AND LOAD AND PROVIDE ASSURANCE THAT CRUDE OIL IS BEING PROPERLY CLASSIFY. WHAT IS HAPPENING IS PEOPLE WHO HAVE -- THEY ARE FINDING CONSISTENT RESULTS. THEY WILL PROBABLY TEST LESS FREQUENTLY. PEOPLE WHO ARE FINDING INCONSISTENCIES WILL TEST VERY OFTEN TO DETERMINE THE SOURCE.

>> DR. BARKIN, WHAT, IF ANY, ARE THE CONCERNS ABOUT THE RICK -- RISK ASSESSMENT PROCESS. I KNOW YOU HAVE PRESENTED RESEARCH FINDINGS. WHAT WERE THEY?

>> I'M WONDERING IF YOU COULD BE A LITTLE MORE SPECIFIC.

>> ONE OF THE RECENT RECOMMENDATIONS WAS ABOUT CRUDE OIL. I KNOW YOU HAVE AN ARTICLE THAT WAS PUBLISHED NOT TOO LONG AGO. IT ADDRESSES SOME CONCERNS ON THAT MATTER. I AM CURIOUS IF YOU COULD SHARE THOSE FINDINGS.

>> I WOULD HAVE TO CHECK THE CONTENTS OF THAT SPECIFIC ARTICLE. I THINK I WILL STAY -- SAME GENERAL THAT WE'VE BEEN LOOKING AT ROAD ANALYSIS TO SOME EXTENT OVER THE LAST SEVERAL YEARS. IT IS A POTENTIAL RISK REDUCTION OPTION. LIKE OTHER THINGS, THERE ARE TRADE-OFFS ONE HAS TO CONSIDER. ONE OF OUR MORE RECENT FINDINGS IS THAT WE'VE KNOWN FOR MANY YEARS THAT THERE IS A CORRELATION BETWEEN FRA TRACK CLASS AND DERAILMENT RATE. MORE RECENTLY, WE HAVE BEEN ABLE TO LOOK CAREFULLY AT MORE DETAILED DATA. WE CAN UNDERSTAND THAT THAT IS NOT A SIMPLE. WE SUSPECTED THAT THAT WAS THE CASE. IT TURNS OUT THAT A VERY STRONG VICTOR OF -- PROTECTOR OF INVERSE PREDICTOR OF DERAILMENT IS OVER TRAFFIC. THIS IS A CORRELATION. I CANNOT SAY IT IS CAUSE AND EFFECT. THERE MAY BE A LOWER DERAILMENT RATE. EVEN IF THEY HAVE THE SAME FRA TRACK CLASS. THERE IS A STRONG RELATIONSHIP WITH WHETHER THE TRACK IS IN SIGNAL OR NON-SIGNALED TERRITORY. THAT MAY BE BECAUSE OF THE TRACK AND ITS ABILITY TO DETECT BROKEN RAILS. TO GET BACK TO YOUR QUESTION, RAILROADS INVEST IN WERE INFRASTRUCTURE ON THE ROUTES THAT HAVE THE GREATEST TRAFFIC. THIS IS A RATIONAL THING TO DO. THEY DO THAT FOR CAPACITY REASONS AND FOR LIABILITY REASONS, BUT IT ALSO YIELDS A SIGNIFICANT SAFETY BENEFIT. THE TRAFFIC DENSITY TENDS TO GO BETWEEN POPULATED AREAS. THE HIGHEST DENSITY LINES TEND TO BE WHERE CUSTOMERS ARE. WHEN YOU START ROUTING TRAFFIC AWAY FROM POPULATED AREAS, YOU MAY BE MOVING INTO A TRACK THAT HAS NOT HAD AS MUCH RESOURCES AND INVESTED. IT MAY HAVE A HIGHER DERAILMENT RATE. YOU ARE EXPOSING THE POPULACE ALONG THOSE LOWER DENSITY LINES TO THAT TRAFFIC. IT BECOMES A NONTRIVIAL TRADE-OFF TO SEE WHEN IT IS BETTER TO INCREASE YOUR EXPOSURE TO DERAILMENT. YOU MAY HAVE A LOWER DERAILMENT LATE, BUT A HIGHER EXPOSURE TO POPULATIONS. THAT IS PART OF THIS INTEGRATED RISK MANAGEMENT ASSETS WE HAVE UNDERTAKEN TO MAKE THOSE KINDS OF DECISIONS.

