Ep15: Inside Diablo Canyon Nuclear Power Plant | BG2 w/ Bill Gurley & Brad Gerstner

28:12Your boss, your boss, for everybody else, the CEO of PG &E. And it was great to hear her support for Diablo Canyon. It was great to hear her support for, frankly, a lot of innovation. Yeah. Right. Whether it's grid innovation, whether it's two way, you know, charge and discharge with cars, whether it's under grounding of power transmission lines, which we talked a lot about today, leads to higher efficiency, you know, less, you know, lower cost to retail customers. So it does feel like there's a lot of upside. And Diablo's, you know, kind of the tip of that spear. Thanks for having us. We're certainly, you know, going to put the word to the governor and others.

28:59I would love to see this place extended for 15 years. It's the type of optionality that we need in the state. And frankly, a huge portion of the incremental bid for power is coming out of Silicon Valley. Right. Power is the primitive for AI. And that's why China is heads down in this race. And they're taking our technology. Right. And they're, you know, they're improving it. And it's high time, I think, that the United States got, you know, back on board. And with leaders like you, you know, at the front of the pack, I think we're in a good place. So thanks for being with us today. Thank you for being here.

29:37It's been a great day. Before I kick in with a little bit of background, I do want to thank the incredible team at Diablo, Marines, the Walnick, you know, who is one of the incredible leaders here. And, and, you know, a startup founder, Tray Lauderdale, you know, after we talked about nuclear on on pod six, he reached out to me, he said, Hey, I think there's incredible opportunities here to make it even more efficient leveraging AI. He's got a partnership here with Diablo. And so thanks to them for having us down here. It's been a great day. And to give ourselves a little bit of credit, do one, one advantage you have as an outsider is you see things with the fresh set of eyes.

30:15And so maybe, maybe for the audience, we will uncover a few tidbits that they will find useful as they think about this. Yeah. I mean, listen, I have to say that I'm embarrassed how little I focused on this issue up until a few years ago. The truth is the United States has been a global leader in nuclear power for 50 years. Right. Okay. We commissioned our first nuclear electricity generating plant 1957. The majority of American plants are built in the 70s and 80s. We have 94 plants today online representing 31 % of the world's total nuclear energy production. It's 20 % of total US power production and nearly 50 % of US clean energy production.

31:00It's large. It's at scale. We've been leaders. The problem is that it represents the effects of investments and efforts and an installed base that largely stopped in the 1990s. Right. China's on track, on the other hand, to bring on more capacity in the next 10 years than we've brought on in the last 40 years. They're expected to pass us in terms of total power generation from nuclear by 2030 or there about our supply chain is atrophine. However, there does seem to be some growing bipartisan recognition that we got to get this back on track. That's a key reason we want to come down here today.

31:45So as you look at this bill, what are some of the things that we ought to just set as a baseline about nuclear? Well, one thing that I would say is super important, especially because we have an audience that includes entrepreneurs. We're going to talk first about level three vision. Yes. There's level four, which is a different type of cooling technique. There's one plant in China doing that. There's SMRs, which are small modular reactors, which a lot of startups are excited about. And then there's obviously eventually fusion, which is a big unknown about the timeline. But for the next window until we stop, we're just talking about level three vision, which is a big scale out discussion.

32:31That's what's operating here at Diablo. That's what's operating in the majority of nuclear plants around the world. So a couple of ways you could go through things. First of all, we have been through this roller coaster of emotional beliefs about nuclear energy. And many people tie that way back to association with the bomb. And this inability to think about these two things separately. We had the the three mile island incident, Sharon Ogle, Fukushima, and all these things have an impact on what people's perceptions are nuclear. I would argue based on the research I've done, the healthcare impact of all three of those disasters is tiny compared to the healthcare impact of coal or other technologies that nuclear competes with.

33:22But people's perception, the media overplayed those things as well. And it's only been recently that the public sentiment has started to swing back in favor of nuclear. Most of the brightest people in our industry, you know, that Elon Patrick Callsson, like I see a pro nuclear bias. And you know, and I'm a huge fan of people like Steve Pinker, who's one of the great thinkers in our world. He's got a huge pro nuclear bias. But a lot of people weren't on that page. Now more and more people are on that page. I mean, it's amazing. It's even in Japan, where, you know, after Fukushima, they took all 30 nuclear reactors offline.

