ESG Sustainability Investing

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Carbon capture - >>> Warren Buffett's Quiet Power Move: Why He's Betting $35 Billion On A 'Yet To Be Proven' Renewable Energy Solution


Benzinga

by Claire Shefchik

Aug 28, 2024


https://finance.yahoo.com/news/warren-buffetts-quiet-power-move-154518849.html


Warren Buffett is at it again, and the financial world is buzzing. He's investing $35 billion into a renewable energy initiative that's still “yet to be proven.” What's surprising is that the famously cautious investor is doubling down on fossil fuels at the same time.

We're not talking pennies here. Chevron is one of the biggest holdings in Berkshire Hathaway's portfolio – almost $19.1 billion. Buffett made his move during the 2020 energy downturn. Although he trimmed his position slightly this year, he remains heavily invested. Chevron's not buying the "fossil fuels are fading" narrative. They've cranked up oil and gas production by 12% and are diving into major projects in the Gulf of Mexico and Israel.

But hold on, there's more. Buffett's got his eye on Occidental Petroleum too. His stake? Close to $15.7 billion. He's been gobbling up shares like they're going out of style. He's even stated that Occidental is one of the few stocks Berkshire would consider holding indefinitely. Under CEO Vicki Hollub, Occidental's making moves, like a $12 billion deal to acquire Crownrock, another oil and gas player.

So, why's Buffett all in on fossil fuels when everyone else is running the other way? It's all about Carbon capture technology. Both Chevron and Occidental are investing heavily in this area. Hollub has even suggested that if carbon capture proves successful, “there’s no reason not to produce oil and gas forever.”

Buffett acknowledges the risk, stating that the “economic feasibility of this technique has yet to be proven." However, Buffett has made risky bets before, and they've often paid off. He's betting that Chevron and Occidental's investments in carbon capture will sustain the oil and gas industry, even as the world shifts toward renewables.

Buffett isn't just focused on short-term gains; he's looking at the long-term potential, particularly with carbon capture technology. If successful, this could transform the industry, making fossil fuels cleaner and more sustainable. That's why he's willing to put so much on the line. Buffett has seen industries change before, and he's positioning himself to be ahead of the curve once again.

In a world where many are following the crowd, Buffett is doing what he does best: going against the grain. Will this gamble pay off? Only time will tell. But if history is any guide, the “Oracle of Omaha” might just be onto something big again.

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