The Value Perspective Podcast episode – with Robert Bryce

Hi, everyone. On this episode, we welcome Robert Bryce to The Value Perspective podcast. Robert is prolific across the media so you may know him from a few different places, including as the author of A Question of Power: Electricity and the Wealth of Nations, and the host of the Power Hungry podcast. If you are American, you might have seen his documentary Juice: How Electricity Explains the World or you may have caught one of his columns in Forbes, The New York Times, Washington Post or Wall Street Journal. For this podcast, Juan Torres Rodriguez and Andrew Lyddon sat down with Robert to discuss second-degree consequences emerging from the current climate change push, the potentially unfair demonisation of fossil fuels, how land constraints can also constrain renewable resources, why nuclear’s PR needs serious work and, finally, some future visions of what an energy grid could look like if it responded to weather patterns. Enjoy!


Juan Torres Rodriguez

Juan Torres Rodriguez

Fund Manager, Equity Value

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Chapter headings for Robert Bryce on The Value Perspective Podcast

Please click on the link below to jump straight to a chapter

* Robert Bryce, welcome ...

* Changing nature of energy transition

* Ongoing importance of hydrocarbons

* Localised impacts of green energy

* Bridging the ‘power-generation gap’

* Who’s winning the argument on nuclear power?

* If I was Joe Biden’s energy czar ...

JTR: Robert Bryce, welcome to The Value Perspective podcast – it is a pleasure to have you here. How are you?

RB: I’m fine, thank you, Juan. Thanks for inviting me.

JTR: Where do we find you today?

RB: I’m at home in my office in Austin, Texas. I have lived here for 37 years – so almost used to the Texas heat! But man, it has been hot this summer. I mean, really hot – over 100F every day for the last few weeks. It has been brutal.

JTR: Wow, that sounds crazy. I have to say – we are always very humble when we have someone who hosts their own podcast on as a guest. So you have your own podcast – which I will let you to introduce in a bit more detail; you have written several books, including, most recently, A Question of Power: Electricity and the Wealth of Nations; and you write columns for a variety of different magazines, including Forbes. Clearly Andrew and I are not doing enough with our 24 hours in the day!

RB: Well, there has been plenty to write about lately – that is for certain. But, yes, I love this stuff. The energy and power sectors are the world’s most important businesses as all the other businesses in the world depend on them. So I am very fortunate to be able to write about it – and still be learning, which is the most remarkable part of it. It is just such a big and complex industry that touches every other industry – the politics of it, the innovation ... it really is an incredible business.

JTR: Could you give us a brief introduction about yourself and talk about your podcast and your latest book? And I forgot to mention you have also filmed a documentary, Juice: How Electricity Explains the World, which we can find on Amazon Prime and Apple TV, so you can tell us what that is all about too.

RB: Sure. Well, first things first – my name is Robert Bryce, I live in Austin, Texas and I am a dad. My wife Lauren and I have three great kids – Mary, Michael and Jacob – who are all moved out of the house, which has been a great thing too! Lauren and I are married 36 years and I have been very fortunate in my life. So those are the most important things in my life but I am also an author, a journalist, a podcaster and a film producer.

I have written six books. My first book, published 20 years ago, was on Enron and my latest book, as you said, is called A Question of Power: Electricity and the Wealth of Nations. I am the host of the Power Hungry podcast, which is available wherever fine podcasts are sold, and also I am the executive producer of a documentary I produced at the same time I wrote my last book. The doc is called Juice: How Electricity Explains the World, which unfortunately is not currently available in Europe – though I have been tussling with the distributor to try and get European distribution. But, here in the US, it is available on all the major streaming platforms so you can also check that out. I am all over the interwebs – you can find me at I am on Twitter at pwrhungry ... I could go on but I will stop there. How about that?

JTR: What’s the background and subject-matter of the documentary?

RB: Well, this is one of the strange things about the movie business, which I had no experience with until I made this documentary – and I am now making another documentary, by the way, on the problems with the electric grid. But the book business is very clear – when you sign a contract, you have a publisher and they distribute the book. They have worldwide rights and they distribute it worldwide. With film distribution, it is just a different business – and I did not understand that. So we are seeking international distribution and we are going to make it happen but I did not realise how kind of ‘balkanised’ the film distribution industry is, relative to the book business. So you know, it is just live and learn but we are very proud of the film and anyone, anywhere can look at our website

But electricity is the world’s most important and fastest-growing form of energy. And we saw that last year – I mean, the latest BP statistical review data is just remarkable. The growth in electricity generation last year was three times the 30-year average. Electricity demand all over the world is just soaring and that explains why we are seeing so much coal-burn lately, which, to me is another interesting trend and one that has not abated. I mean, coal continues its share of the marketplace in the electric generation business and it has maintained it – not the whole sector, but still at over 35% or 40% now for decades.