34:02I think they have 75 % approval rating for people wanting to put those reactors back online because I think there's a recognition in the world, okay? That it's clean. It's the type of dense always on nuclear power that you need. And the facts are just undisputable. It's safe. Well, and this goes back to that statement. I think I actually stole it from Joshua. That locks. But if this were discovered today, people would be like, oh my god, climate change is solved. Yes. But we let it go through this place where it was associated with these negative things that I don't think we're accurate. But now, hopefully, we're moving to a place where people are open -minded.

34:44So you could also look through a bunch of different countries. So France is, most people know this 75 % of their energy from nuclear. They've been the one that stayed in there the longest leaned in the hardest. You have Germany, which I think people think of as the ultimate disaster, where they've taken all their plants. They've decommissioned everything. And because of some of the things that have played out in the European market, they're now a net importer of fossil fuel energy. Disasters. They got sold a bit a good by the Greens. Merkel decides to shut down all the nuclear power plants. You can see how it just falls off a cliff and goes to zero.

35:26And instead, they're getting fossil fuel produced energy. They're less secure both from an energy perspective. I mean, remember at the start of the Russian invasion of Ukraine, we had all the conversations as to whether or not people were going to freeze in Germany during the winter, etc. Because they had taken all these plants off. Unbelievable. And one thing we've learned through this process is, you know, one of the silliest things you could possibly do is decommission because you've already paid for the damp thing. Once you turn one off, is Marina share with us. It's a lot harder to bring it back.

35:59We're going to see if that can work. Right. And so anyway, and there's a fourth country we should talk about. So you already mentioned China. Yeah. One of the amazing, well, let me dive deep on China and then I'll mention the fourth country. So this is publicly available data. So people can go get it. We recently brought on two new plants in the US, Vogel, three and four in Georgia. And the total cost of that was about 30 billion for 2 .2 gigawatts. It turns out over 13 billion dollars per gigawatts. The plants in China that are the equivalent level three fission plants right now are coming on board at 2 .5 billion per gigawatts.

36:43So 13 to 2 .5. Right. Right. And that's a shocking delta. Yes. And one of, I would say the single most surprising thing to me of all the discussions I've had in the past two weeks was everyone that's in this industry is how few people are shocked by. Right. Let's talk about that a little bit. When you look at the cost differential, which I think is one of the biggest problems today with US nuclear. And I want to decompose as to why you think there's such a delta. But let's just talk about what it is. You know, you know, Vogel had a bunch of stuff as they were going through COVID. So let's say that that is more expensive than what a run rate AP 1000.

37:25This is the type of of Gen 3 nuclear reactor that they're building in South Korea in China and at Vogel, right? So in your mentioned Korea, that's the fourth country. So let me just real quickly go there. So Korea, so a lot of people look at the China data and they go, oh, that's China. You know, authoritarian government. Right. And they're able to dismiss it because it's different. South Korea is a democracy, a friend of the United States. They're at the same delivered price point as China. And they're doing it at scale. And they're starting to export their technology. Yes. So in some ways, just because I think it's easier for Americans to wrap their head around it as a data point, the South Korea data is more interesting than the China.

38:15Right. So let's talk about it. Let's break it break this down a little bit because both the South Koreans and the Chinese, right, are building on technology that they procured from the United States, from West 30 years. Okay. Now they're building a lot of indigenous technologies on the back of that technology. And yet, building the exact same technology, even though it was invented here, it costs us, give or take four times as much as what they're spending to build in South Korea or China. So give us your best guess. What are the big buckets that are costing, you know, this cost differential in the United States?

39:05And whether or not there's anything that we can do about it. And I want to come back to later, I'll answer your question, but I want to come back to the built on our technology thing because I think there's some important things to talk about there. So I went out and talked to a whole bunch of people and I was able to talk to one individual who had worked both in the regulatory part of our government and at a producer who I think had a really good lens and all this. And I'm going to, I'm going to leave them anonymous, but, but he brought up, he brought up four things. So the first was regulatory.

39:41So the separate federal and state environmental permitting processes in the US is onerous lengthy, probably 10 years for a nuclear plant, power plant, expensive. Most people don't know this. There you have no reason to know this, but the NRC is a fee -based regulatory. So you literally pay per hour to have them come regularly to you. And so those costs are extremely high. The second thing is litigation. So multiple special interest groups, particularly environmental groups, will sue to stop any development whatsoever. So there's no chance of a deployment or an attempted deployment without fending off, you know, inbound litigation that you have to deal with in the US.

40:26The third is passage of time without us doing anything. And so everyone talks about learning curves. We're so far off the learning curve because these two new plants were the first and 30 years. So there's no repeatable process, which you now have in China and there. And then that's all before you look at other things. I would say labor, cost of steel, cement, those things can be higher here and there. And so it's a whole big litany of stuff added up and none of those factors apply in China. Right. Right. If we could boil that down, the way I kind of got my head around it is one, if you just look at the length of time.

