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I am become 📍 death destroyer of worlds.
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The nuclear industry has a confidence problem.
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It has a horrible story and narrative that needs to be changed.
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Nuclear engineers work day to day, with the most powerful and effective low-carbon energy technology ever invented, and it's not perceived that way by a large number of the public, Chernobyl, the molecules versus, Chernobyl the memes is very, very different.
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The molecules killed several dozen people.
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The memes are killing millions and are still at it.
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The plant kept operating.
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It kept operating for 14 years.
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Ideology is one of the main reasons why we have the toughest job that we have.
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All of this is a war of memes.
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These memes to survive need to be sticky and transportable.
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They do not have to be true.
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They do not have to be accurate or even helpful, and almost nobody is out there with a technical basis who is ready to meme.
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The world is a fundamentally more abundant place than it ever was in the past, ever, because of human ingenuity.
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Nuclear energy is the only technology that lets you eat your cake and have it too, where a fuel supply is nearly infinite because we can make more fuel with the old fuel.
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If we build this, there will be enough to go around where each country, each state and city can have its own independence and dignity while providing for a clean, stable earth.
1:37
Jim O'Shaughnessy: Hi, I'm Jim O'Shaughnessy and welcome to Infinite Loops.
1:37
Sometimes we get caught up in what feel like infinite loops when trying to figure things out.
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Markets go up and down, research is presented and then refuted, and we find ourselves right back where we started.
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The goal of this podcast is to learn how we can reset our thinking on issues that hopefully leaves us with a better understanding as to why we think the way we think and how we might be able to change that to avoid going in infinite loops of thought.
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We hope to offer our listeners a fresh perspective on a variety of issues and look at them through a multifaceted lens — including history, philosophy, art, science, linguistics, and yes, also through quantitative analysis.
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And through these discussions help you not only become a better investor, but also become a more nuanced thinker.
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With each episode we hope to bring you along with us as we learn together.
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Thanks for joining us, now please enjoy this episode of Infinite Loops.
1:40
Jim O'Shaughnessy: Well, hello everyone.
1:40
It's Jim O'Shaughnessy with yet another Infinite Loops podcast.
1:43
And, my cup runneth over.
1:43
Many of you are familiar with my good friend Liberty RFP, who's been on my podcast several times and is a good friend of mine.
1:51
And he introduced me to the fascinating guest that you're going to listen to today. Mr.
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Mark Nelson, the founder and managing director of Radiant Energy.
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He advises governments, nonprofits, and industry about nuclear energy.
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A lot of people hear that word and they begin to freak out depending on what they have been, well, maybe brainwashed into believing.
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And boy, let's talk about brainwashing.
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What's one of the most famous quotes in history was Jay Robert Oppenheimer, after releasing the nuclear weapon, was filmed quoting the Gida saying, "I am become death, destroyer of worlds." Mark, welcome.
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Mark Nelson: Thank you very much. Mr.
2:45
Oppenheimer still has time to be correct.
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History has not yet done.
2:50
The earth has not yet had its full run.
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But his record is poor so far in the sense that there's been no global war since his invention.
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Jim O'Shaughnessy: Exactly. Mark Nelson: Their bad.
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The global conflict ended with his invention and hasn't come again.
3:09
Jim O'Shaughnessy: Exactly.
3:13
And I think that we're going to come back to this theme time and time again in our discussion.
3:19
Because as you've written and spoken about, the nuclear industry has a confidence problem.
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And oddly enough, it has a horrible story and narrative that needs to be changed.
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And you're fitting in with so many of my themes because I believe that we domesticated primates are essentially emotionally driven creatures.
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And if our emotions are involved, you can pile as many facts as you want, or perceived facts, as you want you as high as the Empire State Building.
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And it doesn't matter if you can't reach people's emotions.
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True in markets, true in energy.
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So my question is, what's a way to build a better, truer actually, narrative?
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And why are people in the nuclear energy industry, professionals who are highly trained, why do they have a confidence problem in the first place?
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Mark Nelson: So, let's start with the second question.
4:27
Why is there a confidence problem? Easy.
4:27
Because nuclear engineers work day-to-day with the most powerful and effective low-carbon energy technology ever invented.
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And it's not perceived that way by a large number of the public.
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And a lot of, say the finance industry, a lot of political decision makers around the world do not see that.
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But yet the engineers see it every day.
4:51
They feel it, they breathe it.
4:51
They're doing delicate, high performance activities all the time with the most extraordinary energy machines that humans have ever built.
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Mark Nelson: And that gap between what the world says about them and what they know to be true with their own eyes, with their own senses, that gap is just, it's almost too much to get over for a lot of them.
5:18
In fact, I know a bunch of nuclear engineers that start believing the fear that comes in from the outside world and seeing themselves as needing to engineer their way out of the anxieties of an anxious age.
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In ways that sometimes add cost and push us further from energy independence, sometimes in ways that scare the public more by reflecting the fears the public gives to the industry back to the public.
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Mark Nelson: Let me give you an example. Yucca Mountain.
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Yucca Mountain is a site under a very boring, dry looking ancient mountain in Nevada, the US state of Nevada.
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And underneath is some rock that is really stable.
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So, the idea was we would put the nuclear waste from our nuclear plants under this mountain there in Nevada, where if there was an earthquake and it got sealed off, it would never come back up in a million years.
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It would just be away forever.
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And the thought was, if we bury it deep enough, then people won't be scared anymore.
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But then you have to ask, how many people are dying today because of that same waste? Zero. How many have ever died? Zero.
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How many have been injured by mishandling of waste?
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Well, one or two people in Japan because of an accident, a reprocessing- something that doesn't pertain to our nuclear waste at all.
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Mark Nelson: And then you see that the fight over Yucca Mountain itself gave anti-nuclear activists the keys to the kingdom under Obama.
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And caused a great deal of damage to the functioning of the nuclear regulatory commission in the US because of the leverage that a powerful senator from Nevada had over the administration in order to get Yucca Mountain cancelled.
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And all of this has nothing whatsoever to do with the actual safety and protection of lives.
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It's just a hall of mirrors of fears going towards the nuclear industry, the nuclear industry getting scared of its own shadow, reflecting those fears back.
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Attempting to spend what?
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A hundred, $200 billion, on a problem that has not caused a single injury in this nation.
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That's the crazy story I wanted to bring to you on just how emotion driven the fears have been that have pushed the engineering and finance to the breaking point in the US nuclear system.
7:41
Jim O'Shaughnessy: And, you had me before even coming on, because one of the reasons why I was so excited to talk to you is a mutual friend of ours recommended you highly.
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And one of the things he said was that you were really, really good at reframing things and telling people the truth. Like what you just said. How many deaths? Zero.
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If we compared it, you use an example that I wanted to bring in.
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And because you use it as a good example of where we probably might have wanted a little more worry, and that is electricity.
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So, we managed electricity so well that nobody got frightened about electricity other than the people in the beginning, which they're always frightened of new technologies.
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It's part of our emotionally driven nature to be aware of novel threats.
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Evolution is a good place to look for why we're afraid of novel threats.
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Back then it made a lot of sense.
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It makes less and less sense as we are able to build up our cultural knowledge base. But here we are, right?
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And so- Mark Nelson: But Jim, our cultural knowledge base.
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Sorry, I need to let you ask the question.
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But, includes the toaster in the bathtub trope for committing suicide.
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For example, in one of the attempts in Groundhog Day, to exit that infinite loop, if we're staying with the theme of your show, is for the main character to try to fry himself in a bathtub with a toaster.
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Electricity is that dangerous.
9:16
And yet, exactly as you said, we've learned to live with it.
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Even if we must scare children at the beginning of each new cycle of each new generation, we have to say, do not stick a fork in it.
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This is what the dumb children do.
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The bad children stick a fork in it.
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It will kill you if you do it. But yet we live with it.
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Mark Nelson: What I would want to say is here in Chicago, where I am.
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The light around me on this cloudy winter day is almost entirely from nuclear reactors.
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And I challenge you to find a Chicago resident who knows it.
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They all know that electricity's in their house, they all want electricity in their house.
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They all know not to stick a fork in the socket.
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And they know to laugh when you see a toaster in the bathtub trick on a show, right?
10:00
But then how is it that they learn to fear nuclear and do not even realize that it's the nuclear plants providing the electricity that they're getting?
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Jim O'Shaughnessy: Again, I agree wholeheartedly.
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And because where I was going with the question is, can you imagine what people's reaction would be if you said, if you substituted the number of deaths caused by our management of electricity, randos putting forks in that, right?
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I just had my fourth grandchild born yesterday.
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Mark Nelson: Congratulations.
10:42
Jim O'Shaughnessy: Which I'm happy with, a grandson.