Changing nature of energy transition

AL: Afternoon, Robert – or afternoon here, anyway –  nice to speak with you. Over the last few years, and particularly for us as investors over 2020 and 2021, the narrative about energy transition had started to become more topical, with a particular set of assumptions, I think, about the backdrop against which that would happen. People were not too specific on the mechanism maybe but they had a broad idea of where they wanted to get to and the world in which that would be done. The situation in Russia and Ukraine has obviously started to turn a lot of those assumptions about the way the world would be on their head. How do you think that has changed the equation for the energy transition?

RB: Sure. I will be a bit cheeky here, I think – as you Brits would say – but energy transition, what energy transition? I mean, what we are seeing now is re-carbonisation, not decarbonisation – in Europe in particular, but around the world. I have been looking at the data and what we are seeing is the long-term trend of the growth in hydrocarbons swamping any of the growth in renewables. That is just the numbers – there is no indication in the numbers that we are seeing an actual energy transition. And that is a problem.

But, moreover, to your point, Andrew, Russia’s invasion of Ukraine is an inflection point – it should be seen as an inflection point and I think it clearly will be because Europe made itself too reliant on Russian gas. Not only that – as I testified before the US Senate last November, what else did they do? They were too dependent on imports; they spent too much on renewables and too little on hydrocarbons; and they closed their baseload coal and nuclear plants. All of these were just critical mistakes – and they made all of them.

So now what we see across Europe is, yes – we can talk about ESG, we can talk about decarbonisation, we can talk about climate. Climate is a concern but it is not the only concern. What we are seeing in Europe is countries all across the continent burning more coal, trying to find whatever they can to burn, because they are facing a very harsh winter if Russia does cut off the gas. They just made themselves completely vulnerable and we saw that even in the last few days, when Russia reduced the flow of gas into Europe by half – it was at 40% of capacity, now it’s 20%. And Russia can play this game for as long as they like – they seem to enjoy it. But European consumers are not going to enjoy it and European consumers are going to get hurt very badly.

JTR: I want to pick up on something you’ve discussed in the past. There has been this very big push into the renewable space for very good reasons – climate change and so forth – but it seems as if people have not thought about the second or third-degree consequences to society. Could you elaborate on what those consequences might be?

RB: Well, of course, and that is the question of the moment, Juan. If we are facing climate change, and it appears we are, and we are going to see more extreme weather – hotter, colder, more extremes, longer extremes – it is the height of foolishness, it is nonsense on stilts, to make our most important energy network, the electric grid, dependent on the weather. And yet that is exactly what Europe has done. You have seen there – and even here in Texas – during periods of weak wind, the power prices skyrocket. So you are seeing your power prices being dependent on the weather. Now this is just the height of foolishness. The electric grid is our most important energy network – it is the network upon which all of our other critical networks depend – and now Europe has shown that essentially hitching its wagon to weather-dependent renewables is resulting in all this chaotic pricing schemes and more vulnerability to Russia. So it has just been a huge, huge blunder.

So that is just one quick observation but, while you said second or third-order principles there has also been what, to me, is this mad, headlong rush toward renewables – and I think it is a mad headlong rush because it is politically popular. So there is actually a first-order effect or first principle, which is, well, where are you going to put it all? And you have seen it – you are in Europe, you are in Britain – the backlash from rural Europeans against the encroachment of largescale wind turbines and largescale solar projects and high-voltage transmission has been going on now for decades.

It is the same in the US. I have written about this over and over – now we are at more than 345 communities across the US that have rejected or restricted wind projects over the last 13 years. You cannot build enough of these wind turbines and solar projects to meet demand – you just cannot do it – because rural residents in both Europe and America are saying, we don’t want this this stuff in our neighbourhood. Take your wind turbine and just put it somewhere where the wind doesn’t blow – you’re not going to put it here.

Ongoing importance of hydrocarbons

JTR: That is really interesting. And we do have a specific question about what you have said in the past about the importance of land in the context of renewables. Before we go into that, though, traditional fossil fuels are to a certain extent being demonised so people tend to ignore everything humanity has been able to achieve in terms of progress over the last 200 years precisely because of them. In A Question of Power, however, you offer a very interesting account of the evolution of electricity and how it has helped societies progress. For the benefit of our listeners, can you give us a podcast summary of why fossil fuels have been – and will continue to be – so important?

RB: Well, sure. The short answer, Juan, is that hydrocarbons ... I call them hydrocarbons – so coal, oil and natural gas – while a lot of people call them fossil fuels ... but the reason why hydrocarbons have continued to be so dominant now, nearly 140 years after Edison created the first central power plant on Pearl Street in Lower Manhattan, is they can provide the vast quantities of energy the world demands at prices consumers can afford. That is it – it is just that simple. Coal, oil and natural gas – there are plenty of reasons to criticise the companies and there are plenty of reasons to criticise why we use them – but the reason we utilise them, and the reason they continue their dominance, with over 80% market share still globally, is they can provide the energy services we demand.

