As my friend regularly opines, “Energy is Life.”

More recently, however, I’ve become something of a prime mover determinist, for energy alone can accomplish remarkably little without the means to transform it into useful work.

Plutarch recounts that during Alexander the Great’s conquests of the Middle East, he marveled at the flammability of the petroleum seepages he encountered in Mesopotamia. However, beyond primitive incendiary applications, later developed into Greek Fire, petroleum remained little more than a curiosity for Alexander, who had no tanks or trucks with Otto or Diesel engines to harness this fossilized sunlight and turbocharge his force projection through mechanized mobility.

After reading @Stefan Link’s Forging Global Fordism at the suggestion of subscriber , I am now firmly in the camp of the manufacturing determinists. The invention of prime movers accomplishes relatively little until they can be mass produced cheaply and in enormous quantities.

Before Ford, automobiles were luxury playthings and status symbols for the wealthy elite. Ford’s revolutionary assembly-line manufacturing transformed these expensive novelties into ubiquitous prime movers and, I’d argue, enabled the greatest productivity revolution in human history.

Early automobile manufacturing resembled the assembly of a bespoke carriage. Skilled craftsmen painstakingly assembled engines, transmissions, and bodywork from poorly standardized parts, adjusting components by hand as they moved around largely stationary vehicles.

Ford drew inspiration from the disassembly lines of Chicago’s meatpacking plants, where carcasses hung from overhead trolleys passed stationary butchers. He reversed the process, adding rather than subtracting parts as an increasingly complex machine moved down the line and finally roared to life. At his Highland Park factory in 1913–14, relentless refinement of this principle reduced Model T chassis assembly time from roughly twelve hours to just ninety-three minutes.

Electrification laid the material foundation for Ford’s revolution. The development of practical electric motors in the late nineteenth century, pioneered in part by Nikola Tesla, eventually made possible what became known as unit drive: powering individual machines with their own motors rather than through cumbersome networks of shafts, pulleys, and belts driven by a central steam engine.

This liberated machinery from the restrictive geography of steam-based power transmission, allowing factories to be reorganized around the sequence and flow of production itself. Combined with interchangeable parts and precision machine tools, it helped transform carmaking from a craft into a tightly coordinated industrial process.

Ford’s worker productivity revolution was the consequence of a radical division of labour.

On one side, an engineering elite designed and distributed sophisticated, expensive machine tools along the line, justifying their costs with enormous production runs. One example was a multi-spindle drilling machine that could simultaneously create 45 holes in an engine block from four different angles, compressing what had once required numerous separate machining operations into a single, precisely choreographed mechanical act completed in minutes.

On the other, unskilled workers, many newly arrived immigrants largely drawn from an agricultural labour pool, performed mind-numbing simple, repetitive tasks. The genius of Fordism was that, by embedding craftsmanship in the machinery and organization of the factory, unskilled labourers could collectively replicate the work of master craftsmen at a fraction of the cost and in vastly greater volumes.

But the productivity revolution did not end at the factory gates. The farmer who abandoned his fields for the assembly line was now helping manufacture the tractors, trucks and agricultural machinery that would replace his own labour back on the farm. His departure no longer meant a corresponding loss of agricultural output. Instead, the remaining farmers could cultivate vastly more land with far fewer hands.

Consider the sheer multiplication of mechanical power. A human being engaged in sustained physical labour generates roughly 100 watts; a horse, 500–1,000 watts. The engine of a typical family car can deliver more than 100,000 watts at full output. Make that kind of power ubiquitous in the form of a tractor or combine harvester, and a single farmer can cultivate and harvest land that once demanded the backbreaking labour of hundreds.

Extend this revolution to freight transport, construction, earthmoving and the colossal machinery of modern mining, and one begins to appreciate how thoroughly mechanical power has multiplied human productive capacity.

And critically, machines multiply machines. Excavators mine the iron ore, locomotives transport it, steel mills refine it, and precision machine tools transform it into still more machinery. Fordism thus revolutionized productivity twice: first in the factory that produced the machine, then in the fields, mines, and workshops where that machine was put to work in an ever-accelerating, self-reinforcing cycle.

Mass motorization did more than multiply the power of human labor; it also collapsed the tyranny of distance that had once restricted the movement of people and goods. Railways had already conquered continents, but the internal-combustion engine carried that revolution beyond the railway station, reaching into every farm, factory, village and household.

The scale of that transformation was staggering. According to the U.S. Federal Highway Administration, motor vehicles collectively traveled a mere 100 million miles on American roads in 1900. Thirty years later, they traveled 206 billion miles annually, a more than 2,000-fold increase.

By 1927, some 23 million motor vehicles traveled America’s roads, compared with barely 18,000 in the Soviet Union and fewer than half a million in Germany.

The productivity gap was staggering, and increasingly recognized as a profound economic and strategic vulnerability. The Soviets in particular had no intention of remaining trapped in a subordinate position in the international division of labour. They refused to accept a future in which they exported grain and raw materials to pay for the sophisticated machinery of more advanced industrial economies, forever confined to their supposed comparative advantage.

Such dependence threatened to become self-perpetuating, and with the winds of another European war already stirring, industrial backwardness was beginning to resemble not just an economic liability but an existential threat.

Mastering American mass production became an urgent national priority. In the coming age of mechanized warfare, the gulf between industrial powers and industrial laggards threatened to become as decisive as the advantage Cortéz possessed over the Aztecs.

What followed was one of history’s most consequential episodes of industrial technology transfer. Engineers and industrial planners descended on Detroit to study, imitate, and recruit some of Ford's top talent. River Rouge-inspired, vertically integrated industrial giants arose in the Soviet Union and Germany in the 1930s as Europe raced to close the mechanization gap.

World War II became what historian Stefan Link and others call the “War of the Factories,” the ultimate proving ground for rival Soviet and Nazi adaptations of Fordism, where the capacity to mass-produce trucks, tanks, aircraft, and armaments proved as decisive as the armies wielding them.

In our next essay, we’ll explore how Ford’s political philosophy, which subordinated shareholder returns to the imperatives of production, captivated social democrats, Nazis, and Soviets alike, as well as its contemporary relevance in the era of Western financialization and industrial decline and the astonishing rise of Chinese developmental capitalism.

Like this post if you think it deserves a Ford-star rating.

Buy Stefan Link’s Forging Global Fordism here https://www.amazon.com/Forging-Global-Fordism-Germany-Industrial/dp/0691177546

Israel is widely believed to possess roughly ninety nuclear weapons. There has been no official Israeli test nor public declaration of a nuclear arsenal. Instead, it maintains the carefully worded formulation that it will “not be the first to introduce nuclear weapons into the Middle East.”

This formulation has survived the exposure of its secret nuclear complex by a former technician and more than half a century of regional wars.

The origins of this arsenal are as improbable as the silence surrounding it. In the 1950s, Israel was an impoverished state struggling to absorb hundreds of thousands of immigrants. Within little more than a decade, it acquired the capacity to manufacture nuclear weapons, taking advantage of a brief opening in the international nuclear order.

Israel’s nuclear arsenal was conceived as an apocalyptic insurance policy against national annihilation. Yet their most consequential applications may have been far more limited: the threat of a nuclear demonstration, intended to shock the superpowers into intervening and securing the conventional military assistance needed to avert defeat.

Their continued existence without official acknowledgment has depended upon an enduring accommodation among Israel, Washington, its Arab neighbours and the international nonproliferation system.

The following essay is based on my conversation with Professor Avner Cohen, author of Israel and the Bomb and The Worst-Kept Secret, whose research has done more than any other to reconstruct Israel’s clandestine nuclear past.

Oranges and Refugees: Israel of the 1950’s

Israel had a population of roughly 800,000 when it declared independence in 1948. Three years later it had nearly doubled. Holocaust survivors arrived from Europe alongside large migrations of Jews from Iraq, Yemen, North Africa and elsewhere in the Middle East. The government struggled to house them. By 1951, some 227,000 people lived in ma’abarot, temporary settlements of tents, huts, and one-room shacks erected around Israeli towns.

Food and essentials were rationed under the austerity regime known as tzena. Jaffa oranges and polished diamonds provided most of the country’s scarce foreign exchange. Imported fuel, machinery and military equipment competed for these dollars with housing, roads and water systems. Into this setting David Ben-Gurion introduced one of the most expensive and technologically demanding projects a 20th-century government could undertake.

Israel’s founding prime minister, who also served as defense minister for much of this period, feared the consequences of another major war. Israel possessed almost no strategic depth, and the combined population of its Arab neighbours vastly exceeded its own. Ben-Gurion had watched the world’s spectacular failure to respond to the destruction of European Jewry and doubted that foreign governments could be relied upon when Israel’s survival was at stake.

He believed the scientific achievement of the “Jewish brain” could compensate for the country’s disadvantages in territory, population and industry. Shimon Peres, an ambitious defense official who entered Ben Gurion’s inner circle while still in his twenties, proved adept at turning those ambitions into reality through his political instincts and contacts abroad.

The origins of Israel’s nuclear program make a compelling case for the great man theory of history. Without the particular talents of a handful of individuals, Israel would almost certainly not have managed to squeeze through the narrow window of historical opportunity that made its nuclear weapons ambitions possible.

The Fleeting French Connection

In the mid-1950s, access to nuclear technology was expanding faster than the rules governing its transfer. Eisenhower’s Atoms for Peace initiative encouraged international nuclear cooperation, and the safeguards that would eventually become central to the nonproliferation regime remained incomplete. Peres set aside fanciful ambitions of developing the bomb independently and began cultivating relationships with countries that might be of assistance.

The decisive partnership was with France, which was in those early days of Israel’s existence its principal supplier of fighter jets, tanks and artillery. Its government was fighting a brutal colonial war in Algeria, where the National Liberation Front enjoyed support from Egypt’s president, Gamal Abdel Nasser. Israel regarded Nasser as its principal regional enemy, particularly after Egypt acquired Soviet weapons through Czechoslovakia in 1955.

Peres cultivated sympathetic officials in the French defense establishment, intelligence services and Atomic Energy Commission, often working around opposition in the Foreign Ministry. The Fourth Republic’s divided authority made future nuclear cooperation possible without anything resembling a coherent decision by the entire government.

The Suez Crisis of 1956 deepened the alliance. Britain and France secretly coordinated an intervention with Israel after Nasser nationalized the canal. Under their plan, Israeli troops would invade Egypt, creating the pretext for an Anglo-French operation ostensibly intended to separate the combatants and secure the waterway.

On Israel’s part, it hoped to enlist British and French military power to cripple Egypt’s armed forces before they had fully assimilated their new Soviet weapons. The intervention quickly collapsed under American financial and diplomatic pressure, and Soviet threats of direct intervention potentially involving nuclear weapons.

Britain and France emerged from Suez humiliated. Israel, on the other hand, achieved a dramatically stronger strategic position, having inflicted substantial damage on Egypt’s army and air force at relatively little cost to itself and secured a UN peacekeeping buffer force along its southern frontier.

Its assistance also left influential French officials feeling indebted to their Israeli partners. By October 1957, Peres had secured an agreement for a substantial reactor at Dimona and, critically, a plutonium reprocessing facility. Hundreds of French engineers and technicians would help build the complex.

The window of opportunity was already closing. Charles de Gaulle returned to power in 1958, determined to restore French authority and repair relations with the Arab world. France was developing its own nuclear deterrent and he had little interest in assisting another state to acquire one.

Peres had kept the arrangements confined to a small circle of sympathetic French officials, so effectively that de Gaulle did not learn the full extent of French involvement until more than a year after taking power. By 1960 he was moving to curtail it, although negotiations allowed private French contractors to continue work after official support ended. Much of the essential expertise and equipment had already been transferred.

In the aftermath of the 1962 Cuban Missile Crisis, Washington and Moscow became increasingly determined to prevent the emergence of additional nuclear powers. The Nuclear Non-Proliferation Treaty, opened for signature in 1968, would recognize as nuclear-weapon states only the five countries that had tested before 1967. Israel had used a temporary alignment of French and Israeli interests to establish a weapons program before such transfers became far more politically and legally difficult.

How to Finance the Bomb?

American intelligence estimated the cost of Dimona at $100–200 million, potentially comparable to the entire National Water Carrier and several times the cost of the new deepwater port at Ashdod. Both were under construction at the same time, and offered clear economic benefits. Financing the nuclear program through ordinary government channels would have invited fierce competition for resources. Dimona, after all, promised an uncertain future strategic advantage at a formidable immediate cost.

The Israel Defense Forces wanted tanks, aircraft and artillery to maintain the conventional balance against Egypt. A wider debate over the nuclear project’s cost and uncertain prospects, even if conducted in absolute secrecy, might have killed it.

Ben-Gurion and Peres therefore circumvented normal budgetary and military channels, securing the project’s initial capital from wealthy Jewish supporters abroad.

Abraham “Abe” Feinberg, a New York hosiery magnate and influential Democratic Party fundraiser with close ties to Harry Truman and, later, John F. Kennedy, orchestrated the fundraising effort. Feinberg had helped mobilize American support for Israel since its founding. Ben-Gurion trusted him to discreetly approach wealthy Jewish donors, later referred to as consecrators, to finance what he regarded as an almost sacred undertaking. Peres later claimed that private contributions covered half the cost of the reactor.

According to Avner Cohen, further support appears to have come through a substantial long-term financial arrangement with West Germany under Chancellor Konrad Adenauer, although the precise proportion directed to Dimona, and Adenauer’s knowledge of its purpose, remain unclear. Less than two decades after Auschwitz, German money may have helped finance the Jewish state’s ultimate insurance against another Holocaust.

By the end of the 1950s, construction was under way in the Negev, roughly thirty kilometres from Beersheba. The reactor would attract attention, but the more sensitive infrastructure could be concealed beneath the desert surface.

Inside Dimona

Plutonium weapons require a reactor in which uranium absorbs neutrons and produces plutonium within the irradiated fuel. A chemical reprocessing plant then separates that plutonium from the remaining radioactive material. Finally, weapons engineers must manufacture the explosive assembly capable of compressing a plutonium core. At Dimona, the reactor attracted most of the public attention; the secret reprocessing plant in the basement provided the crucial route to bomb material.

American intelligence discovered the complex in 1960. The incoming Kennedy administration made Israeli nuclear intentions an important issue in the bilateral relationship. Ben-Gurion described Dimona as peaceful, occasionally qualifying the assertion with phrases such as “at present.” Kennedy demanded verification, concerned that an Israeli bomb would encourage Egypt and other regional powers to seek weapons of their own.

The American position was awkwardly asymmetric. In Western Europe, Washington had discouraged independent nuclear programs by extending its nuclear umbrella through NATO’s collective defense arrangements. Israel enjoyed no equivalent commitment. Kennedy sought to prevent Israel from acquiring nuclear weapons without offering the binding guarantee that might have persuaded Ben-Gurion to abandon it.

American scientific teams began visiting Dimona in 1961. By 1963, Kennedy was pressing for inspections frequent and thorough enough to detect diversion towards military purposes. The Israelis resisted a genuine safeguards arrangement and agreed instead to periodic visits under managed conditions. Scientists toured the complex and questioned its operators while Israeli personnel concealed the underground installations and prepared carefully for each visit. The inspectors returned frustrated, with suspicions but without decisive evidence of weapons production.

The reprocessing plant was completed by the middle of the decade, and plutonium production was under way or imminent by 1966. Yet an American inspection report in April 1967 still found no evidence of a reprocessing facility.

Within weeks, amidst an escalating crisis with Egypt, Israel would contemplate what it might do with the nuclear capability its most important ally had failed to detect.

1967: The Nuclear Tripwire

Egypt knew that Dimona was important. Nasser had warned that Egypt might launch a preventive war if Israel appeared close to acquiring nuclear weapons. For Israeli planners, the reactor complex represented an exposed and immensely expensive target whose destruction could set the program back years.

In the spring of 1967, Nasser faced pressure from several directions. His intervention in Yemen’s civil war, intended to install a friendly republican government on Saudi Arabia’s southern border, became a costly quagmire which came to be known as “Egypt’s Vietnam.” Meanwhile, Syria and Jordan questioned his claim to leadership of the Arab world accusing him of hiding behind UN peacekeepers while Israel struck its neighbours. A demonstration of military resolve offered political advantages, though Nasser appears to have hoped to avoid a general war.

Egypt moved troops into Sinai, demanding the withdrawal of UN peacekeepers. Israel mobilised reservists at considerable economic cost. On May 17 and 26th, Egyptian MiG-21 reconnaissance aircraft flew over Dimona. Israeli Mirage fighters failed to intercept them and General Ezer Weizman urged Prime Minister Levi Eshkol to launch a pre-emptive attack, fearing that Egypt was preparing to destroy the nuclear complex. Israeli leaders knew that Egypt regarded the nuclear program as a possible casus belli but had no reliable means of determining whether the flights were intended as intimidation or preparation for a strike.

During the three-week crisis, Israeli scientists and engineers raced to improvise a rudimentary nuclear explosive package. It had never been tested, and its reliability was uncertain. Nevertheless, a contingency later described as Operation Shimson envisaged placing a device in the eastern Sinai and detonating it if Israel faced imminent national defeat.

The proposed explosion would have been a demonstration, away from major population centers. Its principal audience included Washington and Moscow. The sight of an Israeli nuclear detonation could force the superpowers to confront the possibility of further nuclear escalation or proliferation across the region and press urgently for an end to the fighting.

Ultimately, no such demonstration occurred, and the plan remained a contingency. On June 5th, Israeli aircraft surprised the Egyptians by attacking their airfields at low altitude, disabling runways and destroying planes on the ground. The subsequent Israeli victory removed the immediate fear of defeat. It remains an intriguing question whether Dimona’s vulnerability contributed to Israel's decision to strike first.

The Birth of Nuclear Opacity

Israel’s successful work at Dimona meant it now had to decide how to navigate the repercussions of its weapons capability. Declaration would have created serious diplomatic problems for a country still dependent on American support. Egypt might accelerate its own nuclear efforts, perhaps with Soviet assistance. The United States would have to reconcile its relationship with Israel with its opposition to further proliferation. An openly nuclear Israel could also face pressure for inspections, disarmament negotiations and new restrictions on military assistance.

As a result, Israel developed the policy known as amimut, or opacity. It would neither confirm nor deny possession of nuclear weapons, undertake no public test, and repeat its promise not to be the first country to “introduce” them into the Middle East.

The policy acquired American support in September 1969, when Prime Minister Golda Meir met Richard Nixon privately at the White House. No public transcript exists of the decisive part of their conversation, but the subsequent conduct of both governments reveals an informal accommodation. Israel would avoid overt nuclear displays, and Washington would end its visits to Dimona and cease pressing Israel to join the NPT.

Did Israeli Nuclear Blackmail cause the OPEC crisis?

Six years after the Six-Day War, Israel was believed to possess a small arsenal of nuclear weapons deliverable by aircraft, a considerable advance over the improvised, untested device it had contemplated using in operation Shimshon. On Yom Kippur in October 1973, Egyptian troops launched a surprise attack across the Suez Canal behind a dense surface-to-air missile umbrella while Syrian armour attacked the Golan Heights. Israel’s initial defenses buckled. Defense Minister Moshe Dayan feared that Syrian forces might break through into northern Israel and warned of the possible “fall of the Third Temple.”

On October 7, Dayan urged Golda Meir to consider preparations for a nuclear demonstration. She refused, supported by senior ministers who remained confident in Israel’s conventional forces. The extent of subsequent nuclear-related activity and its purpose remain subjects of historical disagreement.

Pulitzer Prize-winning journalist Seymour Hersh later argued that Israel deliberately placed its nuclear forces on alert, preparing eight nuclear-capable F-4 Phantoms at Tel Nof airbase and readying Jericho ballistic missile launchers, with Egyptian and Syrian military headquarters among their intended targets, to pressure Washington into resupplying its battered ally. Cohen confirms that nuclear-related preparations likely occurred at several Israeli sites and that American intelligence detected some of them, but considers Hersh’s account of a coordinated nuclear blackmail operation exaggerated.

Washington had powerful reasons of its own to intervene. The Soviet Union was supplying Egypt and Syria, and Nixon and Henry Kissinger had no wish to see Soviet clients emerge victorious. Yet the possibility that an Israeli defeat might provoke nuclear escalation existed as part of the strategic calculus confronting the United States.

On October 14, American transports began arriving under Operation Nickel Grass. Over the following month, C-5 Galaxy and C-141 Starlifter aircraft flew 567 missions and delivered about 22,300 tons of equipment, including tanks, artillery, ammunition and replacement aircraft. Israeli forces had already begun reversing their early defeats before the first transports arrived, but the airlift replenished their losses and assured them of sustained American support.

The consequences spread beyond the battlefield into the international energy system. On October 17, Arab oil producers announced production cuts in response to Western support for Israel. Two days later, after Nixon requested $2.2 billion in emergency military assistance, they imposed an embargo on oil shipments to the United States. Oil prices nearly quadrupled.

A Flash at the Bottom of the World

In March 1979, Israel achieved a major diplomatic breakthrough. Begin, and Egypt’s Anwar Sadat signed a peace treaty that ended three decades of war between Israel and its strongest Arab adversary. Israel agreed to return the Sinai Peninsula, and Egypt became the first Arab country to recognize the Jewish state. During negotiations, Egypt had demanded that Israel join the NPT. Israel refused with President Carter’s support, and thus Israel obtained peace without conceding anything concerning its nuclear arsenal.

Six months later, Israel may have taken an extraordinary diplomatic risk. An American Vela satellite, purpose-built to detect atmospheric nuclear explosions, identified a distinctive double flash over the remote southern ocean between South Africa and Antarctica.

