Will New Technology and Climate Change Save Nuclear Power?

Growing concern over energy security and climate change has revived interest in nuclear power in some of the world’s most energy-intensive economies. In Japan, nuclear generators that closed following the 2011 Fukushima disaster are reopening, while Germany has extended the operating life of the country’s remaining nuclear facilities. And in the United States recent legislation, including the Inflation Reduction Act, earmarks billions of dollars to support economically struggling nuclear powerplants and the development of next-generation nuclear technology.

Yet the future of nuclear energy remains far from certain as challenges around cost, complexity, and spent fuel disposal persist.

Daniel Poneman, chief executive of nuclear fuel supplier Centrus Energy and former Deputy Secretary of the U.S. Department of Energy, discusses the political and market dynamics underpinning the nuclear industry’s resurgence in developed economies. He also examines the potential for small modular reactor technology to deliver economic, and carbon free, electricity in the future.

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone. Nuclear power has experienced something of a return to favor recently in some of the world’s most energy-intensive economies. Japan, whose nuclear fleet was retired following the Fukushima disaster in 2011, has recently moved to restart moth-balled reactors. In Germany, which had pledged to close the last of its nuclear generators by the end of 2022, the life of the same plants has been extended, at least through this spring. And in the United States, recent legislation, including the Inflation Reduction Act, earmarks billions of dollars to keep economically struggling nuclear plants open and to fund development of next-generation nuclear technologies.

Broadly speaking, these efforts to sustain nuclear power have been in reaction to fossil energy supply concerns raised by the war in Ukraine and to preserve nuclear as a source of low-carbon energy. Yet the future of nuclear energy nevertheless remains far from certain in much of the world, as challenges around cost, complexity, and spent field disposal persist.

On today’s podcast, we’ll explore these challenges with Daniel Poneman. Daniel served as Deputy Secretary of the US Department of Energy during the Obama administration and is now Chief Executive of Centrus Energy, a supplier of nuclear fuel. Daniel will explore the political and market dynamics underpinning the nuclear industry. He’ll also discuss a new generation of small modular reactors that many believe will be the key to nuclear power’s future viability. Daniel, welcome to the podcast.

Daniel Poneman: Andy, it’s great to be with you, and since we’re such good friends, you can call me Dan.

Stone: So Dan, I wonder if, to get started, you could introduce us to your experience at the Department of Energy and your current role with Centrus Energy?

Poneman: Well, the role at the Department of Energy is really one of the most exciting jobs I think you can have anywhere. I have, since college, been fascinated by both energy and national security. Some people don’t know this, but nowhere are those more united than in the US Department of Energy, and indeed, the US Department of Energy began many, many decades ago as the Manhattan Project. To this day, many people don’t realize that the custodianship of our world’s nuclear deterrent in the United States is in the hands of the US Department of Energy because President Truman wisely decided that the Pentagon should not control everything having to do with things nuclear and weapons.

The job of Deputy Secretary of Energy, which is the number two position in the Department, believe it or not, is the lowest position in the Department, with responsibility over both the nuclear deterrent, our arsenal, and our naval reactors, and the civilian use of nuclear energy as a tool to fight climate change. So it’s incredibly exciting in the nuclear space, but on top of that, the Energy Department has responsibility for cybersecurity, for grid resilience, for storm response, for fossil fuels, for energy efficiency, solar, wind, and actually, after the National Science Foundation, is the largest funder of the physical sciences in the country. So it’s an incredible smorgasbord of issues to choose from.

On the other hand, to be the chief executive of a single company in a single sector has its own satisfactions, its own challenges. This company, Centrus Energy, actually was like Adam’s rib, prized out of the US Department of Energy. The United States is the only nation on the face of the planet that privatized the activity known as “uranium enrichment.” Why is that usually a government function? Because the same technology that can enrich uranium to generate electricity can also enrich uranium to a very, very high purity that creates the possibility of a nuclear explosion.

