Warren Buffett Says Coal Will Be Replaced
According to a report from Bloomberg News, Warren Buffett, the U.S.'s second wealthiest person and most-respected investor, said this week that it's time to start planning for the end of coal.
"Coal will gradually decline in importance," Buffett said, in an answer to a question at a ribbon-cutting for a new Geico center in Indiana. "There aren't any new coal plants being built now, so you will see gas-fired plants, you’ll see wind, you’ll see solar."
This is a big statement for a man who has the entire investment community hanging on his every word, and Buffett should know: In many ways, he's been an important part of this transition. In addition to owning Geico, Buffett owns MidAmerican Energy, which under Buffett's ownership has become the country’s top provider of wind power. In January of this year, MidAmerican and the Sierra Club reached an agreement in Iowa in which the company retired seven coal-fired boilers and committed to develop a new solar installation at the Iowa State Fairgrounds. His companies have continued to develop wind and solar power, beginning construction on one of the largest solar farms in the world and investing $1.9 billion in Iowa wind power. This latest wind investment -- the largest economic development project of any kind in Iowa's history -- will put his Iowa utility at a whopping 39 percent wind power by 2017.
Of course, Buffett is not alone. As coal plants continue to retire, and only one new coal plant has broken ground since November 2008, the U.S. is installing record amounts of clean energy. During President Obama's first term, the U.S. doubled its installations of wind and solar, and in 2012 our country installed more wind and solar than coal, gas, or nuclear power, with both wind and solar having their best year ever.
This all raises questions as to what Buffett intends to do about his remaining coal holdings, including his coal-loving railroad, BNSF. PacifiCorp, another energy company owned by Buffett, owns the most coal plants in the West and recently unveiled a long-term energy plan that did not include a single wind project over the next ten years. PacifiCorp has already racked up multimillion-dollar fines for failing to consider alternatives to coal. What does PacifiCorp CEO Michael Dunn plan on telling his boss, given the "eventual decline" of coal?
And Warren Buffett is still involved with one of the biggest coal-burning schemes of all -- ongoing plans to export coal through the Pacific Northwest to developing markets in Asia. Buffett's BNSF Railway would be the primary transporter of that coal, and the company has tried to get the coal export terminals approved over the objections of thousands of activists across the Pacific Northwest. The coal exports plan was once seen as the escape hatch for U.S. coal abroad, but with three out of the original six proposed terminals canceled, recent Senate-requested investigations showing that coal on public land is being sold at under-market value, and announcements from both President Obama and the World Bank that they will be cutting off funding for coal plants abroad, is there a chance that Buffett may reconsider the future of coal exports as well?
Warren Buffett is not the only one to see the writing on the wall. Right before Buffett made an offer to purchase Nevada Energy, its CEO Michael Yackira declared that "coal is not part of the long-term future of our state." But hearing the facts from the Buffett, the "Oracle of Omaha," whose words are pored over and examined by investors all over the world, should be a wake-up call for utilities and public officials still on the fence about coal.
That our country's greatest financial mind sees an endpoint for coal should be welcome news. Coal-fired power plants continue to be the top source of carbon emissions, causing climate disruption and dumping the most toxic water pollution of any source. Thousands of people across the country continue to suffer from asthma attacks, emphysema, and other health symptoms triggered by air pollution from coal plants.
It's appropriate that Warren Buffett made his statement about coal's future in Indiana, a state that still gets 85 percent of its power from coal plants. Indiana Governor Mike Pence, who was on stage with Buffett, had to awkwardly restate his pro-coal position after the most respected investor of all time had just finished saying that it was a dead man walking. It was a poignant moment: When the greatest investor in the world is looking for the exit on coal, it's time for the rest of us to do the same.
-- Bruce Nilles, senior director of the Beyond Coal Campaign