‘The Warren Buffett Shareholder’ author Lawrence Cunningham and Smead Capital Management CEO and CIO Bill Smead respond to Berkshire Hathaway’s shareholders meeting this year that featured only Warren Buffett and his possible successor Greg Abel.
A victory in the 2020 presidential election of former Vice President Joe Biden represents the “biggest risk” for the latest Warren Buffett deal, according to an industry expert.
Buffett’s Berkshire Hathway announced plans on Sunday to buy Dominion Energy’s natural gas transmission and storage network for $ 9.7 billion, including debt. A Biden presidency would likely lead to stricter regulations in the energy industry.
| Heart | Security | Latest | Change | Change% |
|---|---|---|---|---|
| BRK.B | BERKSHIRE HATHAWAY INC. | 182.70 | +3.87 | + 2.16% |
| re | DOMAIN ENERGY | 74.77 | -7.92 | -9.58% |
“Given all the indications regarding all the other messages we’re seeing from him, it will be a soliloquy for the left side of the party, which means unnatural gas,” Stephen Schork, founder and editor of The Schork Daily Oil Subscription Newsletter Report, he told FOX Business. “That means passing laws.”
BUFFETT’S BERKSHIRE TO BUY GAS ENERGY DOMINION ASSETS FOR $ 4 BILLION
Biden appointed the Green New Deal advocate, Representative Alexandria Ocasio-Cortez, DN.Y., to lead her climate working group along with former Secretary of State John Kerry, who signed the Paris climate agreement for the States United.
The Green New Deal calls for “global reductions in greenhouse gas emissions from human sources of 40 to 60 percent from 2010 levels by 2030” and “net zero global emissions by 2050.”
President Trump’s policies, which included efforts to increase production on public land and reverse regulations, have helped the United States become the world’s largest oil producer. Trump abandoned the Obama-era Paris agreement in June 2017.
The Berkshire deal for Dominion’s natural gas assets is “the classic Buffett in that it is the best-in-class operator whose valuation is discounted due to macro or exogenous forces,” Cathy Seifert, director of New York-based CFRA Research. .
The agreement, which includes more than 7,700 miles of natural gas transmission lines and 20.8 billion cubic feet per day of transport capacity, will help Berkshire increase its scale and presence in the energy space.
Seifert “would not be surprised” to see Berkshire continue to develop its energy business due to the number of struggling vendors in the space.
Eighteen energy companies have filed for bankruptcy so far this year, according to the Dallas-based law firm Haynes and Boone, exacerbated by West Texas crude oil prices that briefly plummeted below zero in April.
Although crude oil prices have attracted all the attention, natural gas is the energy component that has suffered during the longest period of difficulty, since space has a lot of production but not enough infrastructure to bring all that product to the market. .
The Berkshire deal is “pretty smart” in that many of the growth pains associated with extracting assets from the ground and into transportation markets have already been incurred, according to Schork.
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“Buffett is one of the guys you’re going to look at and if he’s making this investment, he’s telling you that it’s probably safe to get back in the water,” Schork said. “Regardless of the politics of it all.”
