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One of the world’s leading climate scientists agrees with Gates in spirit, but thinks we can go much further in practice.

There are a lot of things I agree with in Bill Gates’ new memo on climate change. The recent cutbacks on international spending on vaccination, malaria control, feeding the hungry, and poverty alleviation by many of the world’s richest countries (driven in part by a desire for more military spending) are a catastrophe that will cost thousands, if not millions of lives. Adaptation is a critically important part of addressing climate change, and a world with more prosperity and less inequality is one where we can better deal with the impacts of climate change — at least up to a point.
But in other areas I feel that it needlessly sets up a conflict between laudable goals. We can both mitigate emissions and alleviate poverty, disease, and hunger. While there are some tradeoffs, it is more a question of policy priority than a zero-sum game. Similarly, I feel that Gates is a bit too cavalier in his treatment of climate risk.
Given the strong reactions to Gates’ memo on both the left and the right, I thought it would be helpful to provide a more measured reaction and critique, and give some thoughts on how to move forward to — as Gates suggests — have the most positive impact on the world.
Bill Gates — through his philanthropic work with the Gates Foundation — has done more than almost anyone else on the planet to meaningfully improve the lives of the world’s poorest. The Gates Foundation was the founding funder of Gavi, which helped expand vaccination in the global south and drive down prices. They did key work to help eradicate polio and combat HIV, tuberculosis, and malaria, as well as deliver sanitation and clean drinking water, and worked to raise smallholder farmer yields and income through access to agricultural technology.
The recent gutting of the United States Agency for International Development — and smaller reductions in aid spending by other countries — is a humanitarian catastrophe and threatens to undo much of the work that the Gates Foundation supported over the past few decades. I can see why, in light of these urgent needs, he is suggesting that resources to combat climate change be repurposed toward dealing with poverty, hunger, and disease.
But this assumes that funding for climate and development cancel each other out. Here I think that Gates errs in his analysis for a few reasons.
First, the vast majority of spending on climate mitigation worldwide is not in low-income countries, and there is little reason to assume that cutting it would free up resources for development aid. The world spent more than $2 trillion on clean energy technologies (albeit somewhat expansively defined) in 2024, but the overwhelming majority of this was spent by middle- and high-income countries (e.g. China, the U.S., the EU, the UK, India, Japan) to build domestic clean energy, build transmission, buy electric vehicles, electrify heating, etc.
The idea that spending less on domestic mitigation would create more budget space for international development is fundamentally misguided. It’s hard to imagine that the Trump administration will revitalize development spending based on savings from cutting domestic green energy subsidies. Both development aid and climate mitigation spending represent relatively small shares of GDP in higher income countries, and there is space for policy to be able to prioritize spending on both without trading them off against each other. It is much more likely that any reduction in mitigation spending will be repurposed for other domestic priorities — leaving the poorest and most vulnerable parts of the world even worse off.
Second, there are a number of ways that technologies can accomplish goals of climate mitigation and development simultaneously: solar and storage for electrification of more remote areas, clean cookstoves to reduce deforestation, and technologies to reduce both outdoor and indoor air pollution that kills millions per year globally are just a few examples.
That being said, we should take a hard look at international spending priorities for programs in the poorest countries, which, in turn, are the least responsible for global emissions today. Here adaptation should be strongly prioritized, and restrictions around finance for some fossil fuels (e.g. natural gas development in Sub-Saharan Africa) that could help support greater clean energy deployment should be reconsidered. We should generally spend more than we are today on adaptation and development (though the two are strongly related), and mitigation should be less of a priority in low-income countries.
Richer countries should be the ones taking the lead on emissions reductions — and paying a premium that will help drive down the costs of clean energy technologies so that they can be adopted cost effectively by lower income countries. Indeed, that’s largely been the story of our successes here to date, with countries like China, India, and Brazil adopting ambitious net-zero goals in part because they see the cost of meeting them as modest and not trading off against their development priorities.
