Energy Politics and Pathways to Progress

Past couple of weeks have just had so much to talk about with change of administration . So welcome . We're delighted to have you with us .

I mean , is there something going on where the big oil companies are buying one line and the wildcatters are doing another ? It's interesting .

You're close there , I think , in terms of the split in the oil and gas industry between the super majors and the independents or the smaller operators , and it's been a split now for over a century , right where the big internationals , big multinationals , they have one view on the market and then the independents and the other players in the oil and gas business

have another . But you're referring to Chris Wright , who's the nominee and of all of Trump's picks for his cabinet and all of the people he's nominated to be in his administration , I think is just the best . Now , I'm not , let me be clear , I'm not objective at all . I've known Chris for more than a decade .

He's a friend of mine and proud to call him a friend . Finally , finally , finally , gentlemen , we have someone in the going to be the Secretary of Energy who is from the energy business . This is the first thing . That's never happened before what a ? concept . Yeah , I know who is from the energy business . This is the first thing , that's never happened .

Concept . Yeah , I know we've had lawyers , we've had academics , we had that reagan appoints a dentist . Finally , we get somebody who's actually from the energy business , who knows the energy business . He , of course , is the ceo and founder of liberty energy , which is a hydraulic fracturing company , but he's also an investor in nuclear .

So I'm very hopeful about chris and what he might be able to do in that job , if for no other reason but just that he's an energy realist and , more important , energy humanist .

And that is what we need in that position , instead of , you know , this long string of anti-energy , anti-human people that from the left who've , you know , been influencing that agency for a very long time what do ?

And when you have energy and you're a humanist , then that you would allow more human flourishing . Energy realism and energy humanism go hand in hand , and Chris is both . There are three billion people in the world today who use less electricity on average than a kitchen refrigerator in the United States .

We need more energy so more people can come out of the dark and into the modern world . I'm all for that . I'm an energy humanist and proudly so , and Chris is as well .

I'd put it that way no-transcript hitch themselves to the russians and gas prompt bad move , angela merkel and the rest of them . Here in the us , we have more gas than we can say grace over . In fact , fact , more gas now is coming in the form of LNG , is going into Europe . Us gas is going into Europe than from any other source .

So the US is now in a very advantageous position vis-a-vis the rest of the world when it comes to manufacturing , when it comes to cost of living , when it comes to electricity prices , gas prices . All of these things are an incredible advantage . So what would I like to see into this administration under Trump ?

Well , the first thing I would hope that he does is kill all this offshore wind craziness , and I think I can say bullshit , can I on a podcast ?

We want to be able to do this in a responsible way and hopefully as clean a way as possible , but balancing out the cost and the availability versus the alternatives . So that's what we're talking about here . This is not a drill baby drill moment in the sense of oh , let's pollute the planet .

This is a way of responsibly investing in different energy sources that are going to yield us reliable , low-cost energy that is as unpolluting as possible .

You know you're creating these With better weather .

And this is the part that I , you know , I just can't get my mind around , especially in California , where you have all these progressive Democrats and they're raising the cost of energy . Well , who does that hurt ?

It screws the poor in the middle class in a state that California , that has the highest poverty rate of any state in the country when compared , when measuring the cost of living . So you know , these are regressive .

This bad energy policy results in in a regressive taxation on the poor in the middle class , and I'm enough of a small liberal to think this is just a terrible , freaking idea .

The high value brain businesses want AI . That's what they're basing their future on . And what does AI need ? More energy than the manufacturing business needed .

Since 2008 , when Schwarzenegger mandated the utilities , the investor-owned utilities and the munis to add a certain quantity of renewable electricity to their portfolios , on an absolute basis and a percentage basis , electricity rates in California have gone up more than any other state in the US .

You have on peak rates in San Diego now today are about 66 or 67 cents .

So just thinking of that example of the unintended consequences of driving prices up on everything , that's a perfect example .

