Making Hay Monday - June 5th, 2023

High-level macro-market insights, actionable economic forecasts, and plenty of friendly candor to give you a fighting chance in the day's financial fray.

Image note, per Wikimedia: “In developing the reductive extraction processes for removal of protactinium and fission products from the Molten Salt Reactor, high-temperature solvent extraction columns are being studied for contacting molten fluoride salt with liquid bismuth.”

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“This technology appears to be following a pattern seen after the Cold War ended where technology discovered and created by the DoD migrated into the consumer and business sectors, driving a productivity boom. While it is unlikely to arrive in time to prevent a US fiscal crisis, longer term it could easily drive another productivity boom as we saw military technology converted to consumer and business use do from 1990-present.”  -Luke Gromen, referring to the growing momentum by, and support for, small modular nuclear reactors.

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In my long career, no one has called me a starry-eyed optimist. Yet, that’s exactly how I feel about small modular reactors (SMRs), particularly of the molten salt variety. Last week, I cited a number of governments, including the U.S., and major companies, like Dow Chemical, that are jumping on the SMR bandwagon. But I didn’t mention that one of my favorite research sources on the looming Federal Fiscal Funding Fiasco is also picking up on the scent. That would be Forest For The Trees’ Luke Gromen, as you can see above.

Luke has long said that barring an energy miracle, such as a fusion breakthrough, America’s future is very bleak. Thus far, I haven’t seen him comment on molten salt reactors (MSRs) but I think, when he does, he’ll be even more impressed. (Yes, I realize the similarity of the two initialisms, which can lead to confusion.)

Both SMRs and MSRs are, of course, nuclear power producers. They each utilize uranium; however, as I described last week, both processes produce much less nuclear waste than a traditional light water reactor (LWR).

With that preamble out of the way, on to some details about this week’s Making Hay Monday (MHM) edition, which is a definite change of pace. For one thing, it’s a video. For another, I’m reluctantly returning to my role as Haymaker As Host. My strong preference is to be a guest, not the moderator. But the chance to chat about SMRs and MSRs with two very bright people was an opportunity I couldn’t pass up.

The first of those two individuals is my friend and long-time nuclear expert, Richard McPherson. He’ll give you his credentials at the opening of this podcast so there is no need for me to do so here. His current role is as a senior executive of MSR start-up, MicroNuclear. In full disclosure, I’m an investor in one of its subsidiaries. Frankly, though, I have no clue if I’ve bet on the right horse. Consequently, I’ll be on the lookout for other ways to play MSRs which I am more and more convinced will be the safe and pollution-free energy-step change for which we’ve all been yearning.

There are other companies working on MSRs but Richard believes they are inferior to MicroNuclear’s design.  Of course, he is biased but their deep bench of nuclear experts and, especially, the many who were part of the U.S. Navy’s nuclear propulsion program, encourages me that he’s probably right, at least for now.  It’s for sure their competitors aren’t standing still.  In the meantime,  I’m hoping their pending patents are rock solid!  (We’ve attached a link to a short video MicroNuclear’s process in the video description — see link below).

The other member of our trio is Doomberg, whose increasingly famous avatar is the Green Chicken. Doomberg is not a nuclear power professional like Richard but he does have a PhD in Chemistry and is highly knowledgeable about most things atomic.

The other member of our trio is Doomberg, whose increasingly famous avatar is the Green Chicken. Doomberg is not a nuclear power professional like Richard but he’s a trained chemist and is highly knowledgeable about most things atomic.

This altered format also gives us the chance to make another change. We have been planning to split our MHM editions into two parts, with the second running on Fridays. That will be primarily based on our investment positioning guidance. The new format will make MHMs shorter, always a reader pleaser.

The new format will replace our Highlight Reel Haymakers but we want to preserve some of that by running a “Chart of the Week” (possibly two) with some brief commentary. Let us know what you think of this adjustment once you’ve given it a few weeks to prove itself… or not.

Thanks and enjoy the interview!

-David “The Haymaker” Hay

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To learn more about Evergreen Gavekal, where the Haymaker himself serves as Co-CIO, click below.

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Timestamps

0:00 - 5:07 - Introductions

5:08 - 10:41 - Small Modular Reactors: Overview, history, current state

10:42 - 15:39 - SMRs vs LWRs / SMRs vs MSRs

15:40 - 17:37 - Molten Salt Reactor vs USN’s pressurized water reactor

17:38 - 21:51 - Navy technology exports and talent/expertise sharing/challenges

21:52 - 27:06 - Nuclear waste issue (Yucca Mountain)

27:07 - 31:45 - Molten salt reactors, deep-dive history

31:46 - 34:08 - MSR downsides? Challenges?

34:09 - 36:05 - Worldwide nuclear renaissance In progress?

36:06 - 40:55  SMR heat abatement, industrial steam & demonstrable safety

40:56 - 43:11  Grid vulnerability & “Green” movement fallacies

43:12 - 48:49 - Uranium or thorium? The state of materials science.

48:50 - 49:54 -  Enrichment “bottleneck” problem?

49:55 - 50: 39 - Big-picture potential and promise of nuclear power

50:40 - 53:07 - How soon is MSR possible? 

53:08 - 54:22   Richard’s explanatory SMR video & Alvin Weinberg plug

54:23 - 55:33 -  Process heat

55:34 -  Closing remarks

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MicroNuclear

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