If you follow the debates over coal exports or oil trains or pipeline expansions, you might think you’re watching a contest between local communities and the energy sector. But the truth is that standing right behind the fossil fuel companies is a second Goliath. Some of the financial sector’s heaviest hitters are deeply enmeshed in fossil fuel export plans.
Here are just a handful of examples.
Goldman Sachs. Perhaps best known in the Northwest is the link between the would-be coal exporter of Bellingham and the “vampire squid” of finance: SSA Marine and Goldman Sachs. Since 2007, Goldman Sachs Infrastructure Partners has owned a 49 percent stake in Carrix, SSA Marine’s parent company. (The remaining 51 percent is privately held.)
Bank of America. Other major banks have a direct stake in coal exports. As Rainforest Action Network has documented extensively and repeatedly, Bank of America is a major financial backer of US coal mining companies like Peabody and Arch, both of which design to export large volumes of coal from new coal terminals in the Northwest.
Berkshire Hathaway. BNSF Railways, the dominant railroad in most of the Northwest, is advocating so heavily for coal exports that its top executives, including CEO Matt Rose, meet with local government officials and editorial boards to shill for the projects. Many do not realize that BNSF has been wholly owned by Berkshire Hathaway since 2009 when Warren Buffett’s company purchased the portion of company it did not already own for an estimated $44 billion. (Goldman Sachs acted as a major financial adviser to BNSF for the transaction.) It’s hard to overstate the connection between the railroad and the money, as Rose is the heir apparent to the Berkshire Hathaway leadership mantle when Buffett moves on.
Buffett has a controlling stake in Union Tank Car, and has emerged as a major beneficiary of the crude-via-rail boom as the owner of BNSF Railway Co. — one of North America’s largest railway companies. BNSF reportedly earned US$272-million from crude shipments alone in 2012.
In other words, Buffett owns both the railroad and the oil tanker cars that run on it. That gives his company a very large financial stake in moving unconventional oil supplies, like those found in the Bakken formation, that are not well served by pipelines.
The question for opponents of fossil fuel exports, then, is not so much how to overcome the colossi of King Coal and Big Oil, but how to make Big Finance back away slowly. Because when the money goes away, the projects will vanish too.
Update 8/20/13: Warren Buffett is buying a $500 million stake in Suncor Energy, a major producer of tar sands oil.