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Russian Gas & Germany's War on Nuclear: EU Energy Realpolitik feat. Mark Nelson

The European Union finds itself at an energy crossroads. Germany, the economic powerhouse of Europe, has been rushing to shut down its nuclear plants as quickly as possible while leashing itself to Russian natural gas via the Nordstream 1&2 pipelines. France's nuclear electricity infrastructure is being eroded through premature political closures and taxes on ultra low carbon nuclear to pay for gas backed renewables which is enticing de-electrification. Green taxonomies are being contorted to favour the financing of fossil gas and punish nuclear. The geo-political implications of the control of the master resource of energy is leading to a revival of nuclear energy, recently with US funding, as smaller EU countries like Poland, Romania, Finland, Czechia and others seek to maintain energy independence in the face of Russian and German influence. Energy analyst Mark Nelson breaks down this great game for the control of Europe's energy future with his usual verve and deep knowledge of the players and history. 




https://anchor.fm/dashboard/episode/elqofs

https://open.spotify.com/episode/0akkveO3hpiHrsdlkD1RsN?si=PEawIjpLShaLLT2BhWGU1g


Transcript Available below

Chris Keefer 01:37

All right-y. Hello, everybody. Welcome back to Decouple. Today I'm joined by returning guest Mark Nelson, whose show titled "Existing Nuclear and Imaginary Nuclear" topped the Decouple charts briefly. That was of course until Isabel Boemeke of Isotope Productions came onto the scene, like...well, I guess kind of like a virus. Today, Mark and I are going to be talking about energy politics in Europe. Europe claims to lead the world on climate change with ambitious CO2 reduction goals, renewable energy and efficiency targets, and the world's most developed emissions trading system. Of interest to many of our listeners, is that Europe also has the highest density of nuclear energy on earth with more than a quarter of the world's 440 reactors. Although these reactors provide about 26% of EU electricity, and more than 50% of the EU's clean electricity, many of them are under threat of premature closure. And until very recently, there were very few plans for new builds. A debate, of course, has been raging this year over which energy sources will get to be listed in a so-called "green taxonomy," which will have major impacts over the financing of energy projects. While it seems like the final decision is pending, nuclear will likely be excluded over so-called "environmental concerns" such as waste. Within all these developments, various European countries are flexing their muscles and trying to influence their neighbors on their energy policies. We've got a lot to unpack here, folks. Mark, I'm excited to deep dive this one with you. For the sake of our listeners that haven't heard your previous Decouple episode, can you pretend that you've just struck up a conversation with a stranger and introduce yourself?

Mark Nelson 03:15

Sure, Chris. I'm Mark Nelson. I worked a number of years with Michael Shellenberger over at Environmental Progress, and now I'm the Managing Director of Radiant Energy Fund. My goal is to get more nuclear built in the world and to protect the nuclear we have. And the reason why is because I'm convinced by the arguments that nuclear is the only way to lift everybody out of poverty while protecting the natural environment. So I'm pretty much done trying to figure out whether nuclear is good or bad. And I think, our job--my job--and you know, why I'm on this podcast, Chris, is to make sure that nuclear is produced in a safe and effective manner, wherever it ought to be, and that no one is deprived of clean energy (because the claim is that there are too many people and people don't deserve clean energy), and that nuclear is protected where it already exists. And that's pretty much what I do. So the last episode, our last episode, we talked about nuclear technology, right? And in this case, we're going to leave nuclear technology pretty far behind and we're going to talk these major political trends that are actually driving the debate at the highest levels of society in Europe.

Chris Keefer 04:36

And I also just wanted to mention some of your underlying qualifications. If I've got this right, you are an aerospace, mechanical and nuclear engineer - you've done engineering programs, and you have a major in Russian literature and a minor in Mathematics. Is that correct?

Mark Nelson 04:52

It's embarrassing, but I have collected a number of pieces of paper, yes, Chris.

Chris Keefer 04:57

Excellent. Well, without further ado, today we're talking about Europe, and the realpolitik of the European energy system--of course, with our emphasis on what's going on with nuclear. So, Mark, for our non-European audience, can you set the scene for us? I dropped some of the stats on Europe, about the degree to which their electricity is coming from nuclear, that they import about 50% of their total energy. But can you fill in the lines a little bit more to paint our listeners a picture of the European energy system at present?

Mark Nelson 05:28

Sure. A great majority of Europe's imported energy is oil. But these flows are diminishing somewhat, as consumption for transportation is not really increasing anymore. And flows of natural gas are increasing as usage increases in Europe. There's going to be a few bumps in the road, obviously, this year, Chris, with the pandemic, and some amount of lower consumption and lower primary economic activity. But in general, here's what it looks like. Peak oil is likely to have been reached in Europe. Peak natural gas is not particularly close--we see increasing usage down the line--and European production of oil and gas is shrinking. I mean, there are a lot of places in Europe that produced a ton of oil and gas until not too long ago. Here's an example. The Dutch only started producing less gas than Norway, one of the most famous petro states in the world, after the turn of the millennium in 2001. Before then, the Dutch actually produced a good deal more gas than Norway. But that production is dwindling year by year. The UK is no longer in the European Union, but Norway never was, and both of those have been important sources of fossil fuels. UK gas and oil production has been declining for a long time, as many of these countries enact fracking bans, which is, you know, just one way of getting natural gas and oil out of different geological formations. As these countries enact fracking bans, it pretty much guarantees that there's a limit on domestic production of oil and gas. You don't want to say forever, Chris, but I'm considering the double vise of the regulations against production on one hand and the regulations against consumption, perhaps through carbon taxes and or other programs that limit the consumption of fossil fuels, it's hard to see Europe getting another source of energy on its own soil ever again. And that includes large hydro, too, because at this point, if a country in Europe has not built a significantly disruptive and destructive hydro dam--again, never say never--it's very difficult to imagine European countries building those. And in most cases, any exploitable hydrological energy has been already exploited during the decades after World War II, when there was a great concern about energy independence.

Chris Keefer 08:19

Yeah, yeah. So you know, this fracking ban within Europe, I guess, would would prevent things like the shale gas revolution in the States. But this ban, I'm guessing, is not being extended to gas that will be imported. They're still going to import gas that was fracked elsewhere, it sounds like,

Mark Nelson 08:37

Yeah, and I know, a lot of people I talk to like to distinguish between fracked gas and non-fracked gas. I mean, in the oil industry, it's all different ways of getting oil and gas out of the ground. You can't tell at the point that the gas arrives at your doorstep,

Chris Keefer 08:57

But the Europeans are really good at certifying things, right? So you'd think they come up with some kind of a certification process.

Mark Nelson 09:04

And maybe they will, but I think we'll get into this hour, we'll talk a little bit about what happens when lots of certifications and rules and laws come up against really hard and painful realities.

Chris Keefer 09:17

Yeah. So speaking of those painful realities, Europe is undergoing some pretty major changes in energy policy right now. Many countries are embarking on energy transitions away from nuclear and towards renewable energy sources. You know, the EU is claiming that it has surpassed its climate goals of reducing emissions to 20% lower than 1990 levels. Has there been success, or is fossil fuel use declining in Europe overall? And if so, is this because of things like the German Energiewende?

