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People near the site of the disaster say they’re sick. But officials haven’t recognized any link between those symptoms and the fire.

People say they can still taste the metal from the Moss Landing fire. But no one in the local, state, or federal government is able to say why.
The story of Moss Landing got little attention compared to the scale of the disaster. On January 16 — days before Trump reentered office, and as fires continued to burn in and around Los Angeles, when tempers and attention spans were already strained — the Moss Landing Power Plant ignited. We still don’t know what caused the fire, but we do know a few crucial facts: Nearly all of the batteries at the 300 megawatt facility, one of the world’s largest, burned up in the fire, sending a colossal plume of black smoke soaring up from the site for days.
Two months after the blaze was extinguished, many people who live in the vicinity of Moss Landing, a couple hours south of San Francisco, say they’re still sick from the fire. Community organizers on the ground say the number of sick people is in the hundreds, at least. The symptoms range, but there are a few commonalities. Many report having bloody noses in the days immediately following the fire. In the long weeks that followed, they’ve had headaches that don’t respond to pain medications, rashes that resemble burns, and a recurring metallic taste in their mouths. They all say their symptoms go away if they leave their homes and go further away from the site. But the U.S. Environmental Protection Agency and California state regulators have given the all clear.
I have spent weeks trying to get to the bottom of what happened at Moss Landing. I’ve interviewed people who lived in the area and say they’ve experienced breathing issues and other difficulties, many of whom have gathered on Facebook to share photos, stories, and symptoms. Others have offered testimony about these illnesses in public fora and town halls. Multiple lawsuits have been filed against Vistra, the company that runs Moss Landing, over the fire, citing these health issues. Vistra denies the existence of evidence proving pollution from the fire is making people sick, and told me in a statement that the company is “committed to doing everything we can to do right by our community.”
“Moss Landing is not only home to our facility, it’s home to our employees and neighbors,” the statement reads.
And yet, the people say, their symptoms persist. One of the people who told me about their condition is Sheryl Davidson, a former receptionist who lives in the rural nearby town of Prunedale. One of her joys used to be doing Medieval cultural re-enactments, but since the fire she’s been unable to participate.
“My nose just started bleeding. It was traumatic,” she told me. “And I had asthma, but my asthma was miniscule. My whole life, I just had an inhaler. But the inhaler wasn’t working.”
Davidson has other symptoms, including headaches. She says a lump also developed in her face beneath one of her eyes, of which she sent me photos. Despite concerns that something in the air from the fire may have made her sick, she hasn’t left her home, a house she’d lived in since she was a child.
Part of the reason: No one is telling her to leave.
Officials in Monterey County, where Moss Landing is located, acknowledged to me in a statement that they received reports from medical providers that local residents sought care for symptoms related to the battery fire. The EPA said on January 20 that air monitoring throughout the fire incident found no substantial releases of hydrogen fluoride, a fatal pollutant released from battery fires. Records indicate that EPA tested for the particulate matter as well, but there’s no evidence it monitored specifically for heavy metals in the air. Vistra told me it has been doing environmental observations since the incident and is sharing the results with regulators, but said in a statement that it “has not detected risks to public health at this time.”
Davidson may have stayed, but others have left Prunedale, including Brian Roeder, who remembers seeing the fire break out while at home and deciding to leave town with his wife and son out of an abundance of caution. When they got back days later, the fire had been put out. But Roeder told me his wife, who he said is immunocompromised, began reporting breathing issues shortly after they returned. His son started coughing, as well. They quickly left home again, and have been living out of short-term rental apartments far away from the battery plant for weeks.
“This community has been significantly damaged, and they are not coming in to help anybody,” Roeder told me. “There’s been behind the scenes efforts, there’s been some work, but nothing commensurate with the size of this disaster.”
“I know that L.A. caught on fire at the exact same time,” Roeder continued. “That was the huge focus for the state. I know that planes were going down and we had a change in administration. But the fact remains that we, here, cannot explain the absence of support for what is happening from the state. And there’s been a pronounced absence.”