>> I WAS WONDERING IF FOLKS FROM THE RAILROAD WOULD HAVE ANYTHING TO ADD TO THAT IN TERMS OF HOW THIS RECOMMENDATION AND ITS IMPACT ON YOUR OPERATIONS AND TRENDS FOR -- IF YOU HAVE ANY COMMENTS? CLICK THANK YOU FOR THE QUESTION. PERHAPS BEING THE MOST UNSCIENTIFIC PERSON AT THE TABLE, I WILL ANSWER DIFFERENTLY. WHEN WE TALK ABOUT RISK MANAGEMENT SYSTEMS, THE PERSPECTIVE THAT I HAVE IS THAT IT IS ONLY ONE OF MANY ITEMS THAT WE HAVE TO LOOK AT. AS I MENTIONED, WE DO THINK THAT CONTINUED IMPROVEMENTS IN TRANSPORTATION OF HAZMAT BY RAIL -- IT'S CONTINUING EVOLUTIONS OF IMPROVEMENTS INDICATE THAT DERAIL ROAD IS WORKING HARDER. IT IS WONDERFUL. IT IS A MOVE TOWARD ADVANCED ENGINEERING AND TECHNOLOGY. I THINK IT WILL TAKE THE RAIL INDUSTRY TO LEVELS OF A -- A SAFETY. IT IS A CONTINUED EFFORT TO UNDERSTAND THE NEEDS OF THE COMMUNITY AND THE CUSTOMERS STOP THE RISK MANAGEMENT TOOL IS JUST ONE ITEM OF MANY IMPORTANT FACTORS THAT WE HAVE TO LOOK AT. SOMETIMES IT IS A HARD TRADE-OFF. WHERE YOU MOVE THESE COMMODITIES, WHERE THE CUSTOMERS ARE, WE DO NOT WANT TO LEAVE ANYBODY OUT OF THE EQUATION. CRACK THANK YOU.

>> I WANT TO FOLLOW-UP TO MR. CONNOR. IN THE RECENT ANNOUNCEMENT CONCERNING MINIMUM MANDATED SIZES FOR OIL TRAINS, THERE WAS DISCUSSION ABOUT SINGLE POINT OF FAILURE. I WONDERED IF -- HOW THE FRA CAME TO A DECISION TO CLOSE SOMETHING ELSE INSTEAD OF AN EMERGENCY ORDER. IF YOU KNOW HOW THE DISCUSSION WHEN, -- WENT?

>> I WAS NOT INVOLVED IN THAT DISCUSSION. IT WAS ABOUT MAKING AN EMERGENCY ORDER. THERE ARE TWO CREW MEMBERS ON MOST TYPES OF TRAINS. THERE WAS CONSENSUS, SO WE WALKED AWAY. FRA WILL MAKE A DETERMINATION OVER WHETHER TO PUT OUT THE NPR AM WITHOUT CONSENSUS. I HAVE BEEN PULLED INTO THE DECISION-MAKING PROCESS. IT WILL BE DETERMINED WHAT THAT WILL BE.

>> DO YOU ANTICIPATE A TIME FRAME WHERE THAT WOULD OCCUR?

>> MY UNDERSTANDING IS THAT THEY WANTED TO HAVE IT OUT BY JUNE.

>> THANK YOU.

>> THAT CONCLUDES THE PANEL QUESTIONS.

>> I WHICH IS CLOSED TODAY BY ASKING A QUESTION. WE TALKED A LOT ABOUT OPERATIONS AND DEMANDS THAT EXISTS FOR TRANSPORT. IF WE ARE TALKING ABOUT NEW IMPLEMENTATION GIVEN THE RATES THAT WE HAVE HEARD EARLIER FOR PRODUCTION AND THE NEEDS OF YOUR MEMBERS, HOW LONG DO YOU THINK WE WILL SEE DOT-111 CONTINUE TO EXIST IN THE FLEET?

>> I'M GLAD YOU SAVED THE EASY QUESTION FOR ME. I'M TRYING TO PUT THAT IN A CONTEXT. I AM MOST FAMILIAR WITH OTHER TYPES OF PRODUCTION. IT IS MORE RAIL CENTRIC THEN ANY OF THE OTHER PRODUCTION AREAS. THE CONSENSUS WHEN I FIRST BECAME INVOLVED IN THIS IS THAT SOMEDAY IT MIGHT GET UP TO 6000 BARRELS A DAY. SOME SAY IT GOT PAST ARE VERY QUICKLY. TO GET TO ONE MILLION BARRELS A DAY. THE CONSENSUS GOING FORWARD IS THAT THE POCKET AND -- IS THAT I FELT, IT IS PEAKING AT $2 MILLION -- 2 MILLION BARRELS PER DAY. IT IS HOLDING AT THAT LEVEL FOR TWO OR THREE YEARS. THEN IT WILL TAPER OFF. WHEN WE LOOK AT COMMANDS FOR TANK CARS, MOST OF THE CARS ARE GOING INTO CRUDE OIL SERVICE. THE PRODUCTION OF THOSE CARS TODAY IS REALLY JUST SOMEONE KEEPING PACE WITH THE GROWTH OF DEMAND. A LOT OF THE DOT 111S WERE BORROWED FROM THE ETHANOL BUSINESS. THEIR VOLUMES DECLINED. THEY COULD NOT PRODUCE THEIR MANDATED VOLUMES. THEY NEED THOSE CARS BACK. THERE IS A LOT OF TENSION ON THE SUPPLY COMPLIANT CARS. THE QUESTION OF -- WILL THAT BE A SUFFICIENT PACKAGE GOING FORWARD? THAT IS OF GREAT URGENCY TO US AS SHIPPERS BECAUSE WE HAVE TO DETERMINE WHAT THE PACKAGE WILL BE GOING FORWARD. WHAT CAR SHOULD WE BE BUILDING? THAT IS A LONG WAY OF SAYING IT IS A VERY GOOD THING. CAR OWNERS HAVE STEPPED UP TO THE IDEA RETROFITS. WE THINK THAT THEY SHOULD BE ANALYZED AND THAT THERE SHOULD BE A GOOD STUDY IN DATABASE ON WHAT TO DO WITH THOSE CARS. AT THIS POINT, WHAT IS BEING PROPOSED SEEMS TO BE NOT PARTICULARLY WELL GROUNDED IN FACTS. WE LIKE THE HOLISTIC APPROACH OF LOOKING AT INTEGRATED RISK ANALYSIS AND DETERMINING WHERE BEST TO PUT THOSE CARS IN THE SUPPLY CHAIN.