10:42
But we were chatting about it while we were at the hospital and my wife said, isn't it funny that we spend the first four years of their lives trying to keep them from killing themselves?
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But we eventually do, and then they don't stick that fork in.
10:52
But if we looked at the number of deaths, just the number of deaths associated with electricity, I think A, people would freak out.
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They wouldn't have any conception for the fact, even though they know, as you illustrate with your example, how dangerous electricity is.
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We have somehow managed to get the thinking so that they're not worried about it.
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You had a great quote, which I'm going to let you elaborate on, but is, I think, really, what's his name?
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Scott Adams, the guy who does Dilbert.
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Would call this a linguistic kill shot.
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Because what you say is Chernobyl, the molecules, versus Chernobyl, the memes, is very, very different.
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The molecules killed several dozen people.
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The memes are killing millions and are still at it. Please elaborate. Mark Nelson: Sure.
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The memes being the ideas.
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And Richard Dawkins famous coining of this phrase, meme is a spreadable idea.
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Which we can expand, often spreadable phrases or images.
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That move between people and can take on a life of their own versus the molecules which are needing to be born by the wind.
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Which are bound by the laws of physics, which help determine the rate of decay or the danger of that molecule when it gets into a body, if it gets into a body.
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So, at Chernobyl, you had a plant where there was a catastrophic explosion that vented a burning reactor core into the world, and there were several dozen deaths from that accident.
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Several from the trauma of the impact, people who would've died whether it was just a steam explosion with no radioactive molecules at all.
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There are people who died of exposure to acute quantities of radiation from the material in the core.
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Mark Nelson: There are a few folks on a helicopter, including the pilot, that got tangled up during key critical stages of the cleanup operation, which is why I include those who died in the helicopter accident.
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And then finally, there were several dozen victims of a very particular set of diseases that came from exposure to one of the isotopes, that does the most amount of damage in a short period of time in the days, or even first week or two, after a nuclear accident like Chernobyl.
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But then the plant kept operating, it kept operating for 14 years.
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The plant made more electricity the year after the blast than it did of the blast.
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Made more the year after that, made more the year after that.
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It kept setting plant efficiency records.
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And when it was finally shut down in year 2000, workers were quite upset that the best jobs available were being taken.
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Mark Nelson: And those who had some emotional connection to the plant were saying, why would you shut down this one?
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This type of reactor's in operation around Eastern Europe and European Russia, and you were not shutting down those.
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Why would we shut down ours, which has had the most number of safety upgrades based on our learning experience from the disaster?
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So Jim, right there, I've had smart, young, physics educated, anti-nuclear people convert to being pro-nuclear on the spot when I replaced the Chernobyl meme with Chernobyl kept operating and was shut down by European Union cash payouts' meme.
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That alone is an example of the difference between, because why?
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When I say Chernobyl kept operating, I'm not explaining to you the isotope story.
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I'm not justifying the safety or not of the improvements that they made to the reactor so it wouldn't blow up in the future.
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Mark Nelson: And when I say and the workers wanted it to keep operating, we fundamentally know they had the most amount of skin in the game in terms of those most likely to be impacted if another one of them blew up.
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So, you're going directly for, I guess, thank you for calling that a linguistic kill shot, but you're stating an easily verifiable fact.
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And go on Google and see what's the production record for Chernobyl nuclear plant.
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You see it cuts off after year 2000, right?
15:10
You can see that bodies we trust to keep us safe from nuclear, like IAEA, International Atomic Energy Agency, verify that it kept operating.
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Whatever you think you knew about the worst nuclear disaster in the history of mankind, if it didn't even stop the plant from operating and the plant operated better after one of them blew up?
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That destabilizes some of the most deeply held beliefs that people can have about nuclear energy.
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Jim O'Shaughnessy: And what's interesting to me is that this structure extends to non-nuclear things as well.
15:49
The story might be a bit apocryphal because I heard it firsthand from a firefighter in California.
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And there were a group of them, and I tend to not be very shy, and they were having drinks at the bar.
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And so I walked over and I said, "I'm fascinated by what you guys do."
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And they're like, "Okay, really?" And I said, "Yeah.
16:08
You were over trying to put that fire out, right?"
16:15
The fire was visible from where we were sitting. And they're like, yeah.
16:15
And I'm like, so talk to me. What's going on? Why California? All this stuff.
16:21
And the leader of the group who'd been decorated God knows how many times for his bravery in fighting fires, for his innovations in fire fighting, I looked him up later.
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Jim O'Shaughnessy: And, so he told me, he goes, "I want to tell you something that is going to not make sense to you, I don't think, but it's what we're operating under." And I went, "Cool."
16:44
He goes, "Ideology is one of the main reasons why we have the toughest job that we have." I said, "Explain."
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And he said, "California has a long history of drought, torrential rain, drought, torrential rain, et cetera."
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He said, "This history extends back hundreds of years to when we began starting keeping records about it."
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Well, it happened that this gentleman told me that the head of the reservoir building program in California went to the governor's office, when Jerry Brown was governor, and explained with great enthusiasm, with all of the data, why right now we've got to build a minimum of a dozen new reservoirs, because we're going to get torrential rains and if we don't have these reservoirs, the rain's going to run off into the Pacific.
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Jim O'Shaughnessy: And Jerry Brown looked at him and said, you're a fool.
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And the guy is taken aback and he goes, Mr. Governor.
17:51
And he goes, haven't you ever heard of climate change?
17:57
We're not going to have torrential rains anymore.
17:57
And of course, a few years later there were mudslides galore.
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I imagined that this gentleman I was speaking with had to deal with all of those. And yet the memes.
18:11
I'm fascinated by memes too, right?
18:11
There wouldn't be Christianity if St.
18:18
Paul wasn't the best memer in the world.
18:18
That's how Christianity came into being.
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He was a great memer and he was really good at putting ideas out there that were just sticky as hell and transportable to heap from human to human. Mark Nelson: Right.
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Because these memes, to survive, need to be sticky and transportable.
18:35
They do not have to be true.
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They do not have to be accurate or even helpful.
18:41
In fact, that's part of the challenge.
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Nuclear's been bad enough at creating its own memes that the professional anti-nuclear people who are hired specifically to make memes where the truth content is irrelevant, only the stickiness, and the spreadability, and being anti-nuclear.
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They've had a 30, 40 year head start.
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Fortunately we're finally getting up to speed.
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Jim O'Shaughnessy: That's what I was leading up to with this question.
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And one of the other things that you point out, which I agree with, is we need to understand our operating system better.
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And we need to understand that we are essentially emotionally driven creatures.
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I always joke that we are domesticated primates.
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And emotions are our central operating system.
19:26
The one emotion to rule them all, to rip off one of my favorite authors, Tolkien, is fear.
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Especially fear of new things, and evolutionarily that makes sense.
19:43
So it seems to me that you've got to acknowledge that, but you've also got to get in the game, right?
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Jim O'Shaughnessy: So you point out that rituals, emotions...
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Actually tying emotions to success.
19:55
You say, for example, that when a new plant is refueled, there should be a huge celebration because A, you want carbon neutral. We got carbon. We got carbon.
20:12
You say, you're worried about climate change?
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If you are worried about climate change, and you're not pro-nuclear power, there is a massive disconnect there that you've got to try to figure out.
20:23
So give me some of your examples for how do we turn this around?
20:29
How do we get people to understand?
20:29
Or if not understand, at least get the meme to be an earwig for them, so that they're like, "Hey, well I should probably give this nuclear thing another chance."
20:43
Mark Nelson: Well, just as your California firefighters would tell you that a top way to fight fire is fire, but maybe controlled or helpful rather than the surprise, chaotic long tail fire that eventually arrives when you're not prepared for it.
20:57
Fear is very powerful, but there are different types of fear.
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For example, there's a fear of missing out and because the nuclear industry didn't know how to just be proud of itself in a public manner, in a way that was honest and open, it maybe gave itself words internally or talked inwardly.
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But silence, boringness, neutrality was what they went for in the public where instead...
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Because the world is not silent, boring or neutral.
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The world is exciting and nuclear is extremely powerful.
21:31
So it was blatantly not fit for purpose in the eyes of the public.
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Mark Nelson: Instead that smells like self fear.
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They are right to fear the public because they are hiding something.
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Stealth secrecy, sinister conspiracies.
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That's the way the public read the nuclear plans and the nuclear operators.
21:55
And I think in a lot of cases it was justified.
21:55
I still struggle with this. I'll come to it later.
22:00
If there's a point where it makes more sense of some of the crazy things that have happened with the nuclear industry, just self-defeating.
22:10
Jim O'Shaughnessy: Actually, no.
22:10
Just, let's do it now while you're thinking about it.