I'll read the pertinent segment here California's poverty rate increased to 18.9% in 2023 , up from 16.4% in 2022 and 11% in 2021 . 16.4 percent in 2022 and 11 in 2021 . The state's poverty rate was particularly high among black and Latinx Californians , and California continue to have the highest poverty rate of the 50 states .

California's high poverty rate means 7.3 million state residents lack the resources to meet basic needs last year , more than the populations of California's four largest cities Los Angeles , san Diego , san Jose and San Francisco . I mean , it's just . This is just outrageous , and I don't live there .

As you look at the , the new administration that's coming in the obvious change in intent at least of where we're going to extract minerals and energy from where do you see the biggest growth in economic activity over the next four years or so ? In the US .

By the way , they're going to bring in big receipts or big gas turbines . Elon Musk , you know , stood up a data center in Memphis , didn't get permission , didn't get proper permits and just put in like 30 megawatts of new electric generation capacity without asking , you know another guy , Because you can .

The part that concerns me , um marshall , is that it's not clear to me how much of this can be added to the grid and in in short order , because we're shortages of labor , particularly skilled labor , electricians , pipe fitters , um uh , you know , people like electric linemen but also shortages of transformers , uh , high , high voltage , uh uh , transmission equipment of

all kinds , breakers , switch gear , etc . All these are in very short supply and , and part of that is because it's an international market , part of it is because of growth of the grid , part of it is replacement of older , older equipment . So we're going to see a lot of investment of the grid .

Part of it is replacement of older , older equipment , so we're going to see a lot of investment in the grid .

We're going to see a lot of investment in data centers and I think , you know , given what we see in europe , given what we see with the you know ongoing war between russia and ukraine , we're going to see a lot more investment in us manufacturing of all kinds , because the us is becoming has been for long time , but now , especially given what's happening in

Europe , places where manufacturers want to locate . So I'm bullish on the US and have been for a long time , but I think many of these macro trends globally speak well for the future or bode well for the future of the US .

Um , some of them , some of that capacity , is in the US , but a lot of the manufacturing capacity for the grid related equipment , and particularly Transformers , is in rural America . Um , so know that , and the same is true for , you know , for gas compressors . That's in rural Ohio , a company called Aerial Compressors . They're based in Mount Vernon , ohio .

Oh , I've been there . Yeah , so you know . Transformers , these , a lot of the heavy manufacturing for critical equipment for infrastructure for the grid , is made in small towns across the country well , that's a good sign for american growth right and and the disparate and the uh dispersion of wealth across the country .

It was on my sub stack , robert Bryce dot sub stack dot com and the title was China runs the table and what I was talking about the periodic table that in just in the last few days , the Biden administration tightened export restrictions on certain semiconductor manufacturing equipment and software to china .

China retaliated the next day by banning the export of gallium , germanium and antimony to the us , as well as certain certain types of graphite so which is used in electric vehicle batteries . Well , so this is an amping up of the trade war now .

Now , thank god it's not a shooting war , but we're seeing a war of words , trade war between the us and china , and what china is doing is closing off , as was one battery executive told me in I quote him in the piece . China's putting the screws to us and they are . Antimony is used in lead acid batteries .

It's a hardening agent that they use in the lead to make the grids inside the batteries more , more durable and and uh uh this you know more durable and less flexible .

But this is a long-term challenge to the us in terms of the mili , you know , industrial , and in in military security , because these uh components , these elements and and the rare earth elements as well . China has effectively a monopoly on all of them and since 2000 , all of the new copper smelting capacity has been built in china .

China controls the nickel supplies coming out of indonesia .

So you look across the periodic table and I was a terrible chemistry student in high school , but now that I'm an old man I'm looking at this and thinking , holy crap , we have walked into this , this trap that china has set , and through their own mercantile , mercantilist policy over the last policies , over the last three decades .

And now we're , you know , the us is looking around saying , oh well , how do we mine antimony , where do we mind ? And well , you better get on it . And I I hope that the trump administration can deal with this . They've got a lot on their plate .

