Last winter, I traveled to southeastern Montana (brr!) to report on a battle over a coal mine being proposed by Arch Coal, America’s second-biggest coal company, and a coal-carrying railroad that’s needed to transport the coal from the mine to coal-burning power plants, either in the U.S. or in Asia. The railroad, called the Tongue River Railroad, is owned by Arch Coal, by the BNSF Railway, which is a unit of Warren Buffett’s Berkshire Hathaway and by the candy billionaire Forrest Mars Jr.
It’s a fascinating story, for a bunch of reasons. The coal mine and the railroad are interdependent; both will be built, or neither will be. They need the approval of state and federal regulators. And opposing them are an unlikely coalition of Montana cattle ranchers, members of the northern Cheyenne tribe, a small Amish farming community that recently moved to to the state in search of peace and quiet, and some very determined environmental activists from the Northern Plains Resource Council, the National Wildlife Federation and the Sierra Club.
My story was as just published in the May/June issue of by Sierra, the magazine of the Sierra Club, under the headline, Warren Buffett’s Coal Problem. Like the Sierra Club, I think this coal mine is a bad idea–a very bad idea–and that’s one reason why I wanted to write the story.
Most stories I do have shades of grey. (No, not 50 Shades of Grey!) Is Walmart good for the planet, or not? Is nuclear power a viable climate solution? Will GMO foods have feed the world, or ruin agriculture? Should the government subsidies electric cars? All of these, in my mind, are complicated questions. As a longtime reporter for newspapers and magazines, I’m trained to see both sides. And I can understand and respect the arguments of people on opposite sides of them.
This coal mine is different. The world needs to burn less coal, not more, to deal with the threat of climate change. (Here’s why.)This coal will most likely be shipped to China, which is suffering from terrible air pollution. Ranchers who own land that’s needed by the railroad don’t want to sell it, but they may not have any choice; the railroad owners plan to use the state’s power of eminent domain to force the ranchers to sell, if the rail-line owners can’t negotiate deals with the ranchers. The way of life of the ranchers, some of whose families have tended the land for more than a century, and the Cheyenne, who have been their even longer, is threatened by a coal company and a railroad that will extract coal from the area for a couple of decades and then leave. I wanted to give the ranchers a chance to be heard in my story. “Why should we give up our property rights for a coal mine?” one rancher asked me. Good question.
Having said that, Warren Buffett’s role here, as well as his broader impact on energy and climate change, is more complex. Buffett, as my story in Sierra notes, has backed solar and wind power through Berkshire’s Mid American Energy Holdings, a big utility company. Matter of fact, the last time I reported about Warren Buffett was for a 2009 FORTUNE cover story called Warren Buffett Takes Charge, about his investment in the Chinese electric car and solar energy company BYD. What’s more, as a common carrier, the BNSF Railway has an obligation to carry coal on its lines.
So what’s the problem? A couple of things, in my view. First, there’s no obligation for Buffett and BNSF to build the Tongue River Railroad, a 42-mile rail line that would link Arch’s Otter Creek coal tracts to the BNSF’s main lines. You could argue that Berkshire should build the line because it will be profitable and increase shareholder value, but we rightly expect CEOs and, especially Buffett, to hold themselves to a higher standard.
Unlike his good friend Bill Gates, Buffett has been virtually silent on the issue of climate change (while speaking out on other public policy issues, like taxation.) Worst of all, BNSF has lobbied on the wrong side of the issue–opposing regulation of coal through industry groups like the American Coalition for Clean Coal Electricity and pushing for coal export facilities in the Pacific Northwest. The railroad touts itself as environmentally friendly but its chairman, Matthew Rose, has ducked questions about climate. At the very least, Buffett and his company need to be held accountable for being powerful friends of coal.
Like many people, I’m a fan of Warren Buffett. I like his modesty and lack of pretense. I admire his generosity. But his support for coal puts a stain on his reputation, in my view. I invite you to read my story and let me know what you think, on the Sierra site or in the comments below.