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

Take Diablo Canyon. They built two nuclear reactors here. You know, this site was provisioned for six.

For six reactors. I could imagine if you had four more reactors sitting here, 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. Bill, man, I couldn't be more excited to be here. We're sitting in probably your three-wood distance from two nuclear reactors that are banging out two and a half gigs of clean power. We just had an incredible day with Maureen Zawalick down here at Diablo Canyon. It's just this beautiful nuclear facility on the central California coast. It's really great to be here. When you look at this facility, you read about the positive impact on the local economy.

Of course, it's the type of dense baseload power we so desperately need in California. I think you said on a previous pod, somebody showed up with a value proposition of fission today, you know, it'd blow all of our minds. And here we were about ready to decommission this plant in 2016, which, as Elon has said, is incredibly brain-dead. You know, I was pretty excited to see this week, and I was watching ESPN GameDay. I think it was at Texas A&M. And I see somebody holding up a sign, 'I love nuclear'—like, college kids are now holding up signs that say, 'I love nuclear.' So it's good to finally get down here and put on our analyst hat, dig in, ask a lot of questions, and be able to share it with everybody.

Yeah, and two things I think that are a little bit different about the podcast we're going to do today. One, I think... It's important to recognize we're obviously not nuclear experts. We come at this from outside. That being said, the second point I would make is you and I have gone extremely deep in the past week or two and been given phenomenal access to a lot of people that have been in and around the industry for a long time, including getting access today to what is really remarkable. I mean, just to see it up close and the scale and how well run it is, it's just super impressive. And so, I'll qualify, I'm certain that we're gonna get some feedback from some people, like, 'Why are you guys talking about nuclear?'

And my only qualification I would offer to everyone is if someone comes at us with something that's different from what we said or that's additive to the discussion, next time we're up, we'll talk about it and we'll bring that into the discussion.

You know, absolutely. I mean, I think you and I talk about it pretty much on every pod. We're analysts. Yeah. As analysts, the one thing we're reasonably okay at is we ask questions, we dig in, we find our way to experts, we find our way to information. And frankly, the more digging we did about Diablo and about nuclear, it's just so clear that it has to be part of the energy constellation future of the United States. Absolutely. It's clean. It's dense. It's the exact type of energy that we need. So why don't we kick off with a little bit of background today? We'll weave in some discussion about Diablo. We're going to talk to Maureen Zawalick. We're going to talk about China's emerging advantage here, right?

Like, why are they on such a fast path and a cheap path to nuclear? Hone in on those costs. And then some of the things that we believe we got to do in order to get the United States back on the nuclear track and maybe end with a little bit of that positivity.

That'd be great. And one thing I wanted to share with the audience, I think we've uncovered some really amazing documents, research, pieces of research, podcasts, that kind of thing. So we're going to put a list of those together in the show notes. And if anyone wants to follow the journey we've been on and go a little bit deeper than what we're going to talk about today, those will be available.

Maureen, it's great to be here. Maureen Zawalick, Vice President here at Diablo Canyon. It's just been an incredible day. Thank you for having Bill and I here. You know, maybe just a little background on Diablo Canyon. You know, it took 10 years to build this. Starting in 1970, it cost $16 billion to build both reactors. It went online in 1985. It's the state's single largest power station. It generates about 8% to 9% of total energy, about 20% of all the renewable energy in the state at a cost of about $0.06 per kilowatt hour. So very cheap relative to the power that we import in the state. It's been an extraordinary day going around. And I think one of the things we'd love to start with is just a little bit of the history, your history here at Diablo.

Well, great. First of all, thank you for coming. And it's always great to get people here that have not been here before and putting eyes on it and looking at the facility, seeing the security around it, the safety around it, and so forth. And so I've been out here for 30 years and I've raised my children here in the community and I've had various different positions out here. We are the largest private employer in the community. And what is just amazing and just something I like to highlight a lot is the strong safety culture we have out here, the strong use of standards, and the history of the excellence in safely and reliably operating this nuclear power plant.

Well, given how safely you operate it, I appreciate you letting us into the control room. No, it's just the simulator of the control room.

But that was very evident today. The fact of the matter is the history of the last 10 years has not been smooth sailing here at Diablo Canyon. Tell us a little bit about what took you on the path of decommissioning this two-and-a-half-gig facility and kind of where you are today. Yeah.

