(Reuters) - Berkshire Hathaway Inc (BRKa.N) said its energy unit will buy Dominion Energy Inc’s (D.N) natural gas transmission and storage network for $4 billion, helping billionaire Chairman Warren Buffett reduce his conglomerate’s cash pile while letting Dominion focus on utilities operations.
Me thinks the bigger story is Dominion getting out of the natural gas pipeline/storage business. I suspect that Warren is buying at a deep discount and may look to flip the assets in the near term. Can't see Berkshire Hathaway looking at this as a long term hold.
After months of COVID issues and BH analysis, I figure that this is the target that BH felt was the best to go after for your predicted near or longer term "flip".
This may be the first of a few such acquisitions for BH
It will be interesting to see if Warren doubles down by making additional acquisitions.
as a Louisiana native and fairly new resident of NC, I am very disappointed with this decision, although I completely understand the decision. I thought the 4th circuit decision on this pipelines traversing the Appalachian Trail was totally absurd. Just think about this - there is a 2500 mile trail, with, literally thousands of roads, power lines, railroads, and pipelines traversing it, but the Forest Service lacks the legal authority to authorize one more crossing. And the fact that this issue had to be resolved by the Supreme Court shames me as an attorney, and as an American. But wait - as the old commercials say “there is much, much more.” We have a federal judge in Montana that takes it upon himself to shut down the entire federal government in approving certain permits.
So, basically, as I see it, we have federal judges who, based upon their world view, take it upon themselves to decide what the federal government should and should not do, regardless of what the federal laws actually say. this is wrong, regardless of whether the decisions come from conservative or liberal judges. This is not the way the US system of government and laws is supposed to work.
So, from all of these points, I understand the position taken by Dominion and Duke, but this is a terrible commentary on the state of affairs for the federal government right now. These are billion dollar projects being scrapped because of the bureaucratic difficulty in getting things done if they require approval by the federal government.
What does this say about the future of the American economy?
Although much will be made of the "regulatory environment", there is missing context regarding the Dominion announcement in most articles. Having won the court case allowing the project to go forward, Dominion may have been looking for a way out of the deal with Duke. The waning interest of end users in natural gas in that part of the country is one factor in the decision however a more important one just could be the extension of the Mountain Valley Pipeline that would have been competition for that shrinking base of demand. Interesting spin that so many articles fail to mention the surplus of capacity angle.
Extension of Mountain Valley Pipeline gets federal approval
ROANOKE — More than two years into the arduous task of building a natural gas pipeline through West Virginia and Virginia, the Mountain Valley Pipeline has won approval for an extension into North Carolina.
The Federal Energy Regulatory Commission authorized the company to build what it calls MVP Southgate, which would start in Pittsylvania County and run south for another 75 miles.
In an order posted to its website Thursday, FERC dealt with some of the same issues — the project’s environmental impact and the question of whether there is a public need for more natural gas — that made the original pipeline so controversial when it was announced six years ago.
Several conservation groups were joined by the North Carolina Department of Environmental Quality in arguing that Mountain Valley overstated the demand for the pipeline extension.
When existing pipelines, projects under construction and those in the regulatory queue are considered as a whole, they said, there is actually a surplus of capacity in the part of North Carolina that Southgate will serve.
But in finding a “public convenience and necessity” for Southgate, FERC relied largely on a contract between Mountain Valley and Dominion Energy, which will receive about 80% of the pipeline’s gas for distribution to homes and businesses.
It is “well established” that such agreements are sufficient evidence of demand, FERC said in a 131-page decision. FERC ruled that work on Southgate cannot begin until Mountain Valley secures all of the permits it needs for its mainline system.
Construction of the 303-mile pipeline through West Virginia and Virginia is on hold while the permits, set aside by legal challenges from environmental groups, are reconsidered by federal agencies.