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Let's not forget Buffet's recent BoA money infusion, just as credit default swaps were reaching crisis mode. Warren has been doing lots of favors for people lately. What a guy.

Interesting analysis - and an approach much more in touch with probable reality than that of "Bold Neb", et al.

One thing bothers me however - I don't quite follow your logic regarding Buffett's place in all this. It would seem that if the pipeline(s) were built then the Okies could pump their crude to the Gulf and get $15 - $20 more per barrel than would be possible in Oklahoma - which puts money in the Buffett ConPhil pocket, but takes it out of the Burlington Northern pocket - because his trains wouldn't then be hauling the oil from ND and points north. Reverse the situation (no pipeline) and the converse applies. In other words, either way the cookie crumbles, I don't see how Buffett does anything but essentially break even. What did I miss?

Good post.

Good points, thanks for the post!


ConPhil already has a pipeline that moves oil from the gulf to Oklahoma. See the original post and the linked article there. Why do they do this? For some reason they want the price of oil to be cheap in OK but more expensive in the Gulf. ConPhil has more refining capability in the gulf then in OK. Not sure why they would like this setup though. Maybe that's why Buffett has announced his getting out of ConPhil, but it still shows up as a major source. And since you're right about the train thing being counterintuitive maybe he's keeping his bet on ConPhil just in case nothing (pipeline or train) happens.


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