Mark Nelson 09:52

It's interesting, a number of countries in Europe actually saw their peak emissions many decades ago. So for example, the UK saw its peak emissions a long time ago. And it's interesting to see the pushback we've gotten in some places at Environmental Progress, where, you know, we point out that there's been a decline in absolute emissions for a long time in a lot of Europe. Now, I can't help but notice that in the countries where emissions have declined, but nuclear energy hasn't grown significantly, like in France, there have been major problems with stagnating living standards, much lowered expectations for young people and what they're going to be able to get out of life, lowered fertility, which in some cases, you say, "Well, this is good. There's education, people choose." I think that we're past the point in a lot of Europe where lowered fertility is just a function of not wanting to have kids. And certainly a lot of people I've met have an issue with not feeling they have the resources to have kids, Chris. So I think I'm worried about an absolute focus on absolute emissions in a time where clearly many countries don't care about emissions so much that they're allowing nuclear, but they care about emissions so much that they're happy to claim great triumphs that really in many cases, I have to say, go to deindustrialization, loss of expectation of the growth of living standards, and the loss of some expectation of upward mobility. And certainly in Germany, you know, the collapse of East Germany is keenly felt even today by people. If you travel around former East Germany, you get a lot of people who don't say, "Oh, thank goodness, the collapse of our industrial base contributed to the reunified German state being able to meet its climate goals as they stripped out our nuclear plants." And, you know, East Germany's nuclear plants got stripped out as part of reunification, because they were considered to be bad Soviet engineering. So you had the loss of an industrial base, rapid decline in emissions, and rapid decline in jobs. It's hard to look at all of that and trumpet only the emissions and say, "What a success for the planet," especially when Germany is so committed against nuclear, not just at home, but in the rest of the EU.

Chris Keefer 12:26

Well, I guess you might also be falsely ascribing that success to an energy policy win. As you're saying, it's definitely partially explained by industrialization and offshoring, and, you know, the collapse of East Germany, for instance.

Mark Nelson 12:40

Exactly, Chris.

Chris Keefer 12:43

So speaking of Germany, they've certainly been leading the way on a nuclear phaseout and a renewables-heavy energy transition, again, called the Energiewende. What have the specific results of that program been, and how's that process going? Is it carrying on full steam ahead? Are they hitting any roadblocks?

Mark Nelson 13:04

So one of the interesting things about the German energy transition is that it wasn't really started or intended to be about carbon dioxide emissions. And I think a lot of young people are confused about this today, Chris, because we've grown up in a time where we're less worried about being nuked in our beds where we sleep, and a lot more worried about dying from climate change, or at least having a vague sense of doom that everything we know and love will be lost or irrevocably damaged by climate change. So, just as an example, when I was at a conference a number of years ago back in grad school, and I made a point that France was not having to choose between low carbon energy, energy independence and price of energy, cost of energy--that they were getting all three at the same time--I was told quite self-assuredly by professional economists that this doesn't count. France's decarbonisation and growth of its energy supply while achieving cheap electricity prices--that doesn't count as a model for policy because, quote, "they didn't do it to stop climate change. They only did it because they didn't have fossil fuels."

Chris Keefer 14:19

Right.

Mark Nelson 14:21

So in Germany, we have another thing where the Energiewende was not about carbon. The Energiewende was about getting rid of nuclear first, and getting on to harmony with nature, second, through wind and solar energy--and biomass, although that's not talked about as much, for obvious reasons. It's not winning in the court of public opinion. So when you have an energy transition, whose point wasn't carbon and you awkwardly try to, like, put some carbon in there at the end, the results can be counterintuitive. A lot of people think that Germany is being quote "irrational" by shutting down its nuclear when the whole point is to lower carbon. Well, the whole point is not to lower carbon. The point is to harmonize with nature and to eliminate the fear of nuclear war by getting rid of one's own nuclear reactors. Will that get rid of the fear of nuclear war? I don't know, I think that fear of nuclear war is going to fade out in Germany, just by the people who grew up with that as their primary apocalyptic vision, leaving decision-making powers, I suppose.

Chris Keefer 15:29

So why are the Germans, and I think the Japanese as well--why are certain nations more anti nuclear, would you say? Like Germany in particular. Speaking with some folks who know people who work in the nuclear industry, for instance, they almost kind of live secret lives outside of their workplace. Seems like there's a lot of stigma. Why is Germany so incredibly anti-nuclear compared to some of the other European countries?

Mark Nelson 15:57

So I can't help but see the contrast between Germany's industrial strength, global cultural leadership, and their absence from the UN Security Council, when, let's just face it: neighbors that are not as strong industrially, not as strong economically, are on the UN Security Council--like France and the UK. And you have to ask yourself, what is it that makes Germany not a member of the UN Security Council, but France and the UK on the Security Council? And the big one is the UK and France a) won World War II, and b) developed nuclear weapons. So it's not clear how much the UK would have to be diminished in stature or capabilities to not be a member of the UN Security Council anymore. And it's not clear how strong Germany would have to get before it would be allowed to be a member of the Security Council. I'm sort of dancing around it, but let me just get straight to the point. Germany had a ferociously traumatic post-World War II experience, where quite in addition to being utterly destroyed and feeling morally culpable for the war, Germany was split in two, between two different world powers that, I wouldn't say, treated Germany as a plaything, but treated Germany as a means to an end. And that end was, you could say either detente--the powers not fighting each other--or domination of one side by the other, capitalist versus communist worlds. The end result being that Germany had an elite government in many ways on each side that pursued nuclear energy, and was subject to the whims of nuclear powers, USA on one, Soviet Union on the other, without there actually being a democratic embrace of nuclear technology in general by the population. Here's a story that I think is kind of illustrative. EP has done a lot of traveling; Environmental Progress has sent its staff to Europe a lot to just do a lot of on the ground, boot-leather style research, where we just go and we travel as much as possible. And we talk as much as possible to people who are there; we hear as much as possible from them. And what we discovered when in 2017, Environmental Progress staff went to Eastern Germany, to the edges of a colossal coal mine near sunset. And we went to this large, ancient manor house that had been preserved at the lip of a colossal lignite coal mine. And we met a gentleman, an old man whose job it was to care for this big manor house that was owned by the foreign coal company that owned the entire mine. And we talked to them and we said, "Look, you understand, as you told us, that the policymakers are going to have to keep either coal or nuclear or gas, that they can't go to renewables. Coal, gas, and nuclear provide something that renewables don't, which is assurance of energy supply." And the old man said, "Yes, I agree." And we said to him, "Why not nuclear? Why coal?" and he looked at us and he said, "You must understand this word: Heimat. Homeland, our home." And I said, "I don't understand." And he said, "My great-grandfather came to this part of the country for these coal mines. My grandfather was here for the coal mines. My father was here for the mines. And here I am, still here for the mines. I know they're not popular today. But in 20 years, policymakers will understand the importance. And the young people will understand why coal is a part of the German heritage." And I said to him, "But what about nuclear? Nuclear has been here since the 1950s. Germany has been, you know, a world leader in nuclear technology." And he said, "No, it's just not part of our culture."