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Mark Nelson: Okay, here's one.
22:13
I had had a great success visiting a nuclear plant with some of my staff requesting to go visit the nuclear waste, getting photos with the nuclear waste.
22:18
Of course, they had to be run through the hierarchy, the security people.
22:23
Everybody had to speak about whether you could get a picture holding the waste. Now, was it safe? Yes.
22:29
Did our radiation detectors show it was safe? Yes.
22:35
Have they had to file paperwork showing that it'll be safe for a hundred years and even during terrorist attacks and earthquakes, and things that would destroy the entire state we were visiting?
22:44
Would they have to stay safe during that? Yes. Yes. Yes. Yes. Then what's the problem?
22:50
Well, we didn't have the procedures right.
22:50
We'll change the paperwork, the NRC, to let you go visit. Great, okay.
22:55
And then we'll accept some of these photos you've taken.
22:55
We'll send them to you as files later. Okay.
23:00
Mark Nelson: So then we tweet it out.
23:02
It gets millions of views, goes viral to every corner of the internet.
23:08
I still see people I've never met, never heard of, use those photos in their materials.
23:15
And only occasionally will they look us up to see who it is, or what the circumstances were.
23:19
Then the press guy, the PR guy for the plant, he moves on. He gets a promotion. New person comes in. They're young.
23:28
They're trained as technical operator.
23:28
They've got big ambitions to move up in nuclear, and we go to discuss maybe bringing some Hollywood celebrities to come visit.
23:36
We're starting to hear interest from crazy corners in nuclear.
23:42
Cautious interest behind the scenes, but that can be matched by cautious access behind the scenes.
23:47
And we're told, "No, it's not safe to go in there."
23:53
Jim O'Shaughnessy: Oh, my God.
23:56
Mark Nelson: Now, Jim, it could be that it was near the end of the day.
23:57
That's the last person's person.
24:03
They want to make a new mark or something.
24:03
But the fact that they didn't know who I was and our relationship, even though we'd explained it to them, the incredible success, the best social media success that company had ever had in the 35 years of their plant being built and operating, all of that was irrelevant compared to saying, "No. No. No. Close it down. Lock it up. No visitors. Don't come here.
24:25
We're doing just well with nobody seeing anything. No."
24:30
Mark Nelson: There was this moment where we had some very interesting people that would've come to go visit, if they had a chance.
24:40
Could have made the most viral moment in the history of nuclear energy, but to this technically trained young person who needs to be in this field for a long time, it was a risk at all because people are at risk. The public is a risk.
24:50
It's something to be feared, even loathed for its ignorance rather than accepted as a key stakeholder in the same future that you're trying to save with the nuclear plant.
25:03
Jim O'Shaughnessy: And that disconnect is everywhere.
25:07
I have a friend, Philip Howard, who writes endless books about how we can't do big projects anymore because we have let the precautionary principle put us into a state of stasis, and stasis equals death as far as I am concerned.
25:28
Mark Nelson: And incompetency.
25:28
Even if you want to get up to speed, it's easier to hide your incompetency with more bureaucracy because if the bureaucracy weren't there, you might not actually be able to deliver.
25:36
That's a very pessimistic view.
25:40
That sounds like I'm saying, "We wouldn't be able to restart nuclear construction." But I disagree.
25:44
I think we can break out of it.
25:44
Jim O'Shaughnessy: I do too, but I do want to...
25:49
So an exercise that I do all the time is I steel man the argument that I am going to go up against because I think straw manning, anybody can straw man an argument. It's lazy. It's easy.
26:07
All you got to do is look at the memes right there. You got your straw man.
26:07
Can you give me the steel man argument against nuclear? Mark Nelson: Absolutely.
26:19
It requires cooperation and trust between a lot of people over a long period, and we may not just be up for that.
26:24
We may not be that good.
26:24
And by we, I may mean maybe it's why developing countries can't or shouldn't get nuclear.
26:31
By we, I may mean it's why the decadent falling west isn't up to re-achieving the thing...
26:36
The living power plants that remain from our great era of building nuclear, we can ignore that.
26:44
Let them keep operating or whatever.
26:49
They're not wearing out by the way, Jim.
26:49
They keep running, and we're going to come to that when we talk about the one in Minnesota that powered a lot of your early life.
26:53
So we may not be able to trust each other, work well enough, write well enough, speak well enough lead men and women on construction sites well enough in order to build big projects, and even small modular reactors or whatever people use as the buzzword of the day to mean, "No, not that old nuclear. We've got new nuclear."
27:16
Mark Nelson: It takes a lot of work over a long period of time.
27:19
And in finance, that trust that long-term thinking, that's big capital locked up for quite a while.
27:26
We may not have that degree of patience.
27:26
It may be better to decline slowly if we can't get an alternative to work than to attempt nuclear. Now, the alternatives.
27:40
Here's a steel man for the alternatives.
27:40
We've become extremely good at the physical process and administrative in many cases of building large wind turbine farms and solar farms.
27:54
In which case, maybe what remains to do is the harder substitute problem, not politically but engineering, of making this storage or smoothing out the weather, shall we say?
28:01
Rather than the much more difficult political problem, easier engineering problem of long-term energy storage from uranium fuel in uranium nuclear plants.
28:12
Mark Nelson: So if we're already good at wind and solar, we're good at building them.
28:15
We have plenty of land here in the US.
28:20
Then why don't we just do that instead of this awful task of recreating a level of trust and construction efficiency that may be something we need to leave in your day, Jim.
28:30
Us, Gen Xer execs, millennial managers right below them, Zoomer, construction shock troops or whatever you want to call them.
28:42
That combo may just be a losing play because we're not good enough.
28:47
Jim O'Shaughnessy: Well, that's really telling.
28:51
That's a good steel man too.
28:51
Mark Nelson: Notice I didn't say that the safety or the waste.
28:55
Jim O'Shaughnessy: No, I [Inaudible].
28:56
Mark Nelson: Those are the anti nuclear names that are false. They're just false. It's debunking for that.
28:59
But the truth is that it takes a lot of cooperation, good faith.
29:04
It takes a lot of excellence to do nuclear.
29:04
And we may have less excellence to go around, and what excellence we have may need to be just in our software companies, or just in our chip manufacturers, or just in our Boeing and Airbus, who are doing on the daily something gratuitously dangerous by the standards of nuclear engineering, putting up flimsy little hollow, paper thin machines into the sky, where if things go wrong, you all die.
29:28
It's not like, "Oh, can we shut it down a little?"
29:36
No, you die because it's too fast and humans are too fragile. Right?
29:42
Jim O'Shaughnessy: Right.
29:42
Mark Nelson: And yet we fly, and yet we fly.
29:42
I think that the excellence we see in say militaries dealing with high difficulty nuclear operations, propulsion...
29:56
I'm not talking about the weapons at the moment.
29:56
I'm talking about the propulsion in submarines and ships, and also the quality of operations in an aircraft usage where you have transcontinental flights, where we've gotten to where we trust even two engine aircrafts going over the poles where it's not clear you could possibly survive, even a skid landing where you're now needing to be rescued because the conditions, the cold, what you might land on, ocean ice, that sort of thing.
30:26
We've gotten to where we trust it greater and greater levels as aircraft gets safer and safer.
30:31
So there's my addressing the steel man to say, no.
30:31
aircraft gets safer and safer. So there's my addressing the steel man to say, no. I think from a core of excellence that we see everywhere, we can help people find meaning to channel their budding excellence as they grow in their careers into nuclear, where if they come and join us,
30:51
help us build over the next decade or two, what they build, that nuclear plant they may help with, will be powering past their grandchildren's life if they stay locally and enjoy the nuclear local good life, the clean environment, and the high revenues that come from a nuclear plant. And that
31:04
And that brings us to Minnesota.
31:10
Jim O'Shaughnessy: Please.
31:11
Mark Nelson: Yeah, so there are people saying that we need small modular reactors.
31:12
Well, some of these small modular reactor designs, Jim, are actually the same size or larger than the two reactors that were built for a few hundred million bucks, inflation adjusted, not far from Minneapolis.
31:31
And are still on today and are going to expect to be run for 50, 60, 70, 80 years, maybe 90 years.
31:40
And they cost a few hundred million, and they're still on today.
31:41
Jim O'Shaughnessy: It's so amazing.
31:46
And the reason he brings up Minnesota, many listeners will already know that's my home state. That's where I grew up.
31:51
And it amazes me, and this is...
31:51
Maybe I should get smarter because I should stop being amazed, but in this abundance of factual information about things like nuclear, and it doesn't...
32:08
By the way guys, this is not exclusive to nuclear energy.