Initial suspicion fell on South Africa, which was assembling a small arsenal of independently developed, relatively simple gun-type uranium bombs, expected to produce considerably larger explosions than the Vela signal suggested. Attention soon shifted to Israel, whose more sophisticated nuclear program was capable of such a low-yield test. The two countries had established close defense ties, including cooperation on missiles and nuclear materials, raising the possibility that South Africa had provided logistical assistance for a clandestine Israeli test in the remote southern ocean.

But why would Israel risk compromising its carefully cultivated nuclear opacity? Cohen believes it was seeking to validate a new generation of boosted-fission or thermonuclear weapons, whose development required experimental data.

A scientific panel commissioned by Carter favoured a non-nuclear explanation, though some American weapons scientists disagreed. Carter later wrote in his memoirs that he believed Israel had been responsible.

An acknowledged Israeli test, or U.S. confirmation of one, would have endangered the understanding with Washington and embarrassed Sadat, whose peace treaty had been signed only months earlier. The incident remains unresolved in the public record, a fitting scenario for Israel’s ongoing nuclear opacity.

Maintaining a Nuclear Monopoly

On June 7, 1981, eight Israeli F-16s flew into Iraq and destroyed the French-built Osirak research reactor. It was designed to use highly enriched uranium, and Italian firms had provided laboratory-scale plutonium separation equipment. The Iraqi regime was investigating routes towards nuclear weapons, although the reactor itself was under IAEA safeguards and French technicians participated in its operation.

Israeli prime minister Menachem Begin defended the attack on grounds of national survival, insisting that Israel could never permit a hostile regional power to acquire nuclear weapons. The principle became known as the Begin Doctrine. Israel struck a Syrian reactor at al-Kibar in 2007, and the same reasoning has informed its long-standing campaign against Iran’s nuclear program, including sabotage, assassinations, cyber operations and direct attacks.

Israel’s hostility to regional proliferation reflects the geographic vulnerabilities that drove Ben-Gurion’s original project. Former Iranian president Akbar Hashemi Rafsanjani once described Israel as a “one-bomb state.” Its small territory and concentrated population could suffer catastrophic damage from even a limited nuclear strike.

There is more at stake. American cover alongside Israel’s conventional military superiority and intelligence capabilities have given it enormous freedom of action to strike targets across the region, destroy nuclear installations and assassinate senior commanders and scientists inside hostile states. The possibility of retaliation has remained a manageable concern. Nuclear proliferation would alter the possible scale of escalation following such operations.

An Iranian bomb could constrain Israeli strikes on Iranian territory by raising the prospect that a conventional exchange might reach the nuclear threshold. Washington would have stronger incentives to discourage operations capable of producing a direct war between nuclear powers. Tehran might also feel safer conducting proxy operations or mounting conventional provocations if it believed a nuclear deterrent reduced the danger of an Israeli attack on the Iranian homeland.

Such a relationship could produce what strategists call the stability-instability paradox. Nuclear weapons might discourage all-out war while encouraging competition below the nuclear threshold.

In addition, a domino effect of proliferation could complicate the regional balance. Saudi Crown Prince Mohammed bin Salman has publicly said that Saudi Arabia would seek nuclear weapons if Iran acquired them. Turkey and Egypt would face growing pressure to reconsider their own options. For Israel, the resulting loss of regional nuclear monopoly would affect its freedom to employ conventional military force and its calculations about national survival. The Begin Doctrine has sought to preserve both advantages.

A Fiction of Mutual Convenience

In 1986, Mordechai Vanunu, a former Dimona technician, gave the Sunday Times photographs and detailed descriptions of the facility. Independent analysts have subsequently estimated Israel’s plutonium production, warhead stockpile and delivery systems with increasing confidence. The government’s public relations formula has scarcely changed.

How can such a widely known fiction be maintained?

A fiction of this magnitude requires its audience's cooperation. Israel’s nuclear opacity has endured because it serves different interests. Washington can sustain its relationship with Israel without openly reconciling the exception with its nonproliferation policy, while Israeli leaders avoid the obligations and diplomatic confrontations that would follow formal acknowledgment. Arab governments have often criticized Israel’s nuclear status and called for a nuclear-weapons-free Middle East, but pressing the question to a decisive confrontation might impose costs of their own, complicating negotiations and intensifying domestic demands for an Arab bomb.

Opacity may also influence how the arsenal is organized. Israeli nuclear weapons are believed to remain under exceptional civilian control and, remarkably, Cohen believes that the fissile pits are largely kept separated from their means of delivery.

Such arrangements make the transition from possession to operational employment a deliberate political act. The language of “introduction,” however artificial it may seem, has thereby acquired an institutional as well as diplomatic meaning.

Ultimately, for Israel, the bomb that does not exist is unlikely to ever be surrendered, and the policy of opacity that has facilitated its possession has proved to be extraordinarily durable.

If you like this post, your endorsement will remain officially unacknowledged.

You can purchase Professor Cohen’s books here. https://www.amazon.ca/Israel-Bomb-Avner-Cohen/dp/0231104839

Back in 2020, during the first season of the Decouple podcast, Mark Nelson observed in an episode titled Existing Nuclear and Imaginary Nuclear that if a contemporary nuclear startup repackaged and marketed a CANDU-like technology, it would be hailed as an advanced reactor with an impressive list of compelling features. Mark’s tongue-in-cheek prediction is looking rather prophetic.

Natural-uranium fuel, online refueling, and the potential for high-volume isotope production are precisely the sorts of capabilities that Atlas Atomics could tout as innovations. Canada’s CANDU program has been demonstrating them for decades.

The Atlas Atomics proposition is, to put it mildly, ambitious. The company has apparently convinced investors that it can develop a new generation of heavy-water reactors more economically than an established Canadian technology family with decades of accumulated engineering experience.

Adding to the irony, AtkinsRéalis announced in June that it had begun engagement with the U.S. Nuclear Regulatory Commission to bring CANDU technology to the American market. Atlas may find itself competing against the very technology it is trying to reinvent, backed by an incumbent with a half-century head start.

What it took to develop Gen 3+ CANDU

Canada invested many tens of billions of dollars over decades in nuclear research, reactor development and engineering. That investment was followed by billions more in commercial construction, operation, refurbishment and life-extension programs. The result is an extensive body of tightly held intellectual property and institutional knowledge.

Those advantages come with considerable engineering complexity.

Pressure-tube technology alone represents decades of materials science and operational experience. Hundreds of zirconium-alloy tubes must withstand high temperatures, pressure, and intense neutron irradiation while managing creep, deformation, hydrogen embrittlement, and the risk of cracking. Their integrity requires specialized inspection techniques, predictive models, and eventual replacement.

Online refueling adds further complexity, requiring sophisticated reactor physics and reliable precision fuelling machines.

Heavy water is expensive to produce, must be maintained at high isotopic purity, and requires careful management of tritium accumulation. There are rumors that Atlas Atomics will have preferential access to the Department of Energy’s substantial heavy-water inventory at Savannah River. But this is no ready-made supply of reactor-grade heavy water.

DOE has disclosed that its approximately 530,000 gallons of legacy heavy water contain varying levels of tritium and other impurities requiring processing before commercial reuse.

Complicating matters, North America’s only large-scale heavy-water detritiation facility is operated by OPG at Darlington, where capacity is already committed to servicing Ontario’s CANDU fleet and throughput has been declining as equipment ages.

DOE has no comparable facility. Access to Savannah River’s heavy water would therefore solve only part of Atlas’s supply problem, leaving the expensive and technically demanding question of purification and detritiation unresolved.

The CANDU intellectual-property problem

The 2011 sale of AECL’s commercial reactor business, CANDU Energy Inc., established SNC-Lavalin, recently rebranded to AtkinsRéalis, as the exclusive commercial licensee of CANDU technology. AECL cannot simply license the same intellectual property to a competing reactor developer without undermining that exclusivity.

That leaves Atlas needing to develop its own clean-sheet technology or obtain access to another design lineage.

India is the obvious country to consider. Its nuclear program began with Canadian-derived PHWR technology before developing its own designs and a substantial domestic engineering capability. India now has decades of experience in designing, constructing, and operating indigenous heavy-water reactors.

Could Indian collaboration provide Atlas with a shortcut? It is a reasonable proposition, but there is no basis to assume that such a relationship exists. And even if it did, access to expertise would not automatically deliver a complete, commercially mature design or a ready-made American licensing case.

The US Nuclear Regulatory Commission would still need to evaluate the specific design, its safety analysis, materials, fuel, manufacturing processes, and operating systems. A reactor developed around a different regulatory and industrial framework would face substantial work to establish its licensing basis in the United States.

Bubble much?

Atlas is entering a market crowded with nuclear startups promising simpler, cheaper, more manufacturable reactors. Announcing an ambitious technical vision and attracting substantial venture capital are a far cry from constructing and operating a complex reactor technology, let alone at a competitive cost.

A $1.9 billion valuation further inflates the current nuclear bubble and reflects unrealistic expectations about future opportunity.

Nevertheless, there is something flattering to this Canuck about the renewed interest in PHWR technology. AmeriCANDU mimicry is, after all, the highest form of flattery

If you think the nuclear startup bubble is getting a little loonie, give this post a like, eh?

With Trump’s threats of annexation, images of North America draped in the red, white, and blue, and talk of Canada as the 51st state, a basic question underlies the current dispute. Why does Canada exist as a separate country at all? Why didn’t Britain’s possessions north of the rebellious American colonies become part of the United States? This is a strangely personal story for me, as my ancestors played an outsized role in engineering the Canadian nation into existence.

Canada emerged from a series of political bargains, military contests, and infrastructure choices that bound a loose collection of colonies into a viable country, despite the persistent pull of a much larger United States.

In 1775, there was no recognizable Canadian counterpart to the future United States. Britain’s thirteen colonies along the Atlantic seaboard had roughly 2.5 million people, established merchant cities, large agricultural economies, and political institutions that had been developing for generations.

To their north lay the Province of Quebec, a British-controlled but overwhelmingly French society concentrated along the St. Lawrence around Montreal and Quebec City. Conquered from France only fifteen years earlier, it contained roughly 90,000 inhabitants. To the east were Britain’s sparsely populated Atlantic possessions. Westward, settlement consisted of scattered trading posts, forts, and missions, most housing only a handful of Europeans, within vast Indigenous territories.

A year before the American Revolution began, Parliament passed the Quebec Act of 1774, preserving Catholic religious rights and French civil law in private matters. Perhaps no British decision did more to make Canada’s eventual existence possible. The settlement gave Quebec’s French-speaking Catholic majority considerably less reason to join a rebellion led largely by Protestant colonists to the south.

The Americans nevertheless invaded. They captured Montreal in 1775 and advanced on Quebec City. In the spring of 1776, Congress sent Benjamin Franklin, already one of the best-known intellectual and political figures in the colonies, to Montreal. His delegation encouraged Canadians to establish their own representative government and send delegates to Congress, promising religious freedom and protection for Church property.

The occupying army’s unpaid debts, anti-Catholic associations, and doubtful paper currency undermined confidence in American promises. The hoped-for mass uprising among French Canadians never materialized, and the arrival of British reinforcements forced the inadequately supplied and overstretched American army to withdraw.

The Loyalist migration north after the American Revolution, including my own ancestor George Keefer, created a much larger English-speaking population in British North America. They brought with them a political culture that was strongly pro-British, anti-republican, and deeply suspicious of American expansion.

Geographically, the Great Lakes and the St. Lawrence River formed a defensive moat and a critical east-west transportation corridor. George Keefer and his sons, Thomas and Samuel, were instrumental in strengthening this commercial artery: they engineered the Welland and Lachine canals, built sections of the Grand Trunk Railway from Toronto to Montreal, and erected bridges that connected the emerging country.

The War of 1812 became another critical moment in preserving a separate British North America. The conflict grew out of American grievances over British restrictions on neutral trade during the Napoleonic Wars, the impressment of sailors from American vessels, and tensions over the western frontier.

American armies invaded across the Niagara frontier and again attempted to sever the St. Lawrence and capture Montreal. British regulars, colonial troops, and Indigenous allies ultimately repelled these invasions.

The War was marked by dramatic acts of arson on both sides of the border, with American troops capturing York, now Toronto, in 1813 and setting its parliament buildings alight, and British troops burning down the White House and Capitol building the following year.

After the war, Britain and the United States negotiated a northern boundary along the 49th parallel, initially from Lake of the Woods to the Rocky Mountains and later toward the Pacific. American expansion continued across the continent, but Washington generally pursued it within its Louisiana Purchase, avoiding another war with Britain while advancing its broader territorial ambitions against Mexico.

By the 1860s, however, the durability of these distinct British North American colonies was again in question. The American Civil War had mobilized a Union army of roughly a million men and created an enormous war economy capable of overwhelming Canada. Subsequent Irish American “Fenian” raids helped accelerate the final push toward Canadian Confederation in 1867. However, binding the new country together, particularly beyond the Great Lakes-St Lawrence waterway, required a vital piece of transcontinental infrastructure.

My triple great-grandfather, Thomas Keefer, in his 1850 best seller “Philosophy of Railroads,” argued that Canada should stop thinking in terms of isolated local lines and instead build rail networks that would bind its cities and hinterland together, directing the trade of the interior eastward through Montreal rather than allowing it to drain south through American ports. He saw railways not simply as commercial ventures but as instruments of national development, requiring coordinated effort and public investment. By 1869, he was publicly advocating a railway to the Pacific.

The Canadian Pacific Railway was incorporated in 1881 and completed in 1885. It tied the Pacific coast to the Eastern provinces, opened the Prairies to large-scale settlement, and created an east-west transportation system that reduced Canada’s dependence on routes through the United States.

Since the American Revolution, maintaining a separate country has required Canadians to overcome geography: politically, through accommodation of Quebec and federation and physically, through canals and railways that created a continent-spanning internal market.

The line on the map may look artificial to President Trump. Creating and sustaining it was anything but an accident.

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The consequences are asymmetric. More than 70 percent of Canadian merchandise exports still go to the United States, the U.S. economy is roughly 13 times larger, and Canada accounts for a much smaller share of its overall trade.

Canada is being forced to reconsider some of the dependencies it has accumulated over six decades of continental integration. A goal of Canadian autarky would be delusional, but eliminating specific forms of integration for which Canada has no ready alternative, and is therefore exposed to disproportionate economic damage from bad-faith U.S. actions, is prudent.

The recent Gordie Howe International Bridge incident illustrates the unprecedented state of affairs. Canada financed the entire six-lane crossing between Windsor and Detroit, including the American land acquisition and I-75 highway connection, with its investment to be recovered from future toll revenues. Washington was initially responsible for the U.S. customs plaza, but when federal funding failed to materialize, Canada agreed in 2015 to finance that as well.

By early 2026, construction was essentially complete when Donald Trump threatened to prevent the bridge from opening unless Canada offered additional concessions. Because Washington controlled the American port of entry, a project designed to deepen continental integration had also created a political leverage point after billions of Canadian dollars had already been committed.

Postwar-era integration was based on the assumption that the resulting dependencies would remain governed by stable rules. The trade war is forcing Canada to shift away from a narrow focus on economic efficiency to preserve its strategic autonomy.

The following essay is based on my recent Decouple conversation with process engineer Jesse Huebsch about the Canada-US trade war and its implications for Canadian economic sovereignty.

Defying Geography to Forge a Nation

The Canadian national project emerged from the use of state power and infrastructure to impose an east-west economic logic on a continent where north-south trade was often easier and cheaper.

Canada shares roughly 6,400 kilometers of contiguous southern border with the United States, and two-thirds of Canadians live within 100 kilometers of it. British Columbia naturally connects to the Pacific Northwest, the Prairies to the Great Plains, southern Ontario to the Great Lakes industrial belt, Quebec to New York and New England, and Atlantic Canada to the northeastern United States.

The hardest section of the Canadian map for East-West integration lies north of Lake Superior. Between the population centers of southern Ontario and the Prairies lies well over a thousand kilometers of difficult Canadian Shield: bogs, lakes, exposed granite, and boreal forest, with few population centers along the way.

The route south of Superior through Michigan, Wisconsin, and Minnesota is far easier terrain and passes through major American markets that can finance megaprojects.

Infrastructure tends to take the path of least economic resistance. However, several mission-critical nation-building pieces of infrastructure were bushwhacked through this wilderness. The Canadian Pacific Railway and Trans-Canada Highway are obvious examples.

The TransCanada natural gas pipeline, roughly 3,700 kilometers long when completed in 1958 and then the longest natural gas pipeline in the world, required enormous political and financial effort to create an all-Canadian route and ensure a Canada-first use of the resource.

The pipeline carrying Alberta crude to central Canada, however, followed the easier continental geography, cutting through the American Midwest as “Line 5” before returning to Ontario.

Over the last half-century, the need to pay an economic premium for east-west connectivity has diminished as relations with the United States have strengthened and trade barriers have fallen. Canada increasingly accepted that continental integration offered irresistible efficiencies, with the automobile industry providing perhaps the clearest demonstration.

The Continental Bargain

Before the 1965 Auto Pact, Canada maintained a relatively inefficient automotive industry made up of branch plants of the “Big Three” U.S. manufacturers set up behind a Canadian tariff wall. These factories produced small runs of a diverse array of vehicles for a limited domestic market. The subsequent Auto Pact agreement allowed production to specialize across the border while preserving a substantial Canadian manufacturing presence.

A Canadian plant could manufacture one model at scale, export most of it to the United States, and import other models from American factories. Parts suppliers served plants on both sides of the border, and engines, parts, and finished vehicles could cross the border several times before reaching a showroom. The practical distinction between a Canadian and American car gradually became difficult to draw.

Free trade, NAFTA, and eventually CUSMA extended the same principle across much of the economy. Production would occur where it was most efficient within a predictable continental market.

In 2024, more than C$1 trillion in goods crossed the Canada-US border, with the United States accounting for 75.9 percent of Canadian merchandise exports and supplying 62.2 percent of Canada’s imports. The United States was Canada’s largest foreign investor, and Canada the second-largest investor in the United States.

The Emergence of America First

Trump’s mercantilist economic ideas and obsession with trade deficits have roots in Japan’s rise in the 1980s, when highly productive Japanese manufacturers gained American market share in autos and electronics through superior manufacturing efficiency, quality, and cost control. The China Shock heightened U.S. concerns about industrial decline, with American producers confronted by China’s enormous pool of low-wage labour, rapidly expanding industrial capacity, and integration into global supply chains.

Trump has carried this experience forward into a broader belief that bilateral trade deficits are evidence that the United States is being taken advantage of, even when the economic relationship bears little resemblance to the manufacturing competition posed by Japan or China. That logic became central to his justification for confronting Canada.

In 2025, the United States ran a $48.3 billion goods deficit with Canada, partly offset by a $27.7 billion services surplus. But Canadian energy imports alone accounted for an $85 billion U.S. deficit. Excluding energy, the United States therefore ran a substantial trade surplus with Canada.

That energy deficit is also very different economically from a deficit caused by the displacement of American-manufactured goods. Canada supplied an average of 3.9 million barrels per day of crude oil to the United States in 2025, accounting for roughly 63 percent of American crude imports.

Much of it is heavy Canadian crude delivered directly into sophisticated Midwestern and Gulf Coast refineries designed to process exactly those grades. Canadian heavy oil has historically traded at a discount because it requires more intensive refining, allowing American refiners to buy a relatively cheap raw material and upgrade it into higher-value gasoline, diesel, jet fuel, and other petroleum products.

The resulting bilateral deficit therefore says relatively little about whether Canada is hollowing out American industry and makes Canada’s treatment under a framework developed in response to Chinese manufacturing competition particularly striking. Trump has nevertheless increasingly applied the same reshoring logic to Canada. He has not been shy about his intent to “reshore” Canadian automotive manufacturing and recently threatened Canada’s aviation champion, Bombardier.

Trump’s enthusiasm for tariffs reaches back to nineteenth-century Republican president William McKinley, who championed protection for American industry. McKinley protected an economy with abundant domestic energy and raw materials, a fast-growing workforce, a huge internal market and comparatively simple supply chains. Tariffs could shelter an American manufacturer without simultaneously taxing much of its own production network.

The industrial conditions of the twenty-first century are very different. American factories are embedded in international supply chains, importing components, machinery and materials that are themselves inputs into American production. Tariffs therefore not only raise the price of foreign finished products but also raise the costs of domestic manufacturing. They can create an incentive to invest, but their effectiveness depends on whether the productive capacity behind the tariff wall can actually be built.

A Tale of Two Tariffs

Not all tariffs are created equal. Aluminum and automobiles are instructive because the same instrument can have very different effects depending on the structure of the industry it is applied to.

Primary aluminum is sometimes described as congealed electricity. Competitive smelting requires enormous quantities of cheap, reliable power, major capital investment, and transmission infrastructure. Quebec possesses an incumbent advantage built on abundant hydroelectricity and decades of industrial development.

The United States has a large recycling industry but very little primary smelting, accounting for only 16 percent of domestic aluminum production.

Tariffs can raise U.S. aluminum prices immediately, benefiting existing smelters while increasing costs for automakers, packaging companies and other downstream users. Canadian exports to the United States initially fell sharply after the tariffs were imposed, dropping by about 50 percent, but then rebounded as American inventories were drawn down.

Building new electricity-hungry primary smelting capacity is much harder, and competes with data centers for generation, transmission capacity, and grid connections. Investors also have to believe Trump’s tariff regime will last long enough to justify building an asset expected to operate for half a century.

Automobiles are different because the United States does not need to reconstruct an industry from scratch. North American manufacturers already have a large network of assembly plants operating below their theoretical capacity in a mature market where vehicle sales have grown relatively slowly. Canadian production can therefore be reduced while existing American plants absorb some of the displaced volume.

This makes tariffs a potentially effective tool for Trump’s stated objective of moving Canadian manufacturing into the United States. Uncertainty makes investing in Canada less attractive than expanding an existing plant in Michigan, Ohio, or Kentucky.