Chris Keefer 20:01

It's so interesting to compare that to France, obviously, where they really didn't have much in the way of coal or really any fossil reserves, and nuclear became such a big part of their post-war identity.

Mark Nelson 20:13

Right. And it still wasn't enough to take. I think we should jump over to France because France is an interesting situation. I think around the world, people who believe in nuclear energy--one of the strongest reasons that many of us believe, Chris, is that we see France and we say, "There is an existence proof. There is a demonstration every single day that we can have our cake and eat it too. It can be cheap. It can be clean. It can be reliable. We can have it all." But in France, Chris, they don't actually like nuclear. In fact, a ton of the people that I've met at EDF don't like nuclear. I've heard people at EDF who say, "I'm one of the only people at EDF who like nuclear." Certainly EDF is working to deemphasize nuclear. It's focusing on renewables. Chris, did you know that EDF has signed a sponsorship agreement with the Paris Olympics coming up to have 100% renewable power?

Chris Keefer 21:14

I did not. And just for international listeners, EDF is Electricite de France, which is their national energy company, is that right?

Mark Nelson 21:22

It is, but it's a strange beast at the moment, where it's state-owned in terms of shares, but it's not quite not privatized.

Chris Keefer 21:33

Okay.

Mark Nelson 21:35

Right. So in France, we have a situation where there was a generation of leaders who as either kids or young adults witnessed their country at its knees, having spectacularly and humiliatingly collapsed in the face of German blitzkrieg. Where wasn't the point of having been a World War I victor, that France would not be humiliated, especially in a matter of months, by Germany? And yet for a generation of young French folks, not only did they see Germany roll over French forces in a matter of weeks--I said months, but weeks really--but also they saw a generation of their heroes from World War I bow down and in many cases, elect to serve Germany in a fake French government, rather than to fight back. So Gabrielle Hecht, a Stanford professor of Science and Technology Studies has written really, I think, the best work on this subject, which is, "Why did France turn full nuclear?" And she has a number of interesting things she writes about in her book, The Radiance of France. But one of the most interesting things for me is how the engineers who rose up and developed nuclear France, how they saw their own work at the time that they were undertaking it. They did not see their work primarily as engineering. They saw their work as policy, as politics, as society building, through their skills of engineering, and in this case, their skills of making France strong, despite not having fossil fuels. You know, I dream of meeting someday Marcel Watteau. He's a guy who, as a young man, escaped Vichy France, went to Italy, fought the Germans all the way back into Germany, went back to France, and became an electricity economist. In fact, I've been reading electricity economics papers now in the last few months, and I see his name still cited as one of the guys who really invented the theory of electricity pricing.

Chris Keefer 24:04

And this guy's not a spring chicken anymore.

Mark Nelson 24:07

No, he's almost 100. And, anyway, Marcel Watteau saw the humiliation of France and rose up with such a clear vision of making France radiant, powerful, beautiful, strong again, that when there was an internal debate at the top levels of French politics on whether to adopt a foreign Westinghouse PWR system as the basis for the electrification of French society, or the indigenously developed gas graphite program that had risen to prominence on this slightly more, you could say, military engineering side of French society rather than the utility side of EDF--there was a war of the system for the future of French electricity, and Marcel put his thumb on the scale and won the day for the Westinghouse system. Which of course they French-ified--they made it very French, they made a PWR as French as French could be. They named it a French name, and they built it in France, and they built it with French engineers, and they survived French terrorist attacks on it. And it was just French all around, Chris. And that was the way that this generation of young people who had had to literally shoot weapons at Germans who had invaded their country and other European countries--that was the strength of their vision of how to make sure that never happened again.

Chris Keefer 25:32

Interesting. And so take us into the present moment in France. We did explore this a little bit with Myrto Tripathi with the Voices of Nuclear, who was a guest two or three podcasts ago. But you know, more recently, she outlined for us the way that nuclear has become quite unpopular in that country. What's your take on why that has happened?

Mark Nelson 25:54

Almost every young person I've ever met, who's French, has been anti-nuclear, and not in some really intense principle-dedicated sense. They've been casually anti-nuclear, and they've all said the same thing. And it hasn't seemed to matter where in the world I run into them, they're all anti-nuclear in the same way. Now this is, of course, excepting the marvelous young activists that I've worked with, either at Voices for Nuclear or in any of the work we've done in France. But what I've heard is the following: "I don't know anything about nuclear." So I follow up and say, "You don't know that France uses nuclear?" "Okay, well, I know that we use nuclear, but that's only because we had to." And then I ask, "What should you do?" And they said, "Well, we use nuclear because we had to but now we've got ecological energy. So now we can use it." And they all seem to say that. None of them seems to know any of the basic facts and figures. In The Radiance of France, Dr. Hecht points out that in a presidential debate two decades ago, between Sarkozy and his opponent, there's a complete misunderstanding of how much electricity (or is it energy or is it primary energy?) France does or doesn't get from its nuclear power plants. And this is even at the elite levels of French society. Now, what appears to have happened is that the French nuclear program under Marcel Watteau was so strong, so effective, so efficient, at completely powering French society and getting more uses of electricity onto the grid, that there was no ability for even the strongest efforts from the environmental movement. From terrorism to laws, they tried extremely hard to stop the French nuclear program, and unlike in Spain, they were not successful. They were not successful in France. And the way I read this is that that forced them into society. That forced the elite environmental movement into society itself. They had to go speak to the people. They had to convert the teachers, the colleges of teachers. They had to convert the universities. Eventually, France has become quite a lot more democratic; the elite state engineers are--I don't know if that's still a thing, quite frankly. It's hard to imagine an individual quite like Marcel Watteau, anymore, existing in France. Because what they said is, "I joined the state to serve the state and to make it great again, to make France, as represented by the state, great again." I know that I've heard from mid-level EDF plant managers that that's the reason why they left one industry to go into, say, nuclear. But I don't think it's a general sentiment among those who hold power. I'm pretty sure that the EDF board is pretty anti-nuclear, for example, perhaps excepting the Chairman. And what this means is, as the broader society is just anti-nuclear the same way as oxygen-breathing--it's just an air, it's in the baby food--it means that eventually that becomes your ministerial staff. Anti-nuclear becomes all your teachers, and your teachers' teachers were anti-nuclear. It becomes part of planning processes from every end of the government and society. O this 2017 trip, Environmental Progress visited the environmental ministry, and we were speaking to some staff, and we said to them, "If you shut down Fessenheim, that will be like putting, you know, several million cars' worth of emissions back on French roads." And they say, "You don't understand. We have to shut down nuclear because we built it so fast that if we want to get rid of it in an effective manner, we have to start shutting it down now." And I said well, "Maybe just don't get rid of it." And they said, "Well, but that's the plan." And then I changed tactics, and I said "Look, if you shut down Fessenheim you're closing an amount of electricity that would fuel approximately 3 million electric vehicles of a design like what's currently being produced in France." And they said to me, "Oh, the transit ministry has its own climate plan."