41:11So now they're building these AP 1000s in South Korean and China in about seven to eight years. And in the United States, I think six maybe as fast as six in the United States, it's not 10. It's more like 12 to 15. Yeah. Okay. So it's taking us twice as long to bring one of these plants online time equals money. And you and I talked about this, but a a modern large multi -gigawatt vision facility is a large piece of infrastructure. Exactly. It's not like you're building a even a rocket engine. It's more than that. It's just you look at the South Koreans or the Chinese building a highway and airport, a hospital, a school, a subway station.

41:56You see these videos. Go on. If you haven't, go on YouTube and look at China's new subway station. Right. Unbelievable. And so the US, you know, the first thing is just our regulatory environment causes it to take a much longer period of time and time as money. Secondly, then we don't have a scale up or scale out operation going on. Right. Two facilities over the course of the last 20 years compared to six to eight of these in a repeatable process coming online in China. That means supply chain. That means talent chain. That means that regulators are constantly talking with the operators. You know, you just have the type of system that you need to drive down costs.

42:41And in fact, if you look at these Gen 3 and Gen 4 reactors coming online, even in the United States, they always cost more in that first plant. But by plant five, it was cut in half by plant 10. It was cut by 70%. Right. So cost comes down as you ramp up scale production. Think about, you know, the roadster was a lot more expensive for Tesla to build, right? Then the Model 3. Once you are producing a million of these cars. So, you know, we need to get to a place where we also have scale production. And then the third, what everybody tends to focus on is kind of this labor differential. I would put that in a third bucket.

43:20But it's like a third, a third, a third, and this adds up. It seems to me the first two, right, we can tackle, right? You can consolidate the regulatory environment in the United States so that you reduce the time to bring one of these things online. And I also think that if you clustered some of these, if we wanted to get back to building more of these reactors, there's no reason to think that if we had a scaled cluster of reactors, five to 10 reactors that you wanted to bring on over a 10 -year period of time, that you wouldn't drive down the overall cost of the reactor. Perhaps there's not a lot of proof points of us building either at a federal or state level, big projects at very low cost in modern history.

44:05There's famous things. But if you think about infrastructure, most of it is one off, right? You build a bridge somewhere, then you build a bridge in a different city. And it seems like the other issue is the South Koreans are not only building them for themselves, they're building them for export, right? And again, that just gets back to the scale mentality of building these plants. But to be clear, the idea that we're going to bring the cost of building one of these things down by 70%, which is kind of the target needed to make this competitive in the open market with gas and everything else, I think is very, you know, it's hard to see.

44:43And this is a good point. The landed price points in Korea and China are very similar to the landed price points of other renewables and things, just on a CAP -X bill. But ours isn't because ours is three or four X, the global best. I want to talk, I'm going to go back to the South, the Korea thing, because you brought up the IP issue. I'm not convinced that it's helping us any to sit around and cry about whether China or South Korea used our IP in it. Anything I think, and I've mentioned this on the pod before, I think this any Chinese mentality is a little nuts, because if you look at low -cost EVs, if you look at their subway stations, if you look at, they're leading us in many areas.

45:35And we have this whole year than now, you know, attitude that America is the best and that we're the leader, and we're being passed. Like, like, I would say, landed cost of energy is the data point you should measure most. And if there are four X where we are, I would say we should have the alarm bells ring going, what the hell is going on? Why are we so far behind? And I think it's a little bit of a crutch to lean on and say, oh, they built it on our technology. One of the things I learned about the, the Korea situation, so they're trying to export it. Westinghouse, who was the company that originally designed level three -vision in the US, is suing to try and prevent them from delivering to Czechoslovakia.

46:21And you know, we talked to Maureen about how the different nuclear plant operators all share, and we're kind of all in this together, right? And if climate change is a global problem, and we all want it solved, like, we should want everyone to win. Like, we shouldn't be jealous that China is doing that. And so for me, you know, I ask all the AI bots, you know, do you think there's any chance we would license something from South Korea? They all said, no, there's no chance we would do that. And that's the kind of a middle blocker, like Trump derangement syndrome or something. Like, if Korea could help us deliver a planet, 2 .5 billion per gigawatt, why wouldn't we want that?