Great question. So, you know, 10 years ago, 8, 10 years ago, the energy equations and the need for Diablo had very different assumptions and inputs. What I mean by that in the 2015 timeframe, 2016 timeframe, you know, we weren't talking about AI. We weren't talking about data centers. We weren't talking about the electrification goals of the state and of the country. We didn't have geopolitical things going on like the Russian invasion in Ukraine. So that has like a squeeze on some of our supply for nuclear fuel and uranium. And so you have all of that. And then you add on the drought and the climate stuff going on and the severe heat and the wildfires. And what I mean by wildfires is that's impacting our bringing in energy to California and affecting our transmission lines of importing in energy.

So, you—you don't have all that back in 2016. Now fast-forward to 2020, August, rolling blackouts, seeing just peak demands on the system and on the grid in California. And really re-looking at that needs analysis, is Diablo needed given now all these new factors? You run all those numbers, and what we're seeing, it's very hard to pull off the largest clean energy producer, the largest energy producer in California. That's about 9% to 10% of Californians. So the projects to replace, the renewable projects to replace Diablo, have not made the progress that I think the state thought it would back in 2015, 2016.

So this is things like offshore wind? Correct.

Correct. Offshore wind projects and so forth. We need a mix of it all for not only California, but for the country. We need a mix of solar and wind, hydro and clean nuclear energy to meet the goals that we have of this country and of the state.

Yeah. I think a lot of the people in our industry have kind of been on a pro-nuclear bandwagon past five years. And that appears now to be something that's kind of tipped across the U.S. Take us back to prior to that starting to happen. What were the forces that were pushing for decommissioning?

So the forces for—the main force was the projections by the Energy Commission and other energy advisors were showing that there wasn't a need for Diablo. That was the main driver. So there were a number of things that were going on in 2016. And what was important was that we were being used for a bridging strategy to get to have those other renewable projects come online to replace us in 2024 and 2025. So here we are. Unit 1's current license expires November 2nd of 2024. And it'll be really interesting to look at what's going on November 3rd and 4th with our grid had we taken Unit 1 off. So we're right there, right? Unit 2's current license expires in August of 2025. But we've put in for a 20-year license renewal application with the federal regulator, the Nuclear Regulatory Commission.

Even though the state's only asked us for five, we've done that to make sure we maximize the optionality for the state in seeing the progress of those other projects coming online to replace Diablo.

It's inconceivable to me. I mean, we're just in the generating facility. This is an extraordinarily efficient operation for the production of very dense baseload power. Elon Musk recently said, with respect to Germany, that it's utter madness to take plants like this offline. When you look at the shift over the last 10 years, characterize your own view—obviously you're an interested party here, but given the state's increasing needs for baseload power and the fact that some of these things have come online slower, I assume you would agree it would be utter madness to take Diablo offline.

And I would, and I would, from being an engineer and a scientist who loves to work in facts, you know, that, you know, nuclear's capacity factors—you said efficient—you know, their capacity factors, Diablo's, you know, upwards of 90%, right? And we have had our units run at 93, 94%. You can't mess with those numbers. We're available 24/7, 365 days a year, rain or shine. Yeah. And so much needed if you need to store some of that energy or need that energy for, you know, the high demand that we see in extreme conditions. I mean, this today right now, you know, it's—we're under restricted maintenance operations by the state because it's in the hundreds of degrees in the majority of the state. And the demand is going to be so high and we don't want to have what happened in August of 2020—

—you know, 2020 happen again. I mean, that's about people. Rolling blackouts. Rolling blackouts. That's about people's lives. That's people in hospitals. I mean, you see the tragedies in Texas going on, right? You know, we need to be doing something about it. So it would be utter madness and scientifically wrong. And I say that from 35 years in the industry as a nuclear engineer with confidence.

Right. Can you talk about the potential timeline for Diablo? Because you mentioned earlier that the state had talked about five years, but you're applying for 20. How far theoretically could it run, or how long theoretically could it run?

Sure. So the current licenses for all United States nuclear power plants—your original license is for 40 years. Then there's a process that we're in right now to renew it for 20 more years. And just about every nuclear unit in the United States has submitted for that, except for a few of us. We had previously submitted, but part of the decommissioning or the shutting down agreement in 2016 was to pull that application back. And then there's about a dozen plants that are going for subsequent license renewal applications that go 20 more.

From 60 to 80?

Yeah, so go 80 years. And so the NRC has these processes because, just like renewing your driver's license, you have to do on a periodicity. You want to be looking at the licenses and the components and so forth at every nuclear plant. So they have that opportunity as a safety regulator to approve those phases.