Roeder also started a community organization called Never Again Moss Landing, which has been collecting its own samples of the environment in consultation with a professional lab. In doing so, Roeder became part of a broader effort in the U.S. to create public safeguards for battery storage technology in the wake of Moss Landing. Ground zero for this push is, fittingly, California, where the state Public Utility Commission has responded to the fire by requiring battery storage facility owners to make emergency response plans and adhere to modern fire codes for battery storage.
Some Democratic lawmakers in California want to go further, empowering localities to be the final decisionmakers on whether storage projects get built, as opposed to state regulators.
In some pockets of the U.S., this push for battery safety risks morphing into a threat to the energy transition. For my newsletter, The Fight, I’ve chronicled how towns and counties across the U.S., from New York City to rural Texas, are now banning battery storage, citing the Moss Landing fire and the fear another battery fire could happen in their backyards.
By many metrics, Moss Landing is an outlier. The Moss Landing facility was a giant field of batteries inside a former factory, essentially trapping all these combustible mini-bombs prone to “thermal runaway,” a phenomenon where rising heat from a fire leads to a chain reaction of chemical ignition, inside an insulated box. Concerns about thermal runaway are a reason why almost all battery storage today is installed in storage containers and with an appropriate distance between individual batteries.
But Moss Landing is also a crucial test case for the future of battery storage and public trust.
This morning, the renewables sector took a big stride towards attempting to calm the rage against battery storage. American Clean Power, the leading renewables trade group, released an analysis of 35 battery storage fires in the U.S. from 2012 through the end of last year. Many of the incidents involved “early-generation” battery tech, it said, adding that “improved safety measures, such as advanced thermal management, suppression systems, and containment enclosures, significantly reduc[ed] the likelihood of large-scale incidents.”
The analysis does not speculate as to what may have caused the fire at Moss Landing, simply noting investigations into the incident are ongoing. But at the same time, ACP released a new blueprint for safe battery storage development. In the blueprint, the association acknowledges that some of its recommendations — including a requirement that all battery storage facilities meet a new fire safety standard produced years after Moss Landing was commissioned — are aimed at “holistically addressing concerns generated by the Moss Landing Fire.”
Residents are deeply suspicious of the official assessments denying what, to them, are obvious health impacts. To be candid, I can’t blame them. It strains credulity to imagine a battery fire of this size and scope right next door to you somehow creating no pollution worthy of public concern.
“When you burn [batteries] it moves toxic chemicals into the air,” said Tracey Woodruff, a former EPA senior scientist and policy advisor specializing in chemical contamination of the environment, who now works at the University of California San Francisco. “If this is an uncontrolled burn, you can’t just say there isn’t going to be fallout from that or exposure to the population.”
There’s data making people afraid too. In late January, researchers at San Jose State University alerted the public that they’d discovered “unusually high concentrations of heavy-metal nanoparticles” and a “hundreds- to thousand-fold” increase in nickel, manganese, and cobalt — metals all present in Moss Landing’s batteries — in soil two miles from the power plant in the Elkhorn Slough Reserve, one of the state’s biggest estuaries. Exposure to these metals can cause serious health issues, some of which mirror the symptoms described by residents in the area who are sick.
Exposure to dust with heavy metals can be dangerous at even relatively low levels. A county health advisory shared with local medical professionals in February urged doctors to complete a comprehensive physical of anyone concerned about the impacts of the fire on their health. It noted that breathing or coming into direct skin contact with “heavy metal dusts and other particulate matter from smoke” can result in a metallic taste and difficulty breathing, as well as exacerbate underlying conditions like asthma.
Discovering the metals’ omnipresence in the Slough after the fire led Ivano Aiello, a researcher at SJSU who collected that data, to conclude that the contamination is probably more widespread than is publicly understood.
“I freaked out [after the study] because I was breathing the stuff. I was out there for days and I had no idea,” he told me. “Then I alerted the authorities … and they did their own investigation.”