>> IT IS LIKELY THAT WE WILL CONTINUE TO SEE THE LEGACY CARS IN SERVICE FOR AT LEAST ANOTHER DECADE GIVEN WHAT WE HAVE GOT IN TERMS OF PRODUCTION CAPACITY FOR NEW CARS AND THE DEMAND FOR THE CARS A SEPARATE OPTIONS -- PROJECTIONS.

>> IF I AGREE WITH YOU ON THAT, IT WOULD BE A PERSONAL OPINION. I AM SPEAKING FOR API. I THINK IT SHOULD BE EXPECTED THAT WITH THE RAIL INDUSTRY API, THE ETHANOL FOLKS ARE ALL VERY CONCERNED AND FOCUS ON SAFETY, THEY WILL MOVE AS AN INDUSTRY TO ENHANCE THE LEGACY CARS AS QUICKLY AS WE CAN. THEY WILL REPLACE THEM AS QUICKLY AS THEY CAN. THE REALITY OF THE MARKETPLACE WAS NOT REALLY BROUGHT OUT IN THE PANEL. THERE IS VERY LIMITED SHOP CAPACITY FOR DOING RETROFITS. WE HAVE THE REQUALIFICATION CYCLE THAT OCCURS NO LESS FREQUENTLY THAN EVERY 10 YEARS. BECAUSE OF THE NATURE OF DERAIL OUR MANUFACTURING BUSINESS, IT COMES IN BUBBLES. I BELIEVE THE NUMBERS WERE ROUGHLY AROUND 25,000 CARS THAT HAD TO BE REQUALIFIED. THEN INCREASES TO 50,000 BY 2018. THE SHOP CAPACITY IS ALREADY GOING TO BE STRAPPED JUST BASED ON REQUALIFICATION. ADDING ON OTHER -- THE NEED FOR RETROFITS WILL FURTHER CHALLENGE THE INDUSTRY CAPABILITY OF DOING THAT. WHAT PEOPLE SAY THAT THE MARKETPLACE. THE AND INCREASE CAPACITY, YOU ARE ASKING PEOPLE -- WE WANT THEM TO INVESTING CAPACITIES FOR NEW RETROFITS WHEN THEY HAVE A FINITE LIFE. THEN THE BUSINESS GOES AWAY. IT IS AN EXPENSIVE FOR A SHORT-TERM SOLUTION.

>> YOU ARE NOT MAKING ME FEEL OPTIMISTIC. IT SOUNDS LIKE IT IS A NUMBERS PROBLEM WITH RESPECT TO DEMAND.

>> THE SOLUTION THAT WORKS BEST IS THAT WE COME TO A CONSENSUS OR THERE IS REGULATION ON WHAT THE CAR IS GOING FORWARD. IT IS EASIER AS WAS MENTIONED TO RAMP-UP LONG-TERM PRODUCTION CAPACITY. THERE WILL BE NEW PLAYERS IN THE MARKET BECAUSE DEMAND WILL BE THERE. ADDRESSING THE NEW CARS AS WE GO FORWARD ISSUE, THAT IS A BETTER SOLUTION THEN CONCENTRATING MORE THAN WE CAN PRACTICALLY ACCOMPLISHED WITH THE LEGACY CARS.

>> I THINK WE HAVE HEARD A LOT OF GOOD INFORMATION TODAY FROM BOTH OF OUR PANELS. THEY KEY TO THE SECOND PANEL FOR PROVIDING INSIGHTS. WE HAVE A VERY INTERESTING TIME HERE WITH U.S. ENERGY PRODUCTION OF AND U.S. JOBS OF. I THINK WE NEED TO FIGURE OUT HOW WE DO THIS SAFELY. TODAY WE SET ON THE THIRD ROCK FROM THE SUN AND IT IS OUR DAY. WE HAVE TALKED ABOUT A LOT OF GOOD THINGS AS FAR AS REDUCTION IN TRANSPORTATION. I HOPE THAT ALL OF YOU ARE ABLE TO GET OUT AND ENJOY THE DAY, WHETHER YOU ARE TAKING THE TRAIN HOME OR TO THE NOT GAME OR WHETHER YOU WILL GET INTO A VEHICLE FUELED BY PETROLEUM PRODUCTS, I HOPE YOU GET THERE SAFELY. WE WILL RECONVENE TOMORROW MORNING AT 9:00 A.M. WE ARE ADJOURNED.