2008: How would Buffett approach solving pollution?

AUDIENCE MEMBER: Good morning. My name is Mike Palmateer (PH), fisheries supervisor for Karuk Fisheries.

Mr. Buffett, you grew up and still live in the banks of the Missouri River. I, too, live on a river called the Klamath. My family has lived there since time immemorial.

In 2002, 68,000 fish died at the mouth of the Klamath River due to disease and bad water quality. These fish are also my relations.

If another company polluted your river and killed all the fish and made the river unswimable and unfishable, how would you approach this problem? Thank you.

WARREN BUFFETT: Well, I think society would — as a whole — should approach that problem by looking at the net benefits from whatever is taking place in that situation and what the costs of electricity would be and what the farmer’s situation would be if he went to a different form of water distribution.

I mean, there are a lot of competing ideas and desires in a large society, and it’s up to government, basically, to sort out those.

We’re sorting it out — right now, we’re building coal plants in the country. We’re building gas plants. We’re doing various things.

People are coming to different conclusions about what kind of tradeoffs they want to make, and generally these are being made at the state level, although you could have a national energy policy that would override individual states’ decisions.

We’re responsive to national policy on that. We’re responsive to local policy. The Oregon Public Utility Commission, I’m sure, is aware of exactly what you’ve discussed and they have to consider that, but they have to consider a lot of other things in determining what is the best way to generate the electricity required for the citizens of Oregon.

And, Dave, would you want to add anything to that?

DAVE SOKOL: Warren, just one comment. And not in any way to be disrespectful of the fishermen, but it — we are not polluting the river.

We’re not doing — adding — anything to the water that isn’t coming out of Upper Klamath River, and we do recognize the different views as to whether the irrigation is a good thing or a bad thing, whether renewable power such as hydro is better than returning the river to its prior 1907 date.

But the one thing that — just to be clear — is that PacifiCorp is not adding anything. The water is flowing through penstocks, creating electricity, and coming out the rear end, and it did so under a 50-year FERC license.

Again, we understand the varying concerns, and hopefully, over the next six years a societal answer that balances all those concerns will be reached.

WARREN BUFFETT: Thank you. (Applause.)

CHARLIE MUNGER: I’d like to — I’d like to point out how refreshing it is to have people addressing a pollution problem which has nothing to do with burning carbon. (Applause.)