Subsequent studies conducted by county and state environmental officials, including within the Elkhorn Slough, found no level of these heavy metals that they said could be conclusively tied to the fire. On March 19, farm advisors at the University of California Cooperative Extension undertook a “limited study” that found a “slight deposition of metals (copper and manganese) may have occurred in one agricultural field closest to the battery fire site,” but that the “concentration of metals measured were within normal ranges for all soil types evaluated.” Dole, the giant produce company, which has operations in the area, told me that on its end “no health impacts have been reported and no soil contamination has been detected as a result of the Moss Landing battery fire.”
But Roeder and many other members of the surrounding communities are worried there isn’t enough testing being done to find out whether contaminants entered the atmosphere, especially since air pollution is rarely spread evenly. Like Covid-19, the only way we will ever know the extent of the problem is with more testing, testing, testing.
Roeder is trying to do this work himself. On what he says is his own dime, he and other members of Never Again Moss Landing have collected dust samples across the region in consultation with a credentialed lab in the state, BioMax, which he told me reached out after the fire.
On Wednesday, a local NBC affiliate reported that Don Smith, a toxicologist at the University of California San Diego, confirmed elevated levels of nickel, cobalt, and manganese in the dust samples collected by Never Again Moss Landing. “There is reason to be concerned,” Smith told the TV station, adding that people living near the plant should wear masks regularly if they’re interacting with dust in their homes and be careful not to disturb soil in their yards. “Both manganese and, to a lesser extent, cobalt are known to be neurotoxins. And nickel, of course, is recognized as a carcinogen.”
Frustratingly, though, there is no solid proof to date of a conclusive link between the illnesses and metal exposure — just a lot of people with symptoms, a study that hasn’t been replicated in other pieces of research, and samples collected by residents who are also involved in litigation against the company. Still, that’s a lot of evidence of a problem. Medical mysteries are also common in environmental catastrophes like the Flint water crisis and the infamous DuPont PFOA debacle in Parkersburg, West Virginia, in which obviously sick residents butted heads with regulators for years, demanding information and testing.
What’s next for Moss Landing? The three counties most impacted — Monterey, Santa Cruz, and San Benito — just concluded a community health survey that solicited comments from potentially impacted residents and received more than 1,500 responses, according to figures I reviewed that were shared at a recent Monterey County public meeting. When that study is out, we’ll have a comprehensive view of the locations where the sick live to see where it lines up with the plume that emitted from Moss Landing.
Taking a wider view, any society that’s going to rely primarily on intermittent energy sources like solar and wind needs battery storage to keep the lights on. That will require winning the public’s trust in battery technology. The Moss Landing fire was bad, and over time risks becoming an East Palestine moment for the energy transition. But the lack of a loud, sizable government response to calm the nerves of people publicly claiming illness is likely to be even more damaging to the future of the battery sector.
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Deep Fission says that building small reactors underground is both safer and cheaper. Others have their doubts.
In 1981, two years after the accident at Three Mile Island sent fears over the potential risks of atomic energy skyrocketing, Westinghouse looked into what it would take to build a reactor 2,100 feet underground, insulating its radioactive material in an envelope of dirt. The United States’ leading reactor developer wasn’t responsible for the plant that partially melted down in Pennsylvania, but the company was grappling with new regulations that came as a result of the incident. The concept went nowhere.
More than a decade later, the esteemed nuclear physicist Edward Teller resurfaced the idea in a 1995 paper that once again attracted little actual interest from the industry — that is, until 2006, when Lowell Wood, a physicist at the Lawrence Livermore National Laboratory, proposed building an underground reactor to Bill Gates, who considered but ultimately abandoned the design at his nuclear startup, TerraPower.
Now, at last, one company is working to make buried reactors a reality.
Deep Fission proposes digging boreholes 30 inches in diameter and about a mile deep to house each of its 15-megawatt reactors. And it’s making progress. In August, the Department of Energy selected Deep Fission as one of the 10 companies enrolled in the agency’s new reactor pilot program, meant to help next-generation startups split their first atoms by July. In September, the company announced a $30 million reverse merger deal with a blank check firm to make its stock market debut on the lesser-known exchange OTCQB. Last month, Deep Fission chose an industrial park in a rural stretch of southeastern Kansas as the site of its first power plant.