The problem is that sixty years of integration have made the two industries difficult to separate cleanly. An Ontario parts supplier may depend on Canadian assembly plants for the volumes it needs to remain viable while also supplying factories across the American Midwest. If the loss of Canadian production causes that supplier to fail, an American assembly plant can suddenly find itself missing a component worth a few hundred dollars that prevents completion of a vehicle worth tens of thousands.

There is also a broader problem of scale. The Auto Pact and the agreements that followed allowed manufacturers to treat Canada and the United States as a single large production system rather than duplicating plants, tooling and suppliers on either side of the border.

Fragmenting that system sacrifices some of those efficiencies just as Chinese manufacturers are exploiting industrial scale on a different order of magnitude.

The implicit American assumption is that a vehicle no longer assembled in Canada will instead be built in the United States, while Canadians continue buying roughly the same number of North American vehicles. That outcome is not assured if the contraction of Canada’s auto industry leads to retaliatory barriers against U.S.-assembled cars and a preference for sourcing more vehicles from European, Japanese, Korean, or even Chinese manufacturers. Washington could succeed in moving some assembly south while simultaneously shrinking the continental market over which American manufacturers spread engineering, tooling and supplier costs.

This is the paradox of the auto tariffs. Unlike the aluminum tariffs, they may genuinely achieve part of their stated objective by discouraging Canadian investment and shifting production into the United States. On that narrow measure, they can be successful. The broader result will likely be a smaller, less efficient North American automotive system, with disrupted supplier networks, higher costs, and less scale to compete against China.

Trump’s vision for Canada

Leaving aside performative meme warfare and talk of Canada as the 51st state, Trump’s threats suggest a more hierarchical vision of the continental economy. Canada remains highly useful as a supplier of oil, natural gas, potash, uranium, aluminum, lumber, hydroelectricity, and other basic inputs, and as a nearby market for American goods, while an increasing share of high-value manufacturing is expected to locate south of the border.

Trump has not articulated this as a formal doctrine, but the practical direction resembles an older center-periphery relationship in which Canada functions increasingly as a subordinate resource hinterland to an American industrial core.

A Protectionist Ratchet?

The key variable guiding Canada’s response is timing. Although the current measures may prove to be a temporary feature of the Trump administration, the broader turn toward managed trade may operate as a one-way ratchet, with periods of aggressive economic nationalism alternating with periods of more predictable but still restrictive relations. Trump’s eventual departure will change the tone without eliminating the political constituency behind these policies. MAGA now dominates the Republican Party and represents roughly one-quarter to one-third of the American electorate. One 2025 NBC poll found that 36 percent of registered voters and 71 percent of Republicans identified with the movement.

Biden, after all, ended Trump’s confrontation with Canada over steel and aluminum while retaining the broader shift toward protectionism, domestic subsidies and industrial policy. He expanded Buy America requirements, maintained duties on Canadian softwood lumber and continued to press Canada through USMCA disputes, while preserving and later strengthening Trump’s tariffs on China. The methods were less confrontational, but the assumption that U.S. policy should favour domestic production over deeper continental integration survived the change in administrations. MAGA’s hold over the Republican Party makes a full reversal even less likely under the next Republican president.

The assets Canada is considering today will outlast many American presidencies. A pipeline conceived now may not operate until the 2030s. A fighter jet fleet will remain in service for decades, while a nuclear plant selected during this trade dispute could still be producing power in the next century. Canadian planning therefore cannot depend on the assumption that the next change of administration will restore the previous equilibrium.

Reducing Critical Dependence

Despite the trade war, Canada will remain deeply dependent on the United States for markets, products, services and infrastructure. Most of that interdependence is economically useful, and attempting to reproduce it domestically would impose enormous costs. The more important task is to identify critical dependencies in which the United States controls a lever that can inflict disproportionate damage on Canada before alternative arrangements can be made.

Line 5 illustrates the problem. Canada is one of the world’s largest oil producers, yet part of the pipeline system supplying its most populous province, Ontario, runs through the United States. Enbridge Line 5 carries up to 540,000 barrels per day of crude oil and natural gas liquids from Superior, Wisconsin, across Michigan before re-entering Canada at Sarnia. Ontario’s four refineries processed roughly 386,000 barrels of crude per day in 2025.

A sudden interruption would not leave Ontario without fuel permanently, but the adjustment would be expensive and disruptive. Crude movements by rail would have to increase rapidly, absorbing capacity on an already heavily used network. Canada could attempt to bring more overseas crude through eastern ports and reconfigure or reverse other pipelines to move it toward Ontario. Those additional rail movements would compete with grain, containers and other traffic moving east and west, while refineries suddenly dependent on more expensive feedstock could become less competitive against imported gasoline and diesel. The effect would likely be a major logistics and price shock rather than economic paralysis, which is precisely why the vulnerability deserves careful study rather than hyperbole.

An all-Canadian pipeline route through the difficult terrain north of the Great Lakes would make the price tag of redundancy worth many tens of billions of dollars. If Alberta could redirect crude onto an all-Canadian pipeline, shutting the American route would primarily deprive American states and producers of commercial activity while inflicting much less damage on Canada. A project that was never called upon during a crisis could therefore still have provided strategic value by making the crisis less likely. This is the sort of infrastructure decision that requires detailed scenario analysis before tens of billions are committed, but conventional project economics alone cannot capture the value being purchased.

There is a second way to reduce exposure in the petroleum system: refine more of the barrel at home. Canada exports enormous volumes of crude to American refineries and then imports substantial quantities of finished petroleum products in several regions. We recently profiled Ian MacGregor, who pursued precisely this logic with the Sturgeon Refinery he founded northeast of Edmonton. Rather than upgrading bitumen into synthetic crude for a foreign refinery to process, Sturgeon was designed to take Alberta bitumen all the way through upgrading and refining into finished products, using gasification of the heavy residual fraction to produce hydrogen and facilitate carbon capture. It now processes roughly 50,000 barrels per day of bitumen and produces about 40,000 barrels per day of ultra-low sulphur diesel along with naphtha, diluent, vacuum gas oil and other products.

Reducing dependence also means creating more options for Canadian exports. Europe and Asia cannot replace the American market, but additional rail, port and intermodal capacity can increase the share of production that has somewhere else to go when access to the United States becomes more difficult.

The Canadian response should therefore concentrate on a relatively small number of high-consequence vulnerabilities rather than attempt economic self-sufficiency. In some cases the answer may be stockpiles or alternative suppliers. In others it may mean larger rail and port corridors, domestic maintenance capability or, in exceptional cases, a pipeline costing tens of billions of dollars.

The goal is to make the remaining inevitable dependence much harder to weaponize.

The Fragile Hegemon?

The overwhelming asymmetry between the United States and its trading partners can obscure real constraints on American power. This does not, however, provide unlimited freedom of action.

The United States entered September with renewed inflation pressure. Consumer prices were 3.4 percent higher in August than a year earlier, while gasoline rose 3.9 percent in a single month and accounted for more than a third of that month’s CPI increase. At the same time, the 10-year Treasury yield returned to roughly 5 percent.

Those yields influence mortgages, auto loans, corporate financing, and the cost of servicing an ever-expanding federal debt. An American president cannot reopen the Strait of Hormuz or repair damaged Russian refineries by executive order. He has significantly more latitude with inflationary tariffs.

Therein lies one plausible route toward de-escalation, and it wouldn’t be Trump’s first or most reputationally damaging TACO.

Conclusion

Canada spent much of its history paying an economic premium to overcome geography and preserve political independence. As relations with the United States stabilized, continental integration made many of those redundancies appear wasteful, and Canada harvested enormous gains from specialization and scale. The trade war changes that calculation.

Over the last year and a half, confidence in economic integration has been shattered. The very real risk of a protectionist ratchet between U.S. administrations, as well as an America First political base returning Trump-like trade policy to office, will permanently change the assumptions underlying the Canadian trade calculus.

Canada cannot and should not unwind continental integration, but some dependencies now carry a political risk that conventional project economics do not capture. Pipelines, ports, refining capacity, military sustainment, and other forms of redundancy may look inefficient until the alternative is having no practical alternative at all. The challenge is to identify the small number of dependencies where that insurance is worth buying.

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This quote became Canadians for Nuclear Energy’s guiding philosophy in our then long-shot campaign to save the Pickering Nuclear Generating Station from early decommissioning.

Over the last 5 years as energy demand forecasts skyrocketed, and now as Canada is caught up in a trade war with the USA that brings energy security, domestic manufacturing and Canadian strategic autonomy to the forefront, our work to develop alternatives to the policy of shutting down Pickering became the “ideas that were lying around.”

We are pleased that Doug Ford’s government accepted our recommendations and made the right call to prioritize Ontario jobs and workers, clean air, and medical isotopes, and we look forward to the tremendous economic multiplier effect of this CANDU refurbishment during these challenging times of internecine economic warfare.

Our “Save Pickering” campaign, launched in 2020, was an uphill battle. Labour unions that supported refurbishing the plant appreciated our efforts but had given up.

Not only were we the only organization fighting for this refurbishment at a time when nuclear power was struggling reputationally, but major bodies in the nuclear industry made several “interventions,” asking us to call off our campaign.

Ontario Power Generation, the plant owner, and bizarrely the leadership of the Organization of Canadian Nuclear Industries, Canada’s nuclear supply chain association, communicated to us that our efforts were harmful to the nuclear sector.

Over and over, they told us the decision to shut down the plant was a “done deal” and that we were “kicking a dead horse.”

Our non-profit, however, receives no funding from the nuclear industry and had total freedom of action to continue our Quixotic quest.

Our determination to struggle on, which included holding rallies (with placards painted with my son’s art supplies) at Ontario’s Legislature and outside Ontario Power Generation headquarters, as well as hundreds of hours of collective energy and expertise poured into our highly influential “Save Pickering” policy report authored by the extraordinarily talented Dylan Moon, was rooted in our unshakeable and pan-partisan values: Pro-worker, pro-clean air and pro-health.

After all, the four reactors at Pickering B support 4500 direct and indirect jobs. They are a vital part of our nuclear backbone, which underpins Ontario’s energy security and self-reliance. Their 2,200 MW baseload contribution was slated to be replaced by smog-producing natural gas generation, and the plant produces 20% of the world’s vital Cobalt-60 medical isotope, which is essential to maintaining the sterility of the medical supplies I use every day in the Emergency Department.

To us, that was worth fighting for.

We faced several crises of confidence along the way, asking ourselves why we were pouring so much time into a seemingly hopeless campaign. No one played a greater role in keeping our spirits up and our efforts laser-focused on our goal than Canadians for Nuclear Energy co-founder Chris Adlam.

Ultimately, as electricity demand rose, the resounding success of CANDU refurbishments at the Bruce and Darlington nuclear generating stations became apparent, and our political campaign became impossible to ignore; organized labour flexed its muscle, and the Ontario Progressive Conservative government embraced adding Pickering to the refurbishment lineup.

Ontario’s traditionally anti-nuclear left-of-centre official opposition, the NDP, and environmental NGOs were muted in their response to the announcement of the government’s intent to explore refurbishment of the reactors at Pickering, in part because we had made it impossible to ignore the jobs, climate, air quality, and healthcare benefits of keeping the plant operating for another 40 years.

Yesterday, on September 21st, the Ontario government announced the beginning of construction on the Pickering Nuclear Refurbishment.

I’ll close with another quote from the opposite side of the political spectrum as Mr. Friedman, American Anthropologist Margaret Mead.

“Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

Every time you like a Decouple post, a nuclear advocate gets their wings.

The component was a burner buried inside the refinery’s gasifier, where residual heavy hydrocarbons, oxygen and water are reacted at temperatures around 1,100 degrees Celsius to produce the hydrogen required by the refining process. This part, supplied by the German original equipment manufacturer, was supposed to last thousands of hours.

A refinery could not economically operate around replacing a mission-critical component every two days. Without the gasifier, there was no hydrogen. Without hydrogen, the refinery could run on lighter feedstocks like synthetic crude but could not economically perform the job for which it had been built: converting Alberta bitumen into high-value products.

“You just wasted twelve billion dollars,” is how Ian McGregor remembers the stakes.

McGregor is an Alberta mechanical engineer, serial entrepreneur and industrial project developer who conceived the Northwest Sturgeon Refinery and helped develop the Alberta Carbon Trunk Line. When I visited him this summer at his Canadian Museum of Making in the foothills west of Calgary, we ended up talking about Sturgeon and the lessons it holds for nuclear power, an industry once again learning how to build large things.

Bitumen In, Diesel Out

Ian’s refinery began as four boxes drawn on a napkin to address one of Alberta’s longstanding goals: economic diversification. Alberta possesses one of the world’s largest petroleum resources but exports most of it as a raw material, bitumen.

At ambient temperatures, it is too viscous to flow through a pipeline and must first be blended with a much lighter hydrocarbon, called a diluent, at a near 3:1 ratio.

Thus, a relatively low-value raw material is made substantially larger in volume so it can be shipped thousands of kilometres to somebody else’s refinery, where the diluent is removed, and the high-value processing occurs.

McGregor’s napkin solution was essentially bitumen in and low-sulphur diesel out.

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The refinery he eventually built was considerably more complicated. Rather than use a conventional coker, which rejects the heaviest fraction of the bitumen barrel as petroleum coke, Sturgeon was designed around hydrogen addition, breaking large hydrocarbon molecules apart and adding hydrogen to produce lighter products.

The hydrogen itself would be made in the gasifier from the bottom of the bitumen barrel rather than from natural gas. This also produced a concentrated stream of CO2 which could be captured and sent down the associated Alberta Carbon Trunk Line for geological storage and enhanced oil recovery. The refinery was designed to capture around 4,000 tonnes of CO2 per day.

Seven Thousand Pieces of Equipment

Ian’s four boxes were becoming a fairly complicated machine.

McGregor estimates that roughly 100 million person-hours went into the refinery between fabrication shops and field construction. Some 1,434 large modules were assembled at site, many around 20 feet wide, 20 feet high and more than 100 feet long.

His favourite statistic is that the refinery contained roughly 7,000 individual pieces of equipment costing more than $100,000 each.

This helps explain why megaproject estimates have a habit of deteriorating as construction proceeds.

A conceptual design can be surprisingly compact. Engineering gradually reveals the thousands of pumps, valves, heat exchangers, electrical systems, control systems, structural supports, pipes and instruments required to make the boxes on a process diagram become a functioning industrial plant.

On Sturgeon, McGregor estimates around $100 million had been spent by the time the first serious project cost estimate was assembled. That sounds like an extraordinary amount of money. It was in fact nowhere near enough. The final engineering bill was closer to $1 billion.

Finishing all of that engineering before construction would have substantially improved project definition, but it would also have required investors to risk a billion dollars before knowing whether the project would ever proceed. McGregor’s experience was therefore similar to that of many large industrial projects: engineering continued while procurement and construction were already underway.

That creates a secondory problem. A module may be scheduled to leave a fabrication shop while a large heat exchanger destined for its interior is still somewhere in Italy. Thousands of workers at site are waiting for the module and delaying shipment can disrupt an entire construction sequence. So the module is shipped incomplete.

The heat exchanger, however, arrives three months later. By then the surrounding structure may be eight storeys high and the project team is left figuring out how to install equipment in a space that was intended to receive it when the module was still lying on the shop floor.

Looking back, McGregor thinks the expediting department may have been one of the most important organizations on the entire project.

Making Your Own Weather

Sturgeon employed around 7,000 people at peak construction. There were nowhere near enough electricians, pipefitters and other skilled trades sitting idle around Edmonton waiting for a call.

Workers were drawn from the neighbouring provinces of Saskatchewan, British Columbia, Manitoba and later Ontario and Newfoundland. They arrived capable of doing the work but unfamiliar with the site, the systems and the teams around them. By the time a worker became fully productive, the particular phase of construction that required him might already be approaching completion.

The sheer scale of a megaproject, in McGregor words “made its own weather,” by altering the labour market assumptions on which its original estimate had been based.

The same problem existed inside the organization managing it. A megaproject creates a temporary institution composed largely of people who have never worked together and then asks them to execute one of the most complicated activities undertaken by an industrial economy.

Systems for cost control, procurement, engineering and construction management were being developed at the same time that the project was advancing. McGregor had spent his career building industrial businesses, however, the major engineering, procurement and construction contractors across the table had decades of experience negotiating contracts and were very good at protecting their margins.

The Edmonton Manhattan Project

The German gasification technology Sturgeon purchased came from one of the most experienced suppliers in the world. Germany’s historical expertise was based on its struggles in the Second World War to alleviate chronic shortages of petroleum with coal-based synthetic fuels at industrial scale. Its technological lineage stretched back many decades and the process itself was well established.

Although rated for 2000 hours of service the burners failed in just forty. The refinery went off line and interest during construction kept accumulating at a rate of roughly one million dollars per day.

McGregor gathered half a dozen of the smartest engineers and technical specialists he knew and decided they would solve the problem themselves.

The effort lasted 279 days.

The team spent around $12 million running finite element analysis and computational fluid dynamics models, working through heat transfer, fluid velocities, materials and geometry.

The burner contained a narrow water jacket which had to keep cooling water moving at roughly 80 metres per second in a wafer thin hydraulic window: too slow and heat transfer failed; too fast and pressure losses risked local boiling. The geometry controlling that flow had to be held to around one tenth of a millimetre.

Then the engineers confronted the inconvenient reality that their drawings had to be manufactured. The final welding assembly caused roughly six millimetres of shrinkage.

McGregor brought in an experienced engineer/welder named Brett Jackson who he describes as the Leonardo da Vinci of his trade. During their twice daily meetings after the computer specialists finished presenting their latest design McGregor would look over and ask whether Brett could actually build it. Often the answer was no, and the engineers went back to work.

Eventually Brett developed a welding sequence that anticipated the distortion, alternating where heat was applied and gradually bringing the finished component into tolerance.

The lesson is familiar across advanced industrial technologies. Drawings, computer models and specifications capture an enormous amount of knowledge, but never all of it. The remainder lives as esoteric knowledge in experienced people who can sense for example how metal behaves under a welding torch.

The redesigned version of the part that failed in 40 yours now runs for 8,000 to 10,000 hours.

The Long Tail

Sturgeon became an irresistible target for the media during its troubled construction and commissioning. The project ran far over its original budget and the burner failures arrived after most of the capital had already been spent. McGregor turned off his hearing aids and kept working.

Today the refinery is operated by Canadian Natural Resources, one of the most experienced oil sands operators in the world. McGregor sold his interest in 2021 and no longer has access to its detailed operating data, but says that over the last five years the facility has matured into a highly productive asset running above its original design capacity.

With 7,000 major pieces of equipment, initial commissioning does not reveal the full capacity of a plant. Operators continuously learn through failures, maintenance outages, modifications and successive turnarounds.

That creates a peculiar mismatch between the economics of megaprojects and the institutions expected to build them. A refinery, railway or nuclear plant can operate for many decades. Its worst financial years are often concentrated near the beginning, when capital is being spent, interest is accumulating and the plant is producing little or nothing.

Those years also happen to overlap almost perfectly with the career horizon of the executive asked to approve it.

The CEO who is asked to spend several hundred million dollars advancing a project toward a final investment decision is aware that the worst problems will probably arrive four or five years from now. This while approaching the end of their tenure with a substantial portion of their compensation still tied to the company’s performance. There are safer ways to finish a career.

Discounted cash flow adds a second bias against the long-lived asset. At a 10 percent discount rate, revenues several decades into the future contribute very little to present value even when the physical plant may still have generations of useful life ahead of it.

The institution with the longest time horizon is ultimately the state. This is one reason railways, canals, power systems and other infrastructure central to national development have so often involved governments as financiers, customers, guarantors or owners. Their economics unfold over periods much longer than a corporate planning cycle.

The Canadian Pacific Railway, for example, was initially expected to cost roughly $100 million. By the time the last spike was driven in 1885, the main line and its equipment had cost closer to $150 million, repeatedly forcing Ottawa to rescue a company whose failure had become politically and economically unthinkable.

Railway politics had already brought down one Canadian government in the Pacific Scandal of 1873. A century and a half later, on the eve of its merger with Kansas City Southern, CP was worth roughly US$50 billion, and Canada itself was scarcely imaginable without the railway.

Back to Nuclear

Canada is returning to nuclear construction after a long pause. Ontario is building the first BWRX-300 at Darlington while simultaneously preparing for large reactor projects and continuing the refurbishment of much of its existing CANDU fleet.

The nuclear industry already has spent insufficient time debating first-of-a-kind technology risk. McGregor’s experience suggests the category should be expanded further.

A project organization can also be first of a kind. So can a supply chain that has forgotten how to manufacture a component, a construction workforce assembled for the first time or an owner organization without recent experience delivering a greenfield megaproject.

None of this precludes large projects. Sturgeon was built and operates beyond expectations. The near catastrophe of its failed gasifier burners was resolved in an Edmonton machine shop by a combination of advanced computer modelling, experienced engineers and an unusually talented welder.

Canada once possessed a wealth of people with this kind of experience across mining, pipelines, refining, hydroelectricity and nuclear power. Many are now retired or approaching the end of their careers.

The next generation will acquire the same knowledge in much the same way the previous one did: by building things, discovering that some of their assumptions were wrong, fixing them and building again.

Megaprojects will continue to make their own weather. The countries capable of enduring the storm will be the ones that will learn how to build them again.

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Westinghouse Electric Company has confidentially filed for an IPO. The nuclear business which was severed from its industrial parent the Westinghouse Electric Corporation nearly three decades after its transformation into CBS will have a tricky pitch to public markets.

That story will rest heavily on the promise of a nuclear revival, and on its ability to deliver some of the world’s most complex industrial projects on reasonable timelines and at reasonable cost.

That challenge, however, is unfolding in the context of the decades long deindustrialization of the United States, characterized in particular by the erosion of its manufacturing and construction capacity on which projects like nuclear power plants depend.