Chris Keefer 30:12

Hmm.

Mark Nelson 30:13

And you ask, "How can you have staff that--not bullheaded, but that utterly ignorant in a way that could only come by intentionally trying to kill nuclear as your first priority?" And what I say is it came from an inability of the elite engineers to look beyond their physical success, their economic success, and to really win the battle over and over in society in support of what is an absolutely new energy technology. I mean, we heard from we heard from the German gentleman that coal in Europe goes many generations back, and it's accepted as a part of a local homeland. Whereas nuclear in much of Europe is not.

Chris Keefer 31:02

Yeah, yeah. So Mark, I mean, you're describing a scenario that is, you know, quite sort of pan-European then, of this general tendency away from nuclear and towards this, as you call it, "ecologic" energy or, you know, renewable-based energy system. You know, in a previous episode that we did with Meredith Angwin, she was talking about what sort of an energy system is emerging in, say, the northeastern United States, which is, again, becoming quite renewables-heavy--and because of the intermittency of wind and solar, becoming quite gas-heavy. And the fact that gas is something that is not easily stored, it has to be delivered by pipelines or by boats, just in time, minute by minute, this creates a really fragile energy system. And so I'm just kind of scratching my head, looking at Europe and looking where their energy system is headed, and it just doesn't make sense to me--that you'd want to create a situation where you're so dependent. You know, so much of the energy policy up to this point seems to have been around becoming energy independent, creating a strong Europe. And now it looks like they're setting themselves up to be at the mercy of their natural gas suppliers, again, since they're not making their own gas. So you know, Russia, or the US and the Middle East--I guess we're sort of fighting with Russia for who gets to supply gas to Europe, whether it's liquid natural gas, or pipeline. Why do you think the decisionmakers and the policymakers are heading in this trajectory? Are they aware of these factors?

Mark Nelson 32:34

Well, we have to break that down a little further. Because although natural gas is difficult to store, it is orders of magnitude more easy to store than battery electricity.

Chris Keefer 32:47

Sure.

Mark Nelson 32:49

In fact, it's a little bit closer to but probably even more efficient to store than energy stored as water in giant reservoirs. So we're back to something where, compared to the difficulty of storing electricity by almost any other means, the storage of energy and natural gas storage, whether LNG, which has a massive efficiency penalty in the conversion back and forth between liquid and gas state, or in compressed underground storage, which is remarkably efficient, right. You lose a bit of gas in pressurizing your underground system, but then you get a lot back out of the working volume, right?

Chris Keefer 33:33

I've seen a video, I think, that Environmental Progress put out of an underground gas storage facility in California somewhere that offgassed and burped out a huge methane cloud. Is that, like, basically, you're just injecting that gas into a geologic formation underground, or are you building a facility? What does that look like?

Mark Nelson 33:49

Yeah, that's one of the ways to do it. And obviously, you should check to make sure you're not losing all your natural gas in giant blowout events or through some uncontrolled portion of the underground system. But in general, if you go around the world, especially if you go to the Asia Pacific, you'll see lots of these large spherical tanks, and those are gases of various types, often natural gas stored in quantities large enough that you can buffer quite a lot of societal energy demand. One of the working concepts in natural gas industry in the US is the seasonal storage. Chris, we don't have seasonal battery storage. It's never coming--ever. And the battery people themselves know this. The professors who study it know this. Almost everybody in the entire hustle around the energy transition? They know that battery storage is not coming. They know that the public doesn't understand this, they even though that most policymakers do not understand this, and they don't care. In fact, they know that the energy transition itself only proceeds in its increasing costs--for a wind and solar transition that will never be a backbone ever. The wind and solar will never, ever be a backbone. They know that the progress towards it is absolutely reliant on people not knowing that cheap storage of energy is only really gonna come from natural gas. Oil is even easier, I might add; if you travel around the Bay Area where I live, you'll see these big refineries with massive tanks all over the hillsides. And this is in a state where it's illegal to build a nuclear plant, right, Chris? But boy, oh, boy, do you need mass quantities of stored fossil fuels in natural gas, right?

Chris Keefer 35:38

So get getting back to that question, though, about Europe setting up this somewhat house-of-cards energy system, I guess you're saying that the gas is not quite as fragile as you're saying. But still, I mean, you're...

Mark Nelson 35:48

It's not as fragile as electricity.

Chris Keefer 35:51

Yeah. But you're setting yourself up in a situation that is not energy independent, or you're going to be prone to being manipulated by the powers that are supplying you that gas. I guess that would be largely Russia in the sense of the European Union.

Mark Nelson 36:06

The day that Germany turns on its second colossal, country-scale natural gas pipeline from Russia, Nord Stream 2--the day it turns that on, Nord Stream 1 and 2 together will be delivering a volume of natural gas to Germany that is about 20% larger than Germany's annual demand for natural gas today.

Chris Keefer 36:31

Wow.

Mark Nelson 36:32

That is nation-scale energy. And, you know, we talk about storage--the actual volume of gas in the pipeline itself, that itself is an immense amount of energy. Probably the largest energy storage device ever concocted is the US natural gas pipeline system.

Chris Keefer 36:52

Yeah, you think of it as a delivery system, but there's a lot of gas kind of sitting idle on the pipes.

Mark Nelson 36:56

However, that system must be filled with gas. Yeah, Nord Stream and Nord Stream 2 are nice little bits of energy infrastructure that are 51% owned by Gazprom, the state-controlled Russian natural gas champion. And I don't want to ever be sounding anti-Russian, the first place I ever lived in Europe was in Russia. You know, the first big city I ever properly lived in was in Russia. I have friends in Russia; I spent a lot of time in Russia and the former Soviet Union. None of what we're about to get into at all is supposed to be any kind of accusation or slur on the great Russian people. But there's some things that need to be said about Germany's energy policy. And there are things that are being said, behind the scenes, across Europe. They're being said by ministerial officials. They're being said both quietly and out loud by heads of state. There's certainly being said in the halls of power in the United States, which has slapped sanctions on the Nord Stream project. And that's this: Germany is getting itself addicted to Russian gas. And Germany thinks that it's in the driver's seat because it is the customer. Don't we say the customer's always right? At least in the US, we say that. Here's the problem. If you see an incredibly well-behaved dog out at a park, a well-behaved dog never pulls on the leash. Because it's trained to know that pulling on the leash will be punished and not pulling on the leash is to be rewarded. Eventually not pulling on the leash is its own reward. So for a while the well-behaved dog in a park doesn't pull on the leash and can convince itself possibly that the leash isn't even there. In this case, unfortunately, the leash is Nord Stream. The feed, the food for this dog comes when you don't pull on the leash. This might not matter in the minds of Germans today, because they see themselves as rich and powerful. But here we have to get into an important distinguishing feature about power. At the outset of World War II, Germany had all the best guns and no cash. And now, eighty years later, Germany has all the cash in Europe and none of the guns. And Germans confuse cash and guns. They get it confused. They think that because everyone's so peaceful, that having cash is the same thing as having power, like having hard power, and it's not, really. And Germany will only be able to convince itself that it has hard power as long as it doesn't pull at the leash. I know that across Europe, countries know that a Germany with Nord Stream 2 is a Germany on the leash of Russia. You know what they think of this in Poland? in Poland, Germans come over the border from Germany--German retirees with good pensions (because Germany is nice and rich)--they come over the border, and they spread propaganda that Poland shouldn't get nuclear plants, that Polish nuclear plants are going to be a threat to Europe, are going to be a threat to the Polish people. And you know, they know Polish people know instinctively that Germans coming over the border from Germany to Poland, demanding you change your industrial policy, is historically bad news for Poland. And that them doing it while getting rid of their own indigenous energy supply in Germany, and becoming dependent on the energy policies of Russia, reminds them just a little bit too much of a really bad year back in 1939. Where it's not that Poland thinks that Russia and Germany are allies out to get them. And they know damn well that any alliance between Russia and Germany is just--it's just a convenience, right. But Poland knows something about being invaded one way or another, either by guns or cash, and this is the reason why Poland has just announced a colossal new energy program in nuclear with the direct participation of the United States. And I think we should talk about that, Chris.