This is something you educated me on today. I think I was under the perception that there was some kind of finite life to one of these facilities because of something about nuclear I didn't understand. But I'm walking away now thinking that the plant is upgradable and maintainable, and it's just a matter of keeping it in tip-top shape, meeting all the safety standards, and then reapplying for these licenses.

Absolutely. We run this station to excellence in performance, as I said, from a safety perspective, from an operational, from a maintenance, engineering, everything that it takes. We are in the highest compliance ranking of the Nuclear Regulatory Commission, and we have achieved many evaluations by an industry group that evaluates all nuclear power plants in the world of excellence in performance in operation and safety and reliability. So we run this plant very well. And that's what made it such a fairly easy call from the state of California of, 'Hey, what would it take? What's the point of no return? Could you keep operating Diablo Canyon?' And that was the legislation of Senate Bill 846 in September of 2022, because we're regulated by both the federal government and the state government.

So the state government—think the California Public Utilities Commission—they just approved in December of 2023 our new expiration dates, which is 2029 and 2030. State Lands Commission, you got to see the intake and the discharge. We have leases with them so that they just extended it for five more years or up to 2030. And then State Water Resources Control Board, we had to get the continued exemption for things like once-through cooling that has been required because of the way our system is designed, our plant is designed.

But just to be clear, it's up to the current governor, who could extend the plant's useful life for an additional 15 years beyond 2030, assuming the federal 20-year extension comes through, which you expect to come through. Now, of course, at any point along the way, they could say we have excess power generation. All of a sudden, we had a breakthrough in solar or wind, and we don't need Diablo anymore. But there's an opportunity over the next two years, Bill, for Governor Newsom to extend the operating license here in the state on Diablo, which seems to me, given our present power needs and what we see inflecting up, we've talked a lot about what's happening in AI. I'm sure you've had the hyperscalers down here talking to you guys, talking to Patty at PG&E about their power needs.

But if we're going to build data centers in the state of California, as I was walking around here today, I was thinking to myself, they ought to be building data centers right here. You have plenty of excess land and plugging them into these incredible, you know, power-generating machines that we have. So that's the opportunity right now for Diablo is to extend for another, you know, 15 years beyond 2030.

We will stay ready for that call if we get that call. "Do you want to get that call?" "Absolutely."

What's the argument? I mean, tell me if I'm wrong, but what's the argument for decommissioning nuclear ahead of coal? Like, there's no argument, is there?

I think it gets down to the energy policies and how you define renewable versus greenhouse-gas-free. And Senate Bill 350, I believe, is the number from 2015. And at the very end of that bill, they changed the word greenhouse-gas-free to renewable and excluded nuclear and large hydro. So we need a mix of renewables. "Who's they?" Yeah, I mean, legislators, yeah. Which is fine, because again, that's what... that was known in 2015 timeframe. Very different equation and formula that we are navigating through with all the things I mentioned earlier.

That's why I go to some of the smartest people in our world, whether it's Elon or Patrick Collison, or Steven Pinker—who is not in our world, but a very smart individual—I think they would all argue you take coal and gas off before you take nuclear off.

You take, I would say, and then to reverse it or flip it is just go after as much carbon-free as you can. Right, totally, totally agree. And work on that, you know, the latter part there. But again, going for the 20, or applying for the 20-year license renewal application, which is the NRC's process, that's what they approve. So like in the state of New York, Indian Point was a plant which applied for the 20-year license renewal. And NRC process got that approval. And then the state decided, 'Hey, we have enough renewable in that, and we don't need the nuclear power plant.' And after about 10 years or so—I don't have the exacts—but I mean, that is we are governed and regulated by both the state and the federal government.

It's hard to believe. It's hard for me to see a future. When you have China, who's adding six to eight new fission reactors per year, it's going to add upwards of 25 or 30 over the course of the next five or six years, is expected to surpass the United States in nuclear power production by 2030. You've been around this for 30 years. The United States has been preeminent in nuclear technology. We built most of our plants in the '70s and '80s. By the '90s, we basically had stopped building new plants. We were talking about decommissioning all of the plants that we had. As you look at the political environment today, not just in California, but you spent a lot of time around the world, advising, interacting with your operating peers in lots of other countries.

Where are we in terms of that pendulum in the United States swinging back and forth? You're clearly more optimistic than you were in 2016 when they passed the legislation or you entered the agreement to shut down Diablo. But is there hope? Is there a future for shifting the gears back into expanding fission, you know, baseload power production in the United States?