So the United States, in 1998, privatized this activity, but as a private company in the aftermath of the Fukushima disaster of March, 2011, the market in enriched uranium collapsed, and with it, the company also went through a reorganization. And so since 2015, I’ve been trying to restore the capacity in our nation to do this very important function of enriching uranium. That’s the mission space of Centrus Energy.

Stone: So Dan, we’re going to be discussing the potential role of nuclear power in the future, and the emergence of new nuclear generating technologies. But before we look to the future, I wonder if we could take a step back for just a moment and look at the arc of nuclear power history over the past couple of decades. And it has been a very eventful couple of decades. Maybe starting back with the last time that the future for nuclear power in the US looked very bright, in the early 2000s.

Poneman: I’ll take it back very, very briefly, even further because we’re just coming up, Andy, on the 70th anniversary of December 8th, 1953, when President Eisenhower announced Atoms for Peace, a program that posited the United States’ continued defense of freedom and deterrence of adversaries with our arsenal, but at the same time, making the peaceful benefits of atomic fission widely available across the globe. The United States assiduously pursued that policy for many decades. There were lots of nonproliferation challenges in the meantime, but around the time you mentioned, in the early 2000s, was this growing, deepening crisis about climate change and a sinking realization that got further and further scientific validation with each passing year that dramatic steps would need to be taken to cut carbon out of — not only the power sector — but all of the sectors that were generating greenhouse gas emissions.

So in that period, between 2000 and 2011, a number of people who had formerly been very much opposed to nuclear energy because of concerns about radiation, about proliferation, about waste, came to realize that the greatest urgent concern confronting humanity was, in fact, climate change and that, in fact, nuclear energy was the most prodigious form of power that did not produce greenhouse gas emissions.

And so people like Patrick Moore of Greenpeace, Stewart Brand of the Whole Earth Catalog, and many others said, “You know, we really need that nuclear energy.” And so there was quite a bow wave of enthusiasm which came to a screeching halt on March 11th, 2011, when the Fukushima disaster hit. And so that really, as you said in your opening remarks, put things back in many ways to square one. Japan shut down 54 reactors immediately. Germany shut down eight and promised to shut the rest, and so forth. And unfortunately, it has had extraordinarily deleterious effects in terms of the world’s fight against climate change. Only now are we beginning to see a resurgence because of this climate concern, which is getting more and more acute with each passing year of renewed interest, as you indicated, in nuclear energy. And I think that’s exactly the right thing to do.

Stone: Now, a host of challenges face nuclear power, right? We’re seeing again more enthusiasm or more support recently because of the war in Ukraine, the need for a stable base of supply and also looking, obviously, at the challenge of getting fossil fuel at this point, particularly in Europe. But many challenges remain, and these are very well known. We’ve got high-cost, decade-long project development time frames and the unsolved problem of nuclear waste disposal. The industry, at least in the United States, really does appear to be at an impasse. So I wonder if you could break it down for us? What has made it so much more difficult and costly to build nuclear plants today than, say, in the 1970s, when so many plants were built?

Poneman: There’s a lot in that question. I’ll start with a very crude analogy, which I’ve never used before, but unlike riding a bike, think about playing tennis. Imagine putting a tennis racket down, and then picking it up 30 years later and trying to go to Wimbledon. It’s not going to work very well. So if you stop doing anything for 30 years, you lose practice. And when it comes to industry, you lose supply chains, you lose expertise, you lose craft knowledge, you lose labor pools. You lose practice. And so that is a big part of it.