Chris Keefer 41:52

Yeah, no, I mean, that's part of why I was so excited to have you on at this timely moment, because we've been describing this trend in European energy policy away from nuclear towards renewables and gas. And it seems like there's at least two, maybe three countries that are now looking at actively pursuing nuclear, and that would be the Netherlands, Romania and Poland. So let's talk about Poland, since we were just, we just left off.

Mark Nelson 42:18

And Czechia, Slovenia previously. And Bulgaria and Finland. And, yeah, Belarus has gotten their first reactor just turned on courtesy of Russia. And Estonia. And you know, we can just keep going for a while--all the countries that are, at minimum, reconsidering their phase outs.

Chris Keefer 42:42

Right.

Mark Nelson 42:43

This is the part where we advance to the new stage of this farce, this farse World War II. You know, there's a famous quote-misquote, everybody just says, quote now, but where Marx was said to directly come up with the idea that history repeats itself twice: first as tragedy, then as farce. Well, if we take that imagery, and we say that World War II is going to happen, first as tragedy and then as farce, we're deep into the--I would say the US participatory phase of this new energy World War II.

Chris Keefer 43:20

Okay, I'm following, Mark, keep going.

Mark Nelson 43:22

Right. So the Poland deal was not the first one to be announced this summer. A number of weeks ago, the US and Romania announced that China had left and China was not going to build nuclear in Romania, and instead that the US was going to help finance Romania to the tune of billions of dollars, something like $8 billion to get Canadian reactors--CANDU reactors, one of the safest and best designs in the entire world, one of the most advanced nuclear reactor designs--completed in Romania, with US involvement, financing, US engineering help. And this announcement was so quiet that I've met nuclear energy people in Europe who haven't even heard of it yet.

Chris Keefer 44:11

Right.

Mark Nelson 44:11

And it's been almost a month. What this deal said is that the USA is so newly dedicated to financing nuclear projects in Europe, if there's a customer who wants it, if there are partners who want it, that they are willing to help even build Canadian reactors for Romania, in order to turn the tide of the Energiewende war. And that this is such a colossal change in US approach and US policy, that it's almost impossible to exaggerate its importance.

Chris Keefer 44:49

So Mark, this this is interesting, because you were mentioning earlier that the US has been, you know, quite loudly opposing the Nord Stream 2 pipeline. I know there's a lot of sanctions that are in place against Russia that are being used by the US to try and pressure the Germans not to complete Nord Stream and it's almost done from what I understand.

Mark Nelson 45:07

It's completed. It's just waiting to be connected.

Chris Keefer 45:09

And basically Nord Stream makes Europe dependent on Russian gas and therefore, you know, likely to acquiesce to Russian demands, soft power, etc., and maybe even hard power if you cut off energy supplies. But what you're saying, if I'm following, is that the US is funding nuclear in Europe to try and forestall or move away from the dependence that that renewables and gas heavy system is setting Europe up for. Am I correct on that?

Mark Nelson 45:35

Yes, in fact, a little known, little appreciated change in US foreign policy happened with what experts call, based on its section of text in the mission of the US Export Import Bank, or EXIM--this is in Section 402, signed into law December 20, 2019, directs the US EXIM Bank to establish a new "program on China and transformational exports." The program's purpose is to support the extension of loans, guarantees and insurance at rates and on terms and other conditions, to the extent practicable, that are fully competitive with the rates, terms and other conditions established by the People's Republic of China, or by other covered countries, as designated by the Secretary of the Treasury. The law charges EXIM with a goal of reserving not less than 20% of the agency's total financing authority (for example, 27 billion out of the total of 135 billion) for support made pursuant to the program. What this means--and that was me just reading directly from the website of the EXIM Bank of the United States--what this means is that the US, with an amount of money that, quite frankly, is small compared to the economy and foreign policy of the United States, is by law required to challenge China and Russia's transformational exports. And, you know, there's nothing quite so transformational as a nuclear program, or a natural gas dependency program, a dependency leash like Nord Stream 2. And this means that any country, no matter how small, in Europe, that can come up with a credible nuclear project with customers who want it, a city who wants it, government supporting it, and perhaps even equity investors willing to come in, once somebody else takes the risk, can now go to the US and say, "We want this transformational export to come on our soil, on our terms, funded by the US, secured by the US and delivering us nuclear technology." And that era, that era is as old as December 20, 2019. But the launching of these deals over the last two months, is probably (and definitely in my lifetime) the biggest foreign policy change I've seen in the United States.

Chris Keefer 48:00

This is absolutely huge. And it feels like it's breaking here on Decouple. But this is just fascinating, right? Because I think a lot of people have, at least in the lay press, been sort of referring to nuclear as this kind of tired old technology that's just kind of looking for a grave. And that, you know, there's a few outliers like Russia and China that don't reflect where humanity and modern economies are heading towards, that sort of persist at building these plants. But what you're illustrating for us here is this kind of crucial, vital role played by this energy source, in this kind of realpolitik of, you know, the very direction that Europe is going. And that the US again, by financing these deals, is both sort of fending off adversaries in terms of China, but also Russian dominance of the EU. I mean, this is just wild stuff, Mark.