The other part of this, which I think is critical, Juan – and you mentioned this in passing – is when you consider the land footprint of hydrocarbon production, it is tiny, particularly when you compare it to that of renewables. The power density of wind energy – I don’t care where you put it – is one watt per square metre. Solar energy? It is 10 watts per square metre. Hydrocarbon production – natural gas drilling in some parts of the US now – it is 2,000 watts per square metre. They are able to produce the same amounts of power you see coming from a nuclear power plant – I mean, these are just remarkable power-density numbers. Power density matters and that is one of the other key reasons why hydrocarbons have been so dominant. It also explains why I am so pro-nuclear: if we are serious about decarbonisation, we have to be serious about nuclear – and unfortunately, we are not.

JTR: Devil’s advocates would argue the appropriate technology may not be yet there for wind and solar but it will be eventually. Would you agree with that?

RB: No, I don’t. You know, these are not new technologies, Juan – I mean, oh, they still need to innovate? Well, no – the wind energy business is a mature industry. And yet they are still clamouring for subsidies here in the US. It is good that Joe Manchin vetoed this bill that was pending a few weeks ago to extend those tax credits but the reality is that the wind industry is reaching the physical limits of the amount of energy they can harness from the wind. It is called the ‘Betz limit’ and there is just a physical limit in aerodynamics or fluid mechanics, where the turbine can make a certain amount of efficiency – and then no more.

And the only option they have then is to make their turbines bigger. Well, the bigger you make them, the more people see them – and the more people see them, the more people will object. So that is what we are seeing. Just over the weekend, I published a piece in Forbes about Madison County, Iowa – famous for The Bridges of Madison County. MidAmerican Energy, a subsidiary of Berkshire Hathaway, sued the county to force it to take wind turbines they did not want. That is how unpopular wind turbines have become in rural America. And the local residents were happy over the weekend because MidAmerican said, oh, we’re not going to expand – we have cancelled the project. The locals were thrilled. But we are seeing the same thing with solar – and that is this physical limit. It is a matter of maths and physics – not a matter of ‘want to’. These sources of energy – they have their merits, but their power density is just too low.

JTR: That is quite interesting. We had Meredith Angwin on the podcast in May ...

RB: I am a big fan of Meredith. I have had her on my podcast four times. She is fantastic.

JTR: She is fantastic. Andrew and I co-hosted that episode and, in her book Shorting the Grid, she mentions this anecdote where Warren Buffett explained to a roomful of students that the only reason for anyone to go into the wind-generation business was because of government subsidies.

RB: That is exactly right. That was in 2014 and I have used that quote many times since. And what you have seen is his subsidiary MidAmerican, which is a subsidiary of Berkshire Hathaway, being ruthless in their pursuit of tax credits – including being so ruthless as to sue Madison County to force the county to take wind turbines they don’t want. But also – and I pointed this out in a piece I wrote for Real Clear Energy in the last few days – in 2018 the Des Moines Register pointed out that MidAmerican had spent roughly $12bn in Iowa on wind projects ... they are going to get $10bn in tax credits.

I mean, you guys are business guys – in what other industry can you go and you get five-sixths of your capital provided by the government? I mean, this has nothing to do with climate change – this is about subsidy mining. And that is what it is. I’ll quote someone else from Berkshire Hathaway – Charlie Munger, who said: “Show me the incentive and I’ll show you the outcome.” Well, the incentive was ‘collect tax credits’ – and that is what Buffett’s company did. It is that simple.

Localised impacts of green energy

AL: You don’t see it written about very often but I have read in your own writing – and also people like Michael Shellenberger – about the localised environmental impacts of green energy. That may sound like a bit of a paradox but there are actually some important considerations there so it would be interesting if you could set them out for us.

RB: Well, of course. And, to be clear, I have been reporting on the backlash against the wind industry in particular for a dozen years – I mean, this wasn’t a story I went looking for. But in 2010, as I was finishing my fourth book, Power Hungry, I got contacted by a horse trainer in Missouri, who said, if you want to write about the wind business, write about my deal. His name was Charlie Porter and he had had wind turbines built near his home, his television reception was interrupted and he couldn’t sleep at night because the noise was so bad. Since then, Andrew, I have talked to people all over the world – I have interviewed them myself – and many of these people have moved out of their homes.

This problem with noise from wind turbines is well-established and this hand-waving – this ‘oh, those complainers’ – and the way the wind industry has gotten away with this, I think, is just criminal. I mean, it is just criminal the way they dismiss the complaints of rural residents, who have had these giant machines put near their homes and are suffering because of the noise pollution created by these wind turbines. And it is real – this has been documented over and over by researchers all over the world, including in 2009 by the Minnesota Department of Health.

