In 2021 note to shareholders, Buffet pledges $18 billion to jump over transmission regulatory hurdles

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In his 2021 annual note to Berkshire Hathaway shareholders, Warren Buffet noted that “the best sites for the new world of wind and solar generation…are often in remote areas.”  Buffet made this assertion to convey that for the renewable energy evolution and revolution to continue the U.S. must make a concerted effort to expand and reinforce its aging and over-taxed Bulk Electric System (BES).

This point is one that we’ve repeatedly argued over the last two years. In December 2018, we highlighted a report from the Department of Energy’s National Renewable Energy Laboratory (NREL) discussing the necessity of transmission expansion for wind energy to continue its penetration into the overall U.S. energy mix.  In that report, NREL’s Dr. Jennie Jorgenson made very clear that “we can make do with the transmission infrastructure we have for now, but the existing infrastructure was not built considering the changing energy landscape.”

Make do?  Why should we make do with the existing bulk electric transmission system when there is so much potential for the further development of renewables like wind and solar? Well, it’s not because there’s a lack of financial commitment from the likes of Buffet and others. The real answer is because, as the former chairman of the Senate Energy and Natural Resources Committee, Senator Lisa Murkowski (R-AK), noted in 2017, “…the number of federal, state and local agencies involved in a single project makes permitting notoriously cumbersome.”

This cumbersome process is precisely what Buffet noted in his annual shareholder letter.  In discussing Berkshire Hathaway Energy’s financial commitment to the Gateway West transmission project in Wyoming, Buffet noted how “Billions of dollars needed to be invested before meaningful revenue would flow…” because transmission lines “…cross the borders of states and other jurisdictions…each with its own rules and constituencies.”

Of course, one of those entities with its own set of regulations is the Federal government.  And, it’s probably the primary contributing reason why the Oracle of Omaha noted that the Gateway Transmission Project in which his Berkshire Hathaway Energy has made this multi-billion investment wouldn’t be fully operational until 2030.  Or, as Buffet puts in his letter, “BHE began this project in 2006 and expects it to be completed by 2030 – yes, 2030.”

Some might interpret Buffet’s timeline for finishing the Gateway West project as pessimistic, or is he just a well-informed optimist?   

We would argue that it’s the latter.  Why? Because as Berkshire Hathaway Energy notes in its call for revisions to the National Environmental Policy Act (NEPA), “continually changing policies, manuals, and instructions..” have “…resulted in years of delay…” 

Why has NEPA, a six-page bill passed almost unanimously by both the U.S. House and Senate in 1969 and signed into law with much fanfare by President Richard Nixon on January 1, 1970, become such a lightning rod in the bid to build transmission infrastructure? 

Well, as we noted in our June 2020 op-ed for Utility Dive, the legislation establishing not only NEPA but the Council for Environmental Quality (CEQ) was just over five pages long.  Yet, “fifty years of stacking regulation upon regulation and guidance upon guidance has created a bureaucratic leviathan” and is one of the main factors while planning permitting, construction, and ultimate completion of the Gateway West will span five presidential administrations from Bush to Biden to…?. 

That’s too long and speaks volumes to why Berkshire Hathaway Energy will spend $18 billion to finish Gateway West and why we must reform NEPA and other permitting hurdles slowing, if not stomping on, renewable power sources we’ll need for America’s future.