Mark Nelson 48:50

And Russian dominance of the EU through a leash on Germany, when it's Germany's cash. Let's extend a little bit of empathy for Germans who feel that they work and Europe plays. Is that true? I mean, you can look at labor hours. But I think the bigger thing is this: Germany's incredible order down to very small layers of society--down to the individual Germans themselves--their incredible order, self-organizing approach, their incredible middle-sized companies, right, the Misselstand that are the basis of the German economy, the multiple world-leading automobile companies who all managed to share an internal German market while carving up the world outside--this is extraordinary. It's not guns, and it's not moral right to dominate Europe. However, because it generates so much cash, Germany can get a little confused on both counts. So what's happening, Chris? It's that Germany has said, "Well, you know, really we're the ones paying for the party. We're the ones who work; it's our cash." So the EU is, you know, not gonna put any money into sectors on the green recovery that Germany's companies cannot participate in. And because Germany's companies have divested from nuclear, it means that Germany is well within its rights, as the country paying cash for this party, to simply say that nuclear, which German country companies can't do any more--nuclear is not part of the green recovery. It's such a simple thing, right? Don't you think that's reasonable? Chris? If you're paying for something, then you should have some say in what gets built.

Chris Keefer 50:30

And Mark, what you're talking about here is, is this the green taxonomy? Where there's been so much debate about what gets to be included as an energy source that gets a Green Label and therefore is open to favorable financing and interest rates?

Mark Nelson 50:45

Yeah, it's the green taxonomy. But you know, I think there can be a little bit too much focus on the green taxonomy as a document. Germans that I've heard from basically said that if the green taxonomy includes nuclear, we won't let there be a green taxonomy. So people confuse the policy, the document or the policy paper or the white paper--people get that confused with the political, the economic policy equivalent of guns, which in this case, is simply control and bankroll of the system itself. And I'll tell you, I'll tell you how this is going to be pushed back. It's going to happen when little countries join up all around Europe. And by little, I mean, literally, everyone but Germany, in the EU is a little country, all right? One of the only ways to be bigger than a little country in the EU is to successfully oppose Germany or to successfully support Germany, right? So if all the countries in the EU that want nuclear back themselves, back each other, back their own representatives in Brussels as a coalition, not only will Germany not be able to destroy EU energy policy and EU energy independence, but Germany will start bleeding cash to the rest of Europe, because the rest of Europe is going to have cheaper and cleaner electricity than Germany does. I don't think Germany is going to have power outages like California does. Germany is far too competent, capable and cynical for that. They will keep their gas--not their gas, haha--they'll keep the leash on. They will keep their minds ready to open. They'll keep any number of hedges, right. If Germany needed to, they could buy back their coal companies from the smaller, the tiny European states that surround them that have bought all of Germany's coal power.

Chris Keefer 52:37

And I mean, let's not forget that Germany's coal phaseout is not scheduled till 2038, right?

Mark Nelson 52:45

Right, and all the nuclear plants are supposed to be gone in a matter of months. And these are some of the most outstanding and productive individual reactors on planet Earth, absolute marvels of the very best of German engineering.

Chris Keefer 52:59

Mark, let's get personal here with the story of Gerhard Schroeder if you don't mind, who is, I believe, one of the executives within the Nord Stream project and was a former chancellor of Germany who crafted the nuclear law basically, right? Which I think said that all nuclear plants could only go for 32 years and there should be no new nuclear. Can you tell us a bit about that story?

Mark Nelson 53:24

Sure. Um, I don't know the man. I know that every step of his energy approach and career afterwards has been consistent and rational, not just in being good for Gerhard himself, but also being exactly what remains for Germany to do at the point that the German people have decided that nuclear plants must be eliminated around the world. Germans cannot get rid of nuclear weapons. They'll never be able to do that. They don't even have any, Chris, although there's an active debate in German policy that we talked about before in getting nuclear weapons. Most recently, to go on a bit of a tangent here, the former head of Airbus wrote an editorial back in March, saying that it was inevitable that the EU (meaning of course, Germany, because France already has nukes and the EU money comes from Germany), the EU should develop its own nuclear weapons program. It's inevitable that if you reject nuclear energy like Germany has, and Germany doesn't get its own "EU nuclear umbrella," that you end up with an energy policy that looks like what dear Gerhard has been working for, in his post Chancellor career. Who is to blame him for personally profiting from ensuring that there's a steady supply of energy for the German people? Where's it gonna come from, if there's gonna be a steady supply, and Germany can't do nuclear, and Germany has to pretend to do of a coal phaseout for now (just for keeping up appearances, right? Keeping Up With The Schmidts), then it's clear that you have an energy policy that looks like a Russian leash. Gerhard just sees further than others, and he's made it possible for himself to live very well implementing it. So I have nothing, nothing against that sort of entrepreneurial approach. It's been great for Gerhard.

Chris Keefer 55:25

I guess he created his own cushion post-electorally then in terms of, you know, shutting down nuclear and then needing to build the energy supplies that could fill in that gap.

Mark Nelson 55:37

Yeah, sort of like a reverse Marcel Watteau, right? But anyway, in France, they're used to having this reverse of German policy. We can talk all day about French anti-nuclear policy that the French people and government have put into place. One of the most interesting is that for the past, something like 15 years, France has been running a reverse carbon tax scheme, where the clean nuclear energy has been paying big, big money. There's been big taxation of nuclear power to pay for a small amount of renewables, while at the same time it's rapidly escalating French electricity prices--their prices are escalating much faster than Germany's, by the way. And that's driving new energy consumption off-grid, countering a multi-decade--you know, not multi decade but essentially since the 1960s, France has a policy of not encouraging off-grid fossil fuel uses when there was an alternative. There were big advertising campaigns around France as France was rapidly building its PWRs. EDF was saying use electricity, the French energy, you know? That sort of thing.

Chris Keefer 56:44

They were the original electrify-everything people.

Mark Nelson 56:47

Exactly. As any good energy Twitter wastrel professor would tell you, it doesn't count as policy if policy professors don't come up with it. So just because France was making a circular nuclear economy, where French nuclear powered French reprocessing and French enrichment, right? Instead of having a circular economy of French nuclear energy powering French homes, France is now running the reverse of that policy to try to get nuclear to do as little powering of the economy as possible--at the very time when they host international climate summits that are run off nuclear, that are prevented from talking about nuclear. Where you have the Eiffel Tower lit up at night with 95% nuclear energy in downtown Paris in the winter at night, lit up--a sign that says 100% renewables, lit up almost exclusively with nuclear energy. That's France. France doesn't actually make a lot of sense, except as an appendage of German policy. I mean, let's be honest. Let's be honest here. The Fessenheim closure, where hundreds of millions of dollars got paid across the border from France to Switzerland and Germany, in order to shut down a profitable working French nuclear plant with no limit on its long life? And this happened only a few months ago. The shutter of Fessenheim was pure Vichy France energy policy, where at the behest of foreign powers, and going along with some of the elite French opinion, a domestic industrial program was severely damaged while giving cash payments across the Rhine to traditional enemies.

Chris Keefer 58:34

What were these cash payouts for?

Mark Nelson 58:36

Because Germans were co-owners of Fessenheim, even though it wasn't in German territory. That's because it supplies electricity to the Rhine industrial region. Now Fessenheim is closed, and German coal plants will get a bigger lease on life to provide the power across the river that French nuclear used to provide.

Chris Keefer 58:56

That's fascinating.