Also, I mentioned Madison County, Iowa – in 2019, the Madison County Board of Health declared wind turbines a public health hazard and recommended a one-and-a-half-mile setback. So these are significant health issues and the industry – this so-called ‘green energy’ – the way they have been able to escape culpability and the silence of the big media outlets on this, I think, is just execrable. It really makes me mad because I think it has been so irresponsible. And they have latched onto this ‘green’ label, when in fact they are creating noise pollution and lots of it. Look at Falmouth, Massachusetts, where they are taking down wind turbines because of local complaints – I mean, I could go on but I’ll stop there, Andrew! But it is a sore subject with me because of the way the industry has acted here – and in a totally irresponsible way.

AL: I’ll let you stop talking about that but then allow you to start talking about something very similar! That is some of the problems with solar panels and so on that have yet to be resolved – or even have any kind of plan put in place to think about resolving them. Could you talk about that a little?

RB: Sure. Well, I think this is another example of what Dustin Mulvaney of San Jose State University calls the ‘green halo’ around renewables. Or Jesse Ausubel from Rockefeller University has a great line – he says: “Wind and solar may be renewable. They are not green.” And what is increasingly clear when it comes to solar ... and I have been pro-solar for a long time. I have eight and a half kilowatts of solar panels on the roof of my home here in Austin. So I understand the attraction of solar.

But what is the reality? Well, that we are facing a wave of ‘solar trash’ – and this was documented by a report published by the Harvard Business School – in that, in the next 30 years or so, the volume of waste solar panels may equal or exceed the volume of the new panels being manufactured. Well, where are we going to put all this trash? I mean, this is the other part of the lifecycle that no-one talks about. It is similar with lithium ion batteries, which really cannot be recycled at scale. So there is a tail-effect of these technologies that is not being discussed. And so this ‘green halo’ needs to go away.

But I will add one other point because it is an excellent question and it is one I have written about as well –what about the Chinese slave labour that is involved in the production of polysilicon? Remember? It was just about a year ago the US government said the Chinese government is practising genocide – that’s their word, genocide – against the Uyghur Muslim minority in Xinjiang province. And that same report said 70% of the world’s polysilicon for solar comes from Xinjiang province and some of that percentage is produced with slave labour. So, you know, it is not hyperbole to ask, well, how much slave labour or how much genocide is it OK to have in your solar panels and still call this technology ‘green’? I mean, there is no such thing as a free lunch – and I think that is what we are seeing with the solar business. The ‘green halo’ is coming off.

Bridging the ‘power-generation gap’

AL: We have talked with various people on the podcast about the link between energy and development in developing countries. As Juan alluded earlier, you very specifically tie it all back to the importance of electricity – so could you give us your thoughts on, less so perhaps, the fossil-fuel impact, and more the direct importance of electricity to the developing world?

RB: Sure. As I think about electricity and what it means, well, it is most meaningful to women and girls because – as I wrote in my book and I will say in the film – electricity frees women and girls from the pump, the stove and the washtub. For millennia, women and girls have effectively been slaves to household labour, right? Whether it is hauling water or washing clothes by hand or cooking over a stove fuelled with wood or rice straw or twigs or something else.

I saw this myself – I saw it in India. I am not an expert on India but I have been there once and I have seen the absolute dire poverty that billions of people around the world are living in – and they are depending on traditional biomass to cook dinner. I mean, as someone who grew up in a middle-class home in Oklahoma in America, the idea of my mother doing something like that was unfathomable to me. Or relying on burning cow dung for energy, which I saw myself, again in India – women collecting cow dung. I mean, it is just incredible to me that that was the level of poverty these people were living in.

So here are the numbers: there are roughly 3.3 billion people in the world today who use less electricity than the average kitchen refrigerator here in the US. I’ll repeat that: 3.3 billion people – four out of 10 people on the planet today – live in areas where per-capita consumption of electricity is less than 1,000 kilowatt hours per capita per year. This is dire electricity poverty – yet this is the norm around the world for billions of people.

So electricity is the most important energy form and it is the fastest-growing form of energy – you know, people will do whatever they have to do. I coined the ‘iron law of electricity’ – people, businesses and countries will do whatever they have to do to get the electricity they need because it is so important to everything we do – nearly everything we eat, read, touch or wear has in some way or another been electrified. This is the most important form of energy and people are not going to do without it.

AL: So if those 3.3 billion people are to aspire to increase their electricity consumption anywhere towards Western levels, how do we bridge that kind of power-generation gap?

RB: Well, for a dozen years, I have been talking about natural gas to nuclear – end to end. These are the forms of energy where the technologies are mature and the ability to produce the technologies is fairly widespread. Gas resources globally are enormous – I mean, they are so big, we do not even really understand how big they are. There is a lot of stranded gas in the world – Africa has enormous gas resources – but we have to drill for it. And with nuclear, again, the technology is very well-established.

And both nuclear and natural gas – they are low-carbon or no-carbon, they are scalable, they are relatively affordable and so these are the ways we have to think about empowering the rest of the world and continue pursuing lower emissions. So it is not going to be easy, it is not going to be cheap and it is not going to be fast but these are the technologies I think are the best ‘no regrets’ strategy as we look at the future.