But these strategic elements , uh and it's not just lithium , it's , you know , gallium , germanium , tellurium , uh , neodymium , praseodymium , dysprosium , terbium , all of these are critically important to our national security and we have ceded that supply chain to the Chinese . It's a very dangerous situation .

Legislation and Clean Air and Water Acts , kind of thing ?

You know , mining is not a very popular thing to have in your neighborhood and it just it was just in the last few months that Biden administration prevented the opening of a big nickel mine in minnesota . There's a huge they're huge deposits of these resources here in the united states . The same in alaska .

There was a big mine , I forgot which one that was , so look you know it was a big copper mine .

The only way we're going to oppose this kind of mercantilist approach that china has is with a mercantilist approach of our own , and we won't be able to mine all of it ourselves , we won't be able to refine all of it ourselves , but we can count on certain allies .

So with uranium another critical element that we need if we're going to have a nuclear sector in the united states , we can count on the canadians . They have some of the best uranium deposits in the world . We can count on the Australians , but we also need to be producing some of that ourselves .

So you know , we live in a global market , we live in an interdependent world , but we can't . We've made ourselves , we tied our wagon to China at a time when we're facing increasing friction with China . It's a very worrisome situation .

Because , as you say , joel , those supply chains , and particularly when it comes to the batteries and it comes to the neodymium , iron , boron magnets , china controls more than 90% of the global market for those magnets . These are the high-strength magnets that are in the electric motors and in wind turbines and in guidance system for missiles .

I mean , you know , these are very important strategic commodities and the US has just said oh , we love EVs . You know , climate change , evs , climate change EVs , climate change , forgetting where you know that you're . By doing that , you're seeding your supply chain to I'm not going to say our enemy , I would say our geopolitical rival at a critical time .

I just don't understand when is the strategy here ? Why aren't they considering this and instead , they're doubling down .

The idea that you can go all the way back to the mineral extract , the mineral process , the mineral manufacture , the battery manufacture , the car , create a complete vertically integrated supply chain , and not expect that the Chinese would then bomb the prices on EVs and completely kill the American car industry and the European car industry for that matter .

And so you know , I guess you know , if we step back and think , okay , well , so where is the US now relative to Europe , relative to Russia , relative to China ? I think you know Trump is going to have to deal with what I think is a major reset now and now that we're in a trade war with China , we're in nearly a shooting war with the Russians .

Uh , europe is flat on its back economically and politically . Then the US is is going to have to assert itself Now . Could this mean a , you know , a burst in economic growth in the US ? I think you know I'm bullish on the US . We still have , you know , relatively good labor supplies . We have the cheapest energy in the world , we have the rule of law .

You know , we're still the best house . We have a very flawed house , but we're still the best house in a bad neighborhood .

Sure , so where are we on nuclear ? Where are we going on nuclear , and where can we go on nuclear and regain some leadership back from the Chinese ?

So when it comes to a tricky relationship , right , you know , we're givingrainians long-range missiles so they can fire at the Russians , but we can't stop trading with the Russians . Further , in May the president signed a bill that will prohibit the importation of enriched uranium from Russia starting , I think , in 2027 .

Now there could be exemptions from that , but nevertheless we're now starting with a trade war against the Russians as well , involving this critical element and the enrichment of uranium . So we're going to have to figure out , well , how do we navigate this and there's no simple answer and none of this is going to be cheap , quick or easy .

But to get back to the smrs , the small modular reactors , marshall , um , what we have now in the us is an abundance of opportunity and we have an abundance , a super abundance even , of of designs . You know , lead acid I'm sorry , uh uh helium , cooled gas , cooled reactors , salt , salt reactors and light water reactors .

There , you know , we have any number of different designs for the chemistry of the reactors themselves , you know , and , and , and also a wide variety in the sizes one megawatt to 300 megawatts or more , and also a wide variety in the sizes one megawatt to 300 megawatts or more . So where are we ? Well , we're facing a problem with regulation .