Few companies illustrate the economic transformation of the United States from industrial powerhouse to a service and finance dominated economy more vividly than the 111 year history of the Westinghouse Electric Corporation.

To understand the predicament facing the nuclear company that carries George Westinghouse’s name today, it is worth following what happened to the industrial empire from which it was cut loose.

From Industrial Giant to a Media and Entertainment Company

On December 1, 1997, the Westinghouse Electric Corporation’s ticker symbol WX vanished from the New York Stock Exchange, replaced by CBS, the symbol of the television network it had acquired just 2 years earlier. Corporate headquarters moved from Pittsburgh, the Iron City, to New York.

While the nuclear division, amputated from the parent company and sold in 1999, carried the founder’s name and survives as the Cameco and Brookfield owned Westinghouse Electric Company, the corporate lineage runs through legal succession.

By that test the true heir is Paramount Skydance, at the end of the chain from CBS through Viacom. Paramount’s 10-K still discloses roughly 18,000 pending asbestos claims from turbine and marine insulation sold before the early 1970s, and names Westinghouse as its predecessor.

The firm that once built much of the physical apparatus of an industrializing nation now reports its earnings as a broadcaster.

The Origin Story

George Westinghouse, the founder of over 60 companies including the Westinghouse Electric Company incorporated in 1886, made the commercial breakthrough that would become the springboard for his next endeavours with the railroad air brake he patented in 1869.

It was a revolutionary technology that replaced the brakeman, who ran along the roofs of moving cars to set each brake by hand, with a compressed-air line that let the engineer stop the entire train in one operation from the locomotive.

Playing with Fire

Although best known for his pioneering work in electricity and his victory in the war of the currents, the inventor first took on natural gas. In 1883 Westinghouse drilled for gas in the backyard of his estate in Point Breeze, the affluent East End district where Gilded Age coking coal and ketchup industrialists Frick and Heinz kept their mansions.

He struck a roarer estimated at 20 million cubic feet a day. The well escaped uncontrolled for nearly a week before Westinghouse devised a stopcock and brought it under control.

He then erected a sixty-foot pipe and staged evening illumination tests, sending a pillar of flame another hundred feet into the air. The demonstrations were reportedly bright enough for people a mile away to read newspaper print, but the noise soon prompted Westinghouse to end them.

He went on to invent the reduction valve that let his gas travel through pipes at high pressure and arrive at the home at low pressure, the meter that measured what each customer burned, and the automatic cutoff that shut the main when pressure dropped.

By 1887 his company operated 58 wells and 184 miles of distribution piping serving more than 12,000 homes and 582 industrial customers.

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Building the AC grid

The gas business gave Westinghouse direct experience with a networked energy system: production, long-distance transmission, pressure control, metering, leak detection and delivery to dispersed customers.

The reduction valve may have supplied Westinghouse with a useful analogy for AC distribution: carry energy efficiently at high pressure or voltage, then reduce it near the point of use.

Westinghouse financed William Stanley’s improvements to imported European transformers and generators, then licensed Nikola Tesla’s polyphase patents, which supplied AC with what it had lacked: practical motors capable of transforming electricity from a lighting system into a source of industrial power.

Westinghouse equipment illuminated the World’s Columbian Exposition in Chicago in 1893 and helped harness Niagara Falls two years later. The company supplied the full stack of turbines, generators, transformers, switchgear and motors that began to electrify American society.

George Westinghouse lost control of the company during the financial crisis of 1907 and died in 1914 at the age of 67. By then, Westinghouse Electric employed more than 50,000 people and ranked among the largest industrial corporations in the United States.

Creating Demand for Supply

As the American economy grew a middle class with disposable income, the demand side of electrification opened for business. Utilities of the era were desperate to flatten a load curve dominated by the evening lighting peak. Westinghouse had a double incentive to fill it: every appliance sold was a source of dual revenue as it also represented more electrical load, which meant more orders for the generators and transformers that were the company’s core product.

Radio was the breakthrough household electrical product. In 1920 the company launched KDKA in Pittsburgh, one of the first commercial broadcast stations in the world, in part to give people a reason to buy the Westinghouse receivers sitting in stores.

Household amenities followed, including refrigerators, washing machines, stoves, irons, air conditioners and heaters woven into its ultimate branding expression which would delight climate activists today: the “Westinghouse Total Electric Home.”

The Military-Industrial Complex

The state became the next great customer. During the Second World War the company turned its plants over to the war effort, and annual sales climbed from $239 million in 1940 to $835 million by 1944.

That relationship solidified into the postwar procurement structure and Westinghouse stayed inside it with a product catalogue of jet engines, radar, and defence electronics.

The same posture took the company into civilian nuclear power, where the federal government underwrote the early reactor program and absorbed much of its risk. Westinghouse’s Bettis Atomic Power Laboratory, run under contract to the Atomic Energy Commission, developed the pressurized water reactor (PWR) that drove the submarine Nautilus in 1955. When Admiral Rickover was handed the civilian demonstration project, he brought the same lab and the same design with him.

The result was Shippingport which began operating in 1957. The PWR went on to become the dominant commercial reactor design in the United States and around the world.

At its mid-century height the company employed over 100,000 people and was the largest private employer in the Pittsburgh region. Every phase of its growth was reflective of whatever the American economy was organizing itself around: railroads, gas, the grid, consumer durables, then the military-industrial complex and nuclear power.

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The Uranium Cartel that Nearly Broke the Business

The decline came in dribs and drabs. Nuclear power was one of the first casualties. To win reactor orders through the 1960s and early 1970s, Westinghouse had sweetened the sales pitch by promising to supply the uranium fuel at fixed prices of around $10 a pound, on the assumption that uranium would stay cheap.

As a result of the 1973 oil embargo and the operations of the “Yellow Cartel,” a government-backed alliance of Canadian, French, Australian and southern African uranium producers, the spot price climbed past $40 a pound.

Westinghouse found itself committed to delivering tens of millions of pounds of uranium that it did not own at a small fraction of what it would now cost to buy. This ultimately resulted in a settlement of approximately $1 billion with 27 utilities paid in cash, uranium, and services.

Next came the downturn in electricity demand, which had been doubling every decade. Construction cost escalation and the regulatory ratchet before and after the Three Mile Island accident added insult to injury and reactor orders dried up.

Foreign and domestic competitors, particularly General Electric, began to take bites out of the heavy electrical equipment sector that had been the company’s core business. Industrial margins compressed across the American economy in the same decade. Westinghouse responded the way much of corporate America did, by reaching for easier returns in finance.

Financialization, Crisis and Rebirth

The Westinghouse Credit Corporation, originally a vehicle to finance purchases of the company’s own consumer products, moved into high-return ventures like hotels, shopping centers, and junk bonds that conventional banks avoided.

For most of the 1980s the financing arm supplied the earnings that its industrial base struggled to produce. When the commercial real estate market crashed in 1990, the company had to absorb more than $1 billion in bad loans, its worst loss since the uranium settlements.

Michael Jordan, president of Frito-Lay and PepsiCo, was brought in to rescue Westinghouse in 1993. He drew a similar conclusion to many managers across the country: manufacturing was a low-growth, capital-heavy business, and media carried higher earnings multiples.

From Yellowcake to Yellowstone

Between 1995 and 1997 Westinghouse spent more than $15 billion buying broadcasters, starting with the CBS television network for $5.4 billion and adding cable channels and radio groups ultimately rebranding as Paramount. It paid for the spree by selling the industrial company piece by piece.

The defence electronics unit went to Northrop Grumman in 1996. Thermo King refrigeration was sold to Ingersoll-Rand in 1997. The power generation business, the turbines that had lit American cities since the 1890s, was acquired by Siemens of Germany in 1998.

The last industrial asset to go was the nuclear business, sold to British Nuclear Fuels Limited (BNFL) in 1999 for $1.1 billion, and the Westinghouse Electric Company name went with it.

The remaining businesses that bore the great inventor’s name rings particularly hollow. The Westinghouse Licensing Corporation rents the trademark to outside manufacturers for royalties: Westinghouse TV is now part of China’s TongFang global portfolio. Westinghouse generators are designed in the USA but assembled in China and Vietnam.

The Nuclear Revival?

As for the amputated nuclear division, BNFL sold it to Toshiba in 2006 for $5.4 billion, a price that assumed a nuclear construction revival. The revival came eventually, but not in the United States.

That same year China chose Westinghouse’s flagship AP1000 as the technology base for its generation 3 reactor program. The price was the design itself. Toshiba, which had completed its purchase of Westinghouse weeks before the agreement was signed, handed some 75,000 technical documents to the State Nuclear Power Technology Corporation, a firm Beijing created for the purpose, and conceded Chinese intellectual property rights to any derivative above 1,350 MWe.

China absorbed the design across the four first-of-a-kind units, drove domestic content past 90%, and named the indigenized version the CAP1000. As of 2026, the four original AP1000s are operating, the first CAP1000s are in commissioning, roughly a dozen more are under construction on 5-year build schedules, and the CAP1400, the larger derivative China owns outright, is entering service.

Toshiba’s Westinghouse went bankrupt building four AP1000s in the USA. The fixed-price construction contracts it absorbed in 2015 coupled with an incomplete design during construction and poor module fabrication at a hollowed-out domestic supplier put the company into Chapter 11 bankruptcy in 2017. Only the two reactors at Vogtle were ultimately finished.

More recently, Brookfield Business Partners bought Westinghouse out of bankruptcy in 2018 for $4.6 billion and sold it in 2023 to Cameco and Brookfield Renewable Partners for $7.9 billion including debt.

The Metamorphosis and the Chinese Butterfly

Westinghouse engineered much of the gas network and the electric grid when the United States led the world in heavy industry and manufactured home appliances for a burgeoning consumer society. It armed the state and built reactors when federal procurement organized the postwar economy and it financialized when industry and manufacturing profits stalled. Finally, it liquidated its entire industrial stack to become a content creation and streaming company as the US economy offshored much of its industrial base.

Now 30 years after the Westinghouse ticker WX disappeared from the New York Stock Exchange its hived off nuclear division is returning into the public markets.

The irony of whatever valuation the Westinghouse Electric Company achieves is that a little over a century later the industrial ambition its namesake the great George Westinghouse embodied is practiced most successfully not by American private capital, but by the state-directed industrial capitalism of the People’s Republic of China.

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Fusion was experimentally demonstrated four years before nuclear fission, yet fission moved from laboratory discovery to a self-sustaining chain reaction, weapons, naval propulsion and commercial electricity within roughly two decades.

Almost a century after the first laboratory fusion reactions demonstrated in 1933 by Ernest Lawrence and his Berkley cyclotron team, there is still no fusion power plant.

Producing fusion reactions was never particularly difficult. The challenge is to make them self-sustaining, to produce more energy than the machines that produce the challenging conditions for fusion reactions consume and finally to surround them with machinery capable of reliably converting their energy into useful electricity.

The National Ignition Facility’s achievement in December 2022 marked a significant change in that history. Its 192 laser beams delivered just over two megajoules (MJ) to a tiny capsule of deuterium and tritium, producing 8 MJ of energy from fusion. The problem is that the lasers consumed 300 MJ of electricity and perhaps more importantly that the reaction lasted only a few trillionths of a second.

It was nevertheless the first laboratory demonstration of an ignited fusion reaction in which the energy released by fusion products, roughly 20% alpha and 80% neutrons, substantially heated the remaining fuel in order to drive additional fusion in a self-sustaining fashion.

The appropriate historical comparison is Chicago Pile-1, Enrico Fermi’s graphite and uranium assembly beneath the stands of the University of Chicago’s football stadium. Its first criticality in 1942 reached 28 minutes before operators shut it down having demonstrated the world’s first controlled fission chain reaction.

The Chicago Pile produced no useful power and the light bulbs in the building consumed far more electricity than the reactor released as heat, however, Its importance lay in demonstrating that a nuclear fission reaction could sustain itself.

NIF has now done something analogous for inertial fusion, although in a burst lasting picoseconds rather than a leisurely half hour chain reaction.

We are a long way from Fusion’s Shippingport moment.

The following essay is based upon my Decouple Podcast interview with Gerrit Bruhaug, Senior Experimental Target Physicist at Xcimer Energy Corporation.

Really hard fire

The basic idea of fusion is in one respect more intuitive and familiar than fission. After all, physicists in the 1930’s worked out that the Sun is powered by light nuclei releasing energy when combined into heavier ones. Fission, by comparison, resembles witchcraft: arranging the rocks in the correct geometry, introducing a neutron source, and unleashing nuclear reactions.

Fission, however, takes place at room temperature because an uncharged neutron can enter a heavy nucleus without having to overcome its positive electrical charge. The resulting instability and splitting releases additional neutrons which can continue the chain reaction if the geometry of the reactor is adequate.

Fusion requires positively charged nuclei to approach one another closely enough for the strong nuclear force to overcome their electrostatic repulsion. At nuclear distances, the electrical repulsion between just two protons can amount to hundreds of newtons, equivalent to the weight of tens of kilograms, acting between unimaginably small particles.

The fuel must therefore be heated until nuclei vibrate and move at extraordinary speeds. At the same time, the resulting plasma must be held together at sufficient density, and for sufficient duration, to generate and retain more heat internally than it loses to its surroundings.

These requirements are summarized by the Lawson criterion, which combines temperature, density and confinement time.

The Sun achieves fusion due to its immense gravity. Its temperature is very modest by terrestrial fusion standards, the volumetric power density at its core is surprisingly low, less than that of a human body, but gravitational pressure confines a colossal volume of fuel over astronomical time periods while the Sun’s size traps much of the radiation produced in its interior.

A terrestrial reactor must reproduce the necessary combination of heat, pressure and time inside an engineered machine rather than a star.

The two leading approaches occupy opposite ends of this trade-off.

Magnetic confinement heats a diffuse plasma to temperatures well beyond those in the solar core and attempts to hold it using powerful magnetic fields.

Inertial confinement compresses a tiny amount of fuel to extreme density for a fraction of a billionth of a second. The first is an attempt to hold an impossibly hot fire in a magnetic bottle; the second is closer to a microscopic internal combustion engine whose laser spark plugs ignite microscopic hydrogen bombs rather than gasoline.

A diamond capsule in a gold oven

The National Ignition Facility illustrates both how far fusion physics has advanced and yet how much engineering separates an experiment from a viable power plant. At the centre of its target chamber sits a hollow diamond capsule fuel element only a few millimetres across, filled with deuterium and tritium and cooled to approximately 18 kelvin so that the fuel freezes into a precise layer along its interior. The capsule is mounted inside a small gold cylinder known as a hohlraum, the German word for a hollow space.

NIF’s lasers do not directly strike and heat the fusion fuel. They enter the hohlraum and hit its gold lined inner wall, converting laser light into X-rays. Those X-rays ablate the outer surface of the diamond capsule, sending material outward and driving the rest of the capsule inward in accordance with Newton’s third law.

The arrangement functions like a rocket firing spherically toward its own centre. If the implosion remains sufficiently symmetrical, the compressed core reaches fusion conditions and a burn wave begins moving into the surrounding fuel.

The capsule’s surface must be manufactured to extraordinary tolerances and the frozen fuel layer must be highly uniform. The target must be positioned precisely at the centre of a large chamber and struck almost simultaneously from many directions. Slight imperfections in the capsule, ice layer, laser pulse or X-ray field can amplify during compression and prevent ignition.

NIF performs approximately 400 individual experimental shots per year using equipment designed around national-security science rather than electricity generation. A power plant would have to produce targets cheaply in large quantities, inject them several times per second, track their position, hit each one accurately, clear the chamber and repeat the process continuously. To run at a 90% capacity factor that would require more than 85 million shots per year.

The scale of each event would also increase. NIF has deliberately been built near the minimum size believed capable of ignition, which leaves it operating close to the threshold where small imperfections can determine success or failure.

A commercial inertial-fusion machine would probably use larger drivers and targets to obtain far higher gain. Individual pulses could release gigajoules of energy, the equivalent of hundreds of kilograms of TNT, inside the reaction chamber. The chamber would have to absorb the resulting X-ray and neutron pulse without eroding rapidly, while delivering the heat into a working fluid and remaining clear enough for the next target to arrive.

Magnetic fusion avoids the need to manufacture and detonate precision targets, but substitutes a different group of problems. Its plasma must remain stable despite a range of instabilities that cause heat and particles to escape confinement. Helium produced by the fusion reaction must be removed while fresh fuel is added.

The exhaust is directed toward a divertor whose surfaces can experience heat fluxes comparable to those encountered during spacecraft re-entry. Superconducting magnets must operate near absolute zero temperatures close enough to confine the plasma while being protected from high-energy neutrons that damage materials and degrade electrical insulation.

Fusion has taken so long because the reaction occurs under conditions that destroy the machine producing it. Gas turbines waited for alloys, cooling passages and manufacturing precision capable of allowing turbine blades to operate in gas hotter than the metal’s melting point.

Fusion faces an analogous materials challenge, but with plasma temperatures measured in millions of degrees, intense neutron bombardment and components that may have to be replaced remotely from inside an neutron activated radioactive structure.

Breakeven’s moving boundary

The word “breakeven” obscures these distinctions by applying the same label to several different development milestones.

The lowest threshold is sometimes called scientific breakeven: the fusion energy released equals the energy delivered directly to the target or plasma. This is a deliberately narrow accounting boundary.

Ignition describes the physical character of the reaction rather than the overall energy balance. In deuterium-tritium fusion, the reaction produces a helium nucleus, or alpha particle, and a high-energy neutron. The charged alpha remains within the fuel long enough to deposit its energy, raising the temperature and causing more fusion. When that internal heating becomes sufficient to sustain or propagate the burn, the fuel has ignited. Scientific breakeven and ignition are related, but one is an accounting threshold and the other describes the onset of substantial self-propogation of the fusion reaction.

Engineering breakeven expands the boundary to the whole facility. The plant must produce enough usable energy to operate its plasma heaters or lasers, superconducting magnets, cryogenic systems, vacuum pumps, cooling circuits, fuel-processing equipment and other auxiliary loads. It must then overcome the losses involved in converting heat into electricity through a rankine or brayton cycle. NIF is nowhere near this threshold. Magnetic confinement has not yet achieved an ignited plasma, although several proposed machines intend to move directly toward facilities with much more integrated engineering objectives.

Commercial breakeven lies further away again. A machine could produce more electricity than it consumed while remaining economically useless because its targets, magnets or internal components were too expensive, its maintenance outages too long or its capital cost too high.

A commercial plant must be sufficiently profitable, while competing against mature, established forms of power generation, to recover its construction and financing costs while providing reliable output over decades. It is the difference between an engine that turns over on a test stand and one that can be manufactured, certified, maintained and operated profitably across a fleet.

Fusion has therefore remained early in the technology-development cycle. It has demonstrated individual fusion reactions for many decades, achieved target-level gain and ignition in inertial confinement, but has not yet achieved engineering breakeven, closed its fuel cycle or operated an integrated pilot plant.

The reactor as fuel factory

The fuel cycle is a particularly important example of the distance between the physics experiment and the power plant. Fusion is commonly described as burning hydrogen extracted from water, creating an impression of almost effortless fuel abundance.

Deuterium is indeed present in seawater in a 1:6420 ratio and there are a variety of commercial processes by which to concentrate it. The most favourable fusion reaction available on Earth, however, combines deuterium with tritium, a very rare radioactive isotope of hydrogen with a half-life of roughly twelve years.

Tritium exists naturally only in trace quantities. Heavy-water reactors, including Canada’s CANDU fleet, produce it as a by-product and could provide startup inventories for early fusion machines, but not enough to fuel a large global industry.

Indeed it is estimated that if the world’s entire existing heavy water reactor tritium production were entirely diverted to fusion it could support about 20MW of power.

Therefore, a deuterium-tritium reactor must ultimately breed its own tritium by capturing fusion neutrons in lithium surrounding the reaction chamber. The newly created tritium must then be extracted from the blanket, separated chemically, purified and fed back into the machine.

This turns the breeding blanket into one of the reactor’s most heavily burdened components. It must capture neutrons efficiently enough to replace every tritium atom consumed after allowing for leakage, processing losses and radioactive decay.

It also must absorb fusion heat, protect magnets and other equipment from radiation, retain structural integrity under neutron bombardment and permit the tritium to be removed continuously. Tritium itself readily permeates metals and becomes trapped in components, making the total inventory and processing time important constraints on how rapidly a fleet could expand.

Unlike fission where fissile uranium is abundant and breeder reactors are a long term hedge against eventual depletion, fusion depends on a breeder cycle. Compared to other forms of fusion reactions like deuterium-deuterium, the deuterium-tritium reaction is comparatively easy to ignite, but it transfers complexity into the fuel cycle.

This means that a practical fusion plant must simultaneously be a plasma device, neutron source, heat engine, lithium breeder and radioactive hydrogen processing facility.

From early confidence to engineering reality

The slow timeline was not anticipated by fusion’s pioneers. The rapid progress from fission discovery through the Manhattan Project encouraged a belief that controlled fusion would follow on a similar schedule. Early magnetic programs were initially classified because governments expected the technology to arrive quickly enough to carry strategic value. Once researchers began encountering the depth of plasma instabilities, secrecy became less useful than international collaboration.

Laser fusion passed through its own early period of exuberance. KMS Fusion, founded in 1969, was the first private fusion startup and emerged shortly after the first major proposals for laser-driven inertial confinement. Its backers believed the approach might achieve useful fusion within a decade and overtake the magnetic programs that were already struggling with plasma confinement.

The history is strikingly modern: private capital, ambitious timelines and the expectation that a novel technical approach could leapfrog slow government laboratories. The principal difference is that this occurred more than half a century ago.

Those researchers were not necessarily dishonest about the promise of their work. They were operating before experiments had exposed the full set of coupled constraints. Producing a compressed plasma did not by itself solve implosion symmetry, target fabrication, driver efficiency, chamber survival, tritium breeding or repetitive operation. Each advance revealed the next system that had to be developed, tested and integrated.