Third, the idea that we should “spend less” on climate adaptation is a dangerous misunderstanding of the problem. There is no world where we don’t spend money dealing with climate impacts. Rather, our choice is between spending money now, e.g. to build a seawall, or spend money later to rebuild the city after it floods. Our choice here should be guided by the fact that adaptation in advance is cheaper than adaptation after the disaster. In other words, spending money today on adaptation is the cheaper option that will better promote health and welfare of the world’s poorest citizens.
In his memo, Gates highlights the progress we’ve made on climate change to-date, noting that:
Ten years ago, the International Energy Agency predicted that by 2040, the world would be emitting 50 billion tons of carbon dioxide every year. Now, just a decade later, the IEA’s forecast has dropped to 30 billion, and it’s projecting that 2050 emissions will be even lower.
Read that again: In the past 10 years, we’ve cut projected emissions by more than 40%.
This progress is not part of the prevailing view of climate change, but it should be. What made it possible is that the Green Premium—the cost difference between clean and dirty ways of doing something—reached zero or became negative for solar, wind, power storage, and electric vehicles. By and large, they are just as cheap as, or even cheaper than, their fossil fuel counterparts.
Gates is right that cheap clean energy represents a remarkable success story, and is one of the reasons why projections of future warming have fallen from around 3.5 degrees Celsius a decade ago to around 2.7 degrees today.
But focusing on these precise temperature outcomes in 2100 is problematically reductionist. Our emissions are just one of three factors that will determine the future warming of the planet. (And we should remember that current policies represent neither a ceiling nor a floor on current emissions, particularly at a time when some governments are actively rolling them back.)
Even if we knew future emissions precisely, the warming in 2100 remains highly uncertain. It depends both on the sensitivity of the climate to our increased atmospheric greenhouse gas concentrations — the response of various climate feedbacks like clouds and surface reflectivity — and how the carbon cycle responds to both our emissions and the changing climate.
Due to the combination of these uncertainties, it’s possible that we could think we are heading for 2.7 degrees of warming and stop at 3.7 degrees (or even 4+ degrees) even if we roll 6s on the proverbial climate dice. And we won’t know precisely how sensitive the climate is (despite some recent progress) until it’s too late to avoid where we’ll end up.
This means that we should think of mitigation less as targeting (or avoiding) a particular outcome and more as hedging against risk. We should do more mitigation — all things considered — than if we had certainty in the climate response because of the high damages associated with less likely but still quite possible tail risks. Or as the late climate economist Marty Weitzman memorably put it, when it comes to climate change “the sting is in the tail.”
Gates is right to note that climate change “will not lead to humanity’s demise,” but I’d suggest that this represents a bit of a straw man. Outside a fringe community of climate doomers, there are few who think that climate change could realistically threaten the extinction of the human race (though some folks need to be a bit cautious about throwing around the term “existential threat” willy nilly). As the climate scientist Steven Schneider was fond of saying, for climate change, “the end of the world and good for you are the two lowest probability outcomes”.
But not being an existential threat does not tell us all that much, as almost nothing aside from a planet-killing asteroid or (possibly) an all-out global thermonuclear war rises to that highest of bars. Every other problem humanity deals with — war, violence, famine, poverty — is not existential but is still critically important. This is more or less Gates’ point, that climate should be treated as one of many problems we need to solve rather than an all-encompassing ur-problem. But by and large, the majority of people and policymakers have been treating it as just that.
Gates posits that society can best address climate change by working to reduce the green premium associated with clean energy technologies.
The idea of the green premium is compelling. As noted earlier, a lot of the progress that society has made on reducing emissions over the past 15 years has come on the back of near-miraculously rapid declines in the cost of clean energy technologies. Cheaper clean energy in turn enables more ambitious policy adoption, as the costs of getting to net-zero emissions turn from astronomical to manageable.