JTR: One thing you mention in your book is, while you can trade all the different commodities that make the fuel to generate electricity, trading electricity between countries is very difficult. It is very expensive to build the transmission lines and you lose a lot of power sending the electricity from one body to another. That means, ultimately, it is up to each individual country to decide how to fix its own problems, which, I guess, creates a lot of issues for many emerging market countries. You also point out that, regardless of the fuel mix, an electricity system needs four characteristics – cost visibility, storage capabilities, scale and land. Can you walk us through what these four variables mean? Also, why are they so important, what happened with them in the context of renewables and, most importantly, as you alluded at the beginning of our conversation, why is land the major weakness?

RB: I’ll start with the land issue because you have to start with first principles. As my friend, Lee Cordner – who has worked for California and the California electric grid for decades – says, there are three issues you have to solve whenever you are building new infrastructure: where are you going to put it, how are you going to connect it and how are you going to pay for it? So that ‘Where are you going to put it?’ is critical.

And we see this all over the world, regardless of what type of energy project, you are talking about – whether it is drilling for oil or building a nuclear plant or whatever – you have to get acceptance from the local people in order to build it there. And the fundamental problem with renewables is low power density, which means they have a very big footprint – and, to increase their output, they have to increase their footprint dramatically. Well, as you increase the footprint, the more people you are touching and that is a problem.

That is why we have seen all this conflict – in Europe, Australia, Asia, the US – over the siting of these large renewable projects. They are politically popular – particularly in the cities, where there are a lot of liberals. I mean, it is the same in the US – you know, a lot of Democrat voters live in the cities and they say they want renewables but they are not the ones who are living with these projects. So that is the fundamental issue and the basic problem – one of physics and math – that is facing the renewable sector as it tries to grow.

I’ll just give you a quick fact about Europe. About 10 years ago, the European Platform Against Windfarms had about 400 members – today it is over 1,600. So this backlash is not limited to the US – it is happening all over the world. And it is one of the other reasons why I think Europe is facing such a dire situation – Europe has to start drilling. The European countries – and Britain, in particular – you have got to get some drill rigs and some roughnecks and you need to get busy now, because you cannot rely on other countries for this.

And one last point on the issue of electrification and individual countries – electric grids perfectly reflect the societies they serve and weak governments have weak electric grids. You know, if you are going to have a successful electric grid, the people who are served by that grid have to pay for it – you cannot give away the electricity. Unless you are Saudi Arabia or Kuwait or somewhere there is enough money to subsidise it, the grid has to pay for itself. There has to be this belief in the government and, if you don’t have that, you have to have integrity, you have to have capital and you have to have fuel. Those are the three things you have to have but the integrity of the system is the most important one – and unfortunately, in a lot of developing countries, there is not a lot of integrity in the governmental systems.

Who’s winning the argument on nuclear power?

JTR: You are by no means the only one voicing concerns about these policies creating a far weaker system – and we are now seeing the consequences in Germany. Why are these voices are being ignored?

RB: Well, I hope they are not being ignored, Juan! Otherwise, this has been a tremendous waste of time on my part, which I would not be happy about at age 62 – to think I have wasted my career. But I think the conversation is changing. I mean, I’ll disagree with you – I think Russia’s invasion of Ukraine is an inflection point. You have seen Sweden and Finland joining NATO in a very short amount of time and you have seen a fairly unified Europe against this aggression from the Russians, which was foolhardy from the beginning. But, you know, they are going to do what they are going to do.

So I think there is more rationality coming into the energy debate because it is being forced upon policymakers. In some cases, they are being dragged kicking and screaming into this but you look at what happened in Sri Lanka – here is a country with an almost perfect ESG score and there is rioting in the streets. Why? Because of foolish, idiotic policies implemented by government officials, who are saying, oh, we are just going to decarbonise and we are not going to use fertiliser. Well, you idiots. That has resulted in massive food shortages, your people are hungry and in the streets and they are ransacking the palace because you screwed the pooch – you ruined the system.

We need hydrocarbons. We need energy. Energy means civilisation. It is the catalyst. As energy analyst Doomberg here in the US says: “Energy is life and the absence of energy is death.” And we are seeing these countries – like Sri Lanka and, to some extent, Europe ... I will say the same: Europe has essentially been cutting its own throat, with bad policy, by ignoring the centrality and essentiality of energy to civilisation. And no, it is not just making do with less – that is the wrong approach. We need more and we need an abundance of energy. Cheap, abundant, reliable – in that order.

JTR: I guess what I was getting at is that nuclear has been around for 70 or 80 years now and yet it is incredibly difficult, say, to start a new nuclear project in the US. At the same time, Germany has shut down all of its nuclear capacity over the last decade and the US is doing that right now – many states are shutting down nuclear, despite people seeing what is happening and people who have the knowledge and have worked in the energy sector telling them the physics and the maths are going against them.

