All cars on the road will be electric in 20 years, Warren Buffett told a class of business students from Rice University this month.
Buffett made the comments during a question-and-answer session with the Rice students in Omaha, reports The Houston Chronicle. Buffett routinely speaks to business school classes about investing, business and various life topics.
The newspaper reported that Jan Goetgeluk, president of the Rice business school's Finance Club, asked Buffett his thoughts on the peak oil theory, which states that oil production is in decline.
Buffett responded that in 20 years all cars on the road would be electric. He said BYD, the Chinese automaker in which Berkshire Hathaway owns 10 percent, is working on the technology to make that happen.
It seems like a bit of a stretch to think there won't be any gas-powered cars on the road within two decades, but the auto industry is clearly moving toward all-electric and hybrid vehicles.
And this explains another reason why Burlington Northern Santa Fe would be attractive to Buffett.
All those electric cars will need to be recharged, and the electricity that will enable that will be mostly created by coal, at least for the foreseeable future. Burlington's tracks run right through the coal-rich Powder River Basin in Montana and Wyoming, meaning BNSF will be hauling coal to meet the nation's increased electrical needs.
Berkshire's recent investment in ExxonMobil is interesting given Buffett's thoughts about the future of oil. Though Berkshire reported just a $100 million stake in Exxon as of Sept. 30, small by Berkshire's standards. Further, Exxon does much more than produce oil.
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