Billionaire investor Warren Buffet does not approve of President Obama's recent veto of the Keystone XL pipeline. Buffet believes Obama is thumbing his nose at Canada.
Buffet said another reason he would have passed Keystone XL is because the United States may need a favor from Canada in the future. It should be noted that Obama's veto of Keystone XL is not his final decision on the transnational project. The president vetoed the bill because he wants to make the final decision as opposed to allowing Congress to back him into a corner.
But Buffet's support of the pipeline is particularly surprising, given his ownership of BNSF Railway, which is a major network that transports crude from the Bakken region of North Dakota. This may be one case where the prosperous investor is placing his conscious above his portfolio. He mentioned that pipeline explosions and mishaps are rare compared to shipments by way of rail. And given the string of train derailments in recent years, the issue of shipping crude through the rail system has come to the forefront.
Railway vs. Pipeline Debate Rages On
Many contend that pipeline transportation is safer than trains, but the issue is a bit more complicated. According to data taken from 2005 to 2009, there were 718 train-related accidents each year, compared to 354 accidents for pipelines. However, some critics argue that pipeline proponents are misleading the public about the true safety of pipeline networks. The fact is that pipeline leaks occur more frequently than railroad accidents; the only difference is that the pipeline industry is only required to report spills over five gallons. Railway networks, on the other hand, are mandated to report all accidents. Pipeline spills can also be harder to reach and clean up.
Railway Still More Dangerous
While pipeline accidents are more frequent, no one can deny that train derailments can happen in populated areas. Another problem is that the Bakken-type crude being shipped throughout the country ignites at a low temperature due to the higher levels of natural gas contained within. Using pipeline systems is a safer and efficient alternative to loading volatile crude on trains. And those who support further pipeline construction contend that more pipeline networks should be implemented to import more oil from Canada to reduce Middle East dependence.
Buffet Tows the Line
Buffet has stated that the railway industry will need stringent safety standards to minimize accidents and hazards, and he has already put his money where his mouth is by investing in safer railway cars. But Buffet isn't coming down on one side or the other. He still believes both sides are using talking points to advance their agendas, and he stresses that pipelines and trains are necessary to sustain America's energy future.