Obama Puppetmaster Warren Buffett Biggest Winner From Keystone Pipeline Rejection

Tyler Durden's picture

Just when one thinks American crony capitalism couldn't hit new lows, here comes Warren Buffett and his personal puppet, the president, proving everyone wrong once more. Because if one thinks there is no (s)quid pro quo for all that "sage" advice that Buffett has been giving to Obama on extracting as much wealth as possible from future wealthy Americans (before they decide they have had enough with this crony shit and leave the country for good), one would be fatally wrong. As it turns out, it is not just natural resources and aquifer purity that Obama had in mind when sealing the fate of the Keystone XL pipeline. No - it appears there were far more relevant numerial metrics that determined Obama's decisions. Such as the bottom line number of Buffett's Burlington Northern, which according to Bloomberg, is among U.S. and Canadian railroads that stand to benefit from the Obama administration’s decision to reject TransCanada Corp.’s Keystone XL oil pipeline permit. '“Whatever people bring to us, we’re ready to haul,” Krista York-Wooley, a spokeswoman for Burlington Northern, a unit of Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc. (BRK/A), said in an interview. If Keystone XL “doesn’t happen, we’re here to haul." And quite delighted to reap the windfalls of unfounded populist fears she forgot to add. Because while the whole "carbon-credit" multi-trillion top line expansion scheme for Goldman under the pretense of actually caring for the environment may have collapsed, it is not preventing others from trying and succeeding where even Goldman has failed.

From Bloomberg:

Rail car production is already at a three-year high as manufacturers such as Greenbrier Cos Inc. (GBX) and American Railcar Industries Inc. (ARII) expand to meet demand for sand used in oil and gas exploration, according to Steve Barger, an analyst at Keybanc Capital Markets Inc. in Cleveland, citing Railway Supply Institute statistics.

 

Rail-car suppliers can add capacity, Hatch said.

 

“Railroads are not just a stopgap while we wait for a pipeline,” Hatch said in an interview. “They are potentially part of the long-term solution.”

 

Railroads are being used in North Dakota (STOND1), where oil producers have spurred a fivefold increase in output by using intensive drilling practices in the Bakken, a geologic formation that stretches from southern Alberta to the northern U.S. Great Plains. During 2011, rail capacity in the region tripled to almost 300,000 barrels a day as higher production exceeded what pipelines handle, according to the State Department report on Keystone XL.

 

Burlington Northern carries about 25 percent of the oil from the Bakken, said Krista York-Wooley, the railroad spokeswoman. The company can carry higher volumes from North Dakota or Alberta, she said.

 

Canadian Pacific Railway Ltd. (CP)’s shipments from North Dakota climbed to more than 13,000 carloads last year from about 500 in 2009, Ed Greenberg, a spokesman, said in an e-mail. The Calgary- based company has a similar plan in western Canada.

 

“With an extensive rail network and proven expertise in moving energy, CP offers a flexible option for transporting crude oil and other energy-related products to and from key locations in North America,” Vice President Tracy Robinson said in an e-mail. “Rail is scalable, allowing CP to effectively keep pace with the shipping needs of producers.”

So those wondering how it is that AAR railroad statistics continue to be so very strong, it is not because the economy actually justifies it: it is because crony interests such as those of the Octogenarian of Omaha demand it as "payment" for their crony collegiality with the biggest dunce president since Carter.

In other news, it is truly amazing how with every new development, America is now becoming like one giant conspiracy theory, only this time it is actually not a theory as with every passing day we see it enacted in practice.