RB: I am not going to sugar-coat any of this – I am not Dr Pangloss here – the nuclear sector faces some real challenges. But you are in UK and Sizewell C just got approved. I mean, this is a big deal, right? Boris Johnson is out now – and I’m going to miss his hairdo! – but, before he resigned, he said we are going to build a reactor a year. Rolls-Royce is developing an SMR [small modular reactor] with a power density of 10,000 watts per square metre. Now, whether that is a ‘paper’ reactor or they will make it real, I don’t know.

But Eastern European countries are much more motivated on nuclear. And we have seen, I think, a shift in the US – particularly in California, where the governor, Gavin Newsom, said, oh, maybe we should keep Diablo Canyon open. Well, you think so, governor? It is 8% of your electricity generation so you might think seriously about this before you shut it down. So, due to a number of factors, including the invasion of Ukraine, but also skyrocketing prices for coal – the Newcastle marker for coal is now over $400 a tonne – we are seeing countries around the world, I think, taking another look at nuclear. And the public – particularly the younger generations – are looking at nuclear in a way that my generation did not. They are looking at it as an essential part of the effort to reduce emissions and address climate change.

Practicality eventually will win out but we have to get the public to understand their misplaced fear of radiation – it is completely misplaced and wrong and we need to get past that because there is no option for decarbonisation at scale without nuclear. That is just clear and it has been repeated over and over by the IEA [International Energy Agency] and many other people. That is just the reality. But let me switch the tables and ask the two of you –  what is the sentiment in the UK now consumer bills are skyrocketing? What was your feeling about the Sizewell C approval? What do you see in the UK? I’m interested – you’re there and I’m not.

AL: Personally, I see Sizewell C as very positive. To come back to what you said, it is almost as if the politicians have been apologetically pushing nuclear through – but trying to do so under the radar – whereas, actually, at least some people do understand the common sense behind getting it done, in the face of a fleet of older reactors that was about to become obsolete. Also, having built as much offshore wind as we have – which is a very large amount – you still need some baseload and, if you want that to be green, it has to be nuclear, really. Maybe this is optimistic but I do think some people do get it on nuclear and are making decisions – it is just that they don’t want to shout about it too much.

RB: Right. Yes – I think that practicality, in the end, will win the day but it is going to take a while. What did Churchill say about the Americans? They can always be counted on to do the right thing – after they have exhausted all other possibilities! Something to that effect, right? I am going to have to work in a Churchill quote – after all, I’m talking to some guys in Britain so there you go.

JTR: Well, one of them is Columbian but ...!

RB: Well, you’re in the UK. But it is the great line Churchill said about energy security – that it lies “in variety, and variety alone”. So nuclear has to be part of that variety. You can’t just say wind, you can’t just say gas – you need a mixed portfolio. And I think that is the other reason why nuclear is gaining traction – you bet too heavily on Russian gas.

JTR: I guess the other thing is that people are very aware of the mistakes Germany has made over the course of the last 10 years. And they can look across the border at the mistakes France has not made – at least on energy policy – over the same period.

RB: Well, the French are having problems with their reactors because they did not maintain them properly. This is the other part ... if we step back for just a minute and think about the philosophy of the civilization and the critical infrastructure elements in society, we have glanced on these ideas about renewables and what Amory Lovins coined as “the soft path” – that we are going to use renewables and this is “the soft path”. Well, no, we need hard technology. And we need hard, big, complex technologies – like nuclear reactors, like coal-fired powerplants, like gas-fired powerplants – big machinery that is going to be incredibly resilient and weather-resistant. Those are the things on which we can build society and depend, right?

We have been fooled, hoodwinked, deceived by this idea that we can do this soft path nonsense and make our systems dependent on the weather. Wrong – absolutely wrong. We need big hardware and technology and we need to invest in it. And that is one of the problems we have been talking about – for government officials, that is not de rigueur, right? It is not fashionable to say, we need to invest for the next 10, 20, 30, 40 years. And that is what Sizewell C is ... I mean, it is a bet – we are going to make a big bet on this technology, we are going to maintain it and this is going to be the basis on which we can build modern society.

AL: I guess one of the criticisms that might get raised about the nuclear projects – and Sizewell C will be no different – is that, even if it is the perfect solution, it is 10 years away before it is built. Do you just have to hold your hands up and accept that or is there a way to bridge the gap?

RB: There is no doubt the key problems with nuclear for years have been it costs too much and it takes too long. I agree and the US provides a case in point – the Plant Vogtle reactor [in Georgia] is massively over budget and over time and the end-costs will be something in the order of $20bn or $25bn, an enormous sum of money. So for any executive in the utility business, this is not a bet you are going to take casually.

