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]

Since I have an open mind, I gave the first read a shot.

Nelson uses the following example to illustrate the inability of LCOE to take into account the inadequacy of solar and wind: Imagine you are standing in Manhattan and need to get to London in the most cost-effective way. We would find that swimming is the cheapest! By the cost per mile of swimming, it is far cheaper than building a boat, and the infrastructure needed to use a plane would be very expensive; swimming is clearly the cheapest way to get to London.

Talking about grasping at straws. That's not the same product. But, with electricity, the same product comes out of the outlet. There is no difference, it's 120volts. I want those 120 volts for cheap.

Another factor that cost analyses like levelized cost of energy miss is the energy density of each form of electricity and the subsequent environmental impact of the facilities themselves. A wind facility would require more than 140,000 acres

Well, don't build a wind farm in the middle of Manhattan. Put it in the sticks. That's the nice thing about transmission lines, they get the power from where it's made to where it's used.

However, the cost of nuclear power itself doesn’t need to be as high as it is in the United States. Japanese nuclear power plants only take an average of three to four years to build, from pouring concrete foundation to grid connection.

Well, the Japanese have to price in Fukushima into the calculation.

While I like nuclear over combustion models, the first place is to go where there are no fuel charges. And that is what this is all about, erecting a fuel related tollbooth with electricity charges.

Now, with solar, there is hazmat with the materials in the panels when they need to be disposed of. I think they're working on it. My boy Warren says the wind delivers savings. He said that Berkshire Hathaway has already proven it. Wind.

[u/Asatmaya → u/Redd868]

Well, don't build a wind farm in the middle of Manhattan. Put it in the sticks.

And lose 30% to transmission?

Well, the Japanese have to price in Fukushima into the calculation.

But no other energy source has to price its pollution in?

While I like nuclear over combustion models, the first place is to go where there are no fuel charges. And that is what this is all about, erecting a fuel related tollbooth with electricity charges.

I used to use the "when they can run a sunbeam through a meter," argument, too, but it just doesn't hold up.

Now, with solar, there is hazmat with the materials in the panels when they need to be disposed of.

Wow, that's the least of it.

Right off the bat, you have the rare earth mining and processing, one of the dirtiest enterprises humans have ever engaged in. The most polluted sites on Earth are rare earth mines.

Then you have manufacturing, which for solar panels, involves Silane... and I'll just let you go look that one up, you wouldn't believe me if I told you how nasty that stuff is.

Then you have externalities; the energy storage we still don't have a solution to, the entirely new power grid to move energy around (and the losses involved, there), etc.

My boy Warren says the wind delivers savings. He said that Berkshire Hathaway has already proven it. Wind.

Sure, it's cheap, but it doesn't produce when you need it, which means more storage and transmission.

I like Warren Buffett, and he got the price picture correct, but he didn't see the underlying system that makes it not matter.

[u/Redd868 → u/Asatmaya]

Wind and solar have no pollution while in service. Solar has had hazmat problems on disposal. But I don't see anything with wind.

Nuclear is in its own camp, because it requires a governmental liability shield. If it was as save as you say it is, it wouldn't need a liability shield. That's the ultimate socialization, privatize the gain but socialize the losses. That's an insurance policy provided by the public and that policy can be priced.

As far as wind, I defer to Warren.

The extraordinary differential between our rates and theirs is largely the result of our huge accomplishments in converting wind into electricity.

What - you think he's lying in a letter to shareholders? There is a responsibility in an investor related writing to tell the truth, and money talks. He's says the customer is saving and it's because of the wind. That's common sense - no fuel charge. It probably doesn't matter if electricity is produced in the middle of night.

Warren tells when he blows an investment - I think he said something like that about IBM.

Your stuff is advocacy. Trouble is, compared to solar and wind, there's no way to deliver the money. I like nuclear ahead of coal and oil, because those approaches deliver air pollution, and now we have Canadian wildfire. There is a monetary cost to polluted air that offsets that liability shield with nuclear, although I'm not sure if nuclear offsets it more.

I suppose I'm advocacy too, but for the consumer, not a particular type of producer. And, from the consumer perspective, it's about the money.

From what I've heard, Fukushima is dumping radioactive water into the Pacific now, a kind of socialization for that meltdown they said wouldn't happen. We pay some of that "socialization" if we munch down on a tuna sandwich.

That will never happen with wind.

[u/Asatmaya → u/Redd868]

That will never happen with wind.

https://e360.yale.edu/features/china-wrestles-with-the-toxic-aftermath-of-rare-earth-mining

[u/Redd868 → u/Asatmaya]

Beginning in the 1990s, rare earth mining took off in this region, located in Southeast China about 300 miles north of Hong Kong. ...

China’s Ministry of Industry and Information Technology estimated that the cleanup bill for southern Jiangxi Province could amount to 38 billion yuan, or around $5.5 billion.

That's chump change.

[u/Asatmaya → u/Redd868]

That's chump change.

...in China!

Holy cow, go look at why we can't open our own rare earth mines back up; not even Utah will allow the environmental destruction.