Reese Energy Consulting today is following a Seeking Alpha story that performs an insightful post-mortem on last year’s Berkshire Hathaway decision to bet huge on natural gas at a time when the nation’s fossil fuels industry wrestled on life support. While other energy investors already had sour whiffs of anything oil and gas, Warren Buffet sealed the largest deal of 2020 with his $9.7+ billion acquisition of Dominion Energy’s natural gas pipeline and storage business. The July purchase included 100% ownership of three pipelines sprawling 7,700 miles; 50% ownership of a fourth; 20.8 BCFPD of total transportation capacity; 900 BCF of storage; a 25% stake in Cove Point LNG; and control of 18% of all U.S. interstate gas flows. And there was more to come. Buffet in August scooped up stakes in five Japanese commodities trading firms for a cool $7 billion. Now, flash forward to this moment—to $2.55 per MCF gas prices vs last July’s $1.44, record-breaking LNG exports (predominantly to Asia)—and ask yourself: What was I thinking when Buffet was thinking this?

 

Berkshire Hathaway

Berkshire Hathaway is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States.

www.berkshirehathaway.com

Learn more about REC and our natural gas and LNG services at www.ReeseEnergyConsulting.com.

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