32:08
This is a story of a lot of dramatically, factually evident things that are really cool that nevertheless have either a taboo built around them or they're losing the meme war or what have you.
32:25
And I love the fact that on the steel man, you didn't even bring up safety because the fact is, if we were going to stack every form of powering ourselves around, nuclear is going to win on the safety.
32:47
Let's not make it a competition.
32:47
It is going to be on the side of the graph where safest, most predictable, in terms of safety, form of energy available to us today. That's just [inaudible].
33:00
Mark Nelson: Jim, that's not an advantage though.
33:01
That's not necessarily an advantage in the meme wars because that safety comes along with a tiny number of high visibility events.
33:10
I said high visibility, not highly dangerous or anything like that.
33:15
And that makes it not very computable by the public. The public is...
33:15
These emotion based estimations are way better than economists like to give them credit for.
33:23
Let's say thinking fast and slow type person, not in terms of the actual arguments that Kahneman might use, but in terms of the way people misinterpret the thinking fast and slow.
33:35
They say, "Oh, we have a fast thinking.
33:40
That's emotion driven, and it's often wrong, blah, blah, blah." No, no, no.
33:40
The super fast thinking system is about long run survival Mark Nelson: And nuclear has historically triggered that fear without producing the deaths to go along with the severe events.
33:55
In fact, one of the ironies is nuclear has so few meltdowns people cannot calibrate properly.
34:01
Which brings us to the weirdest story for me of 2022.
34:07
The fact that we have an ongoing nuclear catastrophe by the standards of the way nuclear events are typically written.
34:13
We have an unsecure plant under military governorship operating in extreme circumstances for much of the year until finally all reactors were turned off, leading to fear around the world.
34:25
But then now that plant still has issues.
34:25
It still is undergoing shelling every once in a while, and we think by accident of shots, bad shells that don't go as far as the Russians want to shoot them.
34:36
They're using the plant as a garrison, as a shield or reactors.
34:41
These are horrible stories and yet, the public fear of nuclear seems never to have been lower.
34:47
Mark Nelson: I talk to people all around the world, all over the world and talking about Ukraine, about Zaporizhzhia Nuclear Plant, the largest nuclear plant in Europe, occupied by force with gun and tank fire and rocket fire led to an outburst of fear but no meltdown. It could have.
35:02
In fact, if this happened and there was no Fukushima Daiichi, there's a chance that the confusion and chaos and lack of backup that was...
35:16
All changes that got better with the response to Fukushima Daiichi triggered an immune response by the industry that strengthened every single nuclear plant around the world, world.
35:26
Without that, we may have lost a reactor or two. Come up.
35:26
They had a giant plant that needs to be connected to the grid, get chopped off the grid because of shelling and damage and war.
35:33
And yet, what happens in that plant daily, despite being a crisis just does not get people's attention it would've a year ago.
35:46
So it's giving people calibration we've never had before because nuclear was so safe that the events weren't frequent enough to develop an intuition about how dangerous they were. Jim O'Shaughnessy: Yeah.
36:01
I've made a study of all the behavioral biases, and that is one of them.
36:01
The recency bias and simply the number of times you hear about something, stack ranks it in your mind way above where it possibly should be stack ranked, right?
36:16
Mark Nelson: Which tells you what's so wrong in a world where the nuclear industry is pretty quiet or bad at trumpeting its own successes, shall we say?
36:23
So the first thing people tended to hear about nuclear in the sixties, seventies, eighties was nuclear war and meltdown.
36:32
Jim O'Shaughnessy: Those were the- Mark Nelson: We're coming from a time where it's not because of the internet, because of the nuclear memes.
36:34
People are hearing of nuclear in a positive light.
36:40
At the same time, they've heard a little bit about Chernobyl, a little bit about Fukushima Daiichi, a little bit about nuclear war fear as that...
36:45
Rightfully, Iran has receded from the top of our mind.
36:51
Jim O'Shaughnessy: I think that's absolutely true.
36:54
So I'm 62, I was born in 1960.
36:54
I still remember all of the hysteria around Three Mile Island.
37:05
What is the actual story around Three Mile Island?
37:12
Mark Nelson: The nuclear plants grew faster than our sophistication and training for dealing with unexpected controls, unexpected performance.
37:17
And this is the crazy thing about Three Mile Island, first of all, like Chernobyl, you have a case where the plant kept operating for decades.
37:28
In this case, it shut down at the bottom of the energy price crisis, the bottom of the market replaced entirely with fossil fuels that have now jumped up in price.
37:40
The most idiotic management of our electricity system.
37:40
No great country should have that happen.
37:47
It is humiliation, and I have this burning, maybe an unhealthy desire to see the people who put the system together that allow that to happen.
37:53
The people who fought against any short run attempts to stabilize the pricing at that plant and save the plant for 2022.
38:05
This was 2019, Jim, to save it for 2022.
38:05
Mark Nelson: I've got to see these people destroyed before they retire.
38:08
Because to lose a nuclear plant at the bottom of a temporary gasglut, oh boy.
38:15
You want a steel man argument against nuclear?
38:15
Maybe we don't deserve it. How about that?
38:21
Now, that's a very pessimistic moment.
38:21
I get over it quite quickly, but Three Mile Island like Chernobyl kept operating.
38:28
Unlike Chernobyl, Three Mile Island was a very, very solid design that was effectively was chosen around the world to spread.
38:33
And after Three Mile Island, the performance of American nuclear plants skyrocketed.
38:40
In other words, the concern about scaring the public, hurting the public, losing your equipment to meltdown was enough to whip the industry into extraordinary shape at the time of Three Mile Island in 1979. Eight, nine.
39:00
Jim O'Shaughnessy: I think it was- Mark Nelson: [Inaudible]. Jim O'Shaughnessy: ...
39:01
1979 if I have my memories [inaudible].
39:04
Mark Nelson: Okay, thought so.
39:04
So at the time that that happened, the productivity of American nuclear plants was about 50%.
39:06
Yeah, they're up about 50% of the time and about full power.
39:11
Now it's 93, 94% year after year, after year, after year.
39:18
You mentioned something I've said where I want to see a festival, I want to see a party after you refuel a plant.
39:25
That's because we've gotten refueling down to two weeks where all safety improvements that need to be made, get done then all replacement parts happen.
39:31
Then the fuel, which is manufactured so carefully and operated in a plant so well, has no issues that slow down, that require cleaning in between refuelings. You move it out.
39:43
You work 24 hours a day, two shifts of 12 hours each.
39:51
And you go hard with very high level people on call and on the site every single moment until that thing goes back online.
39:58
Mark Nelson: Outages are intense.
40:01
There are internet forums out there for outage workers to share stories, figure out who's going to what, carpool because you have temporary workers who are elite at very specific activities that are done to maintain these plants in between refuelings. How long in between?
40:20
About a year and a half per reactor.
40:20
So for a two reactor site, well, you'll have one or two refuelings per year.
40:28
So averaging two every three years.
40:28
And you'll have an autumn and a spring typically. We'll autumn, spring.
40:32
Let's have a harvest festival.
40:32
Let's have a spring time fertility festival.
40:37
Something to commemorate, bringing in everybody with a stake in the plant locally.
40:43
Obviously, the outage workers are going to move on to the next outage, but you should be able to celebrate a few hundred men and women making enough electricity in a tiny little plant for millions of people.
40:56
Mark Nelson: You should be able to celebrate this F1 pit style refueling where the tires pop off, the fueling, the tanking up process starts, a water for the driver, checking in and you're gone in 12, 13 seconds.
41:10
That's the way we run these nuclear outages, and it's extraordinary. I have not been there.
41:18
I've not served during one, but friends of mine, of course have.
41:18
And it's a rush, and it ought to be celebrated as the human success story it is.
41:23
You see one of those outages, and it's hard to believe we can't get good enough to do nuclear more.
41:31
Jim O'Shaughnessy: And it's just like the imagery just presents itself.
41:37
Imagine everyone listening and watching.
41:37
Imagine people seeing huge solar farms in the desert and driving out with sledgehammers to break those solar farms because they had some intuition that solar farm was evil or what... Fill in the blank. Right? It's hard to imagine.
41:56
That's not going to sell.
42:05
People aren't going to be able to- Mark Nelson: Jim, I might present something to you.
42:07
Jim O'Shaughnessy: Please.
42:09
Mark Nelson: One of the arguments against this steel man case, which I haven't mentioned yet, is the wind and solar being easy.
42:16
It turns out that wind and solar, it's at its best if it's an abstraction and not a reality in people's lives.
42:21
Now, there are people who love to be near the wind turbines and may...
42:26
Solar panels don't really elicit emotions like that because a single hedge can just cover it up.