Absolutely. And I think Diablo Canyon is the case study. And what I mean by that on a micro level, what I call that when I consider what the need of what Secretary Granholm and COP28 has said that we need triple the amount of nuclear for our environmental and climate policies. So I say micro level for Diablo Canyon because what we did in a year and a half, two years is what is needed to keep that pendulum swinging and the momentum needed to build out traditional more nuclear and preserving the current 94 units we have if we count the new Vogtle 3 and 4 that came online, which is outstanding, right? And so we can't have any of the current 94 shutting down. Let's preserve that. Yes. There are other initiatives, Palisades, a plant in Michigan that they're looking to restart.

And they're really looking at a lot of the stuff we did. We call it Team Pivot or pivoting from decommissioning and getting that call from the state in 2022 to continuing to operate. And that's great. You know, hiring over 300 people in an efficient, speedy time, working communicatively, coordinated, and transparent with our regulators on what needs to be done. Just lots of examples there that I think can be used on a macro level to keep that momentum going that we're showing that can be done here at Diablo Canyon.

One thing, another thing I learned today that I was really impressed by, I wonder if you could share with the audience, Maureen, is that there are both national and worldwide communities where you share best practices with other operators. And I'm thrilled to know that that's true. I didn't know that that was true. Can you talk more about that?

Yeah, absolutely. In fact, we're here at Diablo Canyon Simulator, and that came after the unfortunate event at Three Mile Island in 1979, and also the formation of the Institute of Nuclear Power Operations. And I think what you're asking about is a fundamental thing in nuclear, in our nuclear industry, is anything that happens anywhere happens to all of us, and we're a culture of continuous improvement, a culture of self-aware and self-correcting, and we want to learn from each other. So we share information. You don't see that between the airline industry. I heard an example recently, even with hospitals, even the same hospitals in different units, we value that. We have, you know, something happens with a certain motor or a pump or a generator or human performance item.

You know, we, it's called operating experience. We all own that. We enter it into a system called Corrective Action Program, get the learnings from it, make adjustments we need to, you know, how we operate, train, do maintenance, and so forth. And that's just a continuum as we seek excellence in, again, safe and reliable operations.

That's great. One of the things Bill and I are going to spend a lot of time talking about today is the cost differential around the world from building Vogtle versus what they're building AP1000s for in South Korea, as an example. When you think about the state of the supply chain in the United States, when you think about that talent network that you're a part of, that you have to go tap into when you want to hire people, there's a certain amount of that that we got to tap into just to keep the 94 reactors online. But if we want to start building more reactors, more Vogtles, and we want to drive down the costs, right, of scaling up these Gen III and now advanced nuclear reactors, do we have the talent?

Do we have the supply chain? Do we have the capability? What needs to be done? What do you wish was different today?

Well, that's a great question. It did take a Herculean effort to get the human resources and the other resources we needed, but we did it. We had a mantra around here, what needs to be true to hire the people we need to restart up our Senior Reactor Operator license classes. To get operators, you know, trained and qualified and proficient can be upwards of, you know, three, four years. You know, what do we need to do that? But we did it. But on a macro level, on a bigger scale for the U.S. and on supply chain, I can't emphasize enough it's a collective effort. And you have to also fold in there the financial part of it and the regulatory model of it. We are a highly regulated industry, and that's good.

We're running nuclear reactors and nuclear power plants. But there were ways that we were able to put in more innovation or processes or tools to navigate through a 3,000-page license renewal application, for instance. So there needs to be that kind of thinking, that kind of breakthrough thinking on how do we get there. And I worry sometimes that there might be a group over here trying to do it and a group over here, and then they're competing, and then it's just not going to come to fruition. How do we do that on a national energy policy level to move forward? I'm very encouraged by the... You know, the Civil Nuclear Credit Program that we qualified for by the DOE, the ADVANCE Act. I mean, it's a bipartisan discussion now.

So I think that's been a huge step. So I have hope. But you need to have that breakthrough and that what-needs-to-be-true thinking to collectively get that done.

Another thing, Bill, that was amazing to me today, I've heard a lot about nuclear waste, spent fuel rods. And we had the chance to go by the safety facility where you store these spent fuel rods. And there are two things that struck me as pretty extraordinary. One—and maybe you could just share, like, you know, what is the space required for the spent fuel rods in the United States? And this is given that we have a moratorium. We could reprocess 90 percent of this, but we don't currently, like France does. So even in the case where we don't reprocess any of these fuel rods, I think you said—you gave an incredible fact about, like, the total space that would be occupied from all the spent fuel rods from all 94 of the nuclear plants.

And I just thought sharing that information would be interesting.

