{"id":349375,"date":"2010-02-22T10:47:17","date_gmt":"2010-02-22T15:47:17","guid":{"rendered":"http:\/\/greenenergyreporter.com\/?p=6487"},"modified":"2010-02-22T10:47:17","modified_gmt":"2010-02-22T15:47:17","slug":"warren-buffett%e2%80%99s-bnsf-buy-looking-smarter-as-coal-surges","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/349375","title":{"rendered":"Warren Buffett\u2019s BNSF Buy Looking Smarter as Coal Surges"},"content":{"rendered":"

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\"\"<\/a><\/p>\n

Buffett: a clever bet on coal<\/p>\n<\/div>\n

O, Oracle of Omaha, how could we ever have doubted that your bet on coal was a wise choice?<\/p>\n

Now, as coal prices have surged more than 40 percent from last year\u2019s lows, we see three reasons why Warren Buffett\u2019s purchase of the Burlington Northern Sanata Fe railroad \u2013 which hauls 1\/5 of the nation\u2019s coal \u2013 was smart.<\/span>To review: Buffett announced in November that Berkshire Hathaway would pay $34 billion the three-quarters of the massive railroad that it didn\u2019t already own. We initially doubted<\/a> that it was a bet on coal though we later reversed<\/a> and declared that Buffett was going long CO2.<\/p>\n

Bloomberg has a long thinkpiece on coal\u2019s resurgence<\/a> \u2013 it\u2019s up to $59.28 per ton, with a target of $70 \u2013 this morning, which helps us quantify Buffet\u2019s genius.<\/p>\n

1) Brrr\u2026. It\u2019s cold out there.<\/strong><\/p>\n

The winter has also been very cold in some areas of the country, driving greater demand for coal to feed powerrplants and shrinking stockpiles.<\/p>\n

If you live in the I-95 corridor, you may have noticed that it\u2019s snowed a bit this winter. A smallish, swampy city near Virginia, for example, has received 54.9 inches of snow \u2013 breaking a 110-year-old record.<\/p>\n

Dahlman Rose & Co. analyst Daniel Scott tells Bloomberg,<\/p>\n

\u201cThe cold weather the best thing that (coal suppliers) can get right now that\u2019s not a full economic recovery.\u201d<\/p>\n

2) China is hungry<\/strong><\/p>\n

Is it ever. The Chinese economy has been importing coal at a record rate because of a frigid winter and a superheated economy that grew at 10.7 percent last quarter over the same period last year, Bloomberg reports.<\/p>\n

The country\u2019s National Energy Administration is forecasting a coal shortage through March.<\/p>\n

China\u2019s economic growth, more than any other factor, should keep coal prices high.<\/p>\n

3) Global warming legislation is stalled<\/strong><\/p>\n

In case you missed it, the U.N. climate summit didn\u2019t yield great results<\/a> and a cap and trade bill that showed so much promise when it passed through the U.S. House of Representatives in the spring has stalled in the senate.<\/p>\n

A tri-partisan coalition in the senate<\/a> of Lindsey Graham, R-S.C., John Kerry, D-Mass., and Joseph Lieberman, I-Conn., was making noises today<\/a> about trying to revive the climate bill talks but the goal seems a long way off right now.<\/p>\n

The big winner when climate legislation gets railroaded is\u2026 coal!<\/p>\n

Both BNSF and Berkshire Hathaway are both up but there are a lot of factors involved in those valuations and, anyways, that\u2019s beside the point. The point is that Buffett has the right instincts about the energy economy.<\/p>\n

Those instincts tell us that the green energy future is still taking a backseat to the dirty energy past and present.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Buffett: a clever bet on coal O, Oracle of Omaha, how could we ever have doubted that your bet on coal was a wise choice? Now, as coal prices have surged more than 40 percent from last year\u2019s lows, we see three reasons why Warren Buffett\u2019s purchase of the Burlington Northern Sanata Fe railroad \u2013 […]<\/p>\n","protected":false},"author":854,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-349375","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/349375","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/854"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=349375"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/349375\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=349375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=349375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=349375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}