47:05Right. And so I just, I mean, we invited TSMC and DeraZone at help us, no chips. I know. But if you have this attitude, they took it from us, then you don't get into that right mindset. So I just think that's an important kind of thing to think about. We would all be better off if nuclear energy were cheaper for everyone on the planet. Right. We, and it, and, and, and, and a lot of the political disagreements that lead to war, a lot of people believe are tied to energy cost and energy availability. So you might reduce that as well. I think one of the reasons we're so focused on China is what started this conversation for you and I was when you model out the need for data center capacity over the course of the next five to 10 years.

47:53You realize for the first time in really two decades, the US's need to grow its base load power generation is going to go up significantly significantly faster than it has over the course of the last two decades. And this has become a standard topic of discussion in Wall Street. Everyone's talking about it. And energy, reliable, always on energy. Right. In fact, most data centers want to build right next to the source of energy. Right. That is the primitive AI. And we do believe that AI supremacy really goes to national security. So the reason I believe that we're seeing finally some bipartisan movement in Washington and around the country, frankly, on this issue is people realize how inextricably these things are tied together.

48:47So the reason I'm worried about China taking the lead in nuclear is not just that they have more nuclear power plants in the United States, but what enables them to do down the line around AI and everything else? Because if you are the low cost power provider in the world, right, then you're going to be able to build bigger data centers that power bigger AI clusters, et cetera. And I'm not certain that that leads to better AI. But there's a reasonable enough chance that you don't want to give them that unilateral option. I think even if you don't take that lens, you know, you say to yourself, if we can't fix this problem, but other countries can, you may be through, through being imported by South Korea, then it becomes a competitive weapon for those countries.

49:35And, and, you know, just as you might put a manufacturing plant in Mexico or Vietnam or Czechoslovakia, right? Like there's no reason why a data center can't live there as well. And quite frankly, it's easier to drop a fiber off the cable from Mexico to America than it is to move goods by trucks. So should we be trying to build, you know, cooperate with the Mexican government and build AP 1000s just over the border in Mexico? I think we should be open -minded to the fact that the world needs this technology and that it's, if they, if they, if they get it, it's good to, if Czechoslovakia gets it, it's good too.

50:17This was my main point about like, I just don't think having an attitude that, oh, that's ours or, I don't even don't love the, the, it's a race and they're winning. I think everyone should be winning in this area. Like, once again, if you care about global climate change, like it's a global problem everyone should, I mean, it wasn't that long ago that with this same kind of anti -China attitude, we sat here and said, oh, we're going to clean up our pollution, but look at those guys, and we're pointing our finger. Now we wake up and they're landed costs of nuclear energies, one -fourth of ours.

50:53And like, who are we pointing a finger at? Like, you know, I think there is, I was reading, I think I got the name, correct, Professor Brun Gerno from MIT's, The Director for the Center of Advanced Nuclear Energy Systems. You know, he said, China's now the de facto world leader in nuclear technology, right? And it's not because they're smarter, they're better, but it's simply because they made it a national priority, right? That they were going to build these, these plants. And when you do that, you innovate, right? And when I look at the moratorium that has largely existed in the United States over the last two decades, you tell me, if you had the Elon Musk of the United States working on fission over the course of the last two decades, right?

51:39We would be light ears ahead of where we are from an innovation perspective. And maybe that's a decent segue to talk about, you know, what some of these Gen 4 advanced nuclear reactors look like. Because you and I, again, are talking about generation 3 or generation 3 plus reactors. The AP 1000 is kind of the standard reactor that's, you know, that's being built today. But whether you're talking about tarot power, these alternative sources of cooling that are being built, I think we have five or six or seven of these that are authorized under kind of the developmental, you know, regime in the United States that are hoping to come online over the course of the next five to seven years.

52:23For the first time in four decades, an American company broke ground on a next generation nuclear power plant in the US. The company behind the new technology is tarot power and it's batched by billionaire Bill Gates. Nuclear power is carbon -free, which means it doesn't emit the greenhouse gases scientists link to climate change and Gates is building a plant in Wyoming at a cost he estimates will be $10 billion. Terrapower's new reactor uses liquid sodium rather than water for cooling, which the company says makes nuclear power cheaper, safer, and more efficient. If we all agree that the 94 reactors that we have currently online, we should keep online.

53:05The question I have, Bill, is should we be looking to build more of the Gen 3 vision reactors or should we leapfrog and be, you know, there seems to be a lot of energy at least in Silicon Valley and, you know, in Washington, Bill Gates behind these Gen 4 reactors. Where would you spend your time? So, I mean, my first reaction would be it shouldn't be an either war, like we should be doing both. And I think that's what's happening, so that's fine. I would also say if one of the big issues for both level three and for what we could call the futures technologies is utilities having the gumption to put the tap back, exact, and invest.

