Issue 137
August 21, 2022
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At TQC we unequivocally agree with most credible scientists who believe global warming is “real.” Furthermore, the dangerous amounts of greenhouse gasses emitted into the atmosphere contribute to a slow-moving ecological disaster, evidenced by highly abnormal weather patterns that have resulted in flooding of historically dry areas, droughts in wetlands, record heat, intense storms, and rising seas.

To forestall a lasting and irreversible (at least with today’s technology) destruction of the earth's ecosystem that will devastate societies and disproportionately hurt those least culpable for the crisis, *industrialized nations must set an example by swiftly transitioning to carbon-free sources of energy. That much is a foregone conclusion. How we get there, is not.

*(It is absurd and grossly hypocritical for Western nations, who are primarily responsible for ruining the environment, to browbeat impoverished countries, who had little to do with the current environmental calamity, to use cleaner and more expensive forms of energy. Sure, fresher air would be nice. But potable water and protein are more urgent.)

In the United States, installations of solar, wind and other forms of renewable energy are increasing exponentially year over year. And renewables continue to take market share from coal, oil, & gas. Those are good things. But currently, there is dearth of renewable power generation to compensate for the loss of more than a small percentage of fossil fuel power - as evidenced by your massive increase in energy bills - and will not be for the foreseeable future.

The good news is that a safe and carbon free source of energy already exists in the form of nuclear power. The upfront outlays to build a nuclear power plant are enormous; multiple times the cost of constructing a coal or gas fired plant or to install a renewables facility. But the life of a nuclear plant is long – up to 75 years - and nuclear power is very safe, efficient, and does not emit any greenhouse gasses.

Some Western nations such as France, Finland, and Great Britain have embraced nuclear energy. Germany has recently pivoted from a staunchly anti-nuke position to a cautiously welcoming policy stance. America's commitment to nuclear has been equivocal at best. In our view, this is a mistake.

US Energy Mix

Approximately 61% of America’s electricity generation is derived from fossil fuels including coal (~22%), natural gas (38%) and oil (1%). Renewables (wind ~9%, hydro ~6%, solar ~3%, other ~2%) contribute ~20%. Nuclear is currently ~19% of the mix.

Regarding carbon free energy, there are currently two ways to generate it without *intermittency: with nuclear and hydro power. It is difficult to obtain a permit to build a nuclear reactor. It is almost impossible to get a permit to construct a dam, let alone find a suitable location for one.

(*We do not know when the wind will blow or when the sun will shine. Insufficient wind equates to less output per wind turbine. A cloudy day equates to less generation per solar farm. Storage is available on a subscale basis. But the technology to store large amounts of power derived from solar and wind is not yet commercially viable.)

Currently, nuclear power plants generate ~half of America’s emissions-free energy. However, lack of attention, misplaced public and political opposition, and horrific long-term planning have gutted the industry and left it in secular decline.

The U.S. has 92 nuclear power plants in operation and still produces ~30% of the world’s nuclear energy. However, over the last decade, 13 plants have been shuttered prematurely due to a fundamental lack of understanding of energy economics and interplay between fossil fuels, renewables, and the environment. By contrast, only one new plant has connected to the grid and two more, at plant Vogtle in Georgia, are under construction.

The process has been nothing short of an unmitigated disaster. It is over a decade behind schedule, billions over budget, and already tipped a contractor (Westinghouse) into bankruptcy.

A Good Investment

This should not come as a surprise, nor did it have to be, but should have been a forgone conclusion. One cannot build a nuclear power plant without the commensurate expertise and foresight to do so. As the late Benjamin Franklin so eloquently stated, “an investment in knowledge pays the best interest.”

The nuclear lifecycle is long. Many of the current crop of American nuclear specialists are, like the reactors they helped build and operate, retiring. We must empower and incentivize young men and women to enter the field of nuclear engineering so we have the knowledge base and manpower to plan, construct, and operate a new set of modern reactors to keep our lights on and air clean. If we do not, we will be left no choice but to rely on dirty coal and other fossil fuels to fill a gaping energy supply/ demand deficit.

Uranium Mining

We would be remiss not to at least mention uranium, the feedstock that powers nuclear reactors. The uranium fuel cycle is fiendishly complex and goes well beyond the scope of this post. In short, low-enriched uranium (LEU) powers reactors. (Highly enriched uranium (HEU) is used to make weapons).

At the beginning of the 1980s, America mined over 40 million pounds of uranium. Then, like the reactors they power, necessary investments needed to sustain the uranium mining industry collapsed. There is only one uranium mine currently in operation in the United States. It produced a paltry ~20,000 pounds of uranium last year. In addition to re-committing ourselves to the nuclear industry, we must also support American uranium miners so we have ample feedstock to power our reactors and do not have to rely on pariah states such as Russia, for inventory.

Safety Profile

There have been six major nuclear accidents: Two in Russia at Bikini Atoll in 1954 and Chelyabinksl-40 in 1957. One in The United Kingdom at Windscale, also in 1957. One in America at Three Mile Island in 1979. One in Ukraine at Chernobyl in 1986. And one in Japan at Fukushima in 2011. Click on each link to learn more.