Also there are people who believe that, as nuclear plants became larger and more complex, that some of the success from what we call “generation II reactors,” when we were building them at a much more rapid clip, were sort of lost in perhaps a somewhat misconceived attempt to get bigger and bigger and more complex and more bespoke. And every time you do that in an industry as heavily regulated as the nuclear industry, that means change orders. Change order means further regulatory review for safety, et cetera, et cetera. And so it sort of grew like Topsy, and of course when there was an appropriate reassessment of nuclear safety regulations after incidents like, frankly, the attacks of September 11th, 2001, when people started to think, “Well, gee, what if somebody flew a plane not into a building but into a reactor? What would happen then?” And so people jacked up regulatory requirements at that time. And then, of course, after Fukushima, the same kind of process. Things became increasingly complex in the regulatory space, as well. So you just take all of these factors together — increasing complexity, increasing concerns about various dangers, loss of practice, loss of supply chains — and it’s a recipe for cost overruns and delays. And that’s what you saw.

Stone: You know, it’s really interesting, these higher costs for the building of nuclear plants in this country. There is some data that I found in preparing for our talk today that comes from Bloomberg New Energy Finance in combination with the World Nuclear Association, and it says that China, where about 20 nuclear power plants are currently being built, those plants can be built for about a third of the cost of reactors here in the US, and it also says in France.

So is the high cost, then — and I think you’ve just talked about, or started to — the high cost is not just about the technology, but it’s about the loss of the know-how in building these plants efficiently, because we haven’t built any plants in so long?

Poneman: Absolutely, it’s a combination of all these factors. But in China, for example, and when I was Deputy Secretary, I visited both Sanmen and Haiyang, where Westinghouse was building reactors. You know, you get to these sites, and you see thousands of workers. And when you are building a series of reactors, they go from project to project to project. And as happens in anything in life, if you get a lot of practice, you get a lot better. And I think you will find, if you look at the data, there’s an incredibly steep learning curve between building what we call “the first of a kind,” and what we call “the nth of a kind.” So the first is much more expensive than the second, which is more expensive than the third, and so on and so on. You just get better at it. You get to practice. You discover efficiencies. And to build at scale, and not just build once in a blue moon, is obviously going to be beneficial. And just like playing a musical instrument, you get better at it through practice.

Stone: Okay, so the Inflation Reduction Act and the bipartisan Infrastructure Law have provisions designed to keep existing nuclear plants operating in this country. But SMRs, the small modular reactors, are really seen as the future. What financial support is being provided for SMR development, and what practical advantages does the modular technology promise?

Poneman: I want to just offer a friendly amendment to your premise because while the future is very exciting because of SMRs, I don’t want to sell short the importance of the contribution of the current fleet of so-called “generation II” and “generation III” reactors. Just in the United States alone, for example, nuclear power provides almost 20% of our nation’s electricity, but half of the carbon-free electricity. And globally also. We have 440 or so reactors out there operating, and if you look at the data from the International Energy Agency, we’re at risk of a significant spike and moving further away from net-zero if those reactors are allowed to just retire and lose all that carbon-free electricity. That said —

Stone: I think also just to clarify here, when I’m talking about the future in terms of new builds, my understanding is — and correct me if I’m wrong — new builds, SMRs are really what the future holds. At least that’s the promise. Is that right?

Poneman: I would say in the United States, that is certainly true, but there are places, and Poland is a recent example, which recently agreed to buy three large Westinghouse reactors, there are countries that still have significant-sized grids that have significant base load power requirements for which the traditional, large, gen III, gen III+ reactors may still be attractive. That said, in the United States, I think when we see the completion and turning on of the Vogtle power plants that are being built in Georgia, I think you’re right. I think everything after that in the United States, barring something rather remarkable, is likely to be in advanced design.

So you ask, “What is the support in legislation for these advanced reactors?” Well, in the bipartisan infrastructure package, they provided on the order of two-and-a-half billion dollars to support the construction of advanced reactors, the so-called “fourth generation reactors.” The US Department of Energy ran a competitive process known as the Advanced Reactor Demonstration Program, which selected ten reactor designs for further work, but two that they liked best of all to actually be built to scale, as demonstration reactors.

