Saturday, November 7, 2009

Don't help, but help

DEAL SPIN: Berkshire Hathaway's MidAmerican Energy is building windmills under David Sokol.

Mr. Sokol is considered a top candidate to one day succeed Mr. Buffett, and his rising status at Berkshire puts a spotlight on his company's wind-power plans. MidAmerican has spent about $4 billion on wind projects and has billions more in the pipeline to finance wind and other alternative-energy projects around the country.

Sokol is CEO of MidAmerican Energy. Wind power will be viable if fossil fuel prices go higher, as Buffet is said to believe will happen.

Messrs. Buffett and Sokol aren't on an environmental crusade. MidAmerican owns a vast number of coal-fired power plants, among the biggest emitters of greenhouse gases. Electric-power companies in the U.S. produce about 40% of the country's energy-related carbon-dioxide emissions, according to Energy Department data.

Fair enough. They're in business to make money for their companies.

Earlier this year, Mr. Sokol testified before Congress against legislation supported by many environmentalists to establish a market to trade carbon credits, arguing it would "impose a huge and unacceptable double cost on customers."

Government should stay out of the market, for its presence is onerous. Banks and Wall Street said the same thing, o, three years ago.

Mr. Sokol, who has said the wind-power industry still requires government support, also is trying to solve one of the longstanding problems of alternative energy -- how to store excess energy when the wind is blowing and transmit energy when it isn't.

But whilst the government shoiuld stay out of the market, lest it hamper competition and the American people, it should subsidize the market this capitalist is in to make a profit. Curious logic it is: stay out, but help.

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