Dear Mr. Buffett,
I see in the paper that you plan to have 5,000 oil-tanker cars built for your Burlington Northern Sante Fe (BNSF) line. That should head off those regulators and lawsuits after 1,250 derailments these last two years. Exploding tanker shells and fires on those 78,000 old DoT 111 cars hauling fracked oil around the West. Forbes said your outlay would be about $1.6 billion. Not that your Berkshire company couldn’t come across with the cash what with $48 billion cash on hand and the A stock going for $185,200 a share.
I also read those other outfits with accident-prone 78,000 DoT 111 cars are learning that retrofitting just one car runs about $40,000 and cuts capacity 31,000-gallon to 28,000. That means more cars. Longer trains for people to gripe about. Sure, you can lease those 5,000 cars to shippers and stick them with insurance, and transit fees. But both of you are going to wind up in some messy, black-eye court dates. And you’re still going to have to cover labor, and those empty return trips, and track maintenance.
It’s true the seven railcar builders have 60,000 back-ordered cars to get out the door. One big outfit (Oregon’s Greenbriar) says they roll out 4,000 a year. Cash may put you at the head of the lines. And you can spread the wealth around to those seven shops, but delivery may be in early 2016. By then, of course, global warming and natural gas will have killed off most oil and coal sales to your Asian customers.
Now I know BNSF is only about 5% of all your businesses, and you got where you are by cutting your losses and getting into things that interested you, maybe it’s time to shift gears with tough decisions. After all, you just got through telling all your stockholders you’re always “on the prowl” for more “big acquisitions.” There’s a venture out there that’s fun, interesting, profitable – and will pay dividends the world has never known?
It comes from a news story about the Ferrari people who make those $200,000 cars.They’re about to start their second theme park in Barcelona because the first one in Abu Dhabi has been a knockout success – especially with the fastest two roller-coasters in the world (150mph in 5 seconds) and a 169-foot drop on a 1.4 mile track. Its 50-acres are roofed over for 20 rides, two water parks, exhibits galore, movies, and live shows. Tickets run about $185 a day. No Disney park has a flume ride through a giant-sized Ferrari 599 engine. Six Flags doesn’t have a “G-Force” that launches riders 200 feet up and out of the park to a soft landing. And what Cedar Fair park has a kids driving school where they tool down safety-designed streets in miniature F430 Spiders?
Mr. Buffett, maybe you missed USAToday’s article: “Theme parks roar back to life; attendance jumps.” This, even after Disney stopped discounts and hiked single-day tickets to $92. Revenues went up 14% last spring, they said. Ordinary folks are quitting miniature golf courses. Packing up the family and heading for the big parks again. Yet a lot of them are Disney-ed out. They’re looking for something different from Snow White signing autographs or watery trips in the dark. Been there. Done that.
Opportunity is knocking at your door.
What could be more American than a Berkshire Wild West theme park, open the year round? A package that includes a train trip to that park through the Rockies – this country’s most spectacular sights? Families would come from all points: the Upper Midwest, the Pacific Northwest, the Southwest, and Canada. Maybe the world.
Destination: the heart of the West at the totally reclaimed – from coal mining – Wyoming Powder River Basin.
Dried up coal sales from Asia are going to free up – and soon – that vast Eastern corner of Wyoming and Montana mined by the coal giants: Arch, Peabody, White Cloud. Their former Asian customers are doing a fade. They can buy coal cheaper and quicker from Australia or other Pacific Rim countries. Or work on discoveries in their backyards. China, for instance. The upshot will be going bankrupt or getting into sustainable energies. Expect to see their billion-dollar draglines on eBay one of these days soon.
Because BNSF is the biggest coal and oil carrier in the West, you know what fewer trains with fewer cars means. It has to be aggravating that once cargoes are dumped at ports, trains come back empty. So pretty soon your bookkeepers are going to drop some heavy hints: About cost-benefits. Pissed-off train crews. And still having to service tracks, cars, and send in clean-up crews when heat-kinks or tanker blowups total dozens of cars. The feds counted 1,250 derailments alone last year, and shippers are talking up pipelines and trucks being safer and cheaper than rail.
Better forget those 5,000 new tanker cars. Expect stockholders at the next annual meeting demanding you sell the line to Union Pacific or CSX and let them pick up the red ink. But they won’t if you tell them you’re going to convert BNSF into a feeder line for a Berkshire theme park that outdoes all the Disneys and Six Flags and Ferraris rolled together. They can have their cake and eat it, too.
Right now, you can bet the state of Wyoming is getting desperate for a replacement for the tax revenues those coal outfits once parceled out. They’ve been spending a small fortune on all those horse-and-horizon “come-to-Wyoming” TV ads on TV around the country. They’ve got a touristy pitch, but you can bet the “dragline” is out for businesses. The bigger the better. So why not a Berkshire Wild West theme park?
Instead of putting out $1.6 billion for 5,000 tanker cars, quit hauling coal and oil. Buy or lease passenger cars gathering dust in sheds because that end of the business never has been properly pushed – by any line in the last couple of decades. Amtrak would jump at leasing a few.