Of those two designs, one of them uses liquid metal, sodium specifically, as a coolant. That’s Bill Gates’ company TerraPower with their Natrium reactor. And the other uses high-temperature gas. And that’s a company known as X-energy. And why that’s significant is, in the Inflation Reduction Act, they provided, for example, 700 million dollars for a new and special kind of fuel that actually our company, Centrus Energy, has the only Nuclear Regulatory Commission license to produce, that is higher than the enrichment levels of the existing hundreds of reactors around the world, but lower than the enrichment levels needed for submarines, aircraft carriers, and weapons. And so that’s a very important investment from the Inflation Reduction Act. And there are also, beyond those provisions, there are certain production tax credits and so forth, and loan guarantee authority that would be available for projects, including the kind of support that will help new reactors get built, as well.

Stone: One of the key issues going forward is that we’re going to have a grid that’s going to be more reliant on intermittent renewable resources, wind and solar primarily. And one of the needs in the future is going to be to balance that intermittency. My understanding, and it’s pretty basic on this, is that SMRs will be dispatchable, meaning they can be ramped up and ramped down per power demand, relatively quickly, in a way that the current generation of larger nuclear reactors can’t. Is that the case, and if it is, to what extent will these new reactors not only provide base load potential but also balancing load for intermittent renewable resources?

Poneman: I think, Andy, that this is one of the more exciting aspects of what one might think about it, is the new generation of nuclear. And I think it’s important to recognize it comes in a variety of forms. Basically, nuclear reactors are extremely capital-intensive. If you put a lot of capital to work, you want to get the most out of your investment naturally, right? And therefore, nuclear reactors like to go 7/24. So if you want to get the biggest bang for the buck — forgive the expression — that’s what you would do.

Now you can have the reactors, as you said in your question, load follow and produce less to balance out the intermittency of wind and solar. And that’s a very important thing to do. I’d like to invite your listeners to look at a phenomenal book called Taming the Sun by a brilliant young analyst named Varun Sivaram that describes how you will actually be unable to maximize the contribution to clean energy from intermittent sources, if you don’t have what you described as “flexible, dispatchable power,” right?

But one thing I’d just like to add, because it’s really perhaps the most exciting aspect of this is if you take, for example, the Natrium reactor that’s being developed by TerraPower, they do run 7/24, but how it works, Andy, is when the power is needed, the reactor will feed electrons into the grid and into people’s homes for use. But if it’s nighttime or another time when the power requirements are not so great, they’ll use that same power, not to feed electrons to the grid, but to heat up salt. Why that matters is the salt becomes effectively like a battery that’s then backstopping solar for when the sun is not shining. So there you get the benefits, if you will, of running a capital asset in a more efficient configuration of the 7/24 operations and getting the economic benefits from that kind of efficiency at the same time as you get the benefits of load following, without actually going through the pain and, frankly, some of the economic losses involved in switching something on, and switching it off, and switching it back on again.

Stone: This brings up a fundamental question. How are regulators going to treat SMRs differently — or not — than traditional, large nuclear reactors that we’ve been dealing with to date? And this is a really critical question because the regulatory hurdles for nuclear power, as you’ve discussed, are so high that that really drives up the costs of the plants as we have them today, and also really lengthens the time to build them, because in part the permitting is so long.

Poneman: Well, that’s a great question, and it’s a work in progress. In 2019, Congress directed through legislation the Nuclear Regulatory Commission to streamline its licensing process for advanced reactors. The NRC staff came out with draft procedures in 2022. Those are still being very much discussed, but part of the whole storyline with going to small modular reactors is a story of simplification and duplication, in the sense of unlike the traditional generation III reactors that are bespoke to a specific site and with extreme complexity, and each one is just tailor-made. “Tailor-made” means it needs a lot of individualized attention.