But I’d suggest that it is somewhat incomplete, at least in its more straightforward interpretation. There is an idea that innovation and markets alone will necessarily solve the problem in the absence of policy interventions — that if we can just make clean energy cheap enough, the world will sufficiently decarbonize to avoid potentially catastrophic impacts from climate change.
This may be the case, but it also may not. Innovation cuts both ways — the success of hydraulic fracturing and horizontal drilling technology has drastically reduced the cost of natural gas and oil production. There are lots of resources going into producing fossil fuels more cheaply, and while I’m hopeful that the cost of solar, batteries, wind, nuclear, geothermal, and other clean energy technologies will fall faster, there is no law of physics that says it will inevitably be cheaper.
Hoping that clean energy will be absolutely cheaper than fossil fuels at a scale needed to decarbonize our energy system is a gamble — and one with loaded dice. There are real costs associated with fossil fuel use — from air pollution, from climate change, from local environmental damage. These are currently borne by the public and not by the companies producing fossil fuels. As long as the costs remain socialized while the benefits are privatized, the market alone will not lead to the optimal level of deployment of clean energy technologies.
This is where policy comes in: We either need to include the “brown costs” of fossil fuels in their market price (e.g. a carbon tax, something that has been not very politically palatable to date) or be willing to pay some ongoing green premium in cases where clean energy remains more expensive to account for the real costs of climate and pollution.
Policy also plays a key role in technology. The rapid and amazing drop in the price of solar energy over the last few decades has been driven to a large extent by government support of the technology. The free market may have done this by itself, but it would have likely taken many decades longer.
I don’t think Gates would necessarily disagree with any of this, but it’s an important rejoinder for those who assume that innovation alone is sufficient to address the problem.
The reception of the Gates memo was an unfortunate reflection of our extremely polarized politics. Some climate advocates dismissed it as denialism or the second coming of Bjorn Lomborg, while those on the right (including President Trump) portrayed it as proof that the science was wrong and climate change was actually a hoax.
Gates tried at length and upfront to make his position clear that climate change is a big problem, and that his interest is on near-term prioritization of resources. But most interpreted the memo through their ideological priors (many likely without actually reading it).
To be clear: Climate change is a very important problem. It needs to be solved, along with other problems like malaria and malnutrition. Every tenth of a degree of heating that we prevent is hugely beneficial because a stable climate makes it easier to improve people’s lives.
Our inability to have nuanced discussions about these matters is detrimental to the broader societal discussion about serious issues like climate change. The portrayal of climate as an all or nothing problem, coupled with the U.S.’s thermostatic politics where control of government commonly switches between parties, is a recipe for a lack of clear long term action on climate or any other big societal problem that gets caught up in the politicized culture wars. While I don’t know how to change society to make science less politicized and to center the debate around the best solutions rather than the physical reality of the problem, a change is sorely needed.
Ultimately Gates’ memo is making the case that we need to set a higher priority on helping the world’s most vulnerable in a time when aid to them is being cut. I broadly agree. But deprioritizing mitigation spending is not a very effective way to accomplish that goal, outside of the relatively modest amount of money the world spends today on mitigation in the least developed countries.
When there is an option to spend money already going to these countries in a way that provides the greatest benefits for the population even if it does not reduce (or even increases) emissions, we should probably do it. But the vast majority of the resources we spend on decarbonization today in middle and upper income countries will not magically be repurposed for international development aid if we deprioritize climate change as an issue. And deprioritizing climate change as an issue risks substituting near-term benefits for long-term harms that are nearly impossible to reverse.
A world of unabated climate change will impact the poor most severely. Addressing it requires two strategies in tandem: prioritizing development and poverty alleviation to build adaptive capacity (and human flourishing), and reducing emissions rapidly in middle and upper-income countries to mitigate future climate impacts and drive down the cost of clean energy technologies so they can be more readily adopted by low income countries. Perhaps I’m unduly optimistic, but I think that society should be able to do both.
Editor’s note: A version of this article originally appeared in the author’s newsletter, The Climate Brink, and has been repurposed for Heatmap.
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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.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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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.