The present fusion boom rests on a stronger scientific and industrial foundation than its predecessors. Ignition has been demonstrated. High-temperature superconductors permit stronger magnetic fields. Lasers, pulsed-power systems, simulation and precision manufacturing have advanced substantially.

Private companies are testing a much wider range of approaches with levels of capital unavailable to earlier programs. The field is no longer asking whether controlled fusion reactions are possible, but which machine architecture can turn them into an energy system.

This remains, however, a long-term industrial wager rather than a near-term electricity solution.

The engineering work to get to commercial power production, much like space programs, will produce valuable secondary capabilities in magnets, lasers, materials, computation and high-energy-density physics. These benefits justify serious public and private investment even if the first plants are expensive and arrive later than their developers predict.

What fusion should not provide is an excuse to neglect existing sources of firm, low-carbon electricity. Germany’s willingness to fund fusion research while dismantling operating fission reactors is a bizarre paradox. The prospect of eventually burning hydrogen isotopes competitively does not compensate for destroying one of the world’s best operating nuclear fleets.

NIF’s ignition result deserves celebration but also should generate humility. A decisive physics threshold has been crossed in inertial confinement. The work now moves outward from the fuel capsule into the chamber walls, breeding blanket, coolant system, turbine hall, maintenance program and supply chain.

That may well take twenty more years.

The economic damages resulting from sanctions alone have been estimated by experts to be roughly equivalent to those of the Iran-Iraq war, running into the hundreds of billions of dollars.

The result of that investment and sacrifice are shockingly modest. Its power fleet consists of a single Russian-built VVER-1000 reactor at Bushehr, supplying about 1.7% of national electricity. Iran also operates several small research reactors, most notably the 5MW Tehran research reactor.

Its enrichment capacity, the program it has defended and paid most dearly for in punishing sanctions, has never been more than a rounding error when benchmarked against the global industry. At its peak it runs several tens of thousands of separative work units (SWU) per year. For comparison Rosatom runs about 28 million SWU and Urenco and Orano combined run another 20 million SWU.

The quantities are insufficient to fuel any power reactor of consequence. They are, however, enough to build a bomb.

Today’s essay is a comprehensive history of Iran’s nuclear program which will provide historical context and insights into the future of Iran’s nuclear ambitions. It draws on my Decouple Podcast interview with Dr. Farzan Sabet, an Iran expert and historian at the Geneva Graduate Institute.

Origins

Iran’s nuclear program stretches to 1957 beginning under the auspices of Eisenhower’s Atoms for Peace. In 1967 the United States delivered the Tehran Research Reactor, a 5 MW pool-type unit, along with its fuel: roughly 5kg of “bomb grade” highly enriched uranium.

This of course raises eyebrows in today’s non-proliferation environment, however, the quantities involved were far below IAEA estimates of the 25kg of 90% enriched uranium required for a crude nuclear weapon.

For a decade the reactor mostly sat idle. Iran lacked the trained physicists to run it, and the program was small and underfunded, consisting of a smattering of research projects.

Oil for Atoms

The 1973 oil shock changed everything. The price of oil quadrupled just as Shah Mohammad Reza Pahlavi successfully wrested control of Iran’s oil industry back from Western oil companies and the treasury was flooded with petrodollars. The result was huge current account surpluses.

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The Shah’s “Oil for atoms” program was multifaceted.

First, it was an opportunity for economic diversification and techno-nationalism, a bid to plant Iran, an ancient civilization with a long memory of its own greatness, at the cutting edge of the era’s most advanced technology.

Second, Oil, whose value had reached new heights, was now seen as too precious to burn at home for electricity when it could be exported or refined into higher value products. Reactors which in the 1970s were assumed to be coming down a cost curve would therefore carry domestic electricity load to free up lucrative petroleum exports.

Lastly, it offered a mutually advantageous recycling of petrodollars. France, battered by the rising cost of imported oil, could recover hard currency by exporting reactors and nuclear expertise, while Iran converted its oil surpluses into advanced technology and industrial capabilities.

The Nuclear Energy Program

The resulting 1974 Nuclear Energy Program was breathtaking. The Atomic Energy Organization of Iran planned for the construction of 20 reactors targeting some 23,000 MW of capacity.

The organization quickly became the third largest body in the Iranian state, behind only the state oil company and the armed forces. It reached 7,000 staff and broke the civil service pay scale in order to poach the country’s best engineers.

The ambition extended past electricity generation and included sovereignty over the entire fuel cycle. Iran bought uranium in southern Africa, took a stake in the French Eurodif enrichment consortium, and set its sights on one day exporting reactors and nuclear services.

The Bushehr nuclear power station was begun under contract with the German firm Kraftwerk Union and excavations for the French supplied Darkhovin nuclear power station were begun.

The option of Iran pursuing a nuclear weapon under the Shah was considered but kept on the back burner due to the certainty of diplomatic and financial blowback. As a regional bulwark against the Soviet Union, Iran was at the time the largest purchaser of American weapons. Iran simply had too much to lose from pursuing a bomb although the Shah later signalled a nuclear weapon would be considered should a regional rival like Iraq or Libya develop a bomb of their own.

Revolution, War, and Nuclear Deterrence

The 1979 revolution slammed the breaks on the Shah’s nuclear aspirations. To the Revolutionaries the nuclear program was a white elephant, a monument to Pahlavi extravagance in a country wrestling with deep rural poverty.

Nuclear construction was halted at Bushehr and Darkhovin. However, Nuclear technocrats managed to convince Ayatollah Khomeini to resume the Bushehr project which was 80% complete. Kraftwerk Union however had no intention of staying. The company fully withdrew from Iran in July 1979, rendering the technocrats’ internal victory a dead end.

Then Iraq invaded, and the eight year war that followed shifted the Islamic Republics position on the future role of nuclear technology.

Around 750,000 Iranians died in the conflict. Saddam used chemical weapons while the United States supplied him battlefield intelligence and diplomatic cover at the UN. The world mostly looked the other way.

Although it received arms from China and North Korea, Iran had no reliable great-power protector and faced an opposing coalition with far greater diplomatic and financial backing.

The Gulf monarchies bankrolled Baghdad, Both the Soviet Union and America armed Saddam. Kissinger is reported to have summed up America’s position in the following words: “It’s a pity they can’t both lose.”

In a surprising twist Israel, which read Saddam as the greater danger, sold arms to Iran and eventually played a role in the Iran-Contra deal.

The lesson the Islamic Republic drew from this conflict was that no treaty or international body could be counted upon to come to its rescue. It could only depend on itself and needed its own deterrent.

The AMAD Plan

After the war, Iran began clandestine nuclear weapons related work under a succession of military-linked organizations. By the late 1990s, much of this activity had been consolidated under physicist Mohsen Fakhrizadeh into the AMAD Plan: a structured program examining the technologies required for an implosion-type nuclear weapon and reportedly aiming to produce five missile-deliverable warheads with yields of roughly ten kilotons each, slightly smaller than the bomb dropped on Hiroshima.

The program’s scale and organization were reconstructed through years of IAEA investigation and intelligence supplied by multiple countries, then illuminated further by the Iranian AMAD Plan archive itself. In January of 2018 Israeli Mossad agents managed to seize it carrying away 1000lbs of documents from a warehouse in south Tehran.

Iran’s enrichment program received crucial early assistance from the clandestine network built by Abdul Qadeer Khan. A Pakistani metallurgist who had worked during the 1970s for a contractor to the British-German-Dutch URENCO consortium, Khan illicitly obtained European gas-centrifuge designs and used them to establish Pakistan’s nuclear weapons program.

Khan later transformed the procurement network created for Pakistan into an international proliferation enterprise. Iran was one of the network’s earliest customers.

At a meeting in Dubai in 1987, Iranian representatives obtained drawings and sample components for Khan’s P-1 centrifuge, a machine derived from European URENCO technology, together with information needed to establish an enrichment program. The P-1 became the basis of Iran’s IR-1 centrifuge, thousands of which were eventually installed at Natanz and Fordow.

According to the IAEA, Iran separately investigated several technologies relevant to an implosion-type nuclear weapon. Researchers conducted experiments using surrogate materials to study the conversion and casting of uranium metal. They developed exploding-bridgewire detonators capable of firing with the near-simultaneous timing required for an implosion nuclear device, and worked on a multipoint high-explosive initiation system. They also studied how a spherical payload could be integrated into the re-entry vehicle of a Shahab-3 missile.

What Iran lacked was sufficient fissile material.

Scaling Enrichment, Sanctions, and the JCPOA

In 2002, an Iranian dissident group publicly exposed the existence of Iran’s hidden underground enrichment facility at Natanz. In 2003 the presence of US troops on its eastern and western borders following the US invasions of Afghanistan and Iraq is thought to have led to the halting of the AMAD program.

Enrichment, however, was expanded under a civilian banner justified in part by Iran’s need to fuel its research and power reactors. In 2006, under President Mahmoud Ahmadinejad, Iran expanded its centrifuge halls and pushed enrichment levels up.

The discovery in 2009 of a secret enrichment plant burrowed into a mountain at Fordow, a site with roots in the AMAD program, hardened world opinion against Iran. The sanctions that followed were backed by both Russia and China at the UN Security Council. The impact on the Iranian economy was severe.

With the Supreme Leader’s blessing, a moderate government under Hassan Rouhani negotiated the 2015 Joint Comprehensive Plan of Action which provided sanctions relief in exchange for real, physical concessions.

Iran removed two-thirds of its centrifuges, shipped almost all of its enriched-uranium stockpile to Russia, capped its maximum enrichment level at 3.67% and ceased enrichment at its deeply buried Fordow mountain site.

In 2018, under Donald Trump, the United States unilaterally walked away from the deal.

In the subsequent years after initially keeping to its JCPOA committments Iran ratcheted up its enrichment activities and eventually developed a stockpile of 440kg of 60% enriched Uranium, enough for approximately ten small nuclear devices.

After a decades long campaign of cyber attacks and sabotage against its enrichment facilities as well as assassinations of many senior scientists including Mohsen Fakhrizadeh, Iranian nuclear sites came under aerial bombardment and have been heavily degraded by US and Israeli bombs over the last 13 months.

Nuclear Breakout as Anti-Deterrent

One only has to look at the contrast in the fortunes of Saddam, Gaddafi and Kim Jong-Un to see how nuclear weapons capabilities can serve as the ultimate deterrent to external regime change efforts.

Iran’s conventional deterrents are in a fragile state. While its Houthi allies threaten the Bab el-Mandeb strait strengthening their chokehold on the worlds oil supply, the remainder of its proxy network has been significantly degraded.

Hezbollah has been weakened, Hamas is in tatters, the Assad government is gone, and Iraqi militias are being pressed toward disarmament. In addition, Iran’s grip on the Strait of Hormuz, while currently a major threat to the global economy, is a diminishing threat whose leverage will fade as the Gulf states build export pipelines around it.

Seeking deterrence via a breakout dash towards a nuclear weapons capability is not, however, as simple as it seems. One or two crude weapons with an unreliable delivery mechanism are not enough to deter an adversary.

On the contrary they could provoke a first strike before an Iranian arsenal has time to mature. Israel holds an undeclared nuclear monopoly in the region and an Israeli nuclear response to an Iranian test is not unimaginable.

An effective nuclear deterrent involves serialized warhead production, reliable missiles, and a second-strike capability. Iran is thoroughly penetrated by Israeli intelligence networks and such an effort would require enormous resources and many years during which Iran would remain vulnerable.

Curtailing Iran’s Nuclear Options

Iran has paid a huge price for a nuclear program that has delivered very little and yet despite enormous economic and now military costs it still clings to its asserted right to enrich.

Enrichment is difficult for Iran to abandon because it simultaneously represents security, sovereignty, prestige, bargaining leverage, institutional interests and revolutionary identity as well as an enormous sunk cost.

A durable agreement to limit Iran’s nuclear latency is likely to resemble the JCPOA by preserving the formal principle of enrichment while severely constraining its strategic usefulness: very low enrichment levels, tiny stockpiles, strict centrifuge limits, imported fuel guarantees and exceptionally intrusive verification.

Iran could present that domestically as retaining its sovereign right; the other side could obtain a program incapable of rapidly producing weapons material.

A demand for permanently abandoning enrichment asks Iran not merely to make a technical concession but to acknowledge strategic defeat. That may be achievable in the case of regime transformation or outright military capitulation. It is much harder, however, to obtain through an agreement that Iran’s leaders must voluntarily sign, defend and implement.

Its timbers were the skeletons of our housing and ships. As charcoal it was the reducing agent and heat source that pulled iron out of rock. It was also the feedstock for a pre-industrial chemicals industry that produced, for example, the tar and pitch that kept ships watertight.

About 200 years ago the buried fossil forests of the carboniferous era stole centre stage.

In today’s essay, which accompanies my interview with Decouple fan favourite Mark Nelson, we perform a sweeping deepdive of humanity’s symbiosis with trees and wood.

An Arboreal Ancestry

Our co-evolution with trees predates our dependence on wood as fuel and material. Primates are an arboreal order, and the anatomy that gives modern day humans some of our unique capabilities evolved in the canopy.

Amongst those, the grasping hand, the opposable thumb and binocular, trichromatic colour vision that helped us judge distance and find red and orange fruit in a sea of green foliage. The two legged animal that would later slash, burn and build from the forest was itself moulded by it.

The controlled combustion of wood further refined our bodies and boosted our capabilities. Cooking externalizes much of the work of digestion which enabled Homo sapiens to develop a shorter gut, a smaller jaw and spend the energy surplus on a larger brain.

As wise as we are, we might more accurately be called the fire ape, Homo ignis.

The Wooden Battery

What makes wood special among the products of photosynthesis is a biochemistry that enables long term energy storage. Plants are less than 1% efficient at converting sunlight into biomass and for non-woody plants most of that carbon based material is recycled to the atmosphere through rapid decomposition.

A tree, however, can hold a century of energy conversion in a form that can be harvested, transported in bulk by water, stored and burned releasing significant quantities of energy on demand.

This attribute is enabled by a unique biochemistry. In a close parallel to rebar and concrete, cellulose carbon fibres, strong in tension, are set in lignin, a rot-resistant cement that is responsible for 15% to 30% of the tree’s mass.

In the case of the California Redwood this biological composite can stand 100 metres in the air and endure for centuries.

Energy = Land Area x Growth Rate

While the wooden battery can stretch photosynthetic constraints slightly the pre-industrial energy equation: Energy = Land area x Growth rate, imposed unforgiving limits. Forested land is finite, sunlight arrives at a fixed rate determined by geography and weather. Growth rate varies by close to an order of magnitude based on species, precipitation and latitude.

Wood acts like savings in a bank account but the balance refills only as fast as the sun allows. This becomes the ceiling in the story that follows whether it’s one of wood as fuel or the products it enables like iron, ships and even maritime empires.

Charcoal and Metals

Preindustrial metallurgy is illustrative of the limits of photosynthesis and lignin. Smelting iron demanded charcoal, both as the fuel and as a reducing agent. Charcoal is made by pyrolysis: heating wood without air to drive off its volatiles and leave carbon behind. The purer the carbon, the better the metal. Every pre-industrial furnace therefore had a forest standing behind it.

Foresters managed the fuel supply through coppicing: cultivating species that resprouted after cutting and allowing the new shoots to mature over roughly twenty years. A woodland could be divided into twenty lots, with one cut each year, creating a theoretically perpetual supply of fuel for the furnace.

This system however imposed a hard economic limit on growth. A larger furnace required charcoal from an ever-wider ring of forest, and charcoal was a poor freight: bulky, fragile, and low in value by weight.

It could be hauled from farther away, but each added mile raised its delivered cost until expansion ceased to be profitable. Iron output was therefore capped by the productive woodland within an economically cartable radius of the furnace.

Deforestation and Agriculture

While forests provided fuel, materials and process heat they competed with human caloric needs. Clearing forest for farmland has therefore been the greatest driver of global deforestation.

The European medieval warm period saw a particularly rapid era of deforestation. The combination of a solar maximum and uncharacteristically low global volcanic activity raised temperatures across Europe and the North Atlantic.

This expanded the growing season by 3 to 4 weeks and made previously agriculturally unviable land across northern Europe cultivable. Vineyards sprung up in England, the Vikings spread across the North Atlantic into North America and a group of forest clearing monks spread like wildfire transforming the European landscape.

The Cistercians were a reform order. They wanted a stricter reading of the Rule of St. Benedict than the wealthy Cluniac houses of the day, which meant austerity, self-sufficiency, and a return to manual labor as a form of prayer.

The order’s ideal demanded remote sites far from existing towns and tillage, so its houses took the marginal ground nobody else wanted: woodland, moor, and marsh. The monks then set about clearing and draining it.

What turned a spiritual preference into a continental clearing operation was the labor model. A class of lay brothers, the conversi, men bound by vows but dedicated to toil rather than the Divine Office, consolidated farms of anywhere from 30 to over 2,000 hectares. This arrangement concentrated labor and animals on a single block of land under a single owner, which made felling, stumping, and drainage worth the outlay at scale.

The order replicated this model with an efficiency no secular institution of the period could match. Its network of daughter houses worked something like a franchised joint venture fused with an ant colony. From 26 abbeys in 1124 they reached roughly 700 across Latin Europe by the 13th century, from Ireland to Poland and Sweden to Sicily.

Forests the Enablers of Maritime Empires

At sea building materials were also determined by Land Area x Growth Rate and this set the size of navies. A single 74-gun ship of the line consumed on the order of 50 acres of mature oak.

Shipwrights wanted high quality compass timber, curved oak whose grain had grown into the shape of a knee or a rib, so that structural loads ran along the fibres rather than across them.

Above the hull came the naval stores and the running consumables of a wooden fleet: tar, pitch, rosin, replacement beams, and above all masts, which had to be tall, straight, and close to flawless.

Britain had deforested itself of sufficient quantities of these high quality timbers well before it reached for a truly global empire, so the supply came from abroad.

The 18th Century Strait of Hormuz

The old Hanseatic axis ran from London to Novgorod, drawing timber, iron, and naval stores out of the forests of Scandinavia, the Baltic, and Russia, which funnelled the entire system through the Øresund, a four kilometre wide strait between Denmark and Sweden.

During the French Revolutionary Wars, Britain was attempting to starve France of maritime trade using its superior navy to stop, search and confiscate the goods of its trading partners.

These countries, including Denmark and Sweden, banded together into the League of Armed Neutrality and threatened to close the Oresund to British trade if their shipping continued to be harassed.

In 1801 a British fleet under Sir Hyde Parker, with the legendary Admiral Nelson leading the attack, forced the Sound and destroyed much of the Danish navy at anchor off Copenhagen.

The Industrial Fruit of the Subterranean Forests

The fossilized forests of the Carboniferous eventually broke the pre-industrial energy equation. Coal is accumulated lignin and cellulose that refused to rot. A single seam holds the stored photosynthesis of forests that grew and fell across the same ground for millions of years, energy a coppiced woodland could release only one 20-year rotation at a time. Tapping it severed human energy constraints from the fixed rate at which sunlight arrives and the finite acreage available to catch it.

This did not mean the end of humanity’s marriage to trees. As documented by French historian Jean Baptiste Fressoz in 1750 Britain consumed roughly 3.6 million cubic meters of fuel wood per year. In 1900 it used more than 4 million cubic meters just as pit props to hold open the shafts of its coal mines and now in 2025, Drax, a British wood pellet burning power plant, consumes 10 million cubic meters per year.

In an upcoming part two with Mark Nelson we will pick up the story of our ongoing post industrial symbiosis with wood and take a closer look at the broad arc of deforestation and reforestation.

Stay tuned.

Ernest Moniz was US Secretary of Energy from 2013 to 2017 and was the lead technical negotiator of the Iran Nuclear Deal, the JCPOA.

Before his political career he ran the physics department at MIT, where his eventual Iranian negotiator counterpart, Ali Akbar Salehi, had earned a PhD under a colleague during an earlier era of US-Iranian nuclear cooperation prior to the Islamic Revolution.

In 2023 I had the pleasure of interviewing Secretary Ernie Moniz on the sidelines of the COP 28 Climate conference in Dubai at the Net Zero Nuclear Summit hosted by the Emirates Nuclear Energy Corporation.

As the Iran war rages on into its fifth month with no end in sight I thought it would be interesting to explore his reflections on the diplomatic path once taken to rein in Iran’s nuclear ambitions.

We recorded the accompanying interview one day after the 11th anniversary of the signing of the JCPOA.

The agreement signed on July 14th 2015 and endorsed by UN Security Council Resolution 2231 was designed to hold Iran 12 months away from enough fissile material for one weapon.

Perhaps more importantly it insisted upon a gruelling inspection protocol which would make any sprint toward a bomb visible and give ample time for a diplomatic or military response.

The approach was to triage and deal with the nuclear issue before further negotiations on the thorny issues of Iran’s missile program and its proxy forces throughout the Middle East.

Under the JCPOA uranium enrichment was capped at 3.67%, and the stockpile limited to 300 kg of UF6. Iran shipped about 11 tonnes of low enriched uranium out of the country.

Its stock of installed centrifuges fell from roughly 19,000 to 6,104 and were limited to its earlier IR-1 design, 10 times less productive than its third generation IR-6 machine.

Enrichment activities at the deeply buried Fordow mountain site ceased, and the Arak Heavy Water Reactor calandria was filled with concrete so the reactor could not be used for plutonium production.

In return Iran got sanctions relief.

The IAEA provided continuous monitoring that ran from Iranian mines and mills through centrifuge manufacturing to the enrichment halls, with a 24-day ceiling on any dispute over access to non-declared sites. The agency verified Iranian compliance in every report it issued until the American withdrawal in May 2018.