Yeah, absolutely. So absent of having a federal facility to take all of the spent nuclear fuel from all the commercial nuclear reactors, each of the individual utilities or sites have their own independent spent fuel storage installation. We call it by an acronym, ISFSI, that you saw today. I took you up there. And our pad has enough capacity for all 40 years of the original license, and we have enough for 60 years collectively on site, or over 60 years, including the spent fuel pools, the wet storage. You roll up all of that footprint, and you got to see it's very small, and you take all of the over 100 units in the United States, it would fit in the size of a football field up to the goalposts.

And that's the total of the spent nuclear fuel. Now you start reprocessing that, and you have, again, a federal policy change from the Carter administration to allow for reprocessing like France does. You can get about, you hear numbers between 80%, 90% of isotopic use, of being able to use it again.

That's extraordinary. Single football field, and we could actually reprocess 90% of that. Mm-hmm.

And that would help a lot on your supply chain question with where the market is right now with enriched uranium product and so forth.

Yeah. One thing I would just highlight is really I was blown away by the operational excellence. You can see it in everything that's going on here. And I do think Diablo was this kind of massive turning point for the industry, for the nuclear industry in the U.S. There was so much, I think, people were committed to decommissioning this thing that many of us believe is the cleanest, most reliable source of power you could have. And as you stated, now we have a lot of momentum, bipartisan support for the industry writ large. So anyway, I think we all owe you thanks for what you guys have done here. It's pretty impressive.

It's an incredible team out here that are dedicated, committed to those excellent standards. They're community members. They teach Little League. We contribute so much with volunteer hours. There's so much pride out here, and there's generations of people out here and their footprint, which is—you can't walk around San Luis Obispo and say you work at Diablo Canyon and say, "Oh, do you know?" I mean, it's just incredible.

That's correct. I also recently listened to a podcast with Patti Poppe, the CEO of PG&E. I know her—your 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.

Whether it's grid innovation, whether it's two-way charge and discharge with cars, whether it's undergrounding of power transmission lines, which we talked a lot about today, leads to higher efficiency, lower cost to retail customers. So it does feel like there's a lot of upside. And Diablo's kind of the tip of that spear. Thanks for having us. We're certainly going to put the word out to the governor and others. I 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. Yeah, 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 improving it. And it's high time, I think, that the United States got back on board. And with leaders like you 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. It'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, Maureen Zawalnyk, who is one of the incredible leaders here, and a startup founder, Trey Lauderdale. After we talked about nuclear 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, one advantage you have as an outsider is you see things with a fresh set of eyes. And so 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. We commissioned our first nuclear electricity generating plant in 1957. The majority of American plants were 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 U.S. power production and nearly 50% of U.S. clean energy production. It'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 thereabouts. Our supply chain is atrophying. However, there does seem to be some growing bipartisan recognition that we got to get this back on track. And that's a key reason, you know, we wanted to come down here today. So 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 III fission. Yes. There's Level IV, 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 III fission, which is a big scale-out. That's what's operating here at Diablo. That's what's operating in the majority of nuclear plants around the world. So, you know, a couple of ways you could go through things.

First of all, you know, we have been through this roller coaster of emotional anxiety, 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 Three Mile Island incident, Chernobyl, Fukushima, and all these things have an impact on what people's perceptions of nuclear are. 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. But 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, Elon, Patrick Collison, I see a pro-nuclear bias. 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, what's amazing is even in Japan, where after Fukushima, they took all 30 nuclear reactors offline, I think they have a 75% approval rating for people wanting to put those reactors back online. Because I think there's a recognition in the world that it's clean. It's the type of dense, always-on nuclear power that you need. And the facts are just indisputable. It's safe.

Well, and this goes back to that statement. I think I actually stole it from Joshua at Lux, but that if this were discovered today, people would be like, "Oh my God, climate change is solved." But we let it go through this place where it was associated with these negative things that I don't think were accurate, but now hopefully we're moving to a place where people are open-minded. So you could also look through a bunch of different countries. So France, as most people know, gets 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. Yes. 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, and, you know...

Disastrous. They got sold a bill of goods 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. And 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, et cetera, because they had taken all these plants offline.

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 already paid for the damn thing. Once you turn one off, as Maureen shared with us, it's a lot harder to bring it back. We're gonna see if that can work. And so anyway, and there's a fourth country we should talk about. So you already mentioned China. One of the amazing, well, let me dive deep on China and then I'll mention the fourth country. This is publicly available data so people can go get it. We recently brought on two new plants in the US, Vogtle 3 and 4 in Georgia. And the total cost of that was about $30 billion for 2.2 gigawatts. It turns out over $13 billion per gigawatt.