Based in Berkeley, California, the one-time hub of the West Coast’s fading anti-nuclear movement, the company says its design is meant to save money on above-ground infrastructure by letting geology do the work to add “layers of natural containment” to “enhance safety.” By eliminating much of that expensive concrete and steel dome that encases the reactor on the surface, the startup estimates “that our approach removes up to 80% of the construction cost, one of the biggest barriers for nuclear, and enables operation within six months of breaking ground.”
“The primary benefit of placing a reactor a mile deep is cost and speed,” Chloe Frader, Deep Fission’s vice president of strategic affairs, told me. “By using the natural pressure and containment of the Earth, we eliminate the need for the massive, above-ground structures that make traditional nuclear expensive and slow to build.”
“Nuclear power is already the safest energy source in the world. Period,” she said. “Our underground design doesn’t exist because nuclear is unsafe, it exists because we can make something that is already extremely safe even safer, simpler, and more affordable.”
But gaining government recognition, going public, and picking a location for a first power plant may prove the easy part. Convincing others in the industry that its concept is a radical plan to cut construction costs rather than allay the public’s often-outsize fear of a meltdown has turned out to be difficult, to say nothing of what actually building its reactors will entail.
Despite the company’s recent progress, I struggled to find anyone who didn’t have a financial stake in Deep Fission willing to make the case for its buried reactors.
Deep Fission is “solving a problem that doesn't actually exist,” Seth Grae, the chief executive of the nuclear fuel company Lightbridge, told me. In the nearly seven decades since fission started producing commercial electrons on the U.S. grid, no confirmed death has ever come from radiation at a nuclear power station.
“You’re trying to solve a political problem that has literally never hurt anyone in the entire history of our country since this industry started,” he said. “You’re also making your reactors more expensive. In nuclear, as in a lot of other projects, when you build tall or dig deep or lift big and heavy, those steps make the projects much more expensive.”
Frader told me that subterranean rock structures would serve “as natural containment, which also enhances safety.” That’s true to some extent. Making use of existing formations “could simplify surface infrastructure and streamline construction,” Leslie Dewan, a nuclear engineer who previously led a next-generation small modular reactor startup, told IEEE Spectrum.
If everything pans out, that could justify Deep Fission’s estimate that its levelized cost of electricity — not the most dependable metric, but one frequently used by solar and wind advocates — would be between $50 and $70 per megawatt-hour, lower than other SMR developers’ projections. But that’s only if a lot of things go right.
“A design that relies on the surrounding geology for safety and containment needs to demonstrate a deep understanding of subsurface behavior, including the stability of the rock formations, groundwater movement, heat transfer, and long-term site stability,” Dewan said. “There are also operational considerations around monitoring, access, and decommissioning. But none of these are necessarily showstoppers: They’re all areas that can be addressed through rigorous engineering and thoughtful planning.”
As anyone in the geothermal industry can tell you, digging a borehole costs a lot of money. Drilling equipment comes at a high price. Underground geology complicates a route going down one mile straight. And not every hole that’s started ends up panning out, meaning the process must be repeated over and over again.
For Deep Fission, drilling lots of holes is part of the process. Given the size of its reactor, to reach a gigawatt — the output of one of Westinghouse’s flagship AP1000s, the only new type of commercial reactor successfully built from scratch in the U.S. this century — Deep Fission would need to build 67 of its own microreactors. That’s a lot of digging, considering that the diameters of the company’s boreholes are on average nearly three times wider than those drilled for harvesting natural gas or geothermal.
The company isn’t just distinguished by its unique approach. Deep Fission has a sister company, Deep Isolation, that proposes burying spent nuclear fuel in boreholes. In April, the two startups officially partnered in a deal that “enables Deep Fission to offer an end-to-end solution that includes both energy generation and long-term waste management.”