If you go to a totally different business model where you’re stamping out identical units like cookie cutters and then putting them on trucks and sending them around, neither the reactors themselves are unique, nor are the sort of environmental aspects of putting them in a hole in the ground, as challenging to regulate on an individualized basis. So that’s part of it. And they’re also looking much more at using probabilistic risk-informed forms of analysis that will also hopefully allow for a more efficient and expeditious licensing process. Because we must be ever-vigilant in ensuring nuclear safety, and not only that it’s intrinsically safe, but that it’s understood by the public to be safe. And so that’s going to be critical, but it is possible to overdo it and to do things that are duplicative, unnecessary, and if you do that, and if the consequence is that we miss the zero degrees by two or three degrees centigrade, then you just have to have a sensible balancing of the cost and benefits. More regulation does not necessarily mean more safety. What we need to have is smart regulation, and that’s what this NRC review process, mandated by statute, is trying to do.

Stone: Now as you said a few minutes ago, fuel for SMRs doesn’t currently exist, at least not at scale. I wonder if you could tell us about the challenge of creating the fuel supply chain for SMRs and how that might differ from what we’ve seen today in terms of development and production of nuclear fuel.

Poneman: Here’s the way to think about it: As I mentioned a little earlier, just to go to the basics, if you pull uranium out of the ground, it has very little of the isotope uranium-235 — less than 1%; 0.7% to be precise. Why does that matter? That is the isotope, if you read your history, that is easily split, releases neutrons and can actually produce a chain reaction that releases heat. To get it to go high enough to boil water and make steam for an electricity turbine takes up to about 4 or 5%.

The very same technology, if you take the purity of uranium-235 not to 4 or 5%, but to 90% — and you can get an either very powerful small reactor that will fit on a boat — submarine or carrier — or actually a nuclear weapon. The legal limit between what’s called “low enriched uranium,” which is inherently safe, and “high enriched uranium,” which has those proliferation and weapons dangers is 20%. It’s a complicated story why, which I will spare you for the moment.

The reason I mention this is the small modular reactors require — think of your car — a higher octane of fuel than the conventional generation II and generation III reactors for the enhanced performance that they seek. But to avoid creating such a high concentration that it brings on these other security risks, people go up to 19.75%, just below the limit.

Stone: Really?

Poneman: And the only source of that — and it’s called “high assay, low enriched uranium,” or for short, people call that “HALEU.” The only source of HALEU today in the world is Russia. And since the Ukraine invasion, people have been looking for alternatives, and that’s where, again, our company Centrus comes into play, because knowing that these reactors would need this special kind of fuel, the US Department of Energy and our company entered into a contract, a 3-year contract that ended last year, to produce a demonstration cascade.

So in the state of Ohio, we have 16 machines that are standing up and getting ready for Nuclear Regulatory Commission final approval to spin and produce, for the first time in the United States, this very special kind of fuel. And we have the parts to make for those machines in a plant in Oak Ridge, Tennessee, the heart of nuclear territory, so to speak. And it’s a very exciting moment for us, and now what we need is to scale up from this small demonstration which will produce only about one ton of material per year, to a larger-scale plant that would be sufficient to fire up some of the small modular reactors that are getting built.

Stone: So that is what Centrus is working on. How long would that take to scale for this industry?

Poneman: It depends how much you want to build up to. There are a lot of very big plans and excitement around the demand curve for the small modular reactors, but to a first order, we have, as I said, just 16 machines now. We build out these cascades of machines in units of 120 centrifuges per cascade. We could build, from a decision to proceed, the next cascade in about 42 months. And then it would take about six months thereafter for each new cascade, because obviously once you establish the supply chain, you can move it much quicker.

So basically within 48 months, we could be moving from a 1-ton capacity, which we have today, to roughly 23 metric tons per year, which would be a meaningful contribution to the requirements of the industry.

Stone: Dan, I want to bring up a related concern that I’ve run across, and that is one that we really don’t know what the back end of the nuclear fuel cycle is going to look like for SMRs. Hopefully, optimistically, it will be a positive outcome, particularly given the challenges that are well known today in terms of disposing of spent nuclear fuel. But I have seen some research that suggests that the nuclear waste from SMRs could, on a per megawatt hour of energy produced, actually be greater than that of current nuclear technologies. I want to get your thoughts on that. What do SMRs mean for the challenges of addressing nuclear waste? And what are your thoughts on — are they going to add to the problem, or are they going to be an incremental improvement?