53:51If you've done, and I heard this from multiple people that I talked to, utilities are inherently conservative. Yes. Like, well, Wall Street investors think of them as these stable things you buy that don't move around a lot. I think the CEO of PG &E recently said, who owns Diablo? Recently set on a podcast, they have no interest in investing in SMRs. They said, we're going to let risk capital invest in small nuclear reactors. And if they work, right, then we'll consider if we're not going to be the best option. Both of them. And maybe that's changing. You know, when I first heard about a constellation energy group, which operates a bunch of nuclear reactors here in the US, I reached out to them and they said, I asked them, are you doing anything new?

54:36Are you innovating? Are you doing a new plant? They said, no, no, no. Like, we just operate these old ones. Now, there's a rumor that they're talking to three my island about restarting that. And so maybe they're these changes in attitude are going to tip them in. If I say this with a ton of confidence, even though it's unprovable, if these utilities could snap their fingers and have vision level three online, at competitive Korea and China price points, I think they'd be turned along. Of course. So there's a huge difference between two point two or two point three and thirteen. Like, there's just a huge difference.

55:17So if that problem were solvable, I think they'd be investing more. But I don't know if that's solved. I really don't. To answer my own question or perhaps push you a little further on this. So if you listen to Gates talk about the reason for alternative to Gen three power plants, as they effectively said, the Gen three design was a massively complex engineering solution to the safety challenges of the plants that came before it. And so rather than designing with perhaps elegance, like passive cooling, they came up with very complex and expensive engineering solutions to those problems. Now, the great thing about the engineering solutions is they work.

56:04We know they were worked their repeatable processes and we've driven down the costs in some of these other places. But if you look at the Gen four reactors, they're much more modular. Some of them can be produced in factories. A lot of them have sodium or alternative mechanisms for passive cooling. Is that perhaps, when we think about the cost of driving down these plants, it does seem to me that we can't magically snap our fingers and make the labor costs in the United States go down. We can't snap our fingers and make, you know, say we're going to scale this up and make all the regulatory stuff better.

56:41So a leapfrog would be just build a smaller, simpler plant. Yeah. I mean, China, there's a new plant in China. Probably can't pronounce the right should now that is level four, but it came on at a price way above the Vogue. So like, yeah, but any new plant, any new novel thing is going to be a lot more expensive on unit one than it's going to be on unit two. You know, they used to call, I've heard people refer to modern day semiconductor investing as a sport of kings, right? Because they're 50 million to first take. Right. If that's a sport of kings, this is a sport of impoverse. You may be multi -billions to first revenue.

57:21And so a good, good thing we have, Bill Gates, like impoverse that want to make this stuff work. Yeah, let's dive in on SMRs for a second. So I'm sure, you know, the at least high level pitch you would hear from all of the SMR vendors is one of the reasons that level three vision is so expensive. It's a huge infrastructure project and the US isn't good at those anymore. And if you could build this thing in a factory and then ship it in delivery where it's used and there's talks of, oh, I could take an old coal plant and put a SMR in there several levels. And now the transmission lines are all in the right place and I get and to what you just said.

58:06And then I can repeat it. Then the first unit might not be competitive, but the 100th unit might be because I could get into more of an automation factory thing and get out of this infrastructure build problem that we're no good at in the US. That is the argument. I think another super valid argument is the Navy. And one of the links we will provide is a 92 page PDF on the miraculous success of the Naval Nuclear Program, which are in essence SMRs. Exactly. That already exists on 100 different vessels, some summering, some carriers in the US Navy. And the track record is phenomenal. The costs are pretty interesting, especially since they've never been applied to a commercial level.

58:56And so there's reason to believe in this. The problem, I think the overwhelming problem is that the utilities aren't really, they're not acting like say, Google and Amazon are buying Nvidia clusters where, oh, we're going to put them up and they're more conservative. They want the startup to bear most of the risk. There's an agreement called a power purchase agreement where the utility says, oh yeah, I'll buy it from you if you can deliver it to me at this price. Where they know their margin and the startups completely on the hook for where they can get there or not. And we've already had one colossal miss with a startup called New Scale that had one of these agreements in place and they got time to qualify.

59:46And the utility went, I'm out. And New Scale had to start laying people off. And it's just tough. And the other tough part, the NRC, which we haven't talked much about, but the regulatory commission here in the US is fee -based. And all the people that are playing in this market, I've talked to say you're probably 60 million to first approval. Just don't be, the startups going to pay to the NRC to tell them what they're doing is okay. Once again, supportive impers. Yes. Well, and that brings us back to, why did you and I really amp up this conversation because of Nvidia, because of Meta, because of Google, because of Microsoft, the power needs that they have.