42:31
But the problem is, the more people learn in rural America, since we're using America in this case, about wind and solar, the less they're interested in the little bitty slice of revenue you can offer them while still affording to build a project. Why?
42:50
Because each project is not necessary for the grid.
42:50
This is an actual, a subtle point.
42:55
I want to stop with it for a moment because it's a bigger weakness than a lot of experts admit.
43:00
When, say the Texas blackout came in 2021, the wind and solar people rightfully said, "Hey, nobody expected to count on us."
43:06
Now, you put $70 billion into something over a decade, you might hope that it's there, but that's true.
43:12
The wind turbines weren't there and no one thought they'd be there.
43:18
The solar was a little bit there during a few hours, but nobody thought it would be there at night. Right?
43:22
Mark Nelson: "Got you, got you.
43:23
We told you, you couldn't rely on us and we didn't want to be relied on." Well flip that around.
43:31
If no specific solar farm or wind farm is life or death for the grid, because you can't make it be life or death or your grid would fail, but it's life or death for the people who don't want it there.
43:41
You're suddenly caught with a really harsh asymmetry, one that nuclear had to deal with back in the sixties and seventies, but what's the difference?
43:53
Mark Nelson: The difference is you only need a few nuclear plants, only a few in the whole nation, and mostly you can just add reactors to the nuclear plants you have, where people have self-selected to live near the plant, only if they like the plant.
44:07
But, for wind and solar, each new wind and solar farm is enormous compared to its power outage, and it's not essential for the grid.
44:21
Mark Nelson: Okay, so 70 billion of investment, and that's not all government money, it's not all subsidy.
44:24
It's like the capital invested in Texas, wind and solar specific transmission at the time of the ice storm.
44:36
If you say that, that amount is not supposed to be for the grid to rely on, just to benefit on average over the course of the year, but it also means that any new wind and solar plant cannot be something that you rely on, because you can't.
44:47
It can only be relied in aggregate.
44:52
Mark Nelson: But to anyone fighting a wind farm near them, they're not fighting an aggregate, they're fighting that specific one.
44:58
So you have a difference between motivation. But here's the thing.
44:58
People make fun of NIMBY's who don't want wind or solar in their backyard.
45:05
And, yeah, a bunch of pretty wild things get said about...
45:10
Well, I mean under Trump wind turbine cancer, except we know that wind turbines are very loud, people have recordings all the time of showing wind turbines that need maintenance, but you can't justify maintaining every wind turbine all the time.
45:19
Each one isn't making that much money, each individual one, but if the individual one that's loud is near you, you won't be doing much sleeping.
45:29
Mark Nelson: And we know some of the same publications that mock the wind turbine cancer thing, and the wind turbine disease people that just are withering in their mocking of these people and their phantom diseases trying to slow down decarbonization.
45:42
Those same publications run all sorts of columns on how not getting enough sleep gives you cancer, but they don't see the difference because all of this is a war of memes, and almost nobody is out there with a technical basis who is ready to meme, if we can say. Jim O'Shaughnessy: Yeah.
46:03
And so I'm a huge believer in that we are, because of the global connection that now really does connect every part of the globe, because of the ability for narratives and memes and stories to be the make it or break it for a lot of things.
46:20
I take memeing very, very seriously.
46:20
I don't know whether you follow my Twitter account? Mark Nelson: I do. I do Jim.
46:29
Jim O'Shaughnessy: But I am trying desperately to demonstrate to people the power of memes, because even some really switched on friends of mine don't get that in this new world that is interconnected and things go viral, and what took St.
46:47
Paul all of his life because he had to say each one every time he visited a new village, now can make its way around the globe and be believed and made part of somebody's belief system in less than an hour.
47:03
Jim O'Shaughnessy: You'd better take memeing very, very seriously.
47:07
Because if we removed the name, if somebody got blanked out and they didn't know we were happening to be talking about nuclear power, and they heard just the rest of what we're saying, they would be like, "What the hell is wrong with people?
47:26
That that makes no sense."
47:26
It comes back to your, maybe we don't deserve it.
47:34
Maybe we're just so fucking dumb that we just like, "Okay, go ahead."
47:43
Mark Nelson: Or, in the theme of this emotion driven stuff, too smart for our own good. Jim O'Shaughnessy: Good.
47:48
Mark Nelson: That's another one that fits along with the steel man.
47:51
Jim O'Shaughnessy: I love it. I love it.
47:51
Let's bring in yet another thing, because there's a lot of shibboleths that need to be destroyed here.
47:56
So a lot of people, through no fault of their own, and let's be clear listeners, I make this point a lot, but I'm not pointing a finger at you. I'm just as guilty.
48:08
I'm running human OS, just like you are.
48:13
I fall for the same traps that you fall for.
48:13
I just try to figure out them with a little more persistence.
48:21
I'm probably going to get it wrong, but at least I'm trying.
48:21
So I'm not pointing a finger here.
48:28
I'm saying we're all humans.
48:28
We all are run in the same OS system here for the most part, at least that I know of. There's another thing.
48:33
They should just let people tour area 51. Mark Nelson: Thank you. Yes.
48:41
On the flight back from seeing some nuclear sites in Europe a few days ago, I just watched Independence Day, and I'm like, "Why didn't they just update the president at the beginning?"
48:50
Jim O'Shaughnessy: Exactly. I mean, come on people.
48:50
But let's talk about nuclear weapons, because they are a completely different use case. People don't care. They see the...
49:02
And back to my opening quote from Oppenheimer, right?
49:13
"I am become death destroyer of worlds."
49:13
Help us help disambiguate nuclear weapons from nuclear power. Mark Nelson: Sure.
49:28
Sure. Well, so just on a physics basis, in a nuclear power plant, the rate of reaction, the rate of atoms splitting apart, giving off energy and particles, that rate is carefully balanced and the power plant is designed such that if the rate starts increasing,
49:48
for whatever reason, mistake, something, if the rate starts increasing, it actually reduces rather than increases the power of the reaction and it starts to ride at 100, maybe starts moving down by itself. Mark Nelson:
50:00
Mark Nelson: So that's the design of nuclear power plants.
50:02
With nuclear bombs, once the reaction gets started, the goal is to have the reaction proceed as rapidly, as exponentially as physically possible to release an immense amount of energy in the shortest period of time.
50:15
There's the difference between the power plants on one hand and the bomb on the other.
50:20
In a way, this is a use case physically further apart than using a jet plane to fly passengers across the country, or to run it into the World Trade Center.
50:33
They both have jet planes, they both have pilots. They both...
50:37
I mean we've managed to stop the hijacking with very little modification other than, honestly, it ended the day of 9/11, it just ended.
50:44
The hijacking thing kind of ended. We locked the door.
50:50
Jim O'Shaughnessy: Well, but by the way, one of the reasons we locked the door isn't because of the kabuki theater of the TSA.
50:54
It is because regular people would never allow that to happen on a plane again. Mark Nelson: I agree.
51:13
And in fact, one of the crazy lessons of, say Three Mile Island, and then we learned it again a little bit Fukushima Daiichi, is that what matters is the humans in the loop.
51:19
Once you get more than one or two humans in the same loop, you can actually, in high reliability systems, reduce the likelihood of freak problems rather than increase them because of the chaos of irrational humans doing things. Right? Jim O'Shaughnessy: Yeah.
51:40
Mark Nelson: It's one of the reasons that nuclear plants have done so well, that we can't calibrate the danger of a nuclear meltdown because there's so few of them.
51:45
Because with checklists, with self-checking where you bring in outsiders to break into the culture, observe and then report back.
51:55
All voluntarily, that's what happens in nuclear plants nowadays.
51:55
The teams of experts across cultures, across languages come, they look, they see, they're not subjected to your regulator.
52:05
You're not subjected to their regulator, but the operators who are interested in excellence everywhere because of the reputational value, everybody's got reputational skin in the game in the nuclear world. Right?
52:15
Mark Nelson: Well then that that's been a lot of what's improved things, and it's sort of the difference between the locking the doors is like the regulator in this case, and the passengers not standing for that ever again, is the self-checking from the other operators.
52:24
Well, all of that is not quite...
52:32
Doesn't get us to this nuclear bomb problem.
52:32
So let me mention something.
52:37
We are getting further and further away from having a lot of people who live with memories from before the bomb.
52:44
Mark Nelson: It's becoming something we live with.
52:45
So in some ways, I almost want to push back your question, not say anything of any interest back after this point, except for we're learning to get over that particular fear because all times and places we live under doomsday, ours does not feel any more doom-like than any past generations.
53:04
Because the change where it became physically possible under human control to bring about the doom, the biblical Old Testament doom, that memory of that shift as a before and after is going away.
53:16
Mark Nelson: Meaning everyone lives with...