The plants in China that are the equivalent Generation III fission plants right now are coming on board at $2.5 billion per gigawatt. Right. So 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 with everyone that's in this industry is how few people are shocked by it.

Right. Well, let's talk about that a little bit. When you look at the cost differential, right, which I think is one of the biggest problems today with U.S. 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. Vogtle 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 AP1000... This is the type of Gen III nuclear reactor that they're building in South Korea, in China, and at Vogtle, right?

Since you 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. 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 technologies. Yes. So in some ways, just because I think it's easier for Americans to wrap their heads around it as a data point, the South Korea data is more interesting than the China data. Right. So let's talk about it.

Let's break this down a little bit. Because both the South Koreans and the Chinese are building on technology that they procured from the United States, from Westinghouse, under tech transfer licenses over the course of the past 20 or 30 years. 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. Give us your best guess. What are the big buckets that are causing this cost differential in the United States, and 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 on all this. And I'm going to leave him anonymous, but he brought up four things. The first was regulatory. So the separate federal and state environmental permitting processes in the U.S. is onerous, lengthy, probably 10 years for a nuclear power plant, expensive. Most people don't know this. You have no reason to know this, but the NRC is a fee-based regulator.

So you literally pay per hour to have them come regulate you. Right. 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 inbound litigation that you have to deal with in the U.S. The 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 in 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 than 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. So now they're building these AP1000s in South Korea and in China in about seven to eight years. And in the United States- Six, I think six even. Maybe as fast as six. In the United States, it's not 10. It's more like 12 to 15. 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 modern, large, multi-gigawatt fission facility is a large piece of infrastructure. Exactly. It's not like you're building a— Right. Even a rocket engine, it's more than that. It's just—

You look at the South Koreans or the Chinese building a highway, an airport, a hospital, a school. A subway station. A subway station. Have you seen these videos? Yes.

Go on. If you haven't, go on YouTube and look at China's new subway station. Unbelievable.

And so the U.S., you know, the first thing is just our regulatory environment causes it to take a much longer period of time, and time is 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. And 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, than 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 the third bucket. But 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. There's famous things.

But if you think about infrastructure, most of it is one-off. 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. And again, that just gets back to this 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.

And 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 CapEx build. 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. And if anything, I think, and I've mentioned this on the pod before, I think this anti-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. And we have this holier-than-thou attitude that America is the best and that we're the leader and we're being passed.

I would say landed cost of energy is the data point you should measure most. And if they're 4X where we are, I would say we should have the alarm bells ringing 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 Korea situation: so they're trying to export it. Westinghouse, who was the company that originally designed Level III fission in the US, is suing to try and prevent them from delivering to Czechoslovakia. And we talked to Maureen about how the different nuclear plant operators all share and that we're kind of all in this together, right? And if climate change is a global problem and we all want it solved, we should want everyone to win.

We shouldn't be jealous that China is doing that. And so for me, I ask all the AI bots, "Do you think there's any chance we would license something from South Korea?" They all said no. Right, no chance we would do that. And that's the kind of a mental blocker like Trump Derangement Syndrome or something like that. If Korea could help us deliver a plant at 2.5 billion per gigawatt, why wouldn't we want that?

And so I just— I mean, we invited TSMC into Arizona to help us build 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. And a lot of the political disagreements that lead to war, a lot of people believe are tied to energy costs 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, you realize for the first time in really two decades, the US's need to grow its baseload 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 on Wall Street. Everyone's talking about this.

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 to 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. So the reason I'm worried about China taking the lead in nuclear is not just that they have more nuclear power plants than the United States, but what it enables them to do down the line around AI and everything else. Because if you are the low-cost power provider in the world,

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 say to yourself, if we can't fix this problem but other countries can, maybe through being imported by South Korea, then it becomes a competitive weapon for those countries. Right. Just as you might put a manufacturing plant in Mexico or Vietnam or Czechoslovakia. There's no reason why a data center can't live there as well. And quite frankly, it's easier to drop a fiber-optic cable from Mexico to America than it is to move goods by truck.

So should we be trying to build—cooperate with the Mexican government and build AP1000s just over the border in Mexico?

I think we should be open-minded to the fact that the world needs this technology and that if they get it, it's good, too. If Czechoslovakia gets it, it's good, too. This was my main point about, like, I just don't think having an attitude that, "Oh, that's ours." I don't even—don't love the "it's a race and they're winning." I think everyone should be winning in this area. 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 their landed cost of nuclear energy is one-fourth of ours.

