Rail is making a difference indomestic crude growth

Grand Forks, NDBNSF Railway

Matthew K. RoseChairman and Chief

Executive Officer

September 18, 2013

• Birth of crude by rail

• Fast track to growth

• Value of rail

• What’s next

Topics

The Birth of Crude by Rail

BNSF in North Dakota

• BNSF employs nearly 1,500 in ND and has hired more than 240 new employees in 2013

• New or expanded BNSF served facilities represent investments worth $390 million creating more than 680 jobs in ND (2010-2012)

• BNSF has invested more than $540 million in ND for capacity expansion and maintenance (2010-2013)

For more than a century, BNSF Railway has played an important role in North Dakota’s economy

Ag Shuttle Network as the Model

BNSF learned from our record with agriculture customers for building a strong supply chain network

BNSF Shuttle Network

Fast Track to Growth

Growth in Crude Rail Shipments

2010 2011 Jan-12

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

40 78 106 114 139 167 178 204 230 258 306 336 366

434 452 504

547 567 587 581 558

14

42 44 40

43 48 58

57 68

71 64

82 74

66 70

67 69

71 68 45 33

54

120 150 154

181 215

235 261

299 329

371 418

440

499 522

571 616

638 655 626

592 Total Manifest

BNSF Total Volumes(000s bpd)

BNSF Crude Volumes592,000 bpd average in July, 2013

2012 201320112010

North Dakota Unit Train Rail Facilities

1.Dec-09 2.Jun -11 3.Nov-11 4.Nov-11 5.Mar-12 6.Apr-12 7.May-12 8.Jun-12 9.Sep-12 10.Nov-12 11.Aug- 13

BNSF crude shippers invested nearly $1 billion developing 11 new Bakken origin facilities

Crude Transportation PackageUpstream, midstream or downstream, operations are

mainstream to the mission of BNSF Railway.

Upstream: • Sand• Pipe• Aggregate

Midstream: • Crude Oil• NGL

Downstream: • Fuels• Asphalt

Rail is Filling the Gap

8%OTHER

23%PIPELINE69%

RAIL

2013 Williston Basin Production

2010 Williston Basin Production

6%RAIL

20%OTHER

74%PIPELINE

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Relieving U.S. Oil and Gas Transportation Bottlenecks

Value of Rail

Rail is Providing Unique Value

• Market Distribution Flexibility allows producers to ship in multiple constructs and to refineries throughout the U.S.

• Investments in infrastructure, people and process ensures Reliable Transportation Services for producers.

• Decades-long commitment to Safe Operating Practices helps

prevent accidents in the first place.

Vast Origin Network Provides FlexibilityProving access to all of the nation’s western shale plays

Crude Origin Facilities

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50 Destination Facilities by end of 2014

BNSF NetworkOther Networks

Unit Train FacilityManifest FacilityIn-Development Facility

West Coast: 19 Destination

Facilities

East Coast:11 Destination

Facilities

Gulf: 19 Destination Facilities

Mid-Continent:12 Destination Facilities

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Crude Destination Facilities

How Have we Responded Today?

In 2013, BNSF plans to invest $400 million

on capacity initiatives to

support crude-by-rail growth

Safe Crude Oil Rail Transportation

BNSF Number of Hazmat Shipments

• Rail is one of the safest ways to transport crude oil and hazardous materials

• 99.997% of rail industry shipments of hazardous materials reach their destination without a release caused by a train accident

• BNSF hazmat releases continue to decline even as volumes grow

172

165

216

169

221195

144

162

135105105

110

92

105

80

112 96 99

10 23 10 16 17 17 17 14 9 17 21 12 12 15 10 15 8 150

50

100

150

200

250

Non-Accident Accident Trend

BNSF Total Hazmat Releases

• The rail industry has exceeded FRA Emergency Order 28 by implementing tighter controls on the commodity mix.

• The industry is applying provisions of the Emergency Order to:• 1 or more loads of Toxic Inhalation/ Poisonous Inhalation materials, including ammonia

solutions, Spent Nuclear Fuel or High Level Radioactive Waste

• 20 or more loaded tank cars of any hazardous material

• Identified trains will not be left unattended on main line or siding tracks

• Specific location exemptions require lead locomotive to be locked and the operating control handles removed

• All relevant information such as weather and grade for these trains must be recorded, verified and confirmed between the train crew and dispatcher

What’s Happened in the Past 12 MonthsSafety: FRA Emergency Order 28 & Rail Voluntary Measures

What’s Next

Opportunities

• Continued expansion in Bakken • New production in non-Bakken shales • Pipeline to rail connections will expand

options for customers• Destination development continues• Canadian rail development is coming

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Challenges

• Spreads have narrowed, but seems to be a short-term phenomenon

• Pipeline competition

• Political and environmental risks

Questions?