We haven't talk much about the railroads lately, with so much other crazy stuff going on. And yet they continue to do great business and trade for low valuations, catching even the eye of ace value investor Warren Buffett, who has taken a big stake in Burlington Northern Santa Fe (BNI) recently.

One interesting thing about the railroads that's not widely understood is that they are a fuel efficient and environmentally friendly way to move freight. According to a CIBC analysis, they are at least three times more fuel efficient than trucks and emit half as many greenhouse gases. According to some estimates, there is as much a 65% reduction in dangerous emissions per ton-mile for freight moved by rail vs. truck.

Let me put it another way. According to data compiled by state transportation analysts, for every 1% of long-haul freight that is switched from truck to rail, we'll net a savings of around 111 million gallons of fuel per year and a cut in greenhouse gas emissions of 1.2 million tons. If 10% of long-haul freight now moved by truck were moved to rails, annual greenhouse gas emissions would fall by 12 million tons, according to numbers put together by the American Association of State Highway and Transportation Officials.

How is this possible? According to CIBC the railroad companies are using new locomotives that have 12-cylinder engines that produce as much horsepower as older 16-cylinder locomotives. You may be surprised to learn that the industry is also using hybrid locomotives that combine fossil-fuel with a large bank of rechargeable batteries. Electronics also play a role, as the railroads use new on-board monitoring systems to figure out the best speed for a train, which saves fuel. Plus, they're reducing riding time, which also cuts fuel use and emissions. A transportation option that is environmentally friendly and fuel efficient? Sounds good to me!