Berkshire Hathaway Hits A New 52-Week High -- Yes, This Eventually Gets You To The Bakken, And To Fargo

Updates

January 15, 2013: Link here to Fargo Forum.

The company that took over DMI Industries – a wind turbine plant located here – has reopened the plant to manufacture containers for energy-related products.

Dallas-based Trinity Industries told city leaders the West Fargo plant will now produce containers that can hold 100,000 gallons of products such as water, propane or anhydrous.

The West Fargo plant has been open for the past six weeks with about 40 employees on the job. The first product was shipped from the plant last week.

The company plans to grow to more than 75 employees in the coming months, said Mark Vaux, West Fargo economic development director in a statement.

On the west side of the Minneesota/North Dakota state line. Add wheels to the tanks, and you have railroad tank cars. Same story at Minneapolis St Paul Business Journal.

Original Post

Although it's pulled back slightly since the market opened, Berkshire Hathaway has traded above its 52-week high today, and is, for all intents and purposes, at its all-time high today, right around $94.

This site is not an investment site, and I have no interest in Berkshire Hathaway as it pertains to this blog. So why am I posting this? Why did I mention Berkshire Hathaway yesterday in what looked like a throw-away post? Because a) Warren Buffett owns his own railroad, the one that carries most of the Bakken oil out of state; and, b) because of the article Don just sent me: here's the headline -- Buffett Like Icahn Reaping Tank Car Boom From Shale Oil.

Warren Buffett and Carl Icahn are reaping the benefits of surging demand for railroad tank cars to haul shale oil from beyond the reach of existing pipelines.

Buffett’s Union Tank Car Co. is working at full capacity and Icahn’s American Railcar Industries Inc. (ARII) has a backlog through 2014. Trinity Industries Inc., the biggest railcar producer, began converting wind-tower factories last year to help meet demand for train cars that can transport the petroleum product.

All three are getting a boost from a shale-oil boom that’s poised to make the U.S. the world’s largest crude producer by 2020. Rail carloads of crude tripled last year to more than 200,000, and demand for tanks designed for it soared, helping both Trinity and American Railcar outstrip the Standard & Poor’s 500 Index.

“People who want to ship oil can’t get them,” Toby Kolstad, president of the consultant firm Rail Theory Forecasts LLC said, referring to railcars. “They’re desperate to get anything to move crude oil.” 

Did you all see this in the story above:  "Trinity Industries Inc., the biggest railcar producer, began converting wind-tower factories last year to help meet demand for train cars that can transport the petroleum product."

Does this have anything to do with my rants on wind energy? No.

Does anybody remember this story other than Don who sent it to me months ago: the wind-tower manufacturer DMI located in Fargo, ND, was bought by Trinity last autumn. 

Now, did you all read the RBN Energy post today, about that huge geopolitical island on the west coast called California? No pipelines to the west coast bringing oil in from east of the Rockies: the only near-term solution: rail.

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By the way, speaking of Berkshire Hathaway, which I seem to be doing a lot of recently (I am tempted, as I've said before, to scuttle the Bakken blog and replace it with a Berkshire Hathaway blog, but don't worry, I won't. But, wow, it is tempting. Someday I'm going to look back on the Bakken blog as "so yesterday" and wished I had a) spent more time on my literature blog; or, b) started a Berkshire Hathaway blog.

Anyway, I digress. Speaking of Berkshire Hathaway. Did anyone else see that Warren Buffett has bought two solar farms? I posted the story here, buried deep in the blog, hoping no one would see it, but now it finally makes sense. Wow, I told Don, sometimes I have to be hit over the head with a 2x4 before I finally understand things.

Warren is buying the wind farms because a) his conventional energy companies are mandated to provide "x" amount of energy from renewables; and, b) he knows that mandated requirements are eventually reimbursed, either by the government directly or indirectly, or the consumer, directly.

Going forward, starting as soon as 2014 or 2015, "working" Americans (and actually "non-working" Americans, also) are going to be crushed by a) ObamaCare; and, b) home energy costs.

What do those two things have in common? Both are mandates: mandates for universal health care coverage (even those who do not need it: 90% of those between the ages of 16 and 50; except for pregnant people) and mandates for renewable energy which many Californians thought was free, because, hey, it's always there and no one charges you for standing in the sun with the wind blowing through your hair. 

That's what happens when mandates are mandated and free market capitalism is denigrated. "You didn't build that." By the way, that phrase now has its own wiki page.