Berkshire Hathaway’s acquisition of railroad operator Burlington North Santa Fe is really a "huge bet" by Warren Buffett on the coal industry, writes Steve Gelsi. Burlington hauls more coal than anything else, and the material accounted for a quarter of its third-quarter revenue. Buffett already is heavily invested in coal—"of the largest 15 US electricity generators, Berkshire Hathaway holds the portfolio with the largest carbon footprint."
The wager is characteristically smart, writes Gelsi at MarketWatch. Coal still provides nearly half of America’s electricity, and 34 new coal plants have either been approved or are under construction. The nation's GDP is expected to grow between 2%-3% in 2010, and the resulting increase in demand for electricity would raise coal consumption between 5% and 7%.