In recent years Buffett has increasingly been building up Berkshire's energy portfolio, primarily through its MidAmerican Energy Holdings unit. Energy has now joined insurance as one of Berkshire's two major sectors.
As much as environmentalists decry the effect coal has on the environment, it's still the raw material that generates the vast majority of electricity in the U.S. That's not likely to change anytime soon. If plug-in hybrid vehicles grow in popularity, that will leave the country less dependent on oil but more dependent on electricity, which translates into the need for more coal.
In other words, it's likely that Burlington Northern will be hauling ample coal for the foreseeable future, and its customers presumably include the power plants controlled by MidAmerican. Is it possible that Buffett's attraction to BNI stems from the desire to control an important shipping vehicle for Berkshire's growing array of power plants?
This is not to say that the other theories behind Buffett's big bet on BNI have no merit. The company does seem poised to profit off a rebound in imports from China. It will be a cheaper alternative to trucking should oil prices go back up. It would be virtually impossible for a competitor to replace Burlington's massive rail network, which gives BNI the moat that Buffett so desires. But it seems feasible that Buffett is also looking at how BNI could someday fit into the Berkshire organization as a stand-alone firm.
Remember, however, that Buffett didn't complete his purchase of GEICO for Berkshire until 1994, nearly two decades after he bought a major chunk in the 1970s.
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