And, like, who are we pointing the finger at? Like, you know.

Yeah, I think there is—I was reading, I think I got the name correct. Professor Buongiorno from MIT is the director for the Center for Advanced Nuclear Energy Systems. You know, he said China's now the de facto world leader in nuclear technology. And it's not because they're smarter or they're better, but it's simply because they made it a national priority that they were going to build these plants. And when you do that, you innovate. 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, we'd be light-years ahead of where we are from an innovation perspective.

And maybe that's a decent segue to talk about 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 AP1000 is kind of the standard reactor that's being built today. But whether you're talking about TerraPower, 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 regime in the United States that are hoping to come online over the course of the next five to seven years.

For 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 TerraPower, and it's backed 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, the question I have, Bill, is: should we be looking to build more of the Gen 3 fission 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 or, 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 crisis. having the gumption to put the cap exact and invest. If you study, and I heard this from multiple people that I talked to, utilities are inherently conservative. Like 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 said 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, then we'll consider it, but we're not going to be the risk capital."

It affects both of them, and maybe that's changing. When I first heard about Constellation Energy, which operates a bunch of nuclear reactors here in the US, I reached out to them and I asked them, 'Are you doing anything new? Are you innovating? Are you doing a new plant?' They said, 'No, no, no. We just operate these old ones.' Now there's a rumor that they're talking to Three Mile Island about restarting that. And so maybe these changes in attitude are going to tip them over. If—I say this with a ton of confidence, even though it's unprovable—if these utilities could snap their fingers and have fission Gen III online at competitive rates, Korea and China price points, I think they'd be turning them on.

So there's a huge difference between 2.2 or 2.3 and 13. There's just a huge difference.

So if that problem were solvable, I think they'd be investing more. But I don't know if that's solvable. 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 3 power plants, as they effectively said, the Gen 3 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 engineered solutions to those problems. Now, the great thing about the engineered solutions is they work. We know they work, they're repeatable processes, and we've driven down the costs in some of these other places. But if you look at the Gen 4 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... Again, 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 labor costs in the United States go down. We can't snap our fingers and say we're going to scale this up and make all the regulatory stuff better. So a leapfrog would be just build a smaller, simpler plant.

Yeah. I mean, China, there's a new plant in China, I probably can't pronounce it right, Shidaowan, that is Gen IV, but it came on at a price way above Vogtle.

Yeah, but any new plant, any 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 you're $50 million to first tape-out, right? If that's a sport of kings, this is a sport of emperors. You may be multi-billions to first revenue. And so, good thing we have Bill Gates-like emperors that want to make this stuff work. Yeah, let's dive in on SMRs for a second. So, I'm sure the at least high-level pitch you would hear from all of the SMR vendors is one of the reasons that Gen III fission is so expensive is 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 and deliver it where it's used—

And there's talks of, oh, I could take an old coal plant and put an SMR in there, several of them. And now the transmission lines are all in the right place. And if you get into what you just said, and then repeat it, then the first unit might not be competitive, but the hundredth unit might be, because you 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 that already exist on a hundred different vessels, some submarines, some carriers in the US Navy.

And the track record is phenomenal. The costs are pretty interesting, especially since they've never been applied at a commercial level. And 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 startup's completely on the hook for whether they can get there or not.

And we've already had one colossal miss with a startup called NuScale that had one of these agreements in place. And they got time to qualify. And the utility went, "I'm out." And NuScale 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 U.S. 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 on fees the startup's going to pay to the NRC to tell them what they're doing is okay. Once again, sport of emperors. 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. And maybe those companies are the ones that need to kind of—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 hyperscalers form a consortium, okay, and they go to Washington and they say, "Hey, we'll put up X amount in order to build some AP1000s, right? Or daisy chain a bunch of these SMRs together, right?" I'm talking about a new type of project in partnership with Washington, D.C., where there's a mutual need. They have the capital, public-private partnership to get this going. Because honestly, as I sit here today, take Diablo Canyon. They built two nuclear reactors here. You know, this site was provisioned for six.

For six reactors. I could imagine if you had four more reactors 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—by the way, I ran some math on the Diablo dollars just because it's interesting. So in the mid-'80s dollars, the plant was built for 5.5 billion. So right around 2.4. Unfortunately, in today's dollars, that's 6.4. But 6.4 is still half of 13, which is Vogtle. And so, yeah, just interesting.

