Geopolitics Unplugged

Summary:

In this episode we discuss the feasibility of converting existing coal-fired power plants into nuclear power plants, specifically focusing on the use of Small Modular Reactors (SMRs). We examine the process of conversion, highlighting the necessary steps such as site assessment, decommissioning of coal infrastructure, reactor fabrication and installation, steam generation system adaptation, turbine and generator integration, cooling system development, electrical grid connection, waste management planning, and regulatory compliance. We acknowledge the challenges associated with conversion, including potential "Not In My Back Yard" (NIMBY) objections and the need to navigate different regulatory bodies.

Questions to consider as you read/listen:

1. What are the technical and logistical challenges associated with converting a coal-fired power plant to a nuclear power plant?


2. What are the economic and environmental considerations involved in converting coal-fired power plants to nuclear power plants?


3. What are the potential benefits and drawbacks of converting coal-fired power plants to nuclear power plants in the United States?

Long format:

How much of a plug and play is it for a coal-fired power plant to be converted to a nuclear power plant?With recent discussions and interpretations of the Department of Energy’s new grant application process to look at Small Modular Reactors (SMRs) to the tune of $900 million.

https://www.energy.gov/articles/doe-announces-900-million-accelerate-deployment-next-generation-light-water-small-modular

the question becomes how to best implement SMRs into our existing grid. Build new facilities or repurpose and retool existing Coal-fired Power Plants?

We examine this now.

Rather than getting bogged down in the “should” discussion whereby reasonable people disagree reasonably about whether the United States should move to nuclear energy as opposed to other energy sources, I wanted to take a moment to focus practical side of converting from old coal fired plants (CPP) to new SMR plants (mobile micro reactors).

When Peter Zeihan first brought this up several months ago, I did a bit of a deep dive to see how close of a plug and play substitute this scenario could be. And this is what I discovered (for what it’s worth):

Converting a coal power plant into a nuclear power plant involves a multi-step process including: site assessment, decommissioning existing coal infrastructure, building a new nuclear reactor, installing necessary cooling systems, integrating with the existing electrical grid, addressing regulatory requirements and overcoming Not In My Back Yard (NIMBY) objections, while potentially reusing some existing structures like the turbine hall and electrical transmission lines, depending on the design of the new nuclear reactor, particularly if it's a smaller, modular design.

In short, it’s a process but yes a lot of stuff that would traditionally we just scrapped can be reclaimed and rededicated depending upon status. We do something similar and related already with converting coal-fire power plants (CPP) to natural gas power plants (NGPP). Almost 200 plants are either fully converted or are in process to be converted from CPP to NGPP. The biggest practical difference that cannot be stressed enough as we shall see about the switch from CPP to NGPP and that from CPP to NPP is the change in regulatory body oversight.

SITE ASSESSMENT: In the conversion from coal-fired to nuclear (micro reactors) one of the key elements is access to water. If the micro reactor is water cooled that’s an issue. Not such a large issue if it is non-water-coooled like sodium, lead, or molten salts which most of the designs I talked about in my other long post are.

DECOMMISSIONING OF THE COAL PLANT: This may already have been done or is in process, but if it is not, here are the steps oversimplified. Dismantle and remove existing coal combustion equipment, including boilers, coal handling systems, and flue gas desulfurization units, while managing hazardous materials like coal ash. The degree to which the government regulators will require a given site to remediate the flue gas desulfurization units and removal or processing of the legacy coal ash on site may make a given project uneconomic. The removed equipment will include at least the coal, coal-storage facilities, coal-handling equipment, coal dryers and crushers, gas filters, ash-handling equipment, sulfur scrubbers, exhaust towers, and any ponds used in operation. One study found that this step makes up approximately 75% of the original capital cost of the plant.

NUCLEAR REACTOR FABRICATION/CONSTRUCTION AND INSTALLATION. This step seems fairly obvious including but not limited to building a control room, containment structure and installing the reactor core, fuel handling systems, and associated cooling systems.

STEAM GENERATION SYSTEM: Adapt or modify the existing steam generation system to be compatible with the heat produced by the nuclear reactor. The ability of this repurposing depends on prior plant design and also how long the existing system had been operating. The longer it has been in operation the more likely wear and tear has made its repurposing impractical.

TURBINE AND GENERATOR INTEGRATION: Utilize the existing turbine and generator infrastructure where possible, potentially requiring upgrades to accommodate the new steam conditions. Retaining the turbine would potentially save approximately 5.5% of the cost of the original plant. The ability of this repurposing depends on prior plant design and also how long the existing system had been operating. The longer it has been in operation the more likely wear and tear has made its repurposing impractical.

COOLING SYSTEM DEVELOPMENT: Install appropriate cooling systems, such as cooling towers or once-through cooling systems, based on water availability and environmental considerations.