1:00:32And maybe, and maybe those companies are the ones that need to come. I mean, if they're spending $250 billion a year on CAPEX associated with AI, that is emperor level spending. And maybe they need to be the ones underwriting the risk on the SMR. And I also think what they can do, Bill, how about this? Why don't the hyper scalers form a consortium? Okay. And they go to Washington. And they say, hey, we'll put up X amount in order to build some AP 1000s, right? Or daisy chain, a bunch of these SMRs together. Right? I'm talking about a new type of project and partnership with Washington, DC, where there's a mutual need.

1:01:14They have the capital, public private partnership to get this going because honestly, as I sit here today, take take T. Obleokianian, they built two nuclear reactors here. You know, this site was provisioned for six. Yeah. For six reactors. I could imagine if you had four more reactor sitting here. Right? If you could land them at the right price, you could have one reactor for Meta, one for Amazon, one for Microsoft, one for Nvidia, you could have the data center sitting right next to them. It does seem like a ransom, Matta, under the envelope dollars, just because it's interesting. So in the mid 80s, dollars, the plant was built for 5 .5 billion.

1:01:56So right around 2 .4. Unfortunately, in today's dollars, that's 6 .4. But 6 .4 is still half of 13, which is vogal. And so, yeah, just interesting. I mean, you know, again, we know the reasons why they're not coming online at that price. So the question is whether or not you can change this dynamics through some of the things that we talked about. I do think these Gen 4 reactors. There's room, I'm, you know, I like you believe it's in all of the above strategy. We should have the large Gen 4 reactors, but we also should do this small modular stuff. We basically have 100 floating SMRs in our naval fleet.

1:02:38You know, just imagine if you just took those ships and dropped them on land and, you know, set some transmission lines up again. What's great about those reactors is, you know, again, part of what we need to do is get the flywheel going on the marketplace. Not everybody needs. Not every situation needs 1 .5 gigs. That's true. 100 MW out of a small nuclear reactor may be a perfect fit for some of these smaller solutions. Well, let's talk about possible solutions. Okay. Not that we get to decide. And I'll start with, with on the level three side and then let's go to the SMR side. But, you know, the first thing that popped in my mind when I see how far behind China and Korea we are, is like I said, I'm shocked, no one shocked.

1:03:30But if someone inside of Washington is like, oh my God, we have to fix this. The first thing that comes to my mind, and maybe this could be applied to both SMRs and level three scale out, is we could choose to do something more like a Manhattan project or a NASA project. And you've hinted at this already, where you get the best and brightest people. You put them somewhere on the side. You give them the ability to do things they couldn't do before. Like, reimagine the NRC from the ground up. You know, you give them a goal like the Manhattan project that NASA had to deliver nuclear at a competitive rate in the US.

1:04:18Right. You know, and come Heller Highwater. Yeah. Now, we haven't done one of those things since those two that I mentioned. But we were pretty successful when we did those. You know, and I think when you have an industry that's this important to the country and this highly regulated, it is kind of an exception where you say maybe the free markets. Yeah, I mean, it's pretty clear to me that because of the regulation, which again, I'm sure we can regulate this industry better. But you're happy the industry has a lot of regulation. Okay. It's incredibly safe. But given that burden of regulation, it does drive up the cost relative to alternative solutions.

1:05:02And the United States is just incredibly lucky. We have an abundance of natural gas. So left purely to market forces. If you don't subsidize any of this stuff, we wouldn't have any solar. We wouldn't have any wind. We wouldn't have, you know, we're not going to have the investment required to bring on these new plants. So I do think it has to be a partnership where the government is willing. Now, listen, what we're doing in the IRA with chips, we've decided building chips in the United States is a strategic priority. You and I have debated whether or not that will be successful. We happen to both be on the same side of the agreement that that's going to be very challenged in the United States.

1:05:39But the United States. We, concluding in tough stock price. But the United States government is absolutely committed, you know, to that path. I think nuclear is at least as important. But they didn't go as far as we're talking about. They just did loan programs and stuff. I'm saying if you did a Manhattan project or NASA scale thing, where you're trying to redo everything. Not just, not just provide loans or incentives. So I mean, in my way, there is, I think, an imperative. This is a quick side to at least make, make sure nuclear is not disadvantage relative to win. And so, where it has operating efficiency and this durability and this always on piece that make it so much better than those.