In theory, that combination could offer the company a greater social license among environmental skeptics who take issue with the waste generated from a nuclear plant.
In 1982, Congress passed a landmark law making the federal government responsible for the disposal of all spent fuel and high-level radioactive waste in the country. The plan centered on building a giant repository to permanently entomb the material where it could remain undisturbed for thousands of years. The law designated Yucca Mountain, a rural site in southwestern Nevada near the California border, as the exclusive location for the debut repository.
Construction took years to start. After initial work got underway during the Bush administration, Obama took office and promptly slashed all funding for the effort, which was opposed by then-Senate Majority Leader Harry Reid of Nevada; the nonpartisan Government Accountability Office clocked the move as a purely political decision. Regardless of the motivation, the cancellation threw the U.S. waste disposal strategy into limbo because the law requires the federal government to complete Yucca Mountain before moving on to other potential storage sites. Until that law changes, the U.S. effort to find a permanent solution to nuclear waste remains in limbo, with virtually all the spent fuel accumulated over the years kept in intermediate storage vessels on site at power plants.
Finland finished work on the world’s first such repository in 2024. Sweden and Canada are considering similar facilities. But in the U.S., the industry is moving beyond seeing its spent fuel as waste, as more companies look to start up a recycling industry akin to those in Russia, Japan, and France to reprocess old uranium into new pellets for new reactors. President Donald Trump has backed the effort. The energy still stored in nuclear waste just in this country is sufficient to power the U.S. for more than a century.
Even if Americans want an answer to the nuclear waste problem, there isn’t much evidence to suggest they want to see the material stored near their homes. New Mexico, for example, passed a law barring construction of an intermediate storage site in 2023. Texas attempted to do the same, but the Supreme Court found the state’s legislation to be in violation of the federal jurisdiction over waste.
While Deep Fission’s reactors would be “so far removed from the biosphere” that the company seems to think the NRC will just “hand out licenses and the public won’t worry,” said Nick Touran, a veteran engineer whose consultancy, What Is Nuclear, catalogs reactor designs and documents from the industry’s history, “the assumption that it’ll be easy and cheap to site and license this kind of facility is going to be found to be mistaken,” he told me.
The problem with nuclear power isn’t the technology, Brett Rampal, a nuclear expert at the consultancy Veriten, told me. “Nuclear has not been suffering from a technological issue. The technology works great. People do amazing things with it, from curing cancer to all kinds of almost magical energy production,” he told me. “What we need is business models and deployment models.”
Digging a 30-inch borehole a mile deep would be expensive enough, but Rampal also pointed out that lining those shafts with nuclear-grade steel and equipping them with cables would likely pencil out to a higher price than building an AP1000 — but with one one-hundredth of the power output.
Deep Fission insists that isn’t the case, and that the natural geology “removes the need for complex, costly pressure vessels and large engineered structures” on the surface.
“We still use steel and engineered components where necessary, but the total material requirements are a fraction of those used in a traditional large-scale plant,” Frader said.
Ultimately, burying reactors is about quieting concerns that should be debunked head on, Emmet Penney, a historian of the industry and a senior fellow at the Foundation for American Innovation, a right-leaning think tank that advocates building more reactors in the U.S., told me.
“Investors need to wake up and realize that nuclear is one of the safest power sources on the planet,” Penney said. “Otherwise, goofy companies will continue to snow them with slick slide decks about solving non-issues.”
On energy efficiency rules, Chinese nuclear, and Japan’s first offshore wind
Current conditions: Warm air headed northward up the East Coast is set to collide with cold air headed southward over the Great Lakes and Northeast, bringing snowfall followed by higher temperatures later in the week • A cold front is stirring up a dense fog in northwest India • Unusually frigid Arctic air in Europe is causing temperatures across northwest Africa to plunge to double-digit degrees below seasonal norms, with Algiers at just over 50 degrees Fahrenheit this week.