Poneman: Great question, Andy. So first of all, one has to remember that there are literally dozens of designs of small modular reactors. So I would say the first point is, there is not going to be a one-size-fits-all answer. Basic division, as we’ve discussed, is between those reactors that are based on light water technology that cools the core with light water, and those that cool the core with either gas or metal. And they have very, very different performance characteristics. In any case, I would note the following: That as a general matter, nuclear waste, while it is a significant political problem, is not a physically big problem in the sense that if you took all of the nuclear waste generated by all of the reactors in the United States since the dawn of time, it would fill one football field, seven yards deep.

And the world has technology. It’s called deep geologic disposal, which has been very well demonstrated. We’ve been operating a facility called the “Waste Isolation Pilot Plant” in New Mexico, where very stable salt formations which close in around these canisters of used fuel, basically seal it off for eons. And so that’s understood. It has been characterized, and in a place, for example, like Finland, where they had a consent-based process to look at some of the alternatives, they actually did this in a way where they consulted extensively with the community and ended up with two communities bidding for the opportunity to host the repository.

So that’s for the light water-based versions. On many of the so-called “fourth generation,” a lot of those designs are actually designed to reduce either the toxicity or the heat load or the volume of the waste. So I guess my net answer to your question would be, “Is this important?” Absolutely. “Must we be a studious custodian of public safety in making sure that you have very well understood scientific principles and very clearly characterized geologic sites?” Absolutely. But if you’re looking at the possibility that in the absence of these reactors, we’re going to have catastrophic climate change within two or three decades, I think we need to be rather careful not to allow this important — but frankly volume and otherwise limited — problem to outweigh the benefits of deploying on a wide scale the prodigious use of carbon-free energy that might save the whole planet from a very ugly fate.

Stone: There’s another issue I want to bring up here, as well. You’ve talked about the importance of existing nuclear reactors continuing to run for the climate benefits, as well as stability for the grid, et cetera. The only company so far that has received a Nuclear Regulatory Commission approval for a small modular reactor design is a company called NuScale, and their first operating reactor is expected to come online at the Idaho National Laboratory in 2029. That’s the first SMR project in this country. Now presumably, given that we’re talking about a new technology here, it will be some time before we see a significant number of SMRs in operation, particularly at a scale where they’re going to be making a significant contribution to the electric grid. At the same time, we’re seeing a lot of money targeted to renewables, to the development of energy storage in clean hydrogen. And most dramatically and most recently, through the Inflation Reduction Act.

So I’d like to get your thoughts. To what extent should we collectively, from the perspective of energy consumers, to investors in new nuclear energy — to what extent should there be concern that by the time SMR technology reaches scale, its time may have, in a sense, passed, and the need for nuclear for base load and balancing power will somewhat have diminished?

Poneman: Well, there are many problems out there, to be sure. Bottom line up front, I don’t think that’s a big risk, and let me explain why. First of all, it’s interesting you should mention NuScale because I think your listeners might want to know that when you talk about small modular reactors, actually they come in two flavors, if you will. One are basically smaller versions of existing reactors, most of which in the world are cooled, have their cores cooled by just normal H2O. We call them “light water reactors.” And NuScale is of that design. The GE BWRX-300 is a light water-based reactor. Terrestrial, Holtec — they’re all based on the same physical principles, very well established over decades of operations, and non-trivially, they have an established supply chain. They use standard light water reactor fuel, with these lower concentrations that I mentioned, low enriched uranium of 4 or 5%.