The Nuclear Regulatory Commission is very slow . Nuscale Power is a public company traded under the ticker NuSMR . It took them six years and $500 million to get their design approved by the NRC . So now the NRC , is it getting better ? Yes , slowly . But that's going to be one problem .

But the other is going to be deciding on which design is the one that we should deploy at scale . Remember france , if they deployed and they , they are the second largest nuclear energy producer in the world after the us they built a bunch of dozens of the design of the same reactor all over the country . They settled on one design .

This is the design we're going to use , and we build a bunch of them . Well , we need something similar if we're going to make that be successful over the long term .

Here in the united states , we're going to have to pick one design , replicate that and reproduce it , but there's going to be a lot of money wasted , a lot of billions of dollars will be spent , as in these companies X Energy , nuscale , oklo , terrapower , terrestrial Energy , kairos all vie to be the design that becomes the one that gets commercialized at scale .

New Scale Power is publicly traded , I mentioned them . So is Oklo . I first wrote about New Scale 16 years ago . So I mean , I've been following this for a while and what's happened ? They still haven't built a reactor . And I was in Idaho Falls .

I spoke in Idaho Falls at the Idaho Advanced Energy Consortium in October and I remember I'd seen NuScale power guys there in Idaho Falls 10 years earlier and I asked them OK , blue sky it for me , this is 10 years ago , when will you build your first reactor ? And they said 2024 . Well , here we are , we , we still haven't built a reactor .

So all of these companies are now at the same stage , which is the prototyping and testing stage , but it will be fully a decade before any of them deploy meaningful capacity .

Those companies I think cambridge , cambridge fusion has raised like two or three billion dollars . I mean , there's serious money going into this sector . But if I'm going to look at this as a pragmatist and say , ok , well , what should we be doing ? Look , fission works . We know how to do fission . Let's freaking focus on fission and get this scaled up .

I'm not saying you know , if you want to spend your money on fusion , go ahead . But the problems in terms of temperature , in terms of radiation , all these are massive problems in trying to make that work at any kind of scale . And remember , these are just prototypes . We know how to work and build light water fission reactors .

Well , let's get on with it , man . Then let's build them . And one final point , just going back to the fission part of this , because I'm very interested in fusion . But the question we talked about SMRs . I'm wondering whether we shouldn't just , you know , yes , some smrs make some sense in some locations .

But if we're going to close all of our coal-fired power plants and tva tennessee valley authority is closing like six gigawatts of coal well , let's build gigawatt scale reactors . We just built two of them in georgia vogel three and four . We know how to do it . Well , let's build the equivalent of Vogel five and six , or seven and eight .

Let's build those thousand megawatt reactors , because that's the amount of power we're going to need . So this , you know , it's not just about the chemistry , it's not just about regulatory , it's going to be what size and how do you finance it . So I'm bullish on nuclear , but I'm very sober about the outlook .

Do you see any change in the environmental movement ? Is there any divisions ? You know particularly , you know EVs , ai . I mean you have to produce more juice and nuclear is certainly the way to do it without GHG . So the question I have is do you see any changes in the environmental politics here ?

As a friend of mine at DOE a long time ago said , the problem with nuclear energy is you you've got Republicans are pro-nuclear and anti-government and you have Democrats that are anti-nuclear and pro-government . You need politicians who are pro-government and pro-nuclear and anti-government , and you have democrats that are anti-nuclear and pro-government .

You need politicians who are pro-government and pro-nuclear . We've seen the , the democrats , start to change their tune here and I'm saying this as a reporter , not as a partisan , but they're still . They still didn't mention nuclear energy in their freaking , in their freaking platform for 2024 . They did in 2020 , but it went completely missing in 2024 .

So you know again . There's this , you know myopia , and it's partly because the Democratic Party has been so strongly controlled by these radical climate NGOs like Sierra Club and NRDC and the rest of them . But I think in some ways , joel , you know these NGOs and the anti-nuclear NGOs .

