Was Warren Buffett the Key to Keystone?

By Daniel John Sobieski at the American Thinker

Warren Buffett, Investor at the Berkshire Hathaway Fund

When President Obama announced he was killing the Keystone XL pipeline, he said he was agreeing with the State Department’s assessment that the pipeline from Canada “would not serve the national interests of the United States.”

The fact is that it would not have benefitted the personal financial interests of friend and economic mentor, Warren Buffett, who can rest assured that oil from Canada and the nearby Bakken formation in North Dakota will continue to be transported by a railroad he owns. As Investor’s Business Daily noted in a 2011 editorial:

Killing the Keystone XL pipeline may help one of the world's richest men get richer. North Dakota's booming oil fields will now grow more dependent on a railroad the president's economic guru just bought….

As oil production ramps up in the Bakken fields of North Dakota, plans to use the pipeline to transport it have been dashed.

As a result, North Dakota's booming oil producers will have to rely even more on the Burlington Northern Santa Fe (BNSF) railroad, which Buffett just bought, to ship it to refineries.

Buffett's Berkshire Hathaway has agreed to buy Burlington Northern Santa Fe in a deal valuing the railroad at $34 billion. Berkshire Hathaway already owns about 22% of Burlington Northern, and will pay $100 a share in cash and stock for the rest of the company.

When President Obama was first running for office, he publicly declared that Warren Buffet was his prime source for economic advice. As CNBC noted in July 2008:

Barack Obama calls on Warren Buffett, among others, as he turns his attention to the troubled U.S. economy now that he's returned from his international tour that featured a well-attended speech in Berlin.

In an interview with Tom Brokaw on NBC's Meet the Press over the weekend, Obama said that today he would be "pulling together" some of his "core economic advisers" to "examine the policies that we've already put forward--a middle class tax cut, a second round of stimulus, a effort to shore up the housing market in addition to the bill that was already passed through Congress, what we need to do in terms of energy and infrastructure."

President Obama would soon launch an endless review process that would kick the Keystone oil can down the road until he was ready to kill it, a non-suspicious interval of time having elapsed after economic mentor Warren Buffet would buy the railroad that would replace Keystone XL.

So how did Buffett do on his investment and did he profit from buddy Obama’s delaying and then killing the pipeline? Some would say handsomely.

As Forbes reported last year . . . Read More

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