The fourth generation reactors don’t use light water to cool their cores. They get these enhanced performances by using different coolants. They bring on various safety and other kinds of advantages. So as I mentioned a little earlier, you could use liquid metal, and the salient advantage of that one is you can operate the reactor at ambient pressures. And those high-pressure situations that you saw, for example, at Fukushima with the hydrogen explosion are physically impossible.

And then there are high-temperature gas reactors, which have a number of virtues. For example, they produce such high process heat that they can start to take carbon emissions out of industrial processes. So you saw X-energy, for example, signing a deal with Dow Chemical.

Now, timing. We’ve got to get to zero by 2050. We’re going to need every trick in the book, every arrow in the quiver — choose your metaphor. Every drop of efficiency, every drop of wind, solar, geothermal — you name it. The need for balancing is going to be prodigious. Any analysis, and I invite again your listeners to look at that terrific book Taming the Sun by Varun Sivaram — batteries won’t do it. They’re not big enough. They’re not cheap enough. There’s not enough of them. They’re okay for a few hours. They’re not so good between like seasons, right? So look at Bill Gates’ book. He’ll prove the same point to you. So that means the need for this dispatchable power, I think is going to get larger, not smaller.

Fusion, with all of the exciting developments, and they are, indeed, exciting, is not going to be big enough, commercial enough, practical enough to save you — certainly not by mid-century. So I think there’s a much greater risk that we’re not going to have enough of these small nuclear powers to serve the demand that the world has for them than that their time is going to pass them by.

Stone: Let me jump back. I don’t mean to be picking apart this technology, because I’m not. I’m just kind of actually, at this point, really bringing up some of the concerns that come to my mind as I’m exploring the technology and its potential. But something that you said earlier caught my attention, and that is that Russia is a major supplier in the nuclear fuel value chain. And obviously we’ve seen what happens when there’s overreliance on Russia for fossil fuels. Is there a risk that the danger of reliance on Russia as a supplier of fossil fuels could repeat itself in the case of the supply of nuclear fuel?

Poneman: I think it was Winston Churchill who said, “The only way to provide for energy security is through diversity.” And it’s not a risk. It’s a fact that whereas Russia accounts for, say, 10% of world oil production, they account for 46% of the capacity to enrich uranium. So the United States and indeed all countries should always find a multiplicity of energy sources to meet their citizens’ needs, whether it’s oil or gas or nuclear. And therefore, the fact that through, frankly, short-sightedness, complacency, people have allowed a situation to develop of overdependence on too few sources. This is something that must be remedied for several reasons: for security of supply, as I mentioned; for diversity of supply; and those two things bring a third, very important factor, which is price competition. Because energy must be affordable.

So it’s a sad fact that the United States, after Fukushima, shut down its last remaining reactor that was built with US technology. There is a European technology-based reactor elsewhere in the United States, but for those kinds of reactors that can serve US energy security purposes, including supporting our naval reactor requirements and our nuclear deterrent, we have been without anything to produce any enrichment since 2013.

Now when you think about this, in the United States, this technology to enrich uranium was invented here in the 1940s, and when I started as a summer intern for John Glenn working on uranium enrichment in the mid-’70s, we had something like 90% of the world market. And now we’re literally in last place and completely dependent on foreign state-owned enterprises. I think if there’s any message that recent history has taught all of us, again, whether it’s natural gas or nuclear fuel, that’s not a situation that we want to sustain. We need to invest and invest significantly.

I would make just one last analogy here, Andy, which is: The arguments we’re talking about here on nuclear fuel, I think are really quite similar and analogous to semiconductors. It’s just as much a national security threat. This is 20% of our nation’s electricity, half of our carbon-free electricity, and to be completely dependent on a foreign state on enterprises, I think is just unacceptable from a US national security perspective.

Stone: Let me ask you a final question here. In Germany, as we stated earlier, Germany has decided to delay the decommissioning of the last of its nuclear power plants. What’s your view going forward? To what extent do you think nuclear, in the short-term, is going to continue to be supported in Europe? And how much global coordination is there at this point on really getting new nuclear development, particularly in the West, underway.