53:19
There's sort of a conservation of doom where there's only so much doom that society can feel itself under.
53:24
I dug into the history of the bubonic plague, the Black Death during COVID lockdowns, and it was fascinating to see how writers and historians saw this as part of the end of days.
53:39
It was the culmination of bad catastrophes that had been accumulating for decades in Europe.
53:47
When Europe had had a few centuries of population booms, of settling the forest.
53:52
Most of the forest of Europe were cut down in the two centuries before the Black Death.
53:57
Mark Nelson: There are areas of Europe that have never recovered the population level they had before 1348, and the people who lived through that discontinuity had a different experience than those who were on either side.
54:13
But those discontinuities are few and far between, Jim.
54:18
What I wanted to say about how hard it is to deal with some of the older folks who can have a lot of wisdom and a lot of life experience, but some of the older folks working with them on climate change, you realize they have a model of climate change that is not scientific.
54:28
It's doomsday, it's a pattern in their mind held over from being scared as a child about nuclear war.
54:41
Mark Nelson: Where they put up countdown clocks.
54:41
I'll talk to 65 or 70 year olds who, like these clocks that show we have only eight years, 360 days and 10 hours to do something about climate change, or whatever.
54:52
They're often not clear what the clock actually means, and you're like, "Actually this is more your life expectancy.
54:56
Not whether after eight year..." You know what I mean?
55:02
That their vision, their personal vision of how death occurs, how the end of days occur, binds up climate change with nuclear war in a way that, somehow logically for them means they can fight both their coming end, nuclear war and climate change by continuing to fight against nuclear energy.
55:23
Jim O'Shaughnessy: Wow, that's a really- Mark Nelson: That's kind of a subtle thing.
55:27
In other words, the feeling of the end to them is bound up with nuclear technology, so to fight against the end is to fight against nuclear. Jim O'Shaughnessy: Wow.
55:39
That's really profoundly insightful.
55:42
Mark Nelson: We encountered a lot of these folks out in California when fighting to save Diablo Canyon.
55:43
In the end, the same governor who the anti-nuclear forces had convinced to help them close Diablo Canyon.
55:50
He was just too young, a generation.
55:56
He's not scared of nuclear.
55:56
Gavin Newsom is not scared of nuclear.
55:56
So when the political winds changed, he betrayed all of them and decided to save the plant.
56:05
Mark Nelson: They thought he was on their side because he'd helped close it, but then he got worried about blackouts and not becoming president if he got kicked out of office, and he switched. Jim O'Shaughnessy: Yeah.
56:14
Mark Nelson: Because he did not have that fear of the end.
56:14
He did not have that existential fear of nuclear.
56:20
Jim O'Shaughnessy: I love that.
56:20
I'm going to dive down that rabbit hole because that's a great way to connect these things, about the discontinuities.
56:23
I mean, the one that immediately presents itself is people who lived through the depression, and that impacted...
56:32
My own grandfather was very, very successful in the oil business, fossil fuels, and he was very successful, but lived through the depression.
56:41
Actually, it's when he made a lot of his fortune because he didn't trust Wall Street, another wonderful irony, in that that's where I made my bones.
56:53
And was able to buy up his fellow operators at two cents on the dollar because they all went broke in the crash of 1929.
56:58
Mark Nelson: But yet, I bet he could never relax, could he? Jim O'Shaughnessy: No.
57:03
Mark Nelson: I bet he could never forget for a second what it felt to be on the edge?
57:08
Jim O'Shaughnessy: Exactly.
57:08
And I am the youngest of the third generation of males.
57:13
I have one female cousin who's a few months younger than I am, and his grandchildren who are much older than me, my cousins were trying to convince him in, I think, I don't know, 1962.
57:25
No, even before, I have one cousin who's like in his eighties, oddly, whereas I'm the martini baby.
57:32
But they made everything that they would...
57:32
Thought that my grandfather would immediately understand.
57:40
All of the market is so reasonably priced now.
57:40
This is the growth that it is anticipating. "The United States won. We won.
57:47
We destroyed the industrial capacity of the rest of the world.
57:54
That's why we get to provide the world with 85% of the cars being sold globally.
58:00
Granddad, you've got to get in these stocks." "Nope, nope."
58:05
Only municipal bonds tied to revenue that were non-callable. That was it.
58:14
Mark Nelson: Because he'd seen ruination in times that looked just as good and honestly just as unprecedented.
58:17
Jim O'Shaughnessy: Exactly. Exactly right.
58:20
And so what's great about that, that's such a great lens to look through because- Mark Nelson: Well, Jim, can I expand on exactly this theme?
58:29
Jim O'Shaughnessy: Please.
58:33
Mark Nelson: If you are worried about things to zero, about great disasters against nuclear plants causing ruin on one hand, but also against great financial or market disasters.
58:40
Running out of energy would be one of the big ones to hurt countries.
58:46
We're going to see some ugly repercussions of what's hitting Europe.
58:50
Some countries will survive and adopt better than others.
58:54
I'm particularly worried about the UK.
58:54
The UK is in a very bad position with kind of structurally expensive energy for a really long time, and a ton of exposure to world markets and countries that can produce more than Britain can per unit of gas.
59:06
Because it doesn't take much to run the banking houses of London.
59:11
That's only a little bit, but what about the rest of economy? Right.
59:16
Mark Nelson: Well, just a few days ago I was walking around the grandest construction site in all of Europe, the most ambitious.
59:22
It's a two unit nuclear reactor plant, so the largest reactors on planet earth.
59:28
Immense concrete shells rising up to 50, 100 meters, cranes soaring above my head.
59:37
The scale of construction is not like anything I've ever seen before with my own eyes.
59:37
And I've been to this very construction site when they were first laying down the great squares.
59:48
Mark Nelson: Okay, well, I go back and this immense structure, I'm realizing I'm seeing some of these spaces for the last time before they get closed up for a century or more, and this plant is going to have a few hundred workers and is going to crank out a few million people's worth of energy.
1:00:03
While receiving like maybe a barge or a truck, a few trucks a year for just a fuel runs, that's it. Yeah.
1:00:08
And it's going to be nearly impregnable, a natural disaster that hurts this plant.
1:00:15
Mark Nelson: Like I said about their earlier story, it will take down the rest of southwest England or maybe beyond.
1:00:24
So either you don't have an issue, or you should go to the nuclear plant for shelter and security.
1:00:29
So how do we tie this together?
1:00:29
What people need in their old ages, just on fixed income or a little bit of return, while they also literally need the amount of energy.
1:00:36
It's not just the financial cash, they need the literal energy.
1:00:41
Old Brits need the electricity from the turbines.
1:00:47
Mark Nelson: How do we tie those things financially together?
1:00:50
And I don't have really good updates for you now, but we're on the cusp of a moment where the big London asset managers are considering whether to put billions into buying shares of the nation's really absolutely necessary next generation of nuclear reactors.
1:01:03
And think about what a union that would be, ultra long live assets, even if it takes five, 10 years to build.
1:01:17
It provides exactly, not just the energy you need, but also a buffer against the vicissitudes of the global energy market.
1:01:24
Because the uranium price can go up, go down, doesn't really change the cheap cost of production for nuclear.
1:01:28
Mark Nelson: Here in Chicago, our Governor, J. B.
1:01:30
Pritzker, very cleverly arranged a bailout of the plants by buying at a nearly fixed price almost all of their power for the plants near Chicago, for three years, and he did it.
1:01:43
He negotiated at the bottom of the market, and so for what, $45 a megawatt hour, $50 a megawatt hour.
1:01:49
The wholesale price has jumped up to way above that.
1:01:55
We're getting chunks off of our electricity bill each month, back from the nuclear operators for plants that were built in the seventies, and that have no sundown period on the horizon.
1:02:05
Jim O'Shaughnessy: So- Mark Nelson: How do we tie these worlds?
1:02:10
The people who only want the municipal bonds to the nuclear plants?
1:02:14
Because in Texas, San Antonio and Austin own a nuclear plant.
1:02:19
Jim O'Shaughnessy: Right.
1:02:20
Mark Nelson: Now, they tried to get out of it.
1:02:22
They tried to dump it in the era of the eighties, the ultra-high interest rates, the partly NRC led delays in construction with all the design changes and stuff.
1:02:28
It was the end of the nuclear era.
1:02:28
The Texas City's felt saddled with these bad deals, that this old fuddy duddies got them into nuclear.
1:02:39
Now they need to just sell off the whole program, but they couldn't because they couldn't get a good price.
1:02:44
They're stuck with it now.
1:02:44
Mark Nelson: Now it's brilliant, right?
