BNSF has benefited from transporting shale oil. Referring to the proposed pipeline, which has been opposed by environmentalists, Buffett said: "It's not that big a competitor. I think probably that the Keystone pipeline is good for the country."
But he acknowledged that rail cars carrying the oil will need to be made safer and promised they will be. "The oil from the Bakken, and from the Eagle Ford as well, turned out to be more volatile than people anticipated. ... We've lowered the speeds. It's [also] going to require another kind of tank car, too."
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BNSF will be buying 5,000 new tanker cars. "We have found in the last year or so that it's more dangerous to move certain types of crude certainly more than was thought previously."
In late December, a North Dakota town had to be evacuated after a BNSF train carrying Bakken crude derailed and caught fire.
—By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.