Much has changed since then. Iran’s nuclear and missile sites have been heavily bombed, IAEA inspectors are out of Iran, and more than 440 kg of 60% enriched uranium, enough for ten nuclear weapons, lies somewhere inside Iran.

We know from Israel’s daring extraction of the archive of Iran’s former nuclear-weapons program, Project AMAD, from a Tehran warehouse that, between 1990 and 2003, Iran acquired centrifuge technology and nuclear-weapons designs through the A. Q. Khan network with a goal of building five devices by 2004.

During this period it prototyped and developed much of the technical knowledge required to assemble a nuclear weapon. What was missing at the time was fissile material.

As Secretary Moniz makes clear in our interview, while bomb-grade Uranium is defined as being >90% enriched, the “Little Boy” bomb dropped on Hiroshima in 1945 was not bomb-grade and it was never tested prior to its use in Japan.

We find ourselves in a perilous moment with seemingly irreconcilable positions between the belligerents, a regime facing an existential threat and most of the technical and fissile prerequisites for a bomb available to it.

Secretary Moniz still believes that the ultimate resolution of this Gordian knot will come through negotiations but after two surprise attacks by US and Israeli forces during prior negotiations trust is at an all-time low.

In America, despite eye watering subsidies and incentives, utilities just aren’t biting. The question that dogs future nuclear projects is not just how to raise substantial amounts of capital: it is who will absorb the risk of construction overruns.

Like hydroelectric dams, nuclear reactors take the better part of a decade to build, and across that whole period consume enormous amounts of capital while generating no revenue.

The interest accumulated during construction compounds on itself year on year. As a result, depending on the cost of capital and adherence to schedule, by the time first electricity is sold, the financing cost can dominate everything else.

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A combined-cycle gas turbine serves as a useful counterpoint and explains why one technology attracts private money and the other repels it.

A gas plant is predictably constructed in 18-30 months, drawn from a module supply chain that reliably ships hundreds of units a year. Interest during construction doesn’t have time to balloon, and as long as there is demand to serve the asset begins earning revenue quickly.

As a result fixed-price contracts have been commonplace, which is why merchant developers finance gas plants privately without a second thought.

A nuclear megaproject carries two major financial risks. The first is construction risk: will the plant be built on time and on budget? The second is offtake risk: once the plant exists, will a customer pay enough across 60 to 80 years to service the debt?

Nuclear financing structures are fundamentally arrangements for distributing those two risks among a fixed cast of parties that includes the reactor designer, the construction firm, the utility, the government, the ratepayer, the taxpayer, and the industrial offtaker.

Initially, to launch the industry in the USA in the early 1960s GE and Westinghouse took on all construction risk and delivered 13 loss-leading plants under fixed price contracts.

They successfully scaled reactors to sufficiently viable economies of scale that regulated monopoly utilities, confident after a building spree of conventional thermal plants, took on the construction risk. Offtake risk was minimal as electricity demand was skyrocketing in the 1960s.

They financed projects against a captive ratepayer base which offered a low cost of capital. Prudent costs could be passed on to the ratepayer and there was little downside to shareholders.

Elsewhere around the world the answer to the question of who takes on the risk lay with government-owned utilities backed by ratepayers and ultimately taxpayers.

France’s EDF, Ontario Hydro, and Korea Hydro & Nuclear Power could borrow at or near sovereign rates because the lender was, in effect, lending to a government. In these scenarios, nuclear power was being built and financed like infrastructure rather than merchant generation.

In the fizzled “Nuclear Renaissance” of the early 2000s Europe and America tried a variety of approaches to finance EPR and AP1000 reactors.

In the accompanying Decouple Podcast interview with Michael Seely we analyze the evolving state of nuclear construction finance with a deep dive into EPR projects in Finland, France and the UK and look towards what optimal arrangements will look like in the nuclear builds of the future.

These unique design features are the consequence of a single unifying design choice: the use of natural uranium.

The decision to avoid enriched uranium was set in motion during the Second World War. The British atomic bomb program, codenamed “Tube Alloys,” relocated to Canada alongside the world’s entire supply of heavy water which had been spirited out of Norway by a French spy under the noses of the invading Wehrmacht.

The Americans, having found graphite the easier moderator to scale for plutonium production, left heavy water research largely to the British and Canadians, with their laboratory at Chalk River. Work there progressed quickly and ZEEP, a heavy water/natural uranium reactor, was the first reactor to go critical anywhere outside the United States.

Post war politics decisively limited Canada’s options. On January 1st 1947, the McMahon Act cut Britain and Canada off from American nuclear technology, including uranium enrichment. In this context Canada decided to go it alone, developing its own sovereign power reactor technology based on its strengths in natural uranium and heavy water research.

The following essay is based upon my Decouple Media podcast interview with Navid Badie, Chief Nuclear Engineer at Candu Energy Inc.

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The Neutron Economizer

Natural uranium is 0.711% fissile U-235 by weight. The remaining 99.3% is mostly U-238, which absorbs neutrons without fissioning. A reactor running on this fuel starts with almost no margin. With so little fissile material in the core, you cannot afford to lose neutrons to parasitic absorption, and you cannot afford to let them escape.

That rules out ordinary light water as the moderator. Heavy water, in which the hydrogen is replaced by deuterium, absorbs far fewer neutrons. The tradeoff is weaker moderation per collision, so you need more of it to slow neutrons to thermal energies.

More moderator means more volume, and more volume would mean a larger, thicker walled reactor pressure vessel which Canada did not have the capability to forge. Rather than import an oversized reactor pressure vessel and surrender supply chain sovereignty the early designers distributed the pressure boundary.

A Container Full of Microreactors

Because a narrow pressure tube can hold the same pressure with a 4.2mm wall that a conventional light water reactor vessel could only contain with a 21cm thick wall, CANDU designers elected to modularize the core of the reactor into several hundred individual pressure tubes.

These 10cm diameter tubes run six meters horizontally through a large tank of low pressure heavy water called the calandria. Twelve log shaped fuel bundles each 50cm long sit inside each tube with pressurized heavy water coolant circulating around them.

A useful way to conceptualize CANDU reactor anatomy is as a collection of hundreds of tubular 5MWt microreactors.

While a standalone microreactor leaks neutrons from every surface, requires its own costly shielding, refueling apparatus, security perimeter, and spent-fuel handling the CANDU places hundreds of microreactors together inside of a single 7 meter by 6 meter cylindrical calandria vessel. As a result they share a neutron population, radiation shielding, fueling system, and spent fuel bay dramatically reducing costs and simplifying logistics.

The Fueling Machine with a Reactor Attached

A natural-uranium core holds little excess reactivity, so it cannot be loaded with a year or two of fuel at a time the way an enriched core can. If a CANDU were shut down for batch refueling it would sit idle for outages every few weeks. The answer to this challenge is to refuel without shutting down at all.

Online refuelling has led CANDU to dominate the charts in setting run time records and achieving world class capacity factors. For over three years from January 2018 to February 2021, Darlington Unit 1 ran continuously for 1106 days, setting a world record for all thermal generators.

Monday to Friday at every CANDU plant across the globe, two robotic fuelling machines exchange on average 10 fuel bundles. They clamp onto opposite ends of a pressure tube, one pushing fresh fuel bundles in while the other receives the spent ones. This occurs at full power and full pressure.

International operators unfamiliar with the technology are often stunned that Canadians routinely open the primary pressure boundary of their operating reactors.

However, this is routine; with more than 1000 reactor years under their belts, CANDU operators have performed this maneuver almost one million times, becoming the world’s experts in online nuclear refuelling.

Pressure Tube Refurbishment

The same neutron flux the fuel channels are built to share also wears them out. An LWR concentrates its pressure boundary in a single steel forging set outside the core, shielded by the surrounding water, where fast neutron fluence accumulates slowly enough that embrittlement is a 60-80 year concern. CANDU pressure tubes are surrounded by a hard neutron field which causes them to deteriorate more quickly over the course of 30 years.

End of life arrives when rising hydrogen, falling toughness, and dimensional change together leave too little margin, at roughly 30 years. Refurbishment is the reset. The reactor is opened and its pressure tubes, the calandria tubes around them, and the feeder pipes that carry coolant to the boilers are cut out and replaced, returning the core to good-as-new condition for another 30-year run.

The technique has matured across three generations of refurbishment. Each cycle has shortened the outage through better tooling and tighter logistics. The Darlington stations lessons are being carefully filed for the day these reactors return for a second refurbishment, one that would carry them toward 90 to 100 years of service.

The Thermal Sink Safety Margin

One of the most challenging accident scenarios reactor designers plan for is the station blackout, made famous by the Fukushima accident, in which grid power and emergency back up diesels are unavailable. This means that the massive pumps that circulate coolant and remove heat are unavailable.

Thankfully, seconds after a reactor is tripped with control rods or neutron poison injection, power levels drop to 6-7% of full thermal power, reducing further to around 1% within a day. That 1% is still a substantial amount of heat.

In both a CANDU and a pressurized light water reactor it is buoyancy that moves the coolant once the pumps power down. Hot water rising from the core to the steam generators which sit above it, gives up its heat and sinks back, creating a thermosiphon that runs on gravity for as long as the loop stays full of water.

The heat passes into the steam generators, boils their secondary-side water, and leaves as steam through the relief valves. If that secondary side is kept fed and vented, which an Enhanced CANDU 6 does from an elevated reserve tank with no grid power, the reactor cools itself for around three days before stored water runs out. Three days is a very long time to find a fire truck and a hose to refill the reserve tank.

The CANDU adds a second safety margin in the unlikely scenario where thermosiphoning fails. Each pressure tube microreactor is surrounded by a huge inventory of water already prepositioned to provide cooling by simple conduction from one tank to another.

Each fuel channel sits in 230 tonnes of cool, low-pressure heavy water inside the calandria tank. If a pressure tube overheats it sags until it touches its calandria tube, conducting its decay heat straight into that water. Around the calandria, in direct contact with it, another 520 tonnes of light water sits in the shield tank, ready to soak up heat one layer further out.

Finally, the reserve tank, larger than all of these inventories combined, is capable of refilling the calandria and the shield tanks as they boil off. This buys operators ample time to reconnect to the grid or start up backup diesel power sources which restore flow to heat exchangers. The latter definitively rejects decay heat to the ultimate heat sink the reactor uses to condense its steam in routine operations such as a large river, lake or ocean.

Fuel Sovereignty and Isotopes

Fuel sovereignty is a strong value proposition of the CANDU. Uranium enrichment is a very complicated technology which, due to weapons proliferation concerns, is tightly guarded and limited at commercial scale to the USA, several European nations, Russia, China and Japan.

Whereas the CANDU “enriches” its heavy water moderator only once, at the time that the moderator inventory is produced for the reactor, light water reactors depend on enriched uranium fuel to be produced for refuelling intervals every 18-24 months.

In addition, light water fuel elements, which this podcast has referred to as the Swiss watch of fuels, are highly complex engineered products that few countries and companies have the capacity to fabricate.

In contrast, every single country that runs CANDUs fabricates their own far simpler fuel bundles under license. Canada, the only country in the world that mines sufficient uranium to fuel its own nuclear fleet, controls its fuel production from mine mouth to reactor fuel.

The low pressure calandria enables access to a high neutron flux environment during operation with a variety of isotope targets. This makes the CANDU reactor the world’s workhorse for bulk production of medical isotopes like Cobalt-60 and an increasing number of more bespoke cancer treatments like Lutetium-177 which my father received as part of his prostate cancer treatment. CANDU provides the vast majority of the global supply of Cobalt-60, which is used to sterilize most of the world’s single-use medical devices.

Canada’s Choice: CANDU vs. AP1000

The future of Canada’s nuclear sector hangs in the balance with Ontario’s technology selection teetering between CANDU and the American Westinghouse AP1000 reactor technology.

While the AP1000 reactor, covered previously on Decouple, is the world’s most advanced pressurized light water reactor, it has proven difficult and expensive to construct outside of China.

The Vogtle AP1000 units came in at over $25 billion CAD each, more than double their anticipated original cost. The next Western deployments, a three-pack of AP1000s planned for construction in Poland is now estimated at $73 billion CAD, or $24 billion CAD per unit. This price tag is barely better than that of the Vogtle fiasco (and that is the cost estimate, not the final cost).

CANDU benefits from a supply chain that has been energized by successful under budget, ahead-of-schedule refurbishments, meaning greater supply chain certainty regarding reactor components, a workforce and regulator intimately familiar with its inner workings, and unparalleled Canadian content.

The future of CANDU got a boost this week with the Canadian federal government releasing its nuclear industrial strategy and committing to supporting the development of a modernized Gigawatt scale CANDU.

This would complement the Gen 3+ Enhanced CANDU 6 at 750 MW and help build on the success of Canada’s previous CANDU 6 exports. The industrial policy document also declares a strong preference for Canadian technology to maximize local supply chain benefits.

CANDU fits that bill like no other.

My goal is to get half of the North American nuclear industry subscribed to this substack. Please share and recommend to a nuclear friend or nuclear family member.

In the early 1960s the U.S. nuclear industry went from stagnation to the fastest sustained growth for any major industry in the country’s history.

Throughout the mid 1950s to early 1960s attempts by the Atomic Energy Commission to kickstart a power reactor industry through fuel subsidies, R&D support and even reactor ownership in the form of the Power Reactor Demonstration Program (PRDP) disappointed.

The economics and performance of these experimental reactors: SMR sized light water reactors and a smattering of what have come to be called “advanced reactors,” were so unconvincing that in 1961 there wasn’t a single reactor order placed by a US utility.

Philip Sporn, the CEO of American Electric Power and among the most respected utility executives in the country, put the consensus plainly in the early 1960s: a nuclear plant would cost 50% to 100% more than a coal plant.

However from 1962-1976 installed nuclear power capacity grew 40% year on year, doubling roughly every two years going from 200MW in 1960 to more than 50GW in 1977.

The Extraordinary Turnaround

Between 1962 and 1966 Westinghouse and General Electric offered 13 turnkey reactors to utility partners at fixed prices competitive with coal. They sold those plants at roughly half of what they cost to build, kept the books closed, and ate losses that in several cases exceeded the entire sale price.

The “nuclear cheaper than coal” golden-age benchmark referenced by advocates that anchors decades of nuclear cost commentary was perhaps the most consequential marketing campaign in the history of American infrastructure.

What is amazing is that when Westinghouse and GE ceased offering these fixed price contracts in 1966 orders exploded. Utilities were convinced that they could build reactors for even less.

This deep dive of the American Nuclear industry’s origin story, inspired by my interview with James Krellenstein on the Decouple Podcast, explains why.

The Context of the Turnkey Era

The two firms that decided to crack open a struggling market were unlike anything in the modern financialized American economy.

General Electric and Westinghouse had electrified the United States. In the 1960s, as the grid continued to double every 10 years, they manufactured almost every component from generation to consumption of electric power: steam turbines, generators, switchgear, transformers as well as washers, dryers, and stoves.

They also financed power plants through their credit arms, ran broadcasting operations, built locomotives and jet engines, and sat at the center of the military-industrial complex. Nuclear was a small fraction of their revenue, and almost all of it was defense work on the rapidly increasing bomber, submarine and nuclear deterrent forces during the missile-gap years.

The commercial logic for offering turnkey fixed price contracts was straightforward. Both companies had deep relationships with every utility in the country. They knew that utilities wanted to diversify away from coal as fuel costs were projected to rise and urban air pollution was becoming a hot button issue.

GE and Westinghouse believed that a single credible demonstration of nuclear power at coal parity could open the floodgates.

Nuclear Power Cheaper than Coal?

In December 1963 they made it so. Sort of.

General Electric signed a contract with Jersey Central Power & Light to deliver Oyster Creek as a turnkey project. Realizing that economies of scale had the greatest chance of improving the disappointing economics of the PRDP era, this BWR was designed to be 650 MW, three times larger than the Dresden 1, the largest reactor then operating. It was a firm fixed price of $132 per kilowatt in 1963 dollars, with GE acting as designer, constructor, and guarantor, handing over a finished plant no matter what it cost to build.

For that site, the price beat coal. Jersey Central said so publicly, and emphasized that it had selected nuclear on economics alone, with no AEC policy considerations attached.

These orders cascaded. GE followed up with six further large boiling water reactors. Westinghouse, unwilling to cede the market, answered with five large pressurized water reactors all on firm fixed prices.

What the buyers did not see was the gap between price and cost. The AEC’s own estimates, assembled later, are stark. Jersey Central paid $90 million for Oyster Creek; GE spent an estimated $170 million building it.

Point Beach sold for about $145 million and cost Westinghouse an estimated $329 million, a loss of $184 million that exceeded the entire purchase price.

Across roughly a dozen turnkey plants, the combined losses came to about $1 billion in 1960s dollars, north of $10 billion today.

The end of an era

By the summer of 1966 the losses had become intolerable, and General Electric and Westinghouse stopped offering fixed price contracts. From the vantage point of 2026 the reaction was puzzling.

Electrical World, the trade publication of record, ran an editorial on July 4 1966 where the editors predicted that returning control to the utilities would deliver lower costs than the vendors’ fixed prices ever could.

The reasoning was that GE and Westinghouse must have been padding their bids with contingency, and a utility with active ongoing experience competently running large projects with a large rate base could self-insure that risk and build even cheaper.

The rate base did more than absorb risk. Under cost-of-service regulation, a utility earned its guaranteed return on capital invested, with little or no margin on fuel and operating expenses, and prudent cost overruns could be passed through to ratepayers.

A nuclear plant, maximally capital-intensive and minimally fuel-dependent, was the most attractive object a regulated utility’s profit-and-loss statement had ever encountered. The incentive structure that would later prove ruinous looked, in 1966, like alignment.

The order book exploded. From 1962 to 1976 almost the entire American fleet, still the largest in the world in 2026, was built or under construction.

For a brief window, some utilities did build genuinely cheap plants. Palisades, Peach Bottom 2 and Browns Ferry had experienced architect-engineers, a hot supply chain and economies of scale which pushed the capital cost of the best-run plants low enough that, once fuel costs were factored in, were competitive with coal not on a capital cost but on a total-cost basis.

The Cost Plume

However, between 1966 and 1974, the nominal cost of building a nuclear plant rose roughly five-fold. The first leg of that increase, before 1969, came from rising labor costs, falling construction productivity, and economy-wide inflation that doubled coal plant costs at the same time.

Regulation then compounded cost increases from the early 1970s. The 1971 Calvert Cliffs decision forced full NEPA compliance and environmental review into licensing, and the 1972 Giambusso letter imposed high-energy line break and pipe whip analysis. The plants ordered in the boom absorbed these requirements mid-construction.

Then load growth slowed and stalled. Utilities discovered they had ordered plants they no longer required and the cancellation wave of the late 1970s and early 1980s followed. The cost-plus structure that had made nuclear attractive to utility balance sheets now meant ratepayers were funding abandoned reactor projects.

Lessons for our time

The context of the turn key era shares some similarities with our current moment. In 1962, nuclear faced cheap coal, skeptical utilities, and an empty order book despite recent incentives. In 2026 swap in cheap gas, utilities scarred by Vogtle and Summer, generous tax credits and one gets a sense of deja vu.

In some ways we sit in a better position than 1962. We have refined operating “nth” of a kind designs like the AP1000 which has reversed some of the material bloat imposed by earlier regulations. In addition, nuclear regulation is more stable than in the post-Three Mile Island era. Part 52 reduced one of the major cost drivers of that period: late-stage regulatory ratcheting, where plants could be redesigned while already under construction.

However, after the fallout of Westinghouse’s substantially fixed price contracts for Vogtle and Summer and Areva’s fixed price self-destruction at Olkiluoto 3 the days of western reactor vendors offering these kind of contracts seem to be decisively over.

The industrial behemoths of the 1960s that could purposefully price their turnkey plants below cost and shrug off billion-dollar losses as a customer acquisition expense are gone.

Russia, China and South Korea continue to offer fixed price contracts. The West, however, lacks an entity with the demonstrated skills to reliably deliver projects and the enormous balance sheet capable of offering a guaranteed price.

Who will take the risk to enable a renaissance?

The hyperscalers are sometimes nominated for the role, but their nuclear deals so far are power purchase agreements. These lock in demand at a price and leave the construction overrun risk with the developer. In the United States, awash in shale gas, the hyperscalers have cheaper, faster, and above all lower-risk ways to power a data centre.

For the last decade the 50 to 300 MW small modular reactor paradigm was thought to be the way out of this impasse. The vision borrowed from the combined-cycle gas turbine: a largely factory-fabricated set of modules, shipped and assembled on site quickly, at a price low enough, on the order of a billion dollars, that a utility or even a private buyer could carry it on its own balance sheet.

The trouble is that as SMRs moved from slide decks to firm cost estimates, the obvious reasserted itself. A nuclear reactor is not a gas turbine. The inherent costs of a seismic category-I foundation, radiation shielding, bespoke components, spent fuel handling infrastructure and security rivaled large plants like Vogtle on a per kW basis.

The most recent move is to retreat even further from economies of scale towards 1-10 MW micro reactors. Perhaps this scale could enable a new turnkey era at a smaller quantum of capital, one where a micro reactor vendor could credibly guarantee a price because the downside is survivable. The problem is of course that small scale nuclear has always been expensive nuclear. Those arguing that the future will be different are under an enormous burden of proof.

The first turnkey era was the escape from small reactors. Together Westinghouse and General Electric’s race towards GW scale reactors spawned the largest nuclear fleet in the world. If, as some governments have claimed, we want to triple nuclear energy by 2050 construction risk needs to be managed. In the absence of the industrial champions of the past government looks at this point like it will have to take a dominant role.

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This achievement described by the DOE as “the rebirth of America’s nuclear industry” is part of a broader effort by the Trump administration to achieve its Nuclear Energy Dominance agenda.

Energy Secretary Chris Wright used the following words on April 15th of this year to describe this milestone.