1:02:46
They have shares of one of the cheapest nuclear power plants in the world to operate, under $20 a megawatt hour for stable carbon-free power that, now that they've dealt with that first big freeze they had, they know how not to have any glitches.
1:03:02
That will be the most stable and reliable power going forward.
1:03:02
The question is, how do we get more of that?
1:03:08
More municipal nuclear, more widows and orphan nuclear?
1:03:08
I think it's coming, but it's struggling to be born as we speak.
1:03:14
Jim O'Shaughnessy: And, again, listeners, just listen to this conversation, yes.
1:03:17
In the terms of we're talking about a remarkable energy source that has a huge list of advantages and benefits that are invisible, sadly to many, many people.
1:03:34
But then apply the lesson here to a variety of other topics.
1:03:45
And there is an underlying thesis here that I'm going to let you get on your own.
1:03:53
Listeners, I know you will, because our listeners are very smart.
1:03:53
But the idea that despite all of these advantages, despite all of the facts in its favor, you have the UK on the point of a real crisis, because the point you made is very well made, and not made nearly enough.
1:04:24
Jim O'Shaughnessy: You want a real disaster?
1:04:27
Everyone listening and watching this, turn off the lights.
1:04:35
You will see mayhem and destruction that makes Mad Max look like a nice Sunday drive in the desert.
1:04:45
And people don't think about that, because the lights always go on for the most part, right?
1:04:50
Oh, the lights are on, we've come to rely that our lights are always going to turn on.
1:04:50
Well, if they don't, that's going to lead to a problem that is orders of magnitude greater than even a Chernobyl.
1:05:05
Mark Nelson: But let's lean into this, Jim.
1:05:08
In a place where war has returned, as far as the Ukraine can tell, they might even prefer a global war because then they might get more people on their side or help somehow.
1:05:19
Ukraine is stumbling through wartime conditions, brutal conditions, and people there are buying up used electric cars from all over Europe. Why?
1:05:33
Because they still have electricity even if they don't have gasoline. Why?
1:05:33
Because they have one of the greatest nuclear fleets of any country in the world. Why?
1:05:39
Because the enemy invading them built it, and then the country broke apart.
1:05:44
But how do they get fuel?
1:05:44
Because Westinghouse is making the reactor fuel.
1:05:51
They just copied the Soviet design.
1:05:51
Had to do some troubleshooting for a bit then they did.
1:05:57
And then you just ship a few truck fulls with this fuel and crane keeps the semblance of order, semblance of grid, a semblance of society going while having levels of nuclear dependency right now that are above France.
1:06:09
Jim O'Shaughnessy: What's great about that, and makes the point even better is through a horrific wartime condition where there's nothing good happening when all those people are losing their lives and being put under horrible conditions by an assault from their previous country mate, I guess you'd call them.
1:06:34
The plant still works, the lights are still on.
1:06:40
And I simply ask you to take that a step away and imagine, if you will, if the lights went out...
1:06:51
Since you're in Chicago, we'll use Chicago. I love Chicago.
1:06:51
If the lights went out in Chicago and stayed out for 10 days, I don't know how many days it would take for normal human beings to descend into anarchy, but they would descend into anarchy without energy.
1:07:16
Mark Nelson: There would be pockets of order.
1:07:18
But it's order without the luxury of slow justice the way we're used to it.
1:07:24
Jim O'Shaughnessy: Exactly, exactly right.
1:07:26
Mark Nelson: Which of course is Mad Max.
1:07:26
Like pockets of order, perhaps not aesthetically or to our liking as we...
1:07:29
Or maybe not as just as we might think.
1:07:37
Justice has to come with plenty. Is the problem.
1:07:37
Jim O'Shaughnessy: Yes, I agree.
1:07:42
And that's the final thing I wanted to chat about.
1:07:42
I don't blame humanity for having a scarcity mindset.
1:07:51
For most of our evolution, we humans were living in scarce environments, where all of the reasons why evolution trained us to be fearful and to be fearful of new particular threats is because the environment sucked.
1:08:05
And I usually mention, at least once a podcast, the book by David Deutsch, ‘The Beginning of Infinity’.
1:08:13
If you look back at those earlier eras, oh my God, was the world of dangerous place to be for a human.
1:08:25
Mark Nelson: It was hard to wax eloquently about good weather when bad weather killed you. Jim O'Shaughnessy: Yes. I mean, exactly.
1:08:29
Mark Nelson: It was hard to enjoy the mighty mountain peaks when that represented a death giving environment and death giving conditions.
1:08:39
Jim O'Shaughnessy: Exactly.
1:08:41
And so let's stipulate that we will say, yeah, we get that in evolution, the conditions that the world used to be in before human ingenuity turned it into a much, much more friendly place.
1:08:56
We get the scarcity mindset.
1:08:56
But you just made that great point, which is, you need the luxury of time and ability for justice to take place.
1:09:03
If things are chaotic, if the lights are off, if people are running hit and yon, that's a scary environment that just devolves further and further and further.
1:09:21
What else can we do to create an understanding among all generations, hopefully.
1:09:27
But let's just make it Gen Xers and down.
1:09:36
So let's make it Gen Xers all the way down to the Zoomers and to my grandson who was born yesterday.
1:09:42
What can we do to get them to understand that the world is a fundamentally more abundant place than it ever was in the past, ever, because of human ingenuity, because of the now interconnectedness of things and because of all of the cool things that are going on.
1:10:02
Jim O'Shaughnessy: By the way, just as a brief parenthetical, I'm the chairman of the Board of Stability AI, which is an open AI company.
1:10:06
Oh my God, you'd think that we had killed babies out in the middle of traffic with some certain people's attitudes about “AI is stealing from me.
1:10:17
” No, it's not stealing anything from you.
1:10:17
But that's a whole different topic.
1:10:24
How do you get all the way down to my grandson, Charlie, who was born yesterday, to understand, wow, we are so lucky.
1:10:33
We have so much abundance.
1:10:33
We got to be in favor of that no matter what the old guard says. Mark Nelson: Yes. So here's one.
1:10:43
We need to have ways to expose young people to outdoor conditions more, not just a day skiing, but overnighting outside.
1:10:50
Whatever you can do to get outdoor camping back into the curriculum, it's probably worth a whole year of the science course.
1:10:58
I know that sounds crazy, but when people are passionate about something or need to know something, they'll do the learning by themselves in an age of internet.
1:11:06
The tricky thing is when they don't feel the need or, I don't know, the survival instinct that gets triggered when you...
1:11:12
I was a boy scout, I was an Eagle Scout in Oklahoma City where I grew up and just you have respect for the weather, especially if you don't have outdoorsy parents and you don't maybe dress as well as you should.
1:11:26
You learn what it means to not be able to get a fire going in the morning.
1:11:31
Mark Nelson: The lack of not getting it going.
1:11:33
You learn to respect the heat, to respect the flame.
1:11:33
Look, campfires can give you cancer.
1:11:41
They are bad for your lungs.
1:11:41
And to understand why you would make them, even if they're giving you cancer because the alternative is not having fire.
1:11:52
That's a priceless bit of wisdom.
1:11:52
It's just, I think, embedded deep into people who grew up needing to make fires with their own hands in order to, I don't know, get merit badges on one hand.
1:12:00
But those are very important to us young people, and that you can set up incentive structures to help them feel the lack of the modern convenience.
1:12:10
Mark Nelson: So that's one thing.
1:12:10
A lot more camping for kids, a lot more touching grass, I suppose, that'll help. Here's another thing.
1:12:12
People in developing countries, especially over the next few years, they won't have any issue with this at all. Why?
1:12:21
Because the rich world messed up.
1:12:21
Only finance really like LNG, Liquified Natural Gas, or the developing world wouldn't finance nuclear, wouldn't really finance coal anymore.
1:12:34
So you're stuck with this LNG, Liquified Natural Gas, but you cannot afford as a developing country to outbid Germany.
1:12:40
Germany who screwed up their energy supply, can buy all the LNG you thought were going to run your country.
1:12:46
So all across the global south, there's going to be years of brownouts, blackouts, rolling, planned, unplanned. It's going to be bad.
1:12:50
Only developed countries are going to have quite the same thing and they have pretty orderly processes to deal with it.
1:13:01
Mark Nelson: But for countries on the edge of modernity, the edge of industrialization, bad times are coming and they're never going to forget it.
1:13:09
Here's what I would say is quite optimistic in my eyes.
1:13:09
Nuclear is coming into global climate conferences in a huge way.
1:13:17
Nothing is going to compare to what it's going to be like this year in Dubai where UAE is one of the most successful nuclear countries ever.
1:13:21
They built on time, on budget, four massive Korean reactors originally of American design in a very short period of time as a program, as a sophisticated program for the entire nation.
