How a Railroad Merger Will Boost Energy Security and National Security

As 2025 draws to a close, Washington’s national security debate remains focused on front-line assets such as carrier strike groups, fighter aircraft, and cyber defenses. Yet one of the most important and underappreciated national security issues heading into 2026 is far less visible: domestic logistics and the condition of America’s freight transportation system.

In the coming year, the Surface Transportation Board (STB) will likely weigh in on the proposed merger between Union Pacific and Norfolk Southern. While many regulators view this deal through a commercial lens, the merger has broad defense implications. 

The Trump administration has made one principle clear throughout its first year: without energy security, there is no security. It is the prerequisite for a strong economy and powerful military. And now the U.S. is witnessing a resurgence in the demand for reliable, 24/7 baseload power, driven largely by the exponential growth of AI, which requires energy intensive data centers, and advanced manufacturing.

America’s energy resources are highly dependent on freight rail – regardless of whether it is a fossil fuel or renewables. According to the Association of American Railroads, 70 percent of all coal delivered to U.S. power plants moves via freight rail. Railroads also carry 95 percent of all ethanol.

When natural gas pipelines failed during extreme weather events in Texas in 2021, it was the backup mode of rail that kept essential fuel moving, keeping homes heated and Texans safe. A unified Union Pacific and Norfolk Southern network would streamline these energy corridors, creating a transcontinental flow of energy that can bypass bottlenecks and unnecessary stops.

Beyond energy, the mobilization of the U.S. military hinges on rail. For over 50 years, the U.S. Army’s Railroads for National Defense (RND) program has recognized that moving heavy armor and massive quantities of supplies across a continent cannot be done by air or truck alone. This is codified in the Strategic Rail Corridor Network (STRACNET), a 41,300-mile system of critical lines serving 141 military sites.

Currently, the gap between Eastern and Western railroads is a logistical chokepoint. A transcontinental railroad, by way of a Union Pacific-Norfolk Southern merger, would effectively eliminate this divide. By integrating their systems, the U.S. would gain a single-line capable of delivering weapons and fuel from the Atlantic coast to Pacific ports. This means a more resilient supply chain for the military industrial base and economic growth via increased export capacity.

If the U.S. is to maintain its competitive edge in military dominance and in AI, it must have a rail network that functions at its full potential. By approving this merger, the Surface Transportation Board can help secure a more efficient transportation landscape that serves the armed forces, ensures reliable and affordable electricity, and thereby benefits all Americans. 

About the Author: Merrick “Mac” Carey is Chief Executive Officer and founder of the Lexington Institute, a public policy think tank based in Arlington, Virginia.