One of the greatest scenic runs in the world is Montana Rail Link’s 1,000-mile trip from BNSF’s hookup at Billings up to Sandpoint ID. There’s a snapshot per mile as it goes along wild rivers – The River Runs Through It was shot near Big Timber – up and down the Continental Divide’s forests and farms. Thousand-head cattle ranches. Waterways that make even amateur fisher folk want a three-day stopover. That would be part of the theme-park ticket. It would make towns boom even more than the days when WPA crews laid out Highway 90 or built all those bridges and dams across Wyoming and Montana. You could skim off part of their take for all those stopovers.
Make a deal with Montana Rail and the other railroads feeding into Berkshire park from Canada, the Midwest, the Southwest and California. Abu Dhabi, Anaheim, and Orlando could never match this kind of landscape.
Entertainment could begin 10 miles outside the park. Masked men (and women) would come aboard. But instead of robbing the passengers, they’d hand out trinkets, treats and sell Berkshire park T-shirts or Western duds. Country-and-western groups would stroll the cars singing and playing all the way to the park entrance – and hustling their CDs into the bargain.
Once in the park, the Wild West would take them over: Stagecoach rides (with “holdups”). Rodeos. Swimming pools. Rifle ranges. Cardplaying. Dancehalls. Favorite western movies. Box socials. Barn dances in Buffett Grange Hall. Shooting pool. Tribal dances. The Lone Ranger and Tonto – and a posse – tearing after the bad guys through the main drag at high noon. Followed by a Pony Express guy.
Something really different (and Western) could be lessons in riding and roping, fly fishing, safe hunting, and canning. Short courses in how to take care of livestock and the land.
Add field trips to mine shafts. Archeology digs. Photo-ops of flora and fauna. Kayaking the Powder River. Star-gazing. Birding. A Little-House-on-the-Prairie. Out on the back-40 and far beyond all the noise. How about retreat sites and sweat lodges? Maybe an outdoor school for kids 8-12 to learn about the environment.
Oh, the standard stuff would still be a staple: ferris wheels to merry-go-rounds.I ’d get the Intamin factory in Glen Burnie MD to outbuild their Abu Dhabi roller coaster. Make it longer, higher, deeper, and faster. Last, close the park at dusk with chuck-wagon meals and a sing-a-long.
In winter, a big roofed enclosure would preserve the rides and activities. Outdoors, it would be skating, cross-country snowshoeing, ice fishing, sleigh and hay rides. Considering that mining dropped the land nearly 40 feet, build an Olympic ski jump and runs for slaloming, sledding, snowboarding, and luging. Give basic lessons for winter sports.
Vendors would pour in. Housing and food by national hotels, motels, lodges. Maybe dude ranches and Tee-pees. Bring in food carts, too. Shops would sell Western gear and souvenirs. Enforce stiff health rules for food, tough ones about drink, and that would save on security and medical people.
There’s another side of this operation that no park could ever match because of where it is. That’s to do with repairing all the damage coal mining has done to the land we Americans own. Part of getting the permits was leaving the place the way it was. They’ve only done about 5% in 10 years. The feds and state agencies can’t fix it up. They’ve got no money. And they’d need an army. They’d probably lay down and die if you took this on. Or at least let you operate free.
Building a park of 60 acres or so would do a good share of the reclamation work. But for the rest, how about a Berkshire International Land & Water Reclamation Center? Use a percent or two of the gate receipts to bring in water and land experts from all over the world to pool what they know and how to go from there. They’d try things out next to the park. Spread their successes around the world. And another thing: If Rhodes Scholarships bankroll the best and brightest college kids for a year at Oxford, how about bankrolling the best and brightest in land and water use to help the research. Call them Berkshire Hathaway Scholars.
The wind and solar people would power the park, but the bottom line in making everything work depends on water. At Disney operations, almost 200 million people shower, flush toilets, use drinking fountains and swim. They’ve got two oceans for everything but drinking water. In the Powder River Basin, there’s not an aquifer for 500 miles that’s not being used. Bottled water, trucking it in, and Porta-Potties aren’t the answer.
What’s needed is a world Manhattan Project to get the most use out of the least amount of water. The Berkshire Center could take it on and share what they find out with all those countries literally dying for water. You can bet that Ferrari operation in bone-dry Abu Dhabi has figured out some of the basics. The Center could be the mecca for research on dirt-cheap desalinization. Converting “greywater” (non-flushable stuff) and “blackwater” (flushable stuff) to stuff for showers, dishwashers, and toilets. For the drinkable stuff, the researchers would work on better and cheaper reservoir systems for storing rain and snow.
And while all those research folk are hard at work, their families could be enjoying in the park. What other kind of research complex offers that kind of perk?
They say that it’s going to be water, not oil, that will be priceless the scarcer it gets. And it is getting scarcer as population doesn’t. Wars are certainly going to be fought over it. Parts of the world have desert creep and their people are going to move where water is. Which will set up fights as the wells run dry. Look at what a chemical leak into the water supply of one West Virginia City did to nearly 300,000 thirsty people. In the Old West, some people did kill for water when big ranchers blocked off streams or someone poisoned a well. Today, farmers and fishermen are at each others throats in parts of the West that’s drying up. And at least one South American village fought Nestlé to the death when it tried to bottle up their water. That’s going on all over the world, you can bet.
What a legacy you’d leave the world, Warren, if such a Center could solve its water shortages while the park next door and the BNSF pays the bills and earns big bills for Berkshire and the stockholders, too. It’s a win-win-win!
So think about it.
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