Mark Nelson 58:57

That's why it's a Vichy France policy. It's the disgracing, humiliating, and impoverishing oneself on your side of the Rhine, in favor of the interests on the other side of the Rhine--to the contrary interests of all of Europe, right? On carbon, on industrial strength, on energy independence, all of it.

Chris Keefer 59:19

So Mark, we've talked a little bit about the realpolitik around why Germany is pursuing some of its anti-nuclear agenda. And if I'm understanding you rightly, that's because they've divested themselves from the nuclear industry, and they want the rest of Europe to buy their technology off them, their windmills. Is that it?

Mark Nelson 59:36

Yeah, can we go into that just a little further? If you are producing wind turbines in Germany for consumption by the world, your wind turbine factory has some of the cheapest electricity costs in Europe, because you are excused from paying the cost of the Energiewende itself. And this is a very sensible, very rational, aggressive, almost warlike policy from German in terms of what tools are available to it as an economy, where they are undercutting industrial competition in other countries, by excusing the wind turbine factory of paying for the brutal and high and rapidly spinning out of control costs of the Energiewende itself, but then taking in enough cash in business in order to pay for it through consumption taxes and general tax revenue and borrowing power of the German state. So it works like this. If German subsidies are up it, you know, 30, 40 billion euros a year approximately for renewables, what does it matter that the state ships in 10, 12 billion extra euros, so to save consumers from extra fees, and ships in a few billion euros on top of that to excuse its energy-intensive industries from paying for this renewable electricity, if it brings in billions and 50 billion, 60, a hundred billion dollars of business eventually, right? It's an extremely sensible. It's very, very sensible. And it works. It works in the context of Russian policy too. So it doesn't pull on the leash right? To build wind turbines for other countries. So China's the sort of center of solar panel production in the world. Is Germany, a major, major player in the windmill production? Denmark's got, certainly a strong base there; is Germany a global force in wind? Yes, it is. And it's not just the wind turbines. It's the engineering industries that service wind turbines. If you get a wind turbine made in somewhere else that isn't Germany, you may not have the same, shall we say Mittelstand--the industrial engineering base that provides Germany with almost all the internal value of its own production. You know, this is a bit of a complicated topic, but just to illustrate it, I was in Germany on one of my many trips there to work on these issues, and I was at a hotel, kind of a lower-end hotel, but still nice enough hotel in Munich. And I was at breakfast with my colleagues, both of whom have been on your show, Madison and Paris. And we're messing around with the dishes, you know, having our tea, and I have this weird habit of turning over every single dish that I use when I dine. Why? Because it's just interesting: who makes the plastic pieces, who makes the metal pieces, who makes the ceramic pieces? These are such low-technology, low-value-added things to do that you can learn a lot about the global economic system by looking at who makes the stuff. What I found is that every damn thing on that table, this continental breakfast in Germany at a mid- to low-range hotel in Munich, every damn thing with a logo was made in Germany. The little 10-cent injection-molded plastic disposer cup for putting your spent tea bags in? Made in Germany. The ceramic plates? Made in Germany. The silverware? Made in Germany. Almost all the food that you would have seen, made in Germany, right? Meaning anything made in Germany captures an astonishing value chain all the way back to the fields and farms of Germany. Meaning it's not the same thing for Germany to make merely a wind turbine export as it is for America to, right? Supply chains that would be global in the products of other countries are not global in Germany. They go directly to the heart of the German industrial system.

Chris Keefer 1:03:35

Germany has managed to maintain itself in this kind of globalized era and maintain sort of vertical enterprises.

Mark Nelson 1:03:42

Right! Right, and it's done it--we could have an entire podcast episode on how they managed to achieve that, especially with the disruptions of World Wars, right? But I will say that when you talk to folks in South Africa, they complain that there's no business for their consultants and their engineering service firms with the wind turbines because all of the data is fed back to control rooms in Germany, and they get to do all the value added. Maintenance and servicing and control contracts.

Chris Keefer 1:04:13

That's interesting. There's a story I just saw that broke in the UK maybe this week or last week. One of the heads of the GMB union there, Warren Kenny, was quoted. Basically the union is opposing the massive offshore wind developments that have been proposed by Boris Johnson and they're opposing it based upon the offshoring of the labor and supply chain, as these are not being produced in idle shipyards and manufacturing errands across the UK but rather they're being imported, I think largely from China but maybe from Germany as well. And the union actually said, "We will not support offshore wind until its supply chain matches that of nuclear, which is highly penetrated with union labor and is largely made in the UK." What is it about new nuclear? Or is it true that nuclear tends to have a supply chain that's more indigenous or in country-- or the sort of labor benefits that it brings?

Mark Nelson 1:05:10

Well, so here's where it gets really interesting about jobs, green jobs. You have experts on to talk about this all the time, we needn't belabor it. But almost all the jobs in wind and solar that are permanent jobs--they're not just the ones that burn over like a quick grassfire, or a quick sugar hit for a diabetic patient, right? Almost all the actual permanent, well-paying jobs are part of an intense industrial capability, that only a few places have, and only a few places keep. What this means is, is supply chains for any British big wind thing, as Kenny noted, are almost always going to go to a place that doesn't have to pay for deindustrializing energy, like wind and solar energy, right? So either that means it's like Germany, where they're protected against wind and solar prices, or it's going to be equipment from China that's either made in labor camps, or it's made in places that are strongly powered by subsidized fossil fuels, right--subsidized, perhaps more in a--you know, externalities that pollution controls and carbon controls that Europe puts on itself that China doesn't. And again, we can't blame China for this. They're just doing what comes right and profitably to themselves, right? But we can blame people in the UK who say that there are gonna be jobs for these projects, and they count up all the momentary jobs. And when all those jobs disappear the day the program goes into operation, the jobs disappear, the unions are despoiled, there's almost no union job per megawatt hour of energy coming from solar and wind anywhere on Earth, Chris, anywhere. So any union that allows the infiltration of solar and wind projects is asking for its own death. And so I think it's right to be concerned about these supply chains being onshore. But even then, that will only work if the onshore wind energy industry in the UK secures lots of exports to make sure that other countries are suffering from deindustrializing energy sources, and that the UK keeps the supply contracts, the service contracts, the manufacturing contracts, and all the consulting gigs, right? And yeah, it's not going to happen because other countries are already better at this work than the UK is going to be, and they are going to be able to defensively act in a way that the UK has not apparently been able to do in keeping its own industries. There's a reason why the UK nuclear industry, for example, is owned by France.

Chris Keefer 1:07:57

Being owned by France, though, it's still a massive job creator within the UK, is that correct?