Oil prices largely fell throughout 2025, capping off December at their lowest level all year. Spot market prices for Brent crude, the leading global benchmark for oil, dropped to $63 per barrel last month. The reason, according to the latest analysis of the full year by the Energy Information Administration, is oversupply in the market. China’s push to fill its storage tanks kept prices from declining further. Israel’s June 13 strikes on Iran and attacks on oil infrastructure between Russia and Ukraine briefly raised prices throughout the year. But the year-end average price still came in at $69 per barrel, the lowest since 2020, even when adjusted for inflation.

The price drop bodes poorly for reviving Venezuela’s oil industry in the wake of the U.S. raid on Caracas and arrest of the South American country’s President Nicolás Maduro. At such low levels, investments in new infrastructure are difficult to justify. “This is a moment where there’s oversupply,” oil analyst Rory Johnston told my colleague Matthew Zeitlin yesterday. “Prices are down. It’s not the moment that you’re like, I’m going to go on a lark and invest in Venezuela.”
The Energy Department granted a Texas company known for recycling defunct tools from oil and gas drilling an $11.5 million grant to fund an expansion of its existing facility in a rural county between San Antonio and Dallas. The company, Amermin, said the funding will allow it to increase its output of tungsten carbide by 300%, “reducing our reliance on foreign nations like China, which produces 83%” of the world’s supply of the metal used in all kinds of defense, energy, and hardware applications. “Our country cannot afford to rely on our adversaries for the resources that power our energy industry,” Representative August Pfluger, a Texas Republican, said in a statement. “This investment strengthens our district’s role in American energy leadership while providing good paying jobs to Texas families.”
That wasn’t the agency’s only big funding announcement. The Energy Department gave out $2.7 billion in contracts for enriched uranium, with $900 million each to Maryland-based Centrus Energy, the French producer Orano, and the California-headquartered General Matter. “President Trump is catalyzing a resurgence in the nation’s nuclear energy sector to strengthen American security and prosperity,” Secretary of Energy Chris Wright said in a press release. “Today’s awards show that this Administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow.”
Low-income households in the United States pay roughly 30% more for energy per square foot than households who haven’t faced trouble paying for electricity and heat in the past, federal data shows. Part of the problem is that the national efficiency standards for one of the most affordable types of housing in the nation, manufactured homes, haven’t been updated since 1994. Congress finally passed a law in 2007 directing the Department of Energy to raise standards for insulation, and in 2022, the Biden administration proposed new rules to increase insulation and reduce air leaks. But the regulations had yet to take effect when President Donald Trump returned to office last year. Now the House of Representatives is prepared to vote on legislation to nullify the rules outright, preserving the standards set more than three decades ago. The House Committee on Rules is set to vote on advancing the bill as early as Tuesday night, with a full floor vote likely later in the week. “You’re just locking in higher bills for years to come if you give manufacturers this green light to build the homes with minimal insulation,” Mark Kresowik, senior policy director of the American Council for an Energy-Efficient Economy, told me.
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The newest reactor at the Zhangzhou nuclear station in Fujian Province has officially started up commercial operation as China’s buildout of new atomic power infrastructure picks up pace this year. The 1,136-megawatt Hualong One represents China’s leading indigenous reactor design. Where once Beijing preferred the top U.S. technology for large-scale reactors, the Westinghouse AP1000, the Hualong One’s entirely domestic supply chain and design that borrows from the American standard has made China’s own model the new leader.
In a sign of just how many reactors China is building — at least 35 underway nationwide, as I noted in yesterday’s newsletter — the country started construction on two more the same week the latest Hualong One came online. World Nuclear News reported that first concrete has been poured for a pair of CAP1000 reactors, the official Chinese version of the Westinghouse AP1000, at two separate plants in southern China.
