Berkshire Hathaway joins major renewable-energy effort

Source: By Nancy Gaarder 
and Steve Jordon, Omaha World-Herald staff writers • Posted: Monday, August 3, 2015

Warren Buffett is lending his name and deep pockets to the battle against climate change.

Berkshire Hathaway Energy on Monday joined a dozen major U.S. businesses at the White House in calling for robust action on global warming.

Berkshire joined Apple, Walmart, General Motors, Cargill, Bank of America and others to announce more than $140 billion in investments in low-carbon projects and other actions as they shift toward greater reliance on renewable energy.

“It’s important that the world see that U.S. businesses are speaking with a strong voice” on climate change, said Ruth Comer, a spokeswoman for Berkshire Hathaway Energy, a division of Berkshire Hathaway Inc., the Omaha-based conglomerate headed by Buffett.

The timing of the announcement was purposeful — the White House is in the midst of wide-ranging negotiations aimed at an international agreement on climate change in Paris in December. President Obama also has been facing resistance from Congress over his efforts to rein in greenhouse gas emissions.

Monday’s statement by corporate heavyweights follows a statement earlier this summer by Pope Francis advocating for action on climate change.

On Monday, Berkshire Hathaway Energy took a more explicit stance than its parent company has done in years past.

In 2013, a Berkshire shareholder proposed that Berkshire outline goals and strategies for reducing emissions from its energy division, including retrofitting or closing coal plants.

Berkshire’s board of directors successfully urged shareholders to reject the proposal, saying the it wouldn’t be “a prudent exercise” given the uncertain regulatory environment and potential to raise rates “dramatically.”

“We recognize the importance of reducing greenhouse gas and other emissions,” the directors said in arguing for a “no” vote. They said Berkshire’s utilities already had reduced emissions and cited its solar and wind projects.

Energy, including fossil fuels, has become a foundational business for Berkshire Hathaway since it acquired MidAmerican Energy of Des Moines in 2000.

The division accounts for 9 percent of earnings by Berkshire Hathaway’s operating companies, or $1.88 billion in 2014, up 42 percent from two years ago. It sells electricity in 11 states, from Iowa to California, the largest geographic territory of any electric utility.

Buffett has promised that the company would buy and hold utility companies “throughout the world for decades to come.” Berkshire’s headquarters in Omaha declined to comment on the contrast between Monday’s decision to take part in the climate change initiative and some of its other businesses, including hauling coal and crude oil by its railroad division, BNSF Railway Co. Because of the way railroads are regulated, Berkshire is obligated to carry the coal and oil.

BH Energy has invested more than $15 billion in renewable energy and is targeting another $15 billion in investments, Greg Abel, chairman, president and chief executive officer, said in a press release.

“Joining these other U.S. businesses is one more way we can demonstrate our commitment to lead on climate action,” said Abel, who is seen as a possible successor to Buffett, who turns 85 next month.

Berkshire pledged:

» A nearly 16 percent increase in its wind holdings in Iowa.

» A 1,000-megawatt increase in purchases of wind and solar power by one of Berkshire’s western U.S. holdings, PacifiCorp.

» To retire more than 75 percent of coal generation capacity in Nevada in the next four years.

Multiple published scientific studies indicate that a broad consensus has formed among climate scientists: Climate-warming trends over the past century are very likely the result of human activities. In addition, most of the leading scientific organizations worldwide have issued public statements endorsing this position.

They say rapid changes underway have made the ocean more acidic, injected more moisture into the atmosphere, raised the average global temperature and eaten into snow and ice cover in North America.

Ag-reliant states like Nebraska and Iowa are particularly vulnerable, according to two of the region’s foremost experts on climate change, Don Wilhite, a climatologist and drought specialist at the University of Nebraska-Lincoln, and Eugene Takle, an agricultural meteorologist at Iowa State University.

Adverse effects won’t be felt just on the farm, Takle said. It will ripple through the states’ economies. Takle said that if global warming isn’t slowed, farmers in parts of the Midwest and Great Plains can expect a much tougher time making a living off the land.

Takle said he hopes Monday’s announcement will entice more businesses to sign on, something that the Obama administration says is happening. According to Monday’s announcement, additional companies will be signing up for what is being called the American Business Act on Climate Pledge.

“Some businesses had been willing to step up because it was the right thing to do,” Takle said. “More businesses are seeing that it just makes good business sense.”

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.