Two seemingly unrelated investment stories roused the press and the public this week.
On Tuesday, The New York Times wrote about Al Gore’s dual - possibly conflicting - role as advocate and investor in green energy. Gore was pushed to defend himself, saying he is putting his money where his mouth is.
The same day, Warren Buffett announced that he was buying Burlington Northern. His purchase of the railroad was widely applauded as an affirmation of the U.S. economy.
Al Gore
Why such constrasting responses?
Both men are widely respected, even revered. Both have made fortunes through their investments. Both vote Democratic. And both give generously to philanthropic causes.
Gore says he is pouring his profits into the environmental organization he heads, the Alliance for Climate Protection.
Buffett has pledged 10 million shares of Berkshire Hathaway stock, worth $31 billion at the time of his pledge in 2006, to the Bill and Melinda Gates Foundation.
And there’s a prime difference between the two men.
Gore invests in his belief system, which appears to be approaching profitability. Buffett invests in undervalued companies with high growth potential, then gives away the profits to causes he believes in.
Their personal investment styles put the two men on opposite sides of the coal debate.
Gore proclaims that “clean coal” is as much a lie as “healthy cigarettes.” Instead of contributing to global warming through the burning of coal, he argues, the U.S. and other countries should turn to electricity generated by wind, solar and geothermal power.
Burlington Northern, Buffett’s latest acquisition, makes a fourth of its income from transporting coal, according to its most recent annual report. The company’s subsidiary, BNSF Railway, is a member of the American Coalition for Clean Coal Electricity, an industry group that advocates coal-burning electric plants.
Gore’s Alliance for Climate Protection, on the other hand, is a partner in the Reality Coalition, which has launched an ad campaign ridiculing the idea of clean coal.
Even if the Reality Coalition and other environmental groups are successful in restricting coal use in the U.S., Buffett’s trains will likely continue to find markets abroad. BNSF’s routes run from American coal fields to western ports, where coal is shipped to Asia.
Buffett’s favorite charity, the Gates Foundation, founded by his good friend Bill Gates, also is global in scope. Despite its focus on world health, it has not been been a leader on environmental issues.
Bill Gates’ investment company, Cascade Investment LLC, owns 3.4 million shares of Otter Tail Corporation, which relies primarily on coal at its electric generating plants.
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