Back in October, when Japan elected Sanae Takaichi as its first female prime minister, I told you about how the arch-conservative leader of the Liberal Democratic Party planned to refocus the country’s energy plans on reviving the nuclear industry. But don’t count out offshore wind. Unlike Europe’s North Sea or the American East Coast, the sharp continental drop in Japan’s ocean makes rooting giant turbines to the sea floor impossible along much of its shoreline. But the Goto Floating Wind Farm — employing floating technology under consideration on the U.S. West Coast, too — announced the start of commercial operations this week, pumping nearly 17 megawatts of power onto the Japanese grid. Japanese officials last year raised the country’s goal for installed capacity of offshore wind to 10 gigawatts by 2030 and 45 gigawatts by 2040, Power magazine noted, so the industry still has a long way to go.
Beavers may be the trick to heal nature’s burn scars after a wildfire. A team of scientists at the U.S. Forest Service and Colorado State University are building fake beaver dams in scorched areas to study how wetlands created by the dams impact the restoration of the ecosystem and water quality after a blaze. “It’s kind of a brave new world for us with this type of work,” Tim Fegel, a doctoral candidate at Colorado State, who led the research, said in a press release.
Rob talks about the removal of Venezuela’s Nicolás Maduro with Commodity Context’s Rory Johnston.
Over the weekend, the U.S. military entered Venezuela and captured its president, Nicolás Maduro, and his wife. Maduro will now face drug and gun charges in New York, and some members of the Trump administration have described the operation as a law enforcement mission.
President Donald Trump has taken a different tack. He has justified the operation by asserting that America is going to “take over” Venezuela’s oil reserves, even suggesting that oil companies might foot the bill for the broader occupation and rebuilding effort. Trump officials have told oil companies that the U.S. might not help them recover lost assets unless they fund the American effort now, according to Politico.
Such a move seems openly imperialistic, ill-advised, and unethical — to say the least. But is it even possible? On this week’s episode of Shift Key, Rob talks to Rory Johnston, a Toronto-based oil markets analyst and the founder of Commodity Context. They discuss the current status of the Venezuelan oil industry, what a rebuilding effort would cost, and whether a reopened Venezuelan oil industry could change U.S. energy politics — or even, as some fear, bring about a new age of cheap fossil fuels.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
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Here is an excerpt from our conversation:
Robinson Meyer: First of all, does Venezuela have the world’s largest hydrocarbon reserves — like, proven hydrocarbon reserves? And number two, let’s say that Trump has made some backdoor deal with the existing regime, that these existing issues are ironed ou to actually use those reserves. What kind of investment are we talking about on that end?
Rory Johnston: The mucky answer to this largest reserve question is, there’s lots of debate. I will say there’s a reasonable claim that at one point Venezuela — Venezuela has a lot of oil. Let’s just say it that way: Venezuela has a lot of oil, particularly the Orinoco Belt, which, again, similar to the oil sands we’re talking about —
Meyer: This is the Orinoco flow. We’re going to call this the Orinoco flow question.
Johnston: Yeah, exactly, that. Similar to the Canadian oil sands, we’re talking about more than a trillion barrels of oil in place, the actual resource in the ground. But then from there you get to this question of what is technically recoverable. Then from there, what is economically recoverable? The explosion in, again, both Venezuelan and Canadian reserve estimates occurred during that massive boom in oil prices in the mid-2000s. And that created the justification for booking those as reserves rather than just resources.
So I think that there is ample — in the same way, like, Russia and the United States don’t actually have super impressive-looking reserves on paper, but they do a lot with them, and I think in actuality that matters a lot more than the amount of technical reserves you have in the ground. Because as we’ve seen, Venezuela hasn’t been able to do much with those reserves.
So in order to, how to actually get that operating, this is where we get back to the — we’re talking tens, hundreds of billions of dollars, and a lot of time. And these companies are not going to do that without seeing a track record of whatever government replaces the current. The current vice president, his acting president — which I should also note, vice president and oil minister, which I think is particularly relevant here — so I think there’s lots that needs to happen. But companies are not going to trip over themselves to expose themselves to this risk. We still don’t know what the future is going to look like for Venezuela.
Mentioned:
The 4 Things Standing Between the U.S. and Venezuela’s Oil
Trump admin sends tough private message to oil companies on Venezuela
Previously on Shift Key: The Trump Policy That Would Be Really Bad for Oil Companies
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.