I mean, again, we know the reasons why they're not coming online at that price. So the question is whether or not you can change those dynamics through some of the things that we talked about. I do think these Gen 4 reactors, there's room. I, like you, believe it's an 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. Just imagine if you just took those ships and dropped them on land and 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, right? 100 megawatts 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 on the level three side and then let's go to the SMR side. But 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's shocked. But 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 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 give them a goal like the Manhattan Project and NASA had to deliver nuclear at a competitive rate in the U.S. and come hell or high water. 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. 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 market's not the right—

I mean, it's pretty clear to me that... because of the regulation, which again, I'm sure we could 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. And 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 gonna 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.

But the United States—data in the recent week, including Intel stock prices.

But the United States government is absolutely committed 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 provide loans or incentives. And by the way, there is, I think, an imperative, just as a quick side, to at least make sure nuclear is not disadvantaged relative to wind and solar. It has operating efficiency and this durability and this always-on piece that make it so much better than those. And 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 mashup 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, biggest source of clean energy. There's no question that there are benefits.

Our nuclear energy sector produces clean, renewable, and emissions-free energy.

In Germany, they closed the nuclear power plants. They have to keep coal burning. They said no to clean energy, and they said yes to fossil fuels. And we in California, we have a nuclear power plant called Diablo 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. Total madness.

Think about where we were just, you know, like Maureen 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. 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 AP1000s. Maybe there are some companies that we can get behind that are going to go cluster-build some of the Gen 3 reactors. Maybe there are things the government can do to streamline that process, provide some credits, make that process work.

And then I think 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, experiment, see whether or not they're going to work. That feels like a pretty good solution.

I think it's tough. 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. And one thing that becomes very apparent is he 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 think red tape is red tape. And I just think that you're probably at a place where you might want to send a bunch of people off in a room and zero-base it.

Well, I think this is, I mean, again, companies get built where markets are created. There'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 that 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 and exporting. So again, we could change those export controls and perhaps build a domestic export industry for nuclear. Why do you do that? Because it builds the supply chains. It builds the resilience that benefits you domestically.

I'm a little skeptical. Shocking. I 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 NRC. And they recommended 30 things to change about the NRC. 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 and said, 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. And so, I mentioned this earlier, but Josh Shapiro, the Pennsylvania governor, everyone praises because this bridge went down on I-95 and he got it back up in 12 days.

Yeah, how'd he do it?

He took all the regulation and lawsuits off the table. Suspended it, yeah. And so we have to recognize that one of the reasons we can't build infrastructure and 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 three plant, I think you've got to rewrite the regulation from zero ground up, like 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 this.

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, what was one of the leading forces that caused this place to get decommissioned in the first place? It's groups 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 coal-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've built your own problems.

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 much regulation, right, the government has chosen to be involved. You no longer have an unfettered market, right? So market forces break down. Clearly, they've broken down here. And I think now we see the strategic priority 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. We've talked about Facebook's Open Compute Project where they open-sourced all the elements of their data center. And we heard from Maureen 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. It should give them more confidence in what they're doing. I wonder if—I asked all the AIs, 'Has anyone tried to commercialize the learnings of the Navy?' And they said, 'No.' Everywhere I looked, they said no. And so maybe there's an opportunity there, right?

The government, why not take some of the— That would be the coordinating function if the government could create kind of that open-source standard for the AP1000,

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. And if the reason, and I—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 do the Linux of SMRs.

And by the way, again, this is about buying time, right? Like, if we telescope 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, right? Um, 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. Okay. 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 baseload power, is 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 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.

And I think terrific news. And it's also very clear that we can build more. I mean, Vogtle, 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, announce that he's going to extend the license here for another 15 years. I mean, 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 the economy and AI.

Yeah. And 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. And then, two, consider some type of Manhattan Project-like approach where you get out of the current environment, you get a lot of smart people thinking from first principles, you maybe borrow from what the Navy's done, and consider open-source or IP-free solutions to get everybody on the same page.

Yeah. 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.

And I would encourage people that disagree—and I'm sure many will—to reach out.

Oh, you're going to hear from them.

I know. I know. 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 GameDay posters saying, 'I love nuclear.' I'd love to see people energized around the topic. I'd love to see the presidential candidates talking about the topic.

I'm headed to Ann Arbor this weekend, where I suspect GameDay will be. Will we see some more signs? So maybe I can show up with the sign. We'll see if I have time to do that. All right, man. Have a good time. Great seeing you. Take care.

Bye-bye. As a reminder to everybody, just our opinions, not investment advice.