“We can have reactors critical, meaning running their full nuclear systems. They’re not turning it into electricity, but that’s the simple part… We will have multiple small modular reactors running… in the next three months.”

Wright’s enthusiasm is contagious but his framing of criticality needs some interrogation as it inverts where the real engineering difficulty lies.

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Achieving criticality is an important milestone, but the engineering involved is comparatively straightforward. We have understood how to assemble fissile material into a self sustaining chain reaction for more than 80 years.

In just over two weeks in 1942, Italian-American physicist Enrico Fermi and his team arranged 42,000 bricks of ultra pure graphite and 40 tons of natural uranium into a spherical “pile” propped up by a massive wooden timber framework in an underground squash court at the University of Chicago. This was the world’s first man-made criticality.

The Antares test reactor used significantly more sophisticated materials: The fuel, HALEU containing TRISO fuel elements manufactured by BWXT, was arranged within a graphite moderated test core and if true to Antares conceptual design was regulated by control drums. Make no mistake though this was a barebones reactor.

The sodium heat pipes and heat exchanger that Antares intends to use to remove heat from the core and the closed nitrogen Brayton cycle turbine to convert that heat into electricity were absent from the experiment. The framing of this flash in the pan as having “reactors running” is a stretch.

So what’s the best way to understand the significance of achieving criticality in such a pared down system?

The combustor of a jet engine offers an illustrative analogy. Energy release is real but the combustor in isolation does not move an aircraft.

Without the precisely machined compressor feeding it air, the single crystal turbine blades extracting work from its exhaust alongside the multitude of systems and controls coordinating fuel delivery, lubrication, cooling and thrust management the combustor is simply a sophisticated flame thrower.

To run with the reliability required for commercial aviation these systems require years if not decades of design iteration, prototyping and testing.

A commercial reactor is fundamentally a heat engine, and the challenge lies in controlling, moving and converting significant quantities of heat into electricity.

Every component in that chain: fuel, cladding, pumps, valves, turbines, generators, control systems, instrumentation and safety systems, must function together with extraordinary precision under high temperatures, radiation fields, thermal cycling, and demanding operating conditions for years on end.

The June 4th criticality was an essential milestone to gather data validating reactor physics, fuel performance, and control system behaviour in the Antares core but it was a baby step on the long tedious march ahead towards a power producing reactor, let alone an economic one.

Nothing about this event has the ring of “dominance” about it. In the context of the Chinese approving 10GW of new large nuclear reactors per year and being responsible for 50% all new nuclear reactors currently under construction worldwide it was a footnote.

An empty vessel does however make the most noise.

The fact that a VC funded start-up got to this stage so quickly is certainly a regulatory breakthrough, but much less a technological one.

The company’s challenge now is traversing the valley of death that has claimed many a reactor venture before. It must prove that it can engineer the remainder of the reactor’s systems, satisfy regulators, operate its full systems on a Project Janus military base deployment, and finally attract commercial customers.

The latter may be the most challenging of all given the extreme diseconomies of scale of microreactors, but that analysis is for another time.

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Oklo, which merged with Sam Altman’s SPAC in 2024 at an $850 million valuation, reached a peak market cap above $30 billion in 2025, largely on AI electricity demand expectations. Microsoft is reportedly paying $115/MWh for the revived Three Mile Island’s output under a 20-year contract, roughly double historic PJM wholesale prices.

The nuclear sector should not bite the hand that feeds it, but it should examine its palm lines very carefully, because there are now serious reasons to believe the AI demand narrative rests on questionable economics and over investment in an LLM-centric approach. While the technology has seduced many and has genuinely important use cases, limitations are emerging that may be intrinsic to LLM architecture itself.

The exploration of the evidence indicating an AI bubble is inspired by the accompanying podcast interview with returning guest David Helmer founder and managing partner at NTTW consulting. Stick around for the conclusion where I share my thoughts on which nuclear players get hit hardest.

Symptoms of an AI Bubble

Frontier labs have been reporting annualized run-rate revenues of $25 to $30 billion. These murky figures are calculated by multiplying a single strong month by twelve, often at a moment when a product launch like Claude Code can distort numbers well beyond their representative averages. Even accepting those numbers, they sit against enormous training and inference costs, in the case of OpenAI, roughly $600 billion through 2030. All of these compute costs pale in comparison to the supporting infrastructure investments in chips, server racks, datacentres, power and cooling which McKinsey projects to reach 6.7 trillion in capital expenditure by 2030.

Three years after 100 million users were collectively wowed by the Eliza effect of a purposefully designed human-like GPT3 chatbot, subsidized use is still the rule. It is the same playbook Silicon Valley used to underwrite cheap Uber rides and discounted DoorDash deliveries to upend traditional incumbents and establish market share. Sam Altman acknowledged in January 2025 that OpenAI was losing money on every $200/month ChatGPT Pro subscriber, with heavy users consuming an estimated $5,000 in compute: a 25-to-1 subsidy ratio.

The glitch with the LLM subsidy strategy is that the per-user cost of frontier AI is an eye wateringly expensive data centre, not a low wage driver’s time and unlike taxi rides and takeout food no one has yet demonstrated that the users who showed up for the subsidized LLM product will follow it to true market price.

In the absence of organic revenue what is propping up these investments is in part what technology analyst Azeem Azhar has called a “financial ouroboros:” the same capital cycling through chipmakers, cloud providers, and frontier labs in a closed loop. A single point of demand failure could now propagate through every balance sheet in the chain simultaneously.

The agentic era was supposed to be where the economics finally worked. However, early deployments are raising questions. Uber deployed Claude Code to roughly 5,000 engineers in December 2025 and exhausted its entire 2026 AI token budget by April, with heavy users burning $500 to $2,000 per month. The COO subsequently admitted the company could not draw a clear line between that spending and improvements in consumer products. Global research and advisory firm Gartner projects that enterprise AI bills will rise through 2030 even as per-token costs fall, because agentic workflows consume between 5 and 30 times more tokens per task than standard chatbot interactions. While still early in the technology’s deployment, a July 2025 MIT study of 300 enterprise AI deployments found that 95% delivered no measurable P&L impact.

Willingness to pay significantly more depends on products which are truly economically transformative. The obvious prize is white-collar labour displacement, a 5 to 10 trillion dollar opportunity. However, the predictions of Microsofts AI CEO, Mustafa Suleyman, in February of this year that most tasks that involve “sitting down at a computer” will be fully automated by AI within the next year or 18 months is looking increasingly outlandish. While there has been a junior white-collar slowdown brewing over the last few years it is largely explained by the extraordinary numbers of people hired by tech companies between 2020 and 2022 on the assumption that pandemic-era growth was permanent. ‘We are restructuring toward an AI-first workforce’ lands better with investors than ‘we hired 40,000 people we did not need during a zero interest rate frenzy,’ and CFOs have not been shy about exploiting the ambiguity.

LLM architecture a dead end?

Despite our hardwired tendency to anthropomorphize coherent language production stretching all the way back to Joseph Weizenbaum’s primitive ELIZA chatbot, Large language models are at their core next-token predictors: highly sophisticated auto-complete. They generate confident outputs that sound correct by pattern-matching against a vast training corpus but outside of domains like coding and mathematics, where outputs can be tested against an external ground truth, the model has no equivalent check on whether a fluent sentence happens to be a true one.

The resulting hallucinations and reliability problems appear not to be a temporary deficiency that more training data or compute will resolve. Initially scaling impressed researchers with emergent properties like multi-step reasoning and in-context learning such that it was informally codified into a scaling law. However the phenomenon seems to have plateaued with focus shifting to post training optimization. OpenAI cofounder Ilya Sutstever has stated that the age of scaling is ending and we’re back in the age of research. Yann LeCun, who spent 12 years as Meta’s chief AI scientist, departed in late 2025 to found AMI Labs on the explicit thesis that hallucinations are intrinsic to the LLM architecture rather than fixable with more data. “LLMs are too limiting,” LeCun stated. “Scaling them up will not allow us to reach AGI.”

These comments should raise skepticism about all in bets on a massive infrastructure and compute spend to support a technology that may not be able to meet expectations sufficiently to earn the revenues necessary to pay back the extraordinary investments.

The Fallout of an AI meltdown

If the AI bubble deflates, the nuclear sector absorbs collateral damage in proportion to how closely a given project was tethered to that capital.

Uranium fundamentals remain intact regardless of what happens to Nvidia’s valuation. Commercial inventories are thin. The secondary supply sources that suppressed prices for 30 years are gone. A projected gap of more than 1 billion pounds between utility requirements and currently visible supply over the next 20 years looms over slow but steady demand growth from China, India, and Russia’s export program.

A speculative correction will likely push uranium spot prices down, as financial buyers exit and risk-off sentiment dominates. This however could worsen the structural deficit heading into the 2030s as lower prices could delay investment in new mines that must come online quickly to narrow the supply gap.

The advanced reactor companies that tech giants chose as partners occupy a more precarious position. The logic behind those choices reflected what might charitably be called disruption bias: a narrative driven tendency to reach for what are being portrayed as “advanced” reactors held back by overzealous regulation while an inferior conventional reactor fleet failed to make good on the promise of electricity too cheap to meter.

Each tech giant has chosen its own distinct advanced reactor darling, a pot pouri of technologies that have frustrated previous efforts to commercialize them. Meta chose the sodium fast reactor vendor Oklo, Google chose a TRISO fueled molten salt cooled reactor concept being developed by Kairos and Amazon chose the recently IPO’d pebble bed high temperature gas reactor start-up X-Energy.

All of these companies are in the protoype stages. None have a licensed, operating commercial reactor design. Each one is asking its “Magnificent Seven” patron to co-finance the creation of industrial supply chains, regulatory precedents, and fuel fabrication infrastructure that does not yet exist at commercial scale.

Uprates are the most defensible position in a correction scenario. The construction risk is lower, the grid interconnection is already built, and the incremental capacity comes online on a timeline measured in years rather than decades. See my interview below with James Krellenstein and Robb Steward of Alva Energy Inc. for the bulls case for this kind of “boring nuclear” additions.

If demand projections are revised significantly downward as the AI data centre buildout slows, stranded baseload generation becomes a genuine utility-sector fear and the business case for large new builds weakens materially. Demand certainty is the foundation beneath every capital-intensive, long-duration, high-risk energy project, and that AI driven demand certainty looked considerably more solid in 2023-2025 than it does today.

The projects most likely to survive a bursting AI bubble are the ones that were least dependent on AI demand projections or venture-capital patience: refurbishments, uprates, and the least technologically speculative new build reactors, those that already have a licensed design, an operational history and a utility customer with growing demand not solely dependent on AI datacentres.

Without a genuinely transformative AI product that can command prices reflecting actual compute costs, the capital cycling through chipmakers, hyperscalers, and frontier labs has no exit other than a correction. Nuclear investors who have anchored their business cases to data centre demand projections made at the peak of that cycle should be doing the math on what their projects look like if those projections are halved.

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The Book of Mirdad by Mikhail Naimy

I have another life. Outside of energy journalism and advocacy I am an ER doctor. The other night, I had an interaction with an elderly patient that unexpectedly brought my two lives together. He was in his late 70s. He’d lost his house, was living out of his car and was drinking more than he should. He was in rough shape.

I asked him what he used to do for a living.

“Draftsman at Ontario Hydro.”

I probed further. Turns out his career included drawing up blueprints for every one of Ontario’s nuclear power plants. I told him I was interested in nuclear power; he understandably but rather depressingly interpreted “interested” as “anti”.

“Yeah, a lot of people don’t like it,” he said.

I clarified my position, thanking him for being part of the great generation who’d helped to build the infrastructure that underpins our health and prosperity to this day.

He was taken aback. It took a few seconds but his eyes lit up with pride and a sense of rediscovered dignity that shone through his matted hair and unwashed clothes as he lay vulnerable on that emergency room stretcher.

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Before Computer Aided Design (CAD) arrived in the 1980s, draftsmen stood at drawing boards and used pencils, compasses, rulers, and protractors to translate engineering intent into buildable reality. They specified not just what each system needed to do but exactly where every pipe run, cable tray and penetration would sit in three-dimensional space, how it would connect to everything around it, what clearances it needed and how a tradesman standing in front of it with tools in hand would actually build it.

The drawings conducted a symphony of mechanical, electrical, and civil disciplines. If two systems conflicted, someone who understood both the design intent and the physical reality had to catch it at the drawing board before it became an expensive problem in the field.

The 16 reactors that now supply roughly half of Ontario’s electricity were built from hundreds of thousands of such drawings.

My generation struggles to build even modest infrastructure projects: The Toronto Eglinton Crosstown Light Rail Project began in 2011 and only went into service in February of this year. A series of technical problems and associated cost overruns meant that a 19-kilometre light rail line took 15 years to open. We seem to have forgotten how to build the infrastructure we need to renew and grow our cities.

In contrast our parents’ and grandparents’ generations performed miracles. Between 1966 and 1993 Ontario’s power demand nearly tripled, from 51 TWh to 135 TWh. Engineers and tradespeople managed to keep up by constructing 20 large CANDU reactors between Pickering, Darlington and Bruce nuclear generating stations, all in just 27 years. In the current moment we look to China with a mixture of awe and unease as they build highways, bridges and power plants at what feels like lightning speed. We once moved at that pace.

To visit the nuclear stations drafted by my patient, as I have done over the last 8 years, is to be struck both by their monumental size and the sheer volume of electricity they generate. Today these reactors produce power sufficient for 10 million households, all from four buildings the size of modest shopping malls. This energy base has underpinned our productive economy, enabling booming auto and steel sectors and the manufacturing base of Canada’s most industrialized province.

In that ER hallway, speaking about more than just his worn down body, I saw reflected in this man’s aging eyes the harsh hospital lights powered mostly by nuclear energy: literally, the fruits of his labour.

Our society seems finally to have reached a political consensus that we should not be tearing down what my friend and energy historian Emmet Penney refers to as our industrial cathedrals built for us by this great generation: edifices like our nuclear power plants at Pickering, Darlington and Bruce.

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The champions of that kind of vandalism have been decisively defeated. Just this week Avi Lewis, the newly crowned Leader of Canada’s left wing New Democratic Party, once the historic party of labour representing the interests of workers like my patient, now the party of urban elites, renounced his previously firmly held position favouring nuclear phaseout.

I’m glad to have played my role in these battles as co-founder and President of Canadians for Nuclear Energy. From 2020-2024 against what we were told were impossible odds, we led the successful campaign to save and refurbish the 2000 MW Pickering B nuclear station, which was drafted by my patient and had been slated for decommissioning in 2025. The result? The preservation of 7200 direct and indirect jobs and 15% of Ontario’s electricity production for another 30 years. The power plant will last at least 80 years and outlive the now grey haired environmentalists who made it their live’s work to tear it down.

It was an honour to provide clinical care for this man and satisfying that in my strange moonlighting career as a nuclear energy advocate I had also cared for and preserved his legacy.

As I grow into my mid forties and spend the best parts of my days trying to instill the values and lessons I’ve gathered into my 7 year-old son, I have become more sentimental when thinking of my elders and their contributions. Beyond displays of gratitude we owe them something deeper.

It starts with ensuring that our children and grandchildren understand and steward their inheritance, never take it for granted and draw inspiration to pick up their tools to leave their mark, continuing our never ending struggle against entropy and decay, to build healthy, wealthy societies worthy of our ancestors’ toil.

Like this post and share it, consider it a blueprint for intergenerational gratitude.

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The gas turbine emerged only in the 1930s. It is the most recent and the last prime mover. It has subsequently become the undisputed champion of global aviation and increasingly a dominant source of dispatchable electricity on grids around the world. Demand for gas turbines is now surging as AI data centres require rapid additions of baseload power.

John Barber patented a recognizable gas turbine cycle in 1791, describing a compressor, a combustion chamber, and a turbine wheel in sequence. John Brayton worked out the thermodynamic cycle that still bears his name in 1872. By the time Frank Whittle ran his first jet engine prototype in 1937, engineers had been sketching versions of the same concept for 65 years.

A gas turbine is, at its core, a device that compresses air, adds fuel and combusts it to produce extremely hot gas to spin a turbine. As engineers push the thermodynamic limits through hotter temperatures the engineering reality is that the hot gasses leaving a modern combustor are well beyond the melting point of the alloys from which the turbine blades are made.

The compressor in a large commercial engine reaches pressure ratios above 40:1, requiring blade geometries machined to tolerances measured in microns across components spinning at thousands of revolutions per minute. In aviation applications the containment structure must be light enough to fly and strong enough to survive a blade release without sending a fragment through a fuselage.

The extreme safety and reliability requirements in aviation and power generation impose a slower pace in innovation cycles reminiscent of the nuclear industry. In the end the gas turbine’s limits are defined by the cumulative materials and manufacturing knowledge required to operate at the edge of its thermodynamics. These factors determine who can build it, and why it is one of the few technologies that the West still decisively dominates, for now.

The following essay is based on a conversation on the Decouple Podcast with Dr. David Helmer, a veteran of GE Global Research and the American Society of Mechanical Engineers (ASME) K-14 gas turbine heat transfer committee.

The impetus for the development of the gas turbine

What finally shifted the gas turbine from blueprints to a functioning engine was the pressures of a World War in which aviation had become increasingly central. Through the 1930s, piston engines remained the only practical option for powered flight, and their limitations were becoming a military liability.

Piston engines struggle at higher altitudes, where thin air starves combustion and power drops sharply. They are mechanically complex, with hundreds of reciprocating and rotating parts subject to vibration, wear, and failure. Their power-to-weight ratio, while adequate for the propeller aircraft of the era, left little room for the performance gains that military planners were demanding: greater speed, higher altitude, longer range. Frank Whittle in Britain and Hans von Ohain both recognized that the piston engine had reached a ceiling that the Brayton cycle could break through.

The early engines were extraordinary in concept and crude in execution. Whittle’s W.1, which powered the Gloster E.28/39 on its first flight in May 1941, produced 860 pounds of thrust and had a service life measured in dozens of hours before its primitive nickel alloy components failed. The materials problem, which would come to define the entire subsequent history of the technology, had to wait.

What the war years established, beyond the basic feasibility of jet propulsion, was the industrial and institutional foundation that would separate the countries that could build serious gas turbines from those that could not. Britain transferred its early jet technology to the United States during the war which seeded GE and Pratt & Whitney’s programs and gave American manufacturers a running start they have still not yet relinquished. Germany’s early expertise withered due to the destruction of industrial infrastructure, postwar restrictions on German military aviation and the migration of engineers into allied programs after the war. They only recovered in 1960-70’s but this time in the heavy frame gas turbine power generation market.

The know-how embedded in these technology transfers was only partly captured in drawings and specifications. Much of it lived in the hands and judgment of engineers and machinists as tacit knowledge.

The material science miracles of the modern gas turbine

The central engineering challenge of the gas turbine is that it operates in conditions that should destroy it. Hot gas leaving a modern combustor reaches around 1,500 degrees Celsius. The nickel superalloys used in turbine blades begin to lose structural integrity at temperatures several hundred degrees below that. Engineers have spent decades developing systems to keep them alive: internal cooling channels machined into the single crystal turbine blade itself, thermal barrier coatings and the superalloys doped with rhenium that extend the temperature range the metal can tolerate before creep and fatigue set in.

The design philosophy imposed by the extreme conditions within the engine has no real parallel in other high-stakes engineering domains. A turbine blade in service is always degrading or in the parlance of the industry “experiencing distress.” It cannot however fail catastrophically. The first turbine stage can be “mostly missing,” burned back by inadequate cooling or a material defect, and the engine will often still fly for many more flight cycles until measured degradation crosses a defined tipping point. The system is designed to tolerate continuous partial failure of its most stressed components because pushing to the edge of material limits is the only way to achieve the power density, fuel efficiency and longevity that modern aviation, and power generation demand.

This approach, coupled with the incredibly high safety stakes involved in commercial aviation, requires extensive evaluation. That risk management focus imposes a conservative innovation cycle well familiar to those knowledgeable about nuclear power. A modification to a commercial jet engine requires bench testing of the component in isolation, then stand testing under representative operating conditions which sometimes includes the rigors of the famous chicken gun and blade out scenario. Next is flight and endurance testing for hours accumulation, and finally aircraft recertification if the change affects airframe performance.

The gap between the GE90 and its successor the GE9X is roughly 25 years, a near irreducible time required to validate changes in a system where GE applies 6 sigma quality standards across its engine programs or fewer than 3.4 defects per million.

For reference SpaceX which has moved at lightning speeds in its rocket development is able to accept an engine failure rate of roughly 1% across its launch program.

Gas Turbines go Terrestrial

When a gas turbine leaves the aircraft and gets bolted to the ground, some of the engineering constraints relax. Weight stops mattering and bird ingestion becomes a smaller problem but precision engineering around performance and reliability still matters. Unlike a jet with relatively short duty cycles, a utility turbine may be asked to run continuously for weeks, while every small loss in efficiency compounds into fuel cost and every excess maintenance outage becomes lost revenue.

The most interesting design option that became available to terrestrial gas turbines, however, was the potential to use their extremely high quality waste heat which averages 550 degrees Celsius. A gas turbine in simple cycle operation, running alone without any additional heat recovery, converts fuel to electricity at thermal efficiency in the low to mid 40s percent. Unlike an aircraft, where that heat is simply dumped into the ambient air, on the ground it can be routed into a heat recovery steam generator, which uses it to boil water and drive a steam turbine in a second, separate power generation cycle.

Early combined cycle plants existed decades before, but the concept only became commercially transformative in the 1980s and 1990s as improved materials, higher turbine inlet temperatures, blade cooling, digital controls, and increasingly sophisticated combustion management pushed gas turbine performance high enough to make the economics compelling. Combined cycle plants could now exceed 50 percent thermal efficiency and eventually move past 60 percent, allowing natural gas to compete directly with coal for sustained baseload electricity generation rather than merely serving as an expensive peaking fuel.