The most common pushback to nuclear power is also the most unfounded: that it is unsafe. That is false. Nuclear is not only carbon free, but also extremely safe. According to the Economist, “A terawatt-hour (TWh) of electricity from nuclear energy is associated with 0.03 deaths (including indirect deaths from disasters and workplace accidents at the plants). That makes it even safer than wind energy, which is associated with 0.04 deaths per TWh, mostly from accidents during the installation process, drownings on offshore sites and helicopter collisions with turbines. Only solar energy is less deadly than nuclear. Coal is the deadliest because of the air pollution it causes: one TWh is linked to 24.6 deaths.”

What is true is that in addition to being safer than even wind energy, nuclear is also the greenest of any energy source. “Nuclear energy produces just four tons of greenhouse gases per gigawatt-hour of electricity (GWh), the same as wind energy (this includes emissions from the mining of fuels, transportation and maintenance of a plant).”

Nuclear accidents are rare (and scary) but because they affect comparably many people in an abbreviated timeframe vs a few people over a long duration, the psychological aversion towards nuclear power that accidents elicit, trumps reality. Nuclear haters must learn the facts before emitting fiction.

Nuclear Waste

A byproduct of nuclear energy is radioactive waste. Most radioactive materials have short half-lives. Unfortunately, spent nuclear fuel will remain radioactive for hundreds of thousands of years. What to do then with 250,000 tons of it that has accumulated since the 1950s and the waste that will be generated in the future?

Almost all radioactive nuclear waste is stored in cooling pools, typically situated near power plants. These are meant to be temporary living spaces until a permanent resting place can be found. Fortunately, those already exist.

Finland has built a vast storage repository deep underground, encased in hard rock, impervious to natural disasters or military strikes. Radioactive material is now being safely and permanently disposed of there.

Unfortunately, politicians in America (and other countries) continue to dither. In 1987, the Yucca Mountain nuclear waste repository was designated as an appropriate permanent storage facility. Despite years of due diligence, including thousands of man hours and billions of dollars disproving skeptics, the project remains in limbo.

A main reason is that lawmakers lack the will (and in many cases the intellect) to explain to their constituents that a safe, permanent nuclear storage facility is preferable to having spent fuel scattered in pools across the country and or residing next to a belching coal mine or natural gas fired plant.

Lastly, we must mention there are hundreds of abandoned uranium mines littered across Native American territories. This is shameful. It is our duty to clean them up.

Tail Risk

In investment parlance, tail risk is defined as “the chance of a loss occurring due to a rare event, as predicted by a probability distribution.” Regarding nuclear power, perhaps the greatest tail risk of all is a deliberate terrorist or military assault on a nuclear power plant. The results could be catastrophic.

Unbeknownst to some, a nuclear tail risk is occurring right now. Russian forces have attacked the Zaporizhzhia nuclear facility in eastern Ukraine and are holding its staff hostage. Ukrainian brigades have launched counter attacks to re-take the plant (and the energy it produces) and liberate the workforce. For weeks, Zaporizhzhia has been subjected to constant shelling. After one particularly intense barrage of bullets, the Ukrainian state-run atomic energy company, Energoatom forewarned, “this time a nuclear catastrophe was miraculously avoided, but miracles cannot last forever.”

The fact that Zaporizhzhia has absorbed weeks of bullets, bombs and other gross breaches of safety protocol is testament to how well-built nuclear plants are, and the professionalism of the staff that has worked under enormous pressure, to keep it safe. We salute them.

Unbeknownst to many, at the onset of the war, there was another scare at Chernobyl, site of the most famous nuclear accident. Chernobyl is no longer in operation, but after Russians attacked the plant and primary power was lost, backup diesel generators were needed to keep the spent fuel rods cool.

It goes without saying, the timing of this writing is not in our favor. Indeed, we could end up with egg on our face if God forbid Zaporizhzhia or another facility succumbs to a Russian assault or Ukrainian counterattack, lives are lost, and radioactive material is spewed into the air.


Nuclear power provides consistent, stable, and relatively cheap baseload energy regardless of weather conditions. It is not feasible to transition to clean fuel efficiently and cost-effectively without also continuing to allocate sufficient capital to the cleanest form of safe power generation, nuclear energy. Thus, it should be part of both the transition towards a renewable future and part of the energy mix in perpetuity. Said Senator John Barasso (R-WY) “any serious attempt to address climate change must recognize that promoting renewables at the expense of nuclear power is counterproductive.” We agree

If we do not make the critical investments necessary to reverse the decline of America’s nuclear industry with the same urgency as we do towards solar and wind power, the result will be higher energy bills, less reliable power, and perversely, the very thing that politicians and activists are trying to mitigate: a dirtier environment and deadly climate change.

Finally, the first of the two new reactors at Vogtle are scheduled to come online this year, the second by the end of ’23. They will deliver safe, carbon free power to millions of Georgians for ~75 years.