In his letter to investors last year, Berkshire Hathaway Chairman Warren Buffett urged readers to come “inhale the air, drink the water” and attend the company’s annual shareholder meeting in Omaha, his hometown.
The letter, a document pored over by shareholders, analysts and press every year for insights into the legendary investor’s thinking, playfully sought to link the success of his conglomerate with the setting of the heartland city, in eastern Nebraska along the Iowa border.
One detail omitted: Federal emissions data show that Omaha’s air quality ranks in the bottom third of U.S. cities, fouled in part by coal-fired power plants owned by Berkshire in neighboring Iowa. A modeling tool of the Environmental Protection Agency, or EPA, shows that pollution from the plants each year causes up to seven premature deaths, $104 million in healthcare expenses and 1,800 lost school days in the metropolitan area of Omaha, with nearly 1 million people.
The calculations, performed by Reuters using the EPA’s modeling data for 2023, were reviewed and confirmed by three outside emissions scientists consulted for this report. The scientists are all independent research experts with no affiliation with the news agency or the electricity industry.
The air over Omaha, and other areas near Berkshire’s dozen coal-fired power plants nationwide, casts a pall over the environmental record of a company that touts itself at the vanguard of clean energy. Despite investments to date of $41 billion in renewable energies, mostly wind and solar power, Berkshire operates the dirtiest corporate coal fleet in the U.S. by at least one important measure, a Reuters investigation shows.
Berkshire’s coal plant fleet, operated by three utility companies it has acquired in recent decades, emits more nitrogen oxides than any other coal fleet in the country, federal emissions data show. Reuters analyzed the most recent full calendar year of EPA emissions data available for coal plants, from 2023.
Known as NOx, nitrogen oxides are poisonous gases and key components of smog and haze. They help form lung-damaging ozone and tiny soot particles that can cause respiratory illness and premature death in communities up to hundreds of miles away.
Berkshire Hathaway-owned coal plants
Berkshire has lobbied regulators and filed lawsuits to avoid installing expensive pollution controls, known as SCR scrubbers, that can reduce NOx and that are more commonly employed at coal plants owned by rivals. And the company has said it plans to operate some of its coal-fired plants – aging, decades-old facilities in Iowa, Nevada, Utah and Wyoming – for years after many of its corporate competitors plan to shut theirs, company disclosures show.
In an email response to detailed questions from Reuters, Berkshire said its electric utilities operate their coal plants “in full compliance with state and federal environmental laws, regulations and requirements.” The company said it hasn’t employed more SCR scrubbers because it is “an expensive technology for our customers,” but that it has reduced emissions through other methods, retired some coal plants early and converted others to gas. Berkshire didn’t address the toll its coal plants have exacted on the health of residents affected by their emissions.
Its efforts to reduce pollution, the company added, have sharply cut NOx emissions from its electricity portfolio over the last two decades. Coal power now accounts for only 22% of Berkshire’s power generation, it said, down from 71% in 2005. Berkshire said it plans to exit coal power entirely by 2049.
The Reuters analysis used federal emissions data – submitted to the EPA by plant operators themselves – to determine the NOx pollution produced by Berkshire’s coal fleet and compare it against industry peers. Reporters also used an EPA tool known as Co-Benefits Risk Assessment, or COBRA, to see how Berkshire’s coal plant pollution affects the health of communities.
- In 2023, Berkshire’s coal-fired power plants emitted more NOx than any other U.S. coal fleet, according to the analysis of EPA emissions data. Relative to the energy they generate, Berkshire’s coal plants have a higher average rate of NOx emissions than any of the 20 large publicly traded companies that own coal plants in the Standard & Poor’s 500 Utilities Index. No single Berkshire plant itself can be considered the dirtiest in the industry. But Berkshire’s fleet as a whole leads the industry in terms of NOx pollution.
- Berkshire plants produce the most coal-fired electricity in the industry without the use of selective catalytic reduction systems, or SCR scrubbers, a technology that can reduce a coal plant’s NOx emissions by more than 80%. Available since the 1990s and more broadly adopted by Berkshire competitors, SCR scrubbers as of 2023 were employed at plants that generate 62% of the coal power in the U.S., EPA data show. At Berkshire, only 27% of its coal power was generated at coal-plant boilers with SCR scrubbers.
- Under an environmental compliance strategy spearheaded by Greg Abel, chairman and chief executive of Berkshire Hathaway Energy, the company’s utilities have repeatedly and successfully resisted calls to install SCR scrubbers. That has saved billions of dollars, according to company disclosures, and afforded Berkshire plants lower operating costs.
- Berkshire has lobbied federal and state officials for regulatory reprieves, fought stricter air quality requirements and convinced the EPA in 2020 to reverse an order that it install SCR scrubbers in Utah, where the company operates two coal plants that contribute to air pollution over towns, cities and national parkland across the West. One energy consultant hired by the EPA to review Berkshire’s budget for scrubbers proposed in Utah told Reuters the company, to avoid using the equipment, inflated its assessment of the costs needed to install it.
Known for his folksy demeanor, frugal lifestyle and generous philanthropy, Buffet over more than half a century built Berkshire into a champion of American industry. Its trillion-dollar portfolio, forged through acquisitions such as the power plants, ranges from railways to insurance, fast food to real estate. Buffett, 94, is known for his hands-off approach to Berkshire companies, allowing managers to navigate the disparate industry and regulatory environments each confronts.
Berkshire’s late vice chairman, Charlie Munger, told shareholders at the 2019 annual meeting that “the environmental stuff is done one level down from us. I think Greg Abel is just terrific at it.” Pushing back at the time against shareholder proposals for Berkshire to share more information with the public about its emissions, Munger added: “We are not going to do reports like everyone else.”
The energy policies are likely to outlast Buffet’s tenure. Abel, who has led energy operations since the early 2000s, is widely expected to succeed the billionaire at Berkshire’s helm.
“BAD THINGS ALL OVER THE HUMAN BODY”
Electricity has been fundamental to modern life and economic growth for more than a century. The risks and costs associated with its production are an afterthought for some users. As with cars and industrialized foods, convenience often outweighs concerns about downsides, particularly because much of the toll on health happens slowly and not always in plain sight.
“We all know coal plants have this continuous impact that is going to elevate the risk of asthma, heart attacks and death,” said Elena Krieger, who oversees scientific research at PSE Healthy Energy, a California-based policy institute. “But it is very, very difficult to pinpoint a single death. And that makes it very hard to point the finger at any given facility.”
The harm is considerable.
According to Reuters’ COBRA analysis, the roughly 200 coal plants still operating in the U.S. each year cause up to 8,400 premature deaths and $130 billion in excess healthcare costs. Berkshire’s coal plants are estimated to cause up to 260 deaths and $3.9 billion in health expenditures, the model shows. Reuters’ analysis, Krieger said, offers “a reasonable portrait of the magnitude of the health impacts from these coal plants.”
The news agency’s COBRA calculations were also reviewed by Nicholas Mailloux, an expert in the health effects of energy systems at the University of Wisconsin. Tim Canty, a University of Maryland professor who is an expert on pollution at coal plants, reviewed Reuters’ calculations of NOx emissions.