CN seeks to close deal by year’s end but would run no new trains, preserve environmental status quo, and protect all interests pending STB environmental review.CN said that it has asked the Surface Transportation Board (STB) to take a new approach to CN’s proposed acquisition of the major portion of the Elgin, Joliet & Eastern Railway Company (EJ&E). CN has asked the Board to issue a final decision on the transportation merits of the transaction in time to permit the transaction to close before year-end, but to preserve the environmental status quo pending further STB action on the environmental issues posed by the transaction. The new approach would assure adequate protection of the environment for communities along the EJ&E. At the same time, it would avoid the risk to the broader public interest in improved rail transportation posed by regulatory delays that threaten termination of the transaction. CN’s petition requests that the STB decide by September 15, 2008 whether it will modify its procedural schedule to provide for a final decision by October 15, 2008 on the transportation merits of the proposed EJ&E acquisition. Under law, that decision would be based on whether the Board has found adverse competitive impacts that are both “likely” and “substantial.” CN is also asking the Board, if it decides to approve the transaction in October, to condition its approval on preserving the environmental status quo until the Board’s Section of Environmental Analysis (SEA) has completed its environmental review of the transaction. CN contends that, so long as the environment is not affected by the transaction during environmental review, the law requires the Board to approve the transaction on its competitive merits. Once the STB’s environmental review is completed, the Board would be expected to issue a decision governing any change in the environmental status quo. “This transaction has far-reaching economic and transportation benefits to the Chicago region, the Midwest, and the nation as well as for CN and its customers,” said E. Hunter Harrison, President and Chief Executive Officer of CN. “This transaction enjoys significant support from a broad array of shippers and the range of other parties who have a stake in making sure that the serious rail congestion issues plaguing Chicago are being addressed by sound transportation initiatives such as the acquisition by CN of the EJ&E. “At the same time, we are well aware of the concerns raised by communities along the EJ&E line about the environmental impacts of increased train traffic. We are asking the STB to set a schedule providing for a decision on the merits which, if favorable to CN, would allow us to close on this transaction before the end of this year, but would not cause any adverse environmental impacts before the Board completes its environmental review and develops a full record on which to base the environmental mitigation that it may impose on the transaction.” CN is entitled to and requires this relief because the STB declined CN’s request for a fixed timetable that would conclude its regulatory and environmental review by the end of the year and, despite CN’s continuing best efforts, a substantial risk remains that EJ&E, which is an indirect subsidiary of United States Steel Corporation (US Steel), would terminate the proposed transaction if it is not closed before year-end. US Steel has recently declined CN’s request for a modification of the Stock Purchase Agreement (SPA) or other action that would assure that the transaction could still be closed if approved after December 31, 2008. That decision has highlighted the risk that the transaction would be terminated before it was reviewed by the STB. As a result, CN is seeking relief to allow this important transaction to close prior to the end of 2008. “CN is prepared to take the positive step of closing this transaction before year-end in a way that provides the STB with additional time to complete its environmental review by early 2009,” Harrison said. “We are hopeful that the final