We’ve seen some projects in England that were very expensive. France has had trouble with new projects. It’s not just the United States. Is there any concerted effort to solve these? Fuel supply chain issues — is the development of SMRs truly a global effort, and everybody is looking at them to the same extent we might be here in the United States? What’s your view on this?

Poneman: Andy, it goes back to the very beginning of our conversation. One of my former bosses, former Secretary of Energy Ernie Moniz has this phrase: “It ain’t math; it’s arithmetic.” And we just don’t get within a country mile of net-zero by 2050 without a lot of new nuclear, like at least twice as much, ideally three times as much as is now installed. Go to the International Energy Agency reports or the Intergovernmental Panel on Climate Change. You’ll find the same thing.

This is not lost on leaders around the world. This is not lost on the Europeans. You note the decision in Germany to extend the lives, albeit only a few months longer, but Belgium just extended the life of their reactor ten years. The Dutch are looking at now, for the first time in many years, new reactors. The Poles are going to be building their first nuclear power plants. The Romanians not only are continuing their own plants and refurbishing their existing units, but they actually have committed to build a NuScale, a small modular reactor. So that’s pretty exciting. The Czechs are also looking at buying new nuclear. And very importantly, the European Commission, after a very painstaking debate, actually decided in their so-called “taxonomy” to classify nuclear power as green, which is very significant to unleash state financed support for new nuclear.

This is not confined to Europe. In Japan in December, Prime Minister Kishida took a very bold and brave stand and put out a new, 6-pillar policy on nuclear energy. And they’re now talking about potentially restoring not just 22, but perhaps over 30 of those closed reactors to operations. President Yoon in Korea has reversed his predecessor’s rejection of nuclear energy. It’s math. It isn’t math, it’s arithmetic, so people get it. There’s a lot of enthusiasm globally for this.

This is not confined to Europe. In Japan in December, Prime Minister Kishida took a very bold and brave stand and put out a new, 6-pillar policy on nuclear energy. And they’re now talking about potentially restoring not just 22, but perhaps over 30 of those closed reactors to operations. President Yoon in Korea has reversed his predecessor’s rejection of nuclear energy. It’s math. It isn’t math, it’s arithmetic, so people get it. There’s a lot of enthusiasm globally for this.

And yes, third, and just as important as the first two elements that I just cited, is the safety case. And so you have a lot of coordination going on among the nuclear regulatories, bodies of the world, and questions as to whether efficiencies can be found, whether every single global regulator in every single country has to reinvent the wheel every time they look at a new design, or whether they can have some form of cooperation and sharing of information — regulatory statistics and so forth.

So there’s a lot of ferment. There’s a lot of activity. There’s a lot of coordination. And I guess maybe the fourth element to cite is there is a lot of talk about the use of important state aid, which sometimes, because of frankly some political concerns surrounding nuclear, has not been sufficiently available to support the build-out of nuclear energy. Because just like any other energy form, whether it’s depletion allowances for oil and gas, or master limited partnerships for pipelines, or investment tax credits for solar or production tax credits for wind — you know, state aid is important to the propagation of energy that serves the needs of all people, rich and poor. And it also serves the needs of providing carbon-free energy at a time when carbon is not universally burdened by taxes and so forth, notwithstanding a lot of academic debate around that.

So there’s just a lot going on in making state finance available for that purpose. What used to be known as the Overseas Private Investment Corporation, now the Development Finance Corporation, a couple of years ago lifted its ban against nuclear finance. So there’s a lot going on, but there has to be a lot going on because honestly, Andy, if we don’t get a move on, we’re not going to intersect this climate change curve. And just pick up any newspaper and read about how we’re going to lose half of the world’s glaciations by the year 2100, and you’ll realize if there’s one message to take out of this podcast, it’s we’re in a big hurry.

Stone: Dan, thanks very much for talking.

Poneman: Thank you, Andy. Great talking to you.