They've been sidelined to a large degree when it comes to this , because the public has the polling data shows clearly robust support for nuclear power and I think there's a generational shift as well and I'll end with this one is that you know , for you know the two of you and for me we grew up in the age with a specter of nuclear war and that was the

kind of the existential threat of the moment . And now , for younger people and the kids you know the , the voters that are age of my children they , they've grown up around this idea of the threat of climate change . So it's a there's a generational difference in terms of support for nuclear . That I think is very important .

And and so this younger generation I don't know whether Millennials or gen X , gen Z , gen Y , I don't know what all the one of the kids I call those damn kids . They're more pro-nuclear at their age than we were at ours .

Well , 50 years ago now , was much closer in time frame back in the 70s than it is in today , in the 2020s , right ? So that specter of nuclear war back in the 70s and 80s was closer in time , right so ? And and the and the anti-nuclear forces were very skillful in conflating nuclear weaponry with nuclear energy . So is the waste issue an issue still today ?

Yes , of course , because you have so many states that still have bans on new nuclear and you can't build new nuclear plants until they come up with a national waste repository . Well , that still hasn't happened , but West Virginia was last year , the year before rescinded their ban , and so there is progress there as well .

Now I think the entire waste issue is a red herring . We can handle the nuclear waste .

We lack for an opportunity to solve the problem , we lack for political courage to solve the problem and or the challenge . I'll say I don't even think it's a problem . We could leave the nuclear waste , you know , in the canisters , like at indian point , new york , where I was a few years ago . It's sitting out there in the parking lot .

Osama bin laden or his buddies are not going to go out there and just cart one off . These things weigh like 80 tons , you know . They're impregnable . So no-transcript .

So I think in the first week of my prediction and maybe it's more of a hope than a prediction that in the first week Trump will kill the offs , do will take strong executive action that will either kill or severely wound all of the offshore wind craziness , which I think is just absolutely fantastic .

And speaking of , you know , back when we were kids I'm old enough to remember when environmentalists cared about whales it's a long time ago the joke was save a gay baby whale for jesus , right , you know , and that was kind of like it was a joke , right , but there was still this sentiment about we're going to save the whales .

And now the sierra club , nrdc have completely sold out , sold out to the offshore wind business , and I , you know , as you can tell , I'm not a fan of those groups . But so I think there's going to be a strong push to kill offshore wind or severely injure the whole killed by , and killed by that you mean remove subsidies .

Well , I am not as sanguine about the subsidy issue because you know you have major corporate interests now in Washington who love the ITC and the PTC , the investment tax credit and the production tax credit for wind , solar , hydrogen , batteries , all these things that you know .

Once you let these big corporate interests in there and they get their pigs and their snouts in the trough , they're going to be very difficult to dislodge . So can trump do something with the treasury and irs ? In terms of the rules , yes , and I think there will be some movement on that .

Whether they roll them back or completely , I think is unlikely because , again , you know they're very powerful lobby interests now that are already saying we want to keep these , including API , eei , us Clean Power Association . So this is going to be very difficult .

But I also think that and I'm hopeful , very hopeful , that Chris Wright and the new Trump administration will catalyze support for nuclear , and this is one of the areas where they're going to have to get busy . And they're also going to have to get busy on the strategic elements front . You know they call them critical minerals .

These aren't minerals , they're metals . And this is going to have to be something that the administration incoming administration is going to have to take seriously , because we just can't afford to be hitching our wagon entirely to China .

China is not our friend so drill , baby drill means more than just going for oil and natural gas right it means going for critical elements as well right and nuclear power , yeah yeah , and those go together because we're going to need uranium and we're going to need the lanthanum to , you know , to manage the , the nuclear plants we're going to need , you know , at

, sir , at Sirium , these , these , you know , these elements that we've ignored our chemistry for too long , and I will plead guilty to this as well .

But this is critical and we have to be very sober as we look forward , because it's a different world now and , um , you know I Trump , trump is going to bring a lot of new people in and a lot of new thinking . And , uh , you know I wish him well because we , the U S , has a lot of new thinking .

And you know , I wish him well because the US hasa lot of advantages , but we are facing a lot of serious challenges as well .