At the same time, deregulated electricity markets were expanding across North America and Europe, rewarding technologies with lower upfront capital costs, shorter construction schedules, and operational flexibility. Combined cycle gas turbines fit that environment unusually well.

They were efficient enough to run continuously, could ramp up and shut down far more easily than coal or nuclear, and avoided fuel costs entirely when offline, an important advantage in volatile merchant power markets. Environmental pressure on coal was also rising due to concerns over sulfur dioxide, particulates, mercury, and eventually CO2 emissions, areas in which natural gas is a demonstrably cleaner alternative to coal.

GE, Siemens Energy, and Mitsubishi Heavy Industries spent the late 1990s and early 2000s expanding manufacturing capacity aggressively around the assumption that the world was moving toward a gas dominated electricity system built on combined cycle gas turbines. Annual heavy duty gas turbine orders reportedly reached 120 to 140 gigawatts globally in the early 2000s.

Then a perfect storm hit. The 2008 financial crisis crushed electricity demand growth across much of the OECD, wind and solar rapidly absorbed incremental generation growth and the merchant power boom had already saturated the American market with relatively new gas plants. Global heavy-duty turbine orders fell to roughly 30 to 40 gigawatts annually by the mid-2010s, a collapse of more than two-thirds from peak.

The consequences were severe: massive layoffs, factory underutilization, write-downs, collapsing margins, and an investor confidence collapse that fed the broader GE crisis of the late 2010s. Under Larry Culp, GE eventually broke itself into 3 separate companies: GE HealthCare, GE Vernova, and GE Aerospace.

Today GE Vernova, Siemens Energy, and Mitsubishi face another major positive demand shock driven by AI data centers and electrification, with delivery queues stretching toward the early 2030s. This time none of them are expanding recklessly recognizing the possibility of an AI bubble, a strategic stance somewhat akin to the newfound capital discipline in the U.S. shale patch that evolved after its most recent price collapse.

The gap is being filled by companies like FTAI power which is currently taking CFM56 engines off retired commercial aircraft, converting them for ground-based power generation, and selling that capacity to data centers that cannot wait for purpose-built equipment.

Why the West is Still Dominant in Gas Turbines

Commercial jet engine manufacturing is one of the most concentrated industries on earth. GE Aerospace, Rolls-Royce, Pratt & Whitney and France’s Safran produce essentially all of the turbofan engines powering large commercial aircraft.

Fighter jet engines operate under a different set of constraints: shorter service lives, no six sigma safety requirement, and performance prioritized over durability. Both Russia and China have developed credible military engines on that basis, but the jump from a capable fighter engine to a certified commercial turbofan is a different engineering problem entirely.

So why has that dominance proven so durable despite decades of well-resourced attempts to break it? The answer has several mutually reinforcing layers.

First is tacit knowledge; the accumulated manufacturing process understanding, inspection infrastructure, and decades of operating data required to demonstrate 6 sigma reliability simply cannot be extracted from a blueprint or a reverse-engineered component.

Secondly, certified batches of the doped superalloys required for hot section components are sourced from a small number of qualified suppliers whose relationships with the leading manufacturers took decades to build.

Lastly, the precision machine tools required to produce single crystal turbine blades to micron tolerances are themselves a specialized product made by only a handful of manufacturers, with German toolmakers historically prominent among them.

Behind it all sits a century of accumulated operating hours and failure data that the leading manufacturers have built into their design and certification processes. The gap China, for example, faces is having to reconstruct every one of those layers simultaneously.

The terrestrial gas turbines market is similarly concentrated in the Western bloc. Siemens Energy and Mitsubishi Power compete effectively in the heavy frame market alongside GE. The materials demands are less extreme and the certification requirements less stringent but neither Russia nor China has yet produced a competitive large combined cycle turbine without technology transfer or joint venture arrangements with one of the established Western or Japanese leaders.

Russias Gas Turbine woes

The Russian case illuminates what happens when a high-performance industrial capability like gas turbines is simultaneously hit from multiple directions. The deterioration predates the 2022 invasion of Ukraine by decades, beginning with the Soviet collapse and the economic chaos that followed. The engineering talent base that had sustained Soviet aviation and power generation programs dispersed, with experienced engineers leaving for better-paid work abroad or moving into unrelated sectors as defense and industrial budgets collapsed.

The materials problem compounded the talent problem. Russia’s ability to maintain supply relationships for specialized parts, never strong by Western standards, eroded through the 1990s and 2000s as the industrial base contracted.

Then came the precision machining problem. Germany was Russia’s primary supplier of the high-precision machine tools required to produce turbine components to the tolerances modern engines demand. That relationship was embedded in a broader economic interdependence: Russian gas flowing west, German industrial equipment flowing east. Post-2022 sanctions put an end to that special Ost-Politik relationship.

GE’s withdrawal from Russian power generation maintenance under threat of sanctions compounded the crisis at the operational level. GE had engineers on the ground maintaining the most capable turbines running on the Russian grid, many of them originally supplied through the Siemens joint venture arrangements. When those engineers left, the knowledge and tooling they brought with them also disappeared.

The Russian grid is now running aging equipment with a degraded maintenance capability, shortening component life further and creating a compounding reliability problem. Recent adaptations by Russia to overcome sanctions pressure include turning to Iran which has a small but self sufficient gas turbine industry.

The West still dominates. When will the rest catch up?

The gas turbine waited nearly 150 years from theory to practice to join the pantheon of prime movers because the materials and manufacturing precision it required didn’t exist. Its arrival reorganized the world: global aviation, just-in-time supply chains built on air freight, and the most efficient heat engine ever built for generating electricity.

That the Western bloc and Japan still decisively control this technology after nearly a century is the outcome of compounding advantages in materials science, precision manufacturing, tacit institutional knowledge, and certified failure data accumulated across millions of operating hours.

China’s “Two Engines” programme, launched in 2013 and backed by sustained state investment, has not yet closed that gap in either commercial aviation or heavy-frame combined cycle turbines. Whether it eventually does will matter as much to the future balance of industrial power as it does for the semiconductor or battery supply chain contest currently dominating policy attention.

The AI demand surge has arrived into this constrained supply environment with considerable force. CCGT plant costs have roughly tripled over the last 3 years, order books stretch toward the early 2030s, and the gap is being filled in part with jet engines from retired aircraft converted for ground-based power generation. Whether the demand wave will persist long enough to justify genuine capacity expansion, or correct as the 1990s boom did, is the question that manufacturers must judge.

Gas turbines represent an accumulated industrial inheritance which took nearly a century to come within small percentages of theoretical maximum efficiencies. The queue is long in part because the capabilities of those who have mastered the last prime mover are exceptionally rare.

For more on David Helmer visit his website https://www.nttwconsulting.com/

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The first part of this analysis published last week established why uranium behaves unlike any other commodity: no real-time price discovery, demand that arrives in waves separated by years of buyer silence, and a cyclical pattern sustained across 6 decades by a secondary supply wedge that has now been exhausted.

Today we examine both sides of the ledger simultaneously, because the supply story and the demand story are not independent.

They are pressing against each other in ways the aggregate global supply-demand charts do not capture. The geopolitical fracturing of the market means the relevant question is no longer whether there is enough uranium in the world. There probably is. The question is whether there is enough in the western supply chain, and that is a considerably more uncomfortable place to look

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What’s structurally different on the supply side

The absence of secondary supply changes the mathematics of the uranium market in a way that has not yet been fully priced into conventional analysis. When the next demand surge arrives, there is no inventory wedge to release.

The price signal that would previously have been dampened by a flood of government stockpile material or down-blended warheads will now have to travel all the way to primary producers, who will have to respond by sinking capital into new mines that take years to permit, build, and bring to full production. That lag between price signal and supply response is the structural feature that distinguishes this cycle from every predecessor.

Cameco’s position within that structure is deliberate. The company still has 30% of its licensed, permitted production capacity either in care and maintenance or operating below full rate, held in reserve explicitly because sufficient long-term contracting has not yet arrived to justify restart. Isaac was direct about this: there is no build-it-and-they-will-come model in uranium.

Producers commit capital after securing forward demand, not before. Cameco’s Millennium deposit and other Athabasca-adjacent assets remain in the ground as inventory, pounds with a balance sheet value that appreciates as the price environment improves, available for development when the contracting signal justifies it. The discipline is a deliberate strategy of matching production decisions to marketing outcomes rather than running mines at capacity and hoping the market absorbs the output.

Kazatomprom has arrived at the same position by a harder road. Having learned during the post-Fukushima bear that maximizing volume destroys the value of the national asset it is supposed to steward, Kazakhstan’s state producer now runs a contracting-first strategy that mirrors Cameco’s. The production target reductions that initially looked like a sulfuric acid supply problem, output guidance cut 10 to 15% at first and now closer to 25%, are better understood as a capital allocation decision dressed in operational clothing.

The sulfuric acid shortage is real with phosphate fertilizer production competing for available supply, and the constraint genuinely biting into production volumes that Kazatomprom had already sold forward. Building a new sulfuric acid plant takes 18 to 24 months and costs $200 to $300 million. Kazatomprom has done exactly this before and the engineering knowledge exists.

The decision to fund and begin construction came as contracting conditions improved through 2023, not at the moment the shortage first appeared. The plant is now under construction and expected online in 2026. That it was conceived and financed alongside a strengthening contract book, rather than purely in response to an operational emergency, is the tell.

What settles the supply discipline question is Kazatomprom’s 2026 guidance, which has nothing to do with acid. The company announced a further roughly 10% production cut for 2026, stating explicitly that current prices and the existing level of uncovered demand are not sufficient to incentivise a return to full output.

New Athabasca Basin development offers genuine upside against this tightening but carries first-of-a-kind risk that promotional materials for junior developers tend to understate. NextGen Energy’s Rook One project anticipates production of around 30 million pounds per year, which would be transformative for the western supply picture if it materializes on schedule.

But Cigar Lake’s mining method was built on decades of institutional accumulation by a company that had already operated McArthur River and learned the hard way what fractured sandstone and unconformity-hosted ore bodies do when water management fails. The freeze engineering, the jet-boring system, the radiation handling protocols for 15% ore grades: none of this existed as received knowledge before Cameco developed it.

A new operator in a different geological setting, without that institutional base, faces engineering challenges with no established playbook. Isaac described the dynamic precisely: junior uranium projects tend to attract elevated valuations before they have entered what he called the valley of development, the long and capital-intensive period between exploration promise and operational reality.

Cameco’s own reserve and resource pipeline contains around one billion pounds, all adjacent to existing infrastructure and already on the balance sheet. Any external acquisition has to clear that internal hurdle rate. At current junior valuations, very few external projects do, and the moment when they will is the moment those projects have moved through the valley and been repriced accordingly. There is a significant incumbent advantage.

The geopolitical dimension of the supply picture adds a further layer of tightening, one that aggregate global supply-demand charts tend to obscure entirely. Uranium has always been a highly trade-dependent commodity; for most of the industry’s history, around 90% of uranium production came from countries with no civilian nuclear power program, while around 90% of demand came from countries with little or no domestic uranium production. The system worked because no one worried much about where the uranium came from. The unipolar exception to the rule made that comfort possible. Emerging multipolarity is challenging what in retrospect was a naive assumption.

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Multipolarity and a fracturing market

The standard supply-demand analysis of the uranium market operates at the global aggregate level: total pounds produced, total pounds consumed, projected deficit or surplus. That framing was adequate for a world in which uranium flowed freely across borders toward whoever offered the best price and utilities had no preference for origin. That world is gone, and the aggregate framing now obscures more than it reveals.

The uranium market is splitting into two increasingly separate procurement spheres. On one side sit US, European, Japanese, and South Korean utilities buying uranium that can pass ESG screens, government security reviews, and shareholder scrutiny.

On the other sit Chinese state enterprises and Rosatom export clients building reactors and fueling them through supply chains largely invisible to western price reporting and largely inaccessible to western buyers. The question that matters for uranium investors is not whether there is enough uranium in the world. There probably is. The question is whether there is enough in the western supply chain, and that is an increasingly different and more uncomfortable question.

China’s nuclear ambitions alone reframe the demand picture in ways the aggregate numbers do not capture. China currently operates around 62 reactors and has roughly 34 more under construction, with stated government targets pointing toward 150 GW of installed capacity by 2035, roughly triple today’s fleet. That uranium demand is being served through a supply architecture running parallel to the western term market: bilateral offtake agreements with Kazakhstan and Uzbekistan, African production assets acquired by Chinese state enterprises, and processing arrangements that often route material through Russian infrastructure. None of this volume shows up in western spot or term prices as demand. It disappears from the pool of available western-origin supply without generating a visible price signal in the markets western investors watch.

The ownership map of global uranium production makes this dynamic more acute than the geography suggests. Kazatomprom is state-owned. Uranium One, which holds significant Kazakh production stakes, is owned by Rosatom. CNNC controls Rössing in Namibia, with output largely committed to Chinese offtake, and Husab, also among Namibia’s larger producers, is similarly Chinese-controlled.

Namibia looks like a western-friendly source until that ownership layer is examined. Niger’s Somair mine was effectively removed from the western supply chain by the 2023 coup. The geographic map of uranium production and the geopolitical map of uranium availability are not the same map, and confusing them produces dangerously optimistic supply assessments.

The spot and term prices that western investors watch are prices in the western procurement sphere. As western-origin supply tightens relative to western demand, those prices will increasingly reflect western-origin scarcity rather than global aggregate adequacy. The fracture is not symmetric, and the side bearing the greater adjustment cost is the side that spent the post-Cold War decades assuming global commodity markets were a permanent and neutral feature of the energy landscape.

What’s structurally different on the demand side

The demand transformation driving this bull has two distinct layers that are worth separating before examining how they interact. The first is the reversal of the post-Fukushima western phaseout. The second is a class of demand that did not exist in any previous uranium cycle. Together they are pressing against a supply base that is simultaneously tightening for the structural reasons described in the previous section.

Russia’s invasion of Ukraine in February 2022 was the demand-side inflection point. Before the invasion, energy security was a minor consideration in power planning; after it, energy security became the dominant concern. Nuclear’s profile changed accordingly. A technology that was sunsetting as a legacy baseload asset in increasingly deregulated western grids was suddenly being re-examined as a mature, dispatchable, carbon-free power source that does not depend on fuel imports from geopolitically unreliable suppliers.

The irony that Russian enrichment services remained deeply embedded in western fuel chains long after the invasion made the point more viscerally than any policy paper could. Belgium reversed its phaseout. Japan began restarting reactors that had sat idle since 2011, with a government target of returning 30 or more units to service. The United States passed legislation extending production tax credits for existing nuclear plants and strengthening support for new construction, while several European governments that had treated nuclear as a managed decline reclassified it as critical infrastructure.

The reactor life extension wave matters enormously for uranium demand because it converts what had been scheduled demand destruction into sustained long-run consumption. A reactor expected to retire in 2030 that instead receives a subsequent license renewal to 2050 adds 20 years of uranium conversion, enrichment, and fabrication demand. Given the relatively small fleet of global reactors, each reactor is individually responsible for roughly 0.2% of global demand. Multiplied across the US fleet, where subsequent license renewals are now the norm rather than the exception, and across Europe and Japan, the aggregate addition is substantial.

Roughly 70 reactors are currently under construction globally, a figure not seen since the 1970s construction wave, and the uranium demand from those reactors is being contracted years before the plants begin operating. The contracting signal is already building in the term market even though the physical consumption is still years away.

Then there is the data center and artificial intelligence demand signal, which did not feature in uranium investment theses as recently as three years ago. Microsoft’s agreement with Constellation Energy to restart Three Mile Island Unit 1, Amazon and Google signing nuclear power purchase agreements, and a broadening field of technology companies explicitly seeking firm 24-hour carbon-free baseload to power compute infrastructure have introduced a class of buyer into the nuclear power market with no historical precedent.

These buyers carry deep balance sheets and a demonstrated willingness to sign long-duration contracts to secure power supply certainty, and their demand is structurally incompatible with intermittent generation: a data center cannot tolerate the output variability of wind and solar without storage infrastructure that does not yet exist at the required scale and cost. Nuclear is the only mature technology that satisfies both the carbon and the reliability constraint simultaneously. The data center signal is still early but it is layering onto an already tightening picture rather than driving it independently.

The procurement sequencing laid out in Section 1 gives a precise read on where western utilities currently sit within all of this. Conversion prices are at historic highs; the western conversion market, dominated by Cameco’s Port Hope facility and Orano’s Metropolis Works, has essentially no spare capacity and is fully contracted well into the next decade.

Enrichment is similarly tight: after the effective sanctioning of TENEX, Russia’s enrichment export arm, western utilities were left with Urenco and Orano as their primary options, both running at high utilization, and new enrichment capacity takes 10 or more years to permit, finance, and construct. Fabrication contracted, enrichment contracted, conversion contracted. The uranium contracting wave has not yet fully arrived. When it does, it will hit a primary supply base deliberately held in partial restraint, with no secondary supply available to buffer the price signal.

What Cameco’s Vertical Integration Signals

Cameco’s growing vertical integration spans the full western nuclear fuel cycle by design. The 1988 merger of two Canadian Crown corporations created a company that ran from Athabasca Basin mining through milling, refining, and CANDU fuel fabrication from the outset. What has changed over the subsequent three decades is the deliberate extension of that integration into the light water reactor fuel cycle, which accounts for roughly 92% of the world’s operating reactors, culminating in the Westinghouse acquisition completed with Brookfield Asset Management in 2023.

That acquisition is best understood as demand creation. Between what Cameco handles for pressurized heavy water reactors and what Westinghouse handles for light water reactors, around 65% of western world fuel bundles pass through a facility owned by one of the two companies. Every AP1000 that Westinghouse sells and builds is 80 to 100 years of upstream demand for uranium, conversion, enrichment, and fabrication. The logic is circular in the most productive sense: building reactors creates the long-run demand that justifies investing in the upstream supply chain to serve them.

In the fracturing market described in the previous section, Cameco’s ownership structure is itself a competitive asset in a way it was not a decade ago. Western utilities under government pressure to demonstrate supply chain security are not indifferent to the fact that a long-term contract with Cameco is a contract with a Canadian-domiciled, privately owned company whose assets sit in Saskatchewan and Ontario, jurisdictions with stable rule of law and no plausible scenario in which production gets diverted to a state strategic priority. That provenance premium is real and growing as geopolitical sorting accelerates.

Cameco’s Athabasca Basin operations rest on institutional knowledge that cannot be acquired quickly regardless of capital availability: freeze engineering, jet-boring protocols, radiation management at ore grades with no parallel elsewhere in the western world. That knowledge lives in a small workforce operating in one of the most remote industrial environments on the planet, and it is not easily replicated. NexGen and Denison are competing for the same scarce pool of experienced operators and engineers that Cameco has spent decades cultivating.

The labour market in northern Saskatchewan is not elastic. You cannot import this expertise from a copper mine or a conventional uranium operation in Kazakhstan or Namibia. The tacit knowledge embedded in Athabasca Basin operations is specific to that geology, that ore grade, and those extraction methods, and it accumulates slowly through direct experience rather than capital deployment.

Each new deposit presents its own first-of-a-kind engineering problem: McArthur River and Cigar Lake sit 55 kilometres apart and require fundamentally different extraction strategies, and there is no reason to expect the next generation of deposits present less novel mining engineering challenges.

The physical moat and the human capital moat reinforce each other. These barriers do not appear on a balance sheet, but they are the reason Cameco’s assets command the strategic premium they do, and they are the standard against which junior developer promises should be measured.

The company with the deepest operational knowledge of western uranium supply and the most granular view into western utility contracting is the one holding 30% of its licensed capacity in reserve, waiting for the long-term contracting signal to fully arrive. That patience is the clearest available signal that the uranium bull has not yet reached the point at which the smart money feels compelled to rush.

A more boring bull market, maybe

The long-term uranium contract price has been moving steadily upward for three years without a significant reversal, grinding methodically in one direction rather than spiking on a single supply shock or sovereign buying program the way previous bulls did.

That grinding reflects something no previous uranium bull possessed: two major incumbent producers running explicit supply discipline simultaneously, no secondary supply available to buffer a demand surge, a geopolitical environment pushing western utilities toward a narrower pool of origin-appropriate suppliers, and a demand base being rebuilt on foundations more durable than a single policy announcement.

The structural conditions for a disorderly blow-off top, the pattern that ended every previous uranium bull, are less present in this cycle than in any prior one. Kazatomprom now understands that flooding the market destroys the value of a national asset it cannot replace. Cameco has demonstrated through a decade of curtailments and patient contracting that it will not produce into a weak market.

The secondary supply shock absorber that historically amplified both the upswing and the collapse is gone. And the geopolitical fracturing of the market means a Kazakh production surge is less likely to land in the western spot market than it would have in 2012, because the offtake architecture routing Kazakh material toward Chinese and Russian end users is now more contractually entrenched and more politically durable than it was during the last bear.

The residual tail risks are real. A nuclear accident remains the industry’s defining vulnerability, though it would now be in a world where climate security, energy security, and national security have become the explicit pillars of power sector planning in every major western economy.

Governments that reversed phaseout decisions on energy security grounds are less likely to reverse course again, and the generation of reactors now operating embody safety improvements that make a Fukushima-scale event substantially harder to replicate.

The more immediate uncertainty is timing. The uranium market ultimately depends on utilities bringing forward demand, and that timing is not controllable by producers. Conversion and enrichment contracting already reflect the tightened supply picture.

When uranium contracting fully catches up, the price signal will reach producers holding capacity in reserve for exactly that moment. Whether that resolves in an orderly repricing or a violent catch-up move depends on how quickly the last domino falls and how much new primary supply can be brought online in response.

What this cycle has that its predecessors lacked is a structural foundation underneath that uncertainty and that is what makes it worth understanding on its own terms.

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