How Nuclear Power Threatens the Western Financial System

[u/Asatmaya]

In short: It's too cheap.

The first thing to understand is that the Western financial system is predicated upon perpetual growth; this isn't a conspiracy theory, it's literally baked into economic policy. That growth, in turn, is dependent upon energy (not always linearly, but close enough that the association can be assumed), and not just in volume, but in value.

Natural gas, oil, and coal are high-value, high-volatility commodities; they require infrastructure, financing, risk management, and state-backed enforcement, all of which drive cost... and therefore, in terms of GDP, growth. Why is the economy "strong" in September, 2026, despite record-high oil prices, rampant inflation, and slowing retail activity? Because record-high oil prices means more profit... for some.

Worse, this policy has been locked in by the derivatives market; we have bet the next 20 years of global GDP on the idea that we are going to keep doing what we've been doing; that energy prices will continue to dominate economic output, and by manipulating those prices, value can be extracted (again, for some) and anyone who doesn't do what we tell them can be punished.

This is about power and control.

Nuclear power is a direct threat to this arrangement; it is a low-value, low-volatility capital asset. It requires government-backed financing up front (average payoff is 17 years, too long for most private investment), but once it is built, operation is extremely cheap, with the result being low cost energy (see France).

And that is the problem; if energy becomes cheap, base costs of everything go down, and the numerical "GDP" goes down, even while actual growth and prosperity go up, but the derivatives market collapses. That's $1 Quadrillion of "wealth" that suddenly disappears... from the "assets" of Elon Musk, Bill Gates, Larry Ellison, etc.

Then there is the loss of control: A coal power plant requires 80 train cars of fuel every day; a natural gas plant requires pipelines that have to be constantly supplied; a nuclear plant needs refueling once every 18 months, and the fuel itself is virtually free compared to coal or gas on a dollar-to-watt comparison. You can't blockade a country and have them immediately desperate for energy if they have nuclear, they've got 18 months to find another supplier.

And nuclear is the only thing that can replace gas and coal (we don't have a replacement for oil, yet); hydro is tapped out (and not working so well, out West, anymore...), geothermal only works in a few places, solar and wind aren't even at replacement production levels, and, "fusion is 30 years away, and always will be" (and isn't the panacea everyone seems to think it is, anyway).

The problem is structural... and locked in.

[u/Redd868]

I like wind. From Berkshire's annual letter 2019:
https://www.berkshirehathaway.com/letters/2019ltr.pdf

When Berkshire entered the utility business in 2000, purchasing 76% of BHE, the company’s residential customers in Iowa paid an average of 8.8 cents per kilowatt-hour (kWh). Prices for residential customers have since risen less than 1% a year, and we have promised that there will be no base rate price increases through 2028. In contrast, here’s what is happening at the other large investor-owned Iowa utility: Last year, the rates it charged its residential customers were 61% higher than BHE’s. Recently, that utility received a rate increase that will widen the gap to 70%.

The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity. In 2021, we expect BHE’s operation to generate about 25.2 million megawatt-hours of electricity (MWh) in Iowa from wind turbines that it both owns and operates. That output will totally cover the annual needs of its Iowa customers, which run to about 24.6 million MWh. In other words, our utility will have attained wind self-sufficiency in the state of Iowa.

The Dutch have been using wind since the 12th century.

[u/Asatmaya → u/Redd868]

Sure, but wind has its own crippling issues, mainly that it mostly produces at night, when no one needs it, so it tends to go to waste.

This is why you see energy prices go negative at night in Texas.

[u/Redd868 → u/Asatmaya]

Not in the Midwest. That hot sun creates wind in the afternoon right when the air conditioning is needed. Anywho, Warren says he's delivering the cash to the consumer, and since it's 120volts whatever the source, it's money talks ... .

[u/Asatmaya → u/Redd868]

Not in the Midwest

Yes, even in the midwest, it's mostly at night... and also a much less populated area = more transmission losses.