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Warren Buffett Renewable Energy Investment

Warren Buffett's Secret $9 Billion Investment

Written by Jeff Siegel
Posted January 30, 2012

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Until recently, he's kept it pretty quiet.

In fact, when he ponied up his first billion for a piece of this action, he barely made a peep.

The only reason I found out about it is because I know some of the players behind the scenes...

These are the money guys that tend to keep a low profile, yet are typically the most important guys involved in these types of deals. And that's the way they like it.

Regardless, for the past 12 years, Warren Buffett has been meticulously building his position in some very select modern energy markets. And in typical Buffett fashion, he's going make billions.

Fortunately, you can get a piece of this action, too.

You just need to do two things:

First, tune out all the hype and B.S. spewing from Washington and the mainstream media about modern energy technologies. They know nothing, and are nothing more than parasites. As investors, they are of zero value to us.

Second, the next time you look at a solar panel, wind farm, or state-of-the-art, super-efficient co-generation plant, remember one thing: These were not built for treehuggers; these were built for very wealthy investors.

Modern energy technologies don't exist to appease environmentalists. They exist to make very rich individuals even richer.

Buffett Loves Renewable Energy... and Natural Gas... and Nuclear... and...

Warren Buffett isn't hanging out in drum circles talking about clean air. But he is making billion-dollar clean energy deals — and he's actually been doing so for more than a decade.

And last week, Buffett upped the ante on clean energy once again by announcing that his MidAmerican Energy Company is officially forming a branch dedicated solely to the development of modern renewable energy.

The new branch will be broken down into four units:

  • Solar

  • Wind

  • Geothermal

  • Hydro

MidAmerican's already got more than $9 billion in wind and solar alone, and more is expected this year.

The energy giant — which is the largest electricity provider in Iowa, Wyoming, and Utah — is clearly bullish on renewable energy. And management isn't shy about making this new growth strategy known.

In fact, MidAmerican VP Jonathan Weisgall pulled no punches last week when he told reporters this move was simply a vote for renewable energy and not some random bet.

Of course, Buffett's no fool either, and he isn't putting all his eggs in that “clean energy” basket...

While the Oracle of Omaha clearly understands that the long-term outlook on energy will not be dictated solely by fossil fuels, MidAmerican's conventional energy investments will continue to butter most of its bread for years to come.

Natural Gas, Oil, and Nuclear: Buy What Buffett Buys

MidAmerican already transports 8% of the country's natural gas through its own pipelines, and Burlington Northern Santa Fe (which Buffett owns) moves oil from the Bakken region in North Dakota to refineries.

Interestingly, with the Keystone Pipeline construction delayed (I say “delayed” because only a fool believes this pipeline won't be built), oil producers will now have to rely even more on Burlington.

This is a very bullish case for freight rail this year — and of course for continued production in the Bakken, particularly in the Three Forks region, where we've been telling you to load up for months.

Buffett's also big on nuclear — but not in the way you might think.

You see, back in 2008, MidAmerican tried to do a deal in Idaho, but that fell through before Buffett ponied up any real money. He then looked to get a piece of Constellation's Calvert Cliffs nuclear reactor, but French state-owned utility EDF beat him to the punch.

Then Fukushima happened, which resulted in Buffett losing interest in conventional nuclear power generation, saying: “[conventional nuclear] isn't going to happen because the psychology has changed.”

But here's what a lot of media reports missed: Even after Fukushima, MidAmerican's nuclear energy unit had been sniffing around a different kind of nuclear technology — small modular reactors.

Buffett may be in tune with the kinds of risks folks are willing to take when it comes to power generation, particularly after one of the worst nuclear meltdowns in history, but he also embraces and doesn't run from disruptive technology.

Could these small modular reactors prove to be a disruptive technology that could make Buffett even richer?

Perhaps. But that's not the only disruptive technology in the nuclear space right now.

And I would argue that small modular reactors are nothing compared to a recent breakthrough in nuclear fuel technology that allows for both increased safety and lower operational costs, the latter being a big deal as conventional nuclear simply could not exist today without massive government subsidies.

Of course, thanks to a new development in nuclear fuel technology from our neighbors to the north, these huge nuclear subsidies could be a thing of the past.

And the company behind this development?

Well, let's just say that between its truly disruptive technology and the fact that the president of this company was recently appointed as the head of the World Nuclear Association's Fuel Technology Group, it's probably going to be one of the easiest triple-baggers we'll see in 2012.

My colleague Nick Hodge actually has some video of this company's technology in action. Interestingly, he's the only analyst on the planet who was allowed the necessary access to obtain this footage. Not even the big dogs over at Goldman could get their hands on it.

But that's how it goes when you're willing to get your hands dirty instead of sitting behind an antique desk in some overpriced Wall Street office.

Of course, it won't be much longer before every Wall Street hack is jumping into this stock...

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

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