1:13:34
And they're going to be powering COP 28 with nuclear reactors and they're going to be proud of it, and they're going to tell people about it.
1:13:43
They're going to be able to say to poor countries, coming to COP 28.
1:13:43
Normally these climate conferences are the rich countries acting as a...
1:13:48
It's like a trade show for, I don't know, offset programs and wind turbines and solar panels and stuff like that.
1:13:57
Mark Nelson: And then the poor countries are like, where's our money? Give us our money.
1:13:59
Which creates a very awkward dynamic, of what, are the rich countries going to pay poor countries to be poorer?
1:14:04
That doesn't even make a lot of sense.
1:14:04
Instead, how will you make the poor countries not poor anymore in a way that doesn't bring us all down together in terms of environmental problems?
1:14:16
Well, at COP 28, we're going to have a union of these stories where the rich countries, in a way, are going to be the ones selling oil and gas into this market, and the rich countries selling oil and gas into this market who have just built nuclear plants.
1:14:33
They're going to have a real edge in the whole conversation.
1:14:33
And the host country is number one here.
1:14:37
Mark Nelson: So these storylines are coming together, developing world angry and growing up in worse conditions maybe than a few years ago they would've thought they would've had.
1:14:43
And then the rich countries not so, you mean with some wings clipped?
1:14:47
They thought they had it all figured out.
1:14:53
And instead Putin threw a wrench in the gears and pandemic and the supply disruptions through enough wrenches and enough gears to slow down this automatic thought of progress.
1:15:06
Jim O'Shaughnessy: Mark, this is so fantastic.
1:15:09
And the pull quote that I would note there is, isn't it deliciously ironic that the area that is well known and associated with producing the most fossil fuels is also building the most nuclear reactors?
1:15:24
Why would you think they're doing that?
1:15:34
Mark Nelson: And you've seen nothing yet?
1:15:36
You've seen nothing yet to what it's going to look like when Saudi Arabia gets their program going, and they intend to.
1:15:40
It's easy because at these prices, you can't afford to use it yourself.
1:15:47
You got to sell it and be rich forever.
1:15:47
And then you're also creating the infrastructure that make it to where even in a downturn in oil and gas in your production, let's say your production and not the world's need, but just in your production, you have the energy you need anyway.
1:16:04
Here's another one that people have not even begun to really think about.
1:16:04
Because if you want green hydrocarbons, green energy carriers, you need a lot of the machinery, the processes, the chemical engineering sophistication of the oil and gas industry with a feedstock of energy, pure energy that could come from the always on nuclear plants.
1:16:22
Mark Nelson: So if you have the capital to build that energy supply out to run it 24 hours a day for the next century, then you build the green fuels hub.
1:16:32
And if a country can't afford it and they want 50-50, okay, here's your 50% kerosene and jet fuel.
1:16:38
Here's your 50% of new kerosene that comes from carbon dioxide molecules, sucked out, broken apart, combined with H2O that you break apart with electrolysis, put the Hs and Cs together, blend it to the specifications of the client to whatever they can afford in terms of climate protection.
1:16:57
And with the oil and gas on one hand and the nuclear on the other, you can make whatever energy carriers the rest of the world wants but refuses to build for themselves.
1:17:08
Jim O'Shaughnessy: And it's one of those classic examples of, we haven't even made the headline here.
1:17:18
If you are really concerned about climate change, and my guess is you probably should be, we have one of the easiest best answers available right now, where we could fundamentally change the future in terms of carbon emissions without all of these keystone cops Rube Goldberg machines that people are trying to paper here.
1:17:44
We'll do these offsets and we'll charge these taxes on comp... Blah, blah, blah.
1:17:50
And we've got over here a very simple, a very elegant and a very safe solution.
1:17:57
And if you really do care about climate change and you're not willing to look at one of the most obvious safest conclusions, you don't really care about climate change.
1:18:12
Mark Nelson: And I got to push back just a little because I'm not sure if you regularly read New York Times cover to cover or Washington Post or Sinner Center Left Publications.
1:18:22
They are starting to spread this message around nuclear.
1:18:22
I mean, if I were going to say something to investors listening, it's that I'm not saying there's an easy path to nuclear.
1:18:32
I'm just saying it's the most truly bipartisan issue in the country. The whole country.
1:18:37
There's no other issue in the United States that compares to the bipartisan enthusiasm of nuclear.
1:18:42
Mark Nelson: Once the sort of old guard Democrats got rooted out and they're just not there anymore in terms of the anti nuc traditionalists in the Biden administration or they're reformed.
1:18:51
So people who are against nuclear are only in the Biden administration energy if they profess to love nuclear, that is a crazy time.
1:19:00
What I hear on Capitol Hill is that when there's a switch in the party controlling the house or the Senate or the White House, everybody hands off the nuclear work and it continues a pace like a team, one team.
1:19:12
Which is not true on almost anything else. Yes. Not true on wind solar.
1:19:19
Not true on oil and gas or coal.
1:19:19
It's just not the same as it is on nuclear now.
1:19:26
That doesn't mean it'll be easy to figure out the right investments.
1:19:26
That doesn't mean that it's sure winds all the way.
1:19:30
It means that there's never been a bigger gap between the bipartisan enthusiasm at the national, state and local level for nuclear and what we've yet accomplished in nuclear.
1:19:41
I would say that that's the opportunity. Jim O'Shaughnessy: Boom.
1:19:44
That's where we're going to close this one down because that's a very optimistic and true, it's nice when optimistic things are true, statement about moving forward.
1:19:51
And we finally are maybe taking our heads out of our collective asses and moving forward on this despite all of our other divisions and shouting matches that typically divide us into tribes of us and them.
1:20:07
So here guys is one of the most bipartisan things that you could ever look at, and it's also a solution that we really need to put into place right away.
1:20:21
We don't want to look like Europe in terms of what might happen in Germany, what's potentially just years away from happening in the UK.
1:20:28
So, I think that's a great place to leave it.
1:20:35
Jim O'Shaughnessy: At the end of each of our podcasts.
1:20:35
I'm not going to give the secret out that I know about you.
1:20:37
But at the end of our podcast, we tell you that Mark, I am creating you emperor of the world for one day you can't kill anyone, nor can you put anyone in a reeducation camp.
1:20:54
What you can do however, is you're going to be given a magical microphone and you're going to say two things into that microphone, and all 8 billion people on the planet are going to wake up whenever their tomorrow is, and they're going to think, I just had two of the greatest ideas in the world and I'm going to act on them.
1:21:14
In other words, you get to incept two things that people are going to think they thought of and they're going to actually do and follow through on. What you got for me?
1:21:26
Mark Nelson: Nuclear energy is the only technology that lets you eat your cake and have it too.
1:21:30
Where a fuel supply is nearly infinite because we can make more fuel with the old fuel.
1:21:36
Where the waste is nearly nonexistent.
1:21:42
There's so little of it we can't decide what to do with what remains.
1:21:42
Where the technology is so long lived that we can barely decide how to build people once the reactors are cheap enough.
1:21:54
Where the impacts of the disasters, at absolute worst, are unintentional nature parks and tourism hotspots like in Chernobyl.
1:22:02
This is the last thing we need.
1:22:02
Beyond this it will be fun to invent other things.
1:22:09
So if you work together, have some faith in the technology.
1:22:09
If not, maybe the institutions of today, give them a chance to prove themselves of the next few years.
1:22:22
Help build nuclear with us and we'll need plenty of you in your careers to join too.
1:22:28
But if we build this, there will be enough to go around, where each country, each state and city can have its own independence and dignity while providing for a clean and stable earth.
1:22:39
Jim O'Shaughnessy: Love it. Fantastic.
1:22:39
We are going to incept all of you.
1:22:45
When you go to sleep, you're going to wake up tomorrow and you're going to think, wow, what was going on?
1:22:51
That was really dumb of us, wasn't it? At least we got smart.
1:22:51
Listen, Mark, thank you so much.
1:22:58
Tell folks how they can find you. Mark Nelson: Sure.
1:23:01
Easiest way is on Twitter @energybants, E-N-E-R-G-Y- B-A-N-T-S.
1:23:01
My DMs are always open and I always get to everyone.
1:23:10
You can also find me at my consultancy website, radiantenergygroup. com.
1:23:15
And I'm available by email there, Mark@radiantenergygroup. com.
1:23:22
Jim O'Shaughnessy: Perfect.
1:23:22
And, of course, all the links will be in the transcripts to the podcast.
1:23:25
Mark, this has been great.
1:23:25
I love when the popular opinion is often incredibly wrong, but we're coming at a time when people are beginning to change their minds, and so let's hope this pushes them a little bit further along the line.
1:23:43
Mark Nelson: Great to be here, Jim.