But what’s that old line about the best time to plant a tree was 10 years ago? Well, the next best time is today so we need to get cracking. And we have to get good at building reactors at scale, which is where the French model, I think, is the one that should be emulated. They said, we have one kind of reactor, we are going to build a bunch of them and then all of our technicians can go to any one and they are going to find the same thing each time. But therein lies that one key issue, Andrew, which we didn’t mention – the big drawback for nuclear is it requires sustained government backing. And that is difficult because regimes change – but we have to have that strength of character and strength of belief in this technology ... it is the same problem here in the US: we need the liberals and the conservatives to agree and to support it over the long term.

JTR: We asked Meredith a question I would be very interested to hear your take on – what needs to be done to change the negative narrative around nuclear? In your latest book, you noted the Democrats have been against nuclear since the 1970s so that is some very embedded thinking to turn around.

RB: Well, part of it is going to be getting past these big climate NGOs, right – like the Sierra Club, like the Natural Resources Defence Council ... Friends of the Earth is big in Europe. These are very powerful and influential organisations that have a lot of reach and they have a lot of supporters who are diehard in their hatred of nuclear. That is a problem and it’s not going to be resolved overnight. But, as I said before, I think we are seeing a shift in sentiment around this. I think the public is starting to understand – and the top climate scientists in the world agree – there is no way to achieve decarbonisation without lots of nuclear. And so I think that is starting to change. But, as I say, what’s the plan? What’s your strategy on this? Pack a lunch.

Pack a lunch – it’s going to take a while because this sentiment is not going to change overnight. It took us decades to get to where we are now; it’s going to take decades to change it. But when is the time to start? Now. And that is why I have written repeatedly that President Biden should immediately use the bully pulpit and say he’s out in front and in favour of nuclear energy. But, unfortunately, he is a Democrat and, as far as I can tell, since becoming president, he has not mentioned nuclear energy – not once.

JTR: At the start of our conversation, you said the world was not decarbonising but re-carbonising. There is narrative and then there is reality so what are your thoughts on where coal is heading?

RB: Well, coal is not going away. One of the more remarkable developments in the post-Covid era is this massive surge in coal demand and coal prices. As I mentioned earlier, the Newcastle marker – out of the port in Australia – is at over $400 a tonne of coal. That is a big number – you know, just 18 months ago, it was less than $100 and I think, if memory serves, it was about $50 – so this surge in electricity demand has led to a concurrent surge in the demand for coal.

Let me give you a couple of numbers. In the last few months, China and India announced, together, that one is going to be increasing coal production by 300 million tonnes, the other by 400 million tonnes. So the sum is 700 million tonnes of increase in coal consumption – 700 million tonnes increase. Well, if you turn that into CO2 numbers and they burn all that coal, that is roughly 1.4 or 1.5 billion tonnes of CO2 – that is equal to all the CO2 emission reductions that have been achieved in the US over the last 15 years.

So this idea that, oh, we are going to lead the world and show it how to decarbonise? There is no evidence that is happening. And in fact, these countries are doing what is in their own self-interest – they are going to burn coal because they know having blackouts is a problem for the politicians and they don’t want that. So they are going to burn more coal. So coal continues to hold on to that market share. I think it went up slightly last year – 36% of all global electricity is produced with coal and I think it is going to last for a while. I think we are going to see another year of record coal demand this year, just as we did last year.

If I was Joe Biden’s energy czar ...

AL: If you were US president, what would be your five bullet points or your summary policy document so you could hit the ground running your first day in the White House?

RB: Wow – well, I’m tempted to say the first thing I would do is fire me! I’m the wrong guy! They’ve picked the wrong dude – find somebody who’s qualified!

AL: OK – you can just be Joe Biden’s energy adviser, if you like.

RB: OK, if I just want to be the energy czar? Well, I’ll repeat what I said before: the first thing – and, in my view, almost the only thing – is we have to get serious about nuclear and we have to do it right damn now. We need sustained effort and investment and regulatory reform that will allow a robust nuclear sector – not just in the US, but around the world. So immediately begin co-ordinating with the International Atomic Energy Agency and other agencies to roll out new technologies and deploy – at scale – gigawatts and terawatts of nuclear reactors around the world. Immediately. Not tomorrow – now. We have to get serious about it now.

The other thing is obvious – it is that, here in the US, the Biden administration has continually demonised the oil and gas industry. You can demonise it if it makes you happy but at least recognise the importance of the oil and gas industry to national and economic security. But really we cannot demonise it in this way – we have to get rational about this. You don’t have to like ExxonMobil or Chevron but the global economy runs on oil and that is not going to change in anything like the near term.

So first, reform nuclear. Second, quit demonising the oil and gas industry. Third, get serious about supply chains. We have made ourselves too vulnerable to imports of the critical commodities needed for alternative energy technologies. We are way too dependent on China for neodymium iron boron magnets, for cobalt, for lithium – for all of these so-called ‘green metals’ or green technology commodities. China controls the global market for nearly all of them so we need to get serious about producing those things in the US.