1:06:26And right now, I think it actually has less incentive programs. And I'm not sure that's smart. If you look at, you know, I saw this mash up the other day on Twitter. You know, it's Trump and Biden and Elon and Bill Gates. Folks on both sides of the political divide. Right? The one thing that's very clear right now is that both sides of the political divide have come together on this issue. Take nuclear power, bigger source of clean energy. There's no question that there are benefits. There are nuclear energy sector produces clean, renewable, and emissions free energy. In Germany, they closed the nuclear power plants.

1:07:06They have to keep core burning. They said no to clean energy. And they said yes to fossil fuels. We in California read of a nuclear power plant called the Avlo Canyon nuclear power plant. 9 % of clean energy. So why would we shut it down? There's a new effort to increase the amount of energy obtained from nuclear power. It's a better form of energy because it doesn't have greenhouse gas emissions. It's crazy to shut down nuclear power plants. I can't emphasize enough. Please do not shut down the nuclear power plants. Please reopen the ones that have been shut. This is total madness to shut them down.

1:07:41Total madness. Think about where we were just, you know, like Marine shared with us today just 10 years ago. I mean, there was a moratorium. They were decommissioning plants. So I think we do have a lot of forward progress. And I think we need to come up with that statement of principles. No more decommissioning. Bring online the plants that we've decommissioned that are easy enough to bring online. Right? Figure out whether or not I think there's a startup maybe called the nuclear company that's trying to build six or seven of the AP 1000s. You know, maybe there are some companies that we can get behind that are going to go cluster build some of the Gen 3 reactors.

1:08:20You know, maybe there are things the government can do to, you know, streamline that process, provide some credits, make that process work. And then I think, you know, letting the market work by removing some of the regulatory burdens, we've already done this through a lot of legislation at the federal level to let these Gen 4 reactors at least come online experiments, see whether or not they're going to work. That feels like a pretty good solution. I think it's tough. You know, on the NRC front, two of the links we're going to provide are a presentation from the head of the NRC and a podcast with the head of the NRC.

1:08:54And one thing that becomes very apparent is like he's like considers it a win that we've gone from a negative reduction to just keeping everything online. Right. And we're sitting here staring at China going, why aren't we doing this? Right. So they're just not in that mindset. And they've been around a long time. And I don't, I think there's red tape is red tape. And I just think that, you know, you're probably at a place where you might want to send a bunch people off in a room and like zero base it, you know. Well, I think this is, I mean, again, companies get built where markets are created.

1:09:33There's a lot of growth domestically in China. So there's a lot of this stuff coming online. But they don't have the history of red tape, do we have? I agree with that. In South Korea, they're exporting. Well, we have export controls in the United States, which are preventing a lot of these companies from building an export. I know. So like again, we could change those export controls and perhaps build a domestic export industry, you know, for nuclear. Why do you do that? Because it builds the supply change, it builds the resilience that benefits you domestically. I'm a little skeptical. Like, like, I'm shocking.

1:10:07I uncovered this document from the Idaho National Laboratory, I think it's called, which is a separate nuclear arm of the US government from the from the NRC. And they recommended 30 things to change about the NRC. Yeah. And I'm sitting here thinking, wow, that's a lot of things you would change. And people can go find this document. But my guess is, even if Congress got behind this document, so you should change these things. What would happen is over five years, they'd change 20 % of them. They wouldn't change all of them. And I don't think the impacts. We're at a Forex cost. I don't think you get there.

1:10:47You know. And so, you know, I mentioned this earlier, but Josh Shapiro, the Pennsylvania governor, is everyone praises because this bridge went down on 9 .95, and he got it back up in 12 days. Yeah. How do you do it? Well, he took all the regulation and loss. Suspend it to the table. And so we have to recognize that one of the reasons we can't build infrastructure in the California high speed train thing is where it is, is because we've indoctrinated ourselves in red tape, both with regard to regulation and litigation. And if you want to go build this next generation level 3 plan, I think you've got to rewrite the regulation from zero ground up.

1:11:31Like make it thinner and tighter. And two, I think we've gotten to the point where we got to say, this is so important, you can't sue these people. Like the government's doing it. And that to me seems perhaps even more important, Bill, because in South Korea, their national regulation and the regulatory body that oversees it all is modeled on the US. Okay. So that to me doesn't explain why we have this massive price differential, but I do think the litigation environment, all the other things, the fact that we have this dual level of litigation. And then, ironically, here at Diablo Canyon, you say, why, what was one of the leading forces that caused this place to get decommissioned in the first place?

