00:00is Rachel Bronson, Senior Advisor of the Bulletin of Atomic Scientists, and she's also a senior
00:04at the Chicago Council on Global Affairs. Rachel, thank you so much for joining us this morning.
00:10And look, it's another day of uncertainty, the price of oil moving higher with reports
00:14on an attack on a steel facility in Iran. And as we're talking about attacks on refineries,
00:20LNG facilities, threats to the Strait of Hormuz,
00:23how quickly has that changed the calculus for global energy markets?
00:30Well, I think what we've certainly seen is that global energy markets are once again vulnerable,
00:37right? As we headed into this operation, there was a sense that the energy markets had changed,
00:43and they certainly have, right? But that we didn't have to worry too much about these changes to the
00:52market, which is now we're hearing of the worst energy crisis since the 70s. There was a sense
00:59that because of agreements and diversification that we weren't as vulnerable. What we're seeing,
01:08of course, is that the global economy runs on energy, and a significant shock like this
01:15will move through the system for years to come, and that energy security is national security.
01:23It's a reminder, unfortunately, of a lesson that many stop thinking about.
01:28I just wonder, because it feels like markets haven't fully priced this idea in, but during COVID,
01:34we had this rethink of global supply chains. And then we do that again when tariffs come into the
01:39fore. Is the level at which we're rethinking energy markets at the same scale of those paradigm shifts
01:46we saw in recent years?
01:48Yeah, it's a great question. And I think that there is a sense that, and actually it was data
01:57centers that put this kind of first and foremost onto the table for energy markets more recently,
02:03is that as we began to understand that information and data centers, that data centers were going to be
02:11a piece of the future. We were going to have to find a way to power them because, of course,
02:16we've been hearing these data centers require huge amounts of energy and amounts of energy beyond which
02:21the system can currently provide. And that began to focus attention on this economy of the future,
02:31critical mineral supply, supply change. And now this current environment reminds us that the energy to power,
02:40that it accelerates that awareness that the market is changing as kind of the future commodities of
02:47what's going to power the economic system changes. So I do think there was a growing awareness of it.
02:53You're right to say that there wasn't a panic on day one of this crisis, a belief that the current
03:02system,
03:02economic system, energy system could sustain a week or two of shock. As we move into four weeks,
03:10five weeks, five weeks, we're now just talking about June, it can't sustain that kind of duration
03:17at the current levels. So I think the market is starting to, wait a minute, if this is going to
03:22last, you know, weeks to months, we're in a different ballgame. And I think that's why you're
03:28seeing the oil prices now really at 110, 112 and questions of whether it moves north.
03:34I know about, you know, two weeks ago, which feels like a lifetime ago, but this still feels
03:39incredibly relevant. You're writing in the bulletin of the atomic scientists, this idea
03:42that what the war would also do is speed up the transition from fossil fuels into alternative
03:47energy sources, kind of what you're getting at now, but specifically nuclear energy. If that does
03:52become the future, what sort of position does that put the United States in? It's trying to prevent the
03:58nuclear proliferation in Iran, trying to strike this balance between what is civilian usage and
04:04what could potentially be military usage. How does this unfold, Rachel, and how complicated would it
04:10be for the United States? Yeah, it's a really complicated situation for the United States. And so
04:16I do believe one of the things coming out of this is that the world will double down on a
04:24push to
04:24nuclear power. We are seeing that amongst the Europeans. We just had the president of the EU
04:30come out and say that the EU made strategic mistakes moving away from nuclear power. The EU had been
04:41about 30 percent nuclear. It's gone down to 15 percent. Nuclear is trying to move itself back up to
04:4630 percent. France was at 70 percent nuclear, down to 50, headed towards 20 percent, now trying to revamp
04:55to get up to 70 percent. My home state of Illinois, 55 percent of our energy comes from nuclear power.
05:02So
05:02the United States had traditionally been a leader in nuclear power. And we lost that leadership role
05:10because it wasn't as important to us. We were focused on renewables and we were focused on gas.
05:16And we let our leadership in nuclear power slip. And the Russians and the Chinese have taken over the
05:24positions. The South Koreans are powerful in that. France is trying to regain its position. But the
05:29Russians and the Chinese understood the value of nuclear power and they have adopted really a
05:36leadership position. This president, in truth, has understood the power of nuclear power, if you will.
05:43And he is doubling down. The Biden administration was definitely moving in that direction and you
05:48could see them understanding it. But they weren't moving with alacrity. They weren't moving with
05:53urgency. This president is. And we have changes in the American economic infrastructure and base to move
06:01to try to regain the role in traditional nuclear plants as well as smaller module reactors. So we are moving,
06:09but we have a long distance to make up as the rest of the world begins to look towards nuclear
06:16and
06:16renewables in combination to give them a homegrown energy source. It's a pretty fascinating moment.
06:23It's ironic that as we're in Iran to reduce its nuclear weapons power, that we're moving towards
06:32civilian nuclear use. But those are different systems and for the most part can be separated.
06:38But as we move into emerging markets in different areas, it's a new area that the U.S. will also
06:45have
06:45to pay attention to is how we think of enrichment and how we move forward.
Comments