Mark Nelson 1:08:01

Exactly. So let's get to one other fine point about energy supplies, and we'll turn this back to natural gas a little. Siemens builds some of the finest natural gas turbines in the world. They're going to build a bunch in Germany to burn Russian gas. In fact, Siemens could do almost everything (if they wanted to expand into it) in a German energy program to be converted to natural gas turbines. And still, it will be a Russian energy policy. It won't be Germany's. It will be a lease, Russia has and will continue to build entirely Russian-built and even managed, operated, financed, nuclear plants. They can even fuel those nuclear plants, and those plants aren't Russian. So it's a bit of a paradox. A natural gas plant you build yourself isn't yours. It's whoever fuels that natural gas. A nuclear plant is not whoever builds it--it's who's ever territory and soil it sits upon, period. Now there can be some issues; for example, the Indian engineers and operators wanted to take over operations at the Kudankulam plants and a plant in southern India from the Russians, and they found that they need a lot more help than they expected. But they're gonna figure that out. Let's take a look at Ukraine. Ukraine, (the home of Chernobyl, right?) is one of the most pro-nuclear countries on planet Earth. Because what do they have other than nuclear gas? Where does that gas come from? Either from the east from Russia or from the west from--oh, wait, if it's coming from the west, it's going to come from Russia, too, once Nordstream 2 is up and running. Meaning, Ukraine with Russian-built nuclear plants that had Russian fuel contracts? It's still Ukrainian. Even when being invaded by Russia itself, it's still Ukrainian. Ukrainian had a very painful switchover to Westinghouse fuel supplies, and it's getting on with business.

Chris Keefer 1:10:05

That's very interesting.

Mark Nelson 1:10:08

Meanwhile, Germany is making sure that its leash is made with the finest and most beautiful Siemens bridle leather, with gold-plated attachments straight to the most glorious, highly manufactured and managed collar, expertly fitted to two micromillimeter precision around its own neck with German engineering.

Chris Keefer 1:10:34

So Mark, I think we're reaching, you know, towards the final quarter of the interview, let's say, to be generous. You've painted where Europe has kind of emerged from, I think, in terms of the German and French examples, the challenges of energy independence that were the initial drivers of the French policy at least. And you've presented, I guess, these two competing visions for an energy future--and really kind of laid bare the geopolitics underlying them in a way that's really blown my mind here today. What are your predictions for how this is going to play out going forward?

Mark Nelson 1:11:12

Carbon policy will always fall to the ground, when home and hearth are threatened. Germany has long refused a bilateral carbon price with France on the basis that if France doesn't get rid of its nuclear, German industry can't compete against France because of how dirty its energy supply is. That is illustrative. You know what? If I'm predicting the future, I think of all my conversations with very smart, very well-informed, very passionate Germans who say to me that really, Germany has done its part for the world. If Germany doesn't reduce its emissions any further it doesn't really matter, does it, because it's only 2% of global emissions. That's the future if we don't turn this around, if the USA does not succeed in its mission to turn around Germany's World War II, Energy and Cash Edition. If we don't turn back Germany at the Rhine, if we don't turn back Germany at the Danube, with reactors for the Czech Republic, then our future in Europe, at least (I say "our"--a lot of what Europe does is going to impact the whole world)--our future is one where one by one, climate policies are mitigated into irrelevancy or eliminated all together, and everyone involved will shrug and say, "Well, the power went off last night, what do you expect us to do?" Or, "Hey, they tugged on the leash, what do you want from us?" Right? So it's going to be a fork in the road. This is my prediction for the future: either we fail in this revival in nuclear energy all across the west, in which case, there will be a general loss of strength, and an eventual cap on our ability to fight climate change without simply taking food from the mouth of babes and deindustrializing our economies, or the other path is, we meet the incredible, and in my opinion, honorable challenge posed by Russia and China in their fantastic nuclear exports, with our own brilliant work, and we make a world that's strong, not because of global governments or something--we make a world strong with individual countries, from the Congo, to France; from Germany, to Philippines and Taiwan, powered under their own control, with carbon-free energy, with space left for nature, and with prosperity for all. And I'm gonna say that I think the second is going to happen, and it's what I dedicated my life to.

Chris Keefer 1:13:45

That's a pretty awesome, awesome place to end this. You know, reflecting on this, you know, it seems like the wind and solar, the renewables part of this are really a distraction. Like the big fight here is really between fission and fossil, the way that you've portrayed this. And, you know, while wind and solar can potentially spare some amount of fossil fuels, I think we're seeing in jurisdiction after jurisdiction, that they are not capable of being 100% powered by themselves, or permanently displacing fossil fuels--like you just don't see that happen. And so again, what you're left with is nuclear or fossil. It kind of reminds me, you know, we're using a lot of kind of World War II` analogies here, but sort of, it's socialism or barbarism. You know, it's these stark choices between between these two forces here. And I think you've really clarified that in this interview, that the renewables part of this is really a distraction. It's not a hinge point of a country's energy security, for instance. Germany is not going to be run by its wind turbines; it will be run by that natural gas that's going to provide the dispatchable reliable power that it needs to maintain its industries. I'm just wondering like, is the wind and solar part of this all just virtue signaling or what's going on?

Mark Nelson 1:15:04

No, no, no, no, it's not virtue signaling. It's like the rush for shale fracking, you know, fracked shale, natural gas in the US. There's a business. It's good if you can hustle hard and get into it. You have really aggressive men swarming around the world, finding land and customers for renewables. They aren't environmentalists, let's not be naive here. I've had an awful, awful time trying to find a single environmentalist at any successful wind or solar company, not just here in San Francisco, but almost anywhere, where they admit "You know what? Look, anybody who survives in this racket is somebody who's like, just gunning for the next deal." Right? Now you also see a bunch of the wind and solar people on say, energy Twitter saying, "Oh, man, I wish I studied engineering." To me that indicates that there's a big culling of the herd coming in wind and solar, I think, even if Biden gets elected, right? Because in the end, if the solar industry in California has to put out a statement saying, "We weren't responsible for the blackouts, because no one expects us to be there when it counts," they're just, they're just a side show. Now, they're a very destructive side show, no, don't get me wrong. And people really like wind and solar in the abstract, yeah. And if you're getting paid society's money to put it on your roof, you like it even more. But in the end, because solar and wind themselves, say "Only a fool would rely on us," they're not power players, and they're not at the table. Unless they're at the table because, say, the German Ministry of Foreign Affairs is backing your project in sub-Saharan countries in Africa. So really, I would say that the biggest role of wind and solar is as cover for the oil and gas majors, as they transition to a sort of a swing play, where instead of oil and gas being not just the backbone, but the meat of the energy system. In the words of a powerful Siemens exec that I heard come speak at Berkeley (University of California, Berkeley), in her words, no matter how big solar and wind get, it will always have a fossil fuel backbone. And the importance of wind and solar is to make sure that that backbone has the funding and the resources it requires to keep nuclear out of the important discussions. And that's its main purpose now. And in the coming years, of course, a bunch of winning solar projects are going to be found to be lemons, and they're going to cause a bunch of pension funds to go belly up and stuff like that. But that's just--that's not now. That's coming, right? For now, their main purpose is to make sure that oil and gas is always included in the room in any clean energy discussion.

Chris Keefer 1:17:54

Mark Nelson, thank you so much again, for coming on Decouple. It's been a lot of fun, and I can't wait to have you back for a future show.

Mark Nelson 1:18:02

Thank you very much, Chris. It's been fun as normal.

Chris Keefer 1:18:06

All right. We'll talk soon.