Norfolk Southern reaches agreement to resolve federal East Palestine derailment claims and investigations

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May 23, 2024, 11:35 ET

Agreement establishes long-term health monitoring and mental health services for residents and first responders, codifies rail safety improvements, and recognizes Norfolk Southern's extensive community investments

ATLANTA, May 23, 2024 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) has reached an agreement on a consent decree with the U.S. Department of Justice (DOJ), U.S. Environmental Protection Agency (EPA), and U.S. Department of the Interior (DOI) to resolve all their claims and investigations arising from the derailment in East Palestine, Ohio.

The agreement, which is subject to court approval, builds on the significant financial commitments that the company has already made toward environmental remediation, community-based programs, and safety-related enhancements.

"From day one, it was important for Norfolk Southern to make things right for the residents of East Palestine and the surrounding areas," said Alan H. Shaw, president and CEO of Norfolk Southern. "We are pleased we were able to reach a timely resolution of these investigations that recognizes our comprehensive response to the community's needs and our mission to be the gold standard of safety in the rail industry. We will continue keeping our promises and are invested in the community's future for the long-haul."

Consent Decree Terms
Under the agreement, Norfolk Southern will formalize several commitments to address environmental remediation, health monitoring, and rail safety. Those include:

Paying a $15 million civil penalty and reimbursing the EPA for its full response expenses, which are approximately $57 million through November 30, 2023, as well as subsequent response costs.
In addition to completing clean-up of the derailment site, implementing several environmental remediation projects to address pre-existing pollution and to improve water quality in the region. This is estimated to cost $7 million.
Continuing monitoring of groundwater and surface water bodies estimated to cost $10 to $15 million. Additionally, a drinking water monitoring program will be established, which is estimated to cost $15 million over 10 years.
Establishing a $25 million Community Health Program that will provide medical exams and mental health services for the community and first responders for up to 20 years.
$244 million to be spent on safety initiatives through 2025, as part of the company's Six Point Safety Plan and investments in safety infrastructure, technology, and training.

The financial impacts associated with the above have either been previously estimated as part of the total $1.7 billion recognized in response to the incident through March 31, 2024, or are included as part of the company's ongoing financial outlook, including those surrounding capital expenditures and overall 2024 outlook. The company continues to pursue insurance reimbursements and third-party claims.

Comprehensive Response to Date
As detailed by the DOJ and EPA in the consent decree, Norfolk Southern has developed, coordinated, and performed one of the most comprehensive incident responses in recent history. At the core of that response are significant investments that have been realized to date, including:

Approximately $780 million in environmental response and remediation costs.
A recently announced $600 million class action settlement, which along with the community health program under the consent decree with DOJ and EPA, fulfills Norfolk Southern's promise to address long-term healthcare for residents of East Palestine and surrounding areas.
Direct financial support and commitments of $107 million to the community through its Family Assistance Center and investments in the citizens, businesses, and life of the East Palestine and surrounding Ohio and Pennsylvania communities.

To learn more about Norfolk Southern's commitment and ongoing remediation efforts in East Palestine visit NSMakingItRight.com.

About Norfolk Southern
Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a customer-centric and operations-driven freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid approximately 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver more than 7 million carloads annually, from agriculture to consumer goods, and Norfolk Southern originates more automotive traffic than any other Class I Railroad. Norfolk Southern also has the most extensive intermodal network in the eastern U.S. It serves a majority of the country's population and manufacturing base, with connections to every major container port on the Atlantic coast as well as to major ports in the Gulf of Mexico and Great Lakes. Learn more by visiting www.NorfolkSouthern.com.

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SOURCE Norfolk Southern Corporation