So nuclear; promote oil and gas; and allow more mining and production of the critical commodities needed for alternative technologies. Fourth, we have to get serious about pipelines and transmission capacity. We have been stymieing the expansion of pipelines, which is then decreasing energy security and harming affordability – particularly in the north-eastern US.

And number five? Geez, you put me on the spot here, Andrew – what would I say? We need a humanist approach. And maybe this should be the first one actually – that energy realism is energy humanism. We need to get past this idea that we are just going to use less or that people in the developing the world don’t need energy – that is just wrong. If you believe in humans, if you are a humanist, if you are pro-human, then you have to be pro-energy. That may be more of a philosophical issue but it is one that is critical to this debate – because the public has been misinformed, and uninformed, about energy and power systems. We need more rationality, we mean need more science, we need more physics – but, with that, we need to understand the essentiality of energy in our lives – again, energy means life; absence of energy means death. It’s that simple.

JTR: As part of your advice to the president, would you recommend stopping or delaying the push for electric vehicles and focusing more on hybrids?

RB: I have been a long-time critic of the electric vehicle market. Elon Musk has made billions – you know, $200bn or whatever it is – but, let’s be clear, his empire is largely built on subsidies. My line is: electric vehicles are the next big thing and they always will be. They have been in the marketplace for over 100 years – I can point you to an article 111 years ago in the New York Times, where they said the EV has long been recognised as the ideal technology because it is more economical, la, la, la. OK, fine – that was 111 years ago. Last year in the US, EVs had 3.7% of the new car market. So, in 100 years, they have captured less than 4% of the new car market and who’s buying them? The ‘Benz and Beamer’ crowd.

This is not the average working man. These aren’t carpenters and bricklayers buying Teslas – it’s rich people. The average household income for an EV buyer in the US is $140,000 a year – that is twice the national average. So you ask the question – I’ll answer it. This hype around EVs has got to stop – I mean, it is just ridiculous. If rich people want to buy an EV, go ahead and buy it – but don’t make me subsidise your car. That's wrong. Second, I would put it this way – hybrids are robust and they are here to stay. I think the hybrid technology is really remarkable and that is going to continue to grow. But I just don’t believe in vehicles that have a plug. I continue to question that because of the fragility of the grid and the lack of recharging infrastructure. And I don’t think building more recharging infrastructure is a good use of public dollars – if people want that vehicle, let them buy it.

JTR: I am interested in your point on humanism. On your podcast, one of your guests was discussing how ‘Mother Earth’ had taken centre-stage and everyone’s attention – and all the rest came second.

RB: Yes. Well, you know, there is a ‘religious’ element to all of this, Juan. There is this idea that in the US – and I think it is the same thing in Europe – the population has become more secular, right? There are fewer churchgoers – particularly among the people on the left. And that is one of the big differences, one of the great divides, in America and, I think, around the world – between the secular voters and the ones who are religious. Yet, with the secular voters, there is a religiosity – it isn’t necessarily Christianity but, when you look at the phrasing and you look at the terminology they use ...

Take this idea of carbon credits – well, Martin Luther would be very familiar with this idea of carbon credits and ‘absolution’, right? Oh, I can fly to Bali – but only if I buy carbon credits for my aeroplane flight, as then it doesn’t really matter! I mean, this is an indulgence. So there is a certain amount of religiosity to all of this that I think is critical to understand. There is an entrenched belief system around this preservation of Earth, right? That we have done wrong to the earth and now we are going to, you know, ‘get in communion’ with Earth by quitting hydrocarbons, and particularly nuclear, because that is too much technology. I mean, this smacks of this idea around technology that can even be traced back to Genesis and Adam biting the apple of knowledge – well, yeah, but maybe he bit from the apple of knowledge because God wanted humans to prosper and use technology to better themselves.

So this idea we should all go backward in time – it is just a very dangerous and anti-human stance. ‘40 acres and a mule’? I get that whole sentiment but that 40 acres and a mule and living on the farm stinks. Nobody wants to do that. They want to live in comfort in the city. So we have to get past this romantic notion around healing the earth and going back in time. No – the old days sucked. We need modernity, we need energy, we need technology. That is humanism and, if we are going to be real humanists, we have to have more energy.

JTR: Fantastic. Robert Bryce, thank you very much for coming onto The Value Perspective podcast.

RB: Well, I’m pleased – and flattered – to be invited. Thanks, Andrew. Thanks, Juan. Happy to do it.


Juan Torres Rodriguez

Juan Torres Rodriguez

Fund Manager, Equity Value

I joined Schroders in January 2017 as a member of the Global Value Investment team and manage Emerging Market Value. Prior to joining Schroders I worked for the Global Emerging Markets value and income funds at Pictet Asset Management with responsibility over different sectors, among those Consumer, Telecoms and Utilities. Before joining Pictet, I was a member of the Customs Solution Group at HOLT Credit Suisse.  

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