1:12:19It's groups like euphemistically called Friends of the Earth, who sue them at every different stage who turn public support against them, ironically. If you decommission Diablo, you know what the state does? It imports more cold -produced power. We know this. And yet, Friends of the Earth are lobbying for this. And that doesn't exist in China. Right. So to a certain extent, you know, you built your own problem. Well, listen, I would much rather deal with the downsides of, you know, a free system where, you know, you have the market competing, but I will say that when you have this in much regulation, right, the government has chosen to be involved.

1:13:03You no longer have an unfettered market, right? So market forces break down. Clearly, they broken down here. And I think now we see the strategic priority to get, you know, to get behind this. It's been a heck of a learning. Let me riff on one other thing you said before we wrap up. On the SMR front, I like your idea of these people getting together. You know, we've talked about Facebook's Open Compute Project, where they open sourced all the elements of their data center. And we heard from Marine that a lot of these operators get together and share best practices. And it strikes me that creating an IP free world for these people to live in, is beneficial to the utilities.

1:13:48It should give them more confidence that they're doing. I wonder if, I ask all the AI's, has anyone tried to commercialize the learnings of the Navy? And they said, no, everywhere I guess I'm like, no. And so maybe there's an opportunity there, right? The government, why not take someone? That would be the coordinating function. If the government could create kind of that open sourced standard for the AP -1000. Or for the SMR one, maybe, by leveraging what's been done in the Navy and maybe getting these hyperscalers behind it. And maybe that's a mini version of a Manhattan project. But boy, it seems like there's an opportunity there.

1:14:27And if the reason, and people will be very upset that as a capitalist, I'm suggesting this, the reason to make it IP free is to get everyone working on the same platform to remove single source dependency risk and to get the utilities confidence that this thing's going to be successful and going to go forward. And to get everyone behind it. So it's just do the Linux of SMR. And by the way, again, this is about buying time. Like if we tell a scope way out, and I think Elon's thought about this as much as anyone, he said ultimately the sun's the source of all of our power. The problem is we don't have the technologies today to store it as efficiently as we need to in order to provide all of our energy.

1:15:18Okay, so I don't know whether it's 25, 50, 75 years, but we're going to have to bridge these technologies. We have a clean energy that we invented, right? That currently is powering, you know, is 20 % of our total base load powers, 50 % of our clean energy. If there's one thing I've taken away from what we've studied over the course of the last 10 weeks, is that we have 94 plants in this country and we should not be decommissioning any of them. They all have much longer useful lives than I ever thought about. At 70, you know, 60, 70 years old, they still run safely provided that you do the proper maintenance and all this stuff to these plants, which frankly is new news to me.

1:15:57That means you know. And I think terrific news. Yeah. And it's also very clear that we can build more. I mean, Vogel, yes, we had big cost overruns, but we have the capacity in this country to build more of these Gen 3 reactors. We have a lot of vibrancy and activity going on on the Gen 4 side. We've got a lot of bipartisan support now in Congress. And so, you know, I come out of this a little bit more optimistic, but in the state of California, you know, we are sitting here at Diablo. I would love to see Governor Newsom in the course of the next 24 months announced that he's going to extend this, extend the license here for another 15 years.

1:16:33I mean, it, it, this seems to me to be a crown jewel of California's leadership on things like AI, our ability to produce this type of energy. It makes no sense. Take this off the table and let's get to working on what we need to do next in order to reduce our dependency on fossil fuels. And frankly, drive up the power generation in the state that we're going to need to power, you know, the economy and AI. Yeah. And I, and I just, I would, I would urge those that care that if you want to really meaningfully keep up with China and Korea, that one, we should quit vilifying them and start respecting the fact that they're executing at a level above and beyond us.

1:17:20And then to consider some type of Manhattan project like, like approach where you get out of the current environment, you get a lot of smart people thinking from first principles, you may be bar from what the Navy's done. And consider open source or IP free solutions to get everybody on the same page. Well, next week or the week after, we'll be back to regular programming. But this is one of the things you and I wanted to do. We wanted to take some deep dives on some topics that interested us along the way. So thanks. And I would encourage people that disagree and I'm sure many will to reach out.

1:18:01Are you're going to hear from them? I know. I know. You're going to hear from them. Share your point of view and we will bring that data into the discussion. But on the flip side, I want to see more of those game day posters saying, I love nuclear. I'd love to see people energize around the topic. I love to see the presidential candidates talking about the topic. I'm headed to Ann Arbor this weekend where I suspect game day will be. We see what we see some more signs. So maybe I can take it short with the side. We'll see if I have time to do that. All right, man. Have a good time. Good.

1:18:45As a reminder, everybody, just our opinions, not investment advice.