ELECTRICAL GRID CONNECTION: Connect the new nuclear power plant to the existing electrical grid, leveraging the existing transmission lines from the coal plant. This is a major advantage of conversion from a legacy CCP to a new nuclear power plant (NPP). If the NPP’s power levels match those of the CPP, this should allow for minimal investment in the local grid.

WASTE MANAGEMENT PLAN:  Develop a plan for managing spent nuclear fuel, including storage and transportation to a disposal facility. And also there are potential issues with cleaning up the onsite legacy coal storage areas depending on how much coal remains.

REGULATORY COMPLIANCE: Obtain all necessary permits and licenses from regulatory agencies, including site permitting, construction authorization, and operation licenses. Switching regulatory bodies is no joke. From the EPA for CPP to the the NRC with any nuclear power plant is a change in culture for sure.

NIMBY CONCERNS: As we can see from the comments within our own community some folks have very log held and very heart felt beliefs on the subject of nuclear power. Will anti NPP folks be able to sufficiently organize and galvanize local thought to impact the project? That’s always a possibility.

Just some research I did that might be useful. I look forward to Eric’s or others amplifications/corrections. I like to learn. Thanks for helping me learn, y’all.

Sources:

https://www.energy.gov/ne/articles/8-things-know-about-converting-coal-plants-nuclear-power

https://inldigitallibrary.inl.gov/sites/sti/sti/Sort_54812.pdf

https://www.energy.gov/ne/articles/could-nations-coal-plant-sites-help-drive-clean-energy-transition#:~:text=A%20Look%20at%20the%20Study&text=The%20team%20further%20evaluated%20the,environmental%20benefits%20to%20energy%20communities

https://www.energy.gov/ne/articles/could-nations-coal-plant-sites-help-drive-clean-energy-transition#:~:text=A%20Look%20at%20the%20Study&text=The%20team%20further%20evaluated%20the,environmental%20benefits%20to%20energy%20communities

https://www.pnnl.gov/sites/default/files/media/file/PNNL-SA-193632-CoaltoNuclear.pdf

https://www.energy.gov/ne/articles/nuclear-101-how-does-nuclear-reactor-work#:~:text=The%20water%20in%20the%20core,electric%20generator%20to%20produce%20electricity

https://www.iaea.org/newscenter/news/repurposing-fossil-fuel-power-plant-sites-with-smrs-to-ease-clean-energy-transition#:~:text=Nevertheless%2C%20challenges%20remain%20to%20implementing,salt%2Dbased%20energy%20storage%20system

https://spectrum.ieee.org/nuclear-power-plant#:~:text=I%20find%20it%20difficult%20to,than%20simply%20building%20new%20machinery

https://nuclearinnovationalliance.org/sites/default/files/2023-11/NIA_Resources%20for%20Coal%20Repowering%20with%20Nuclear%20Energy_v1.0_.pdf

https://www.utilitydive.com/news/coal-nuclear-power-pant-conversion-naseo-naruc/714586/#:~:text=Despite%20the%20opportunity%2C%20challenges%20remain,kW%2C%E2%80%9D%20the%20report%20said

Summary:

In this episode, we discuss two distinct strategies for addressing economic dependence on China: de-risking and strategic decoupling. De-risking, favored by the Biden administration, aims to reduce reliance on China in specific strategic sectors like semiconductors through targeted tariffs and export controls. In contrast, strategic decoupling, favored by Republican policymakers, advocates for broader tariffs and restrictions to minimize trade deficits and dependencies, prioritizing long-term economic threats. We highlight that while both approaches seek to reduce dependence on China, they differ in their scope and implementation, with de-risking potentially facing criticism for perceived compromises and strategic decoupling risking backlash from trade partners and businesses. We conclude by suggesting that regardless of the political outcome, the United States will reduce its global footprint and increase reshoring, with the degree of change depending on the chosen policy approach.

Questions to consider as you read/listen:

1. What are the key differences between de-risking and strategic decoupling in terms of their objectives and policy tools?


2. How do the respective approaches of de-risking and strategic decoupling impact the US's economic and political relationships with China?


3. What are the potential challenges and trade-offs associated with implementing each approach in the US-China relationship?

Long format:

A distinction without a meaningful difference? Decoupling v. De-risking

De-risking, as endorsed by the Biden-Harris administration, selectively uses tariffs and export controls to target specific strategic sectors, aiming to reduce reliance on China, especially in key industries like semiconductors, without severing all economic ties. It balances the costs of action (e.g., tariffs and restrictions) against the costs of inaction (e.g., dependency on China).

Strategic decoupling, favored by Republican policymakers and rooted in the ideas of former U.S. Trade Representative Robert Lighthizer, seeks to minimize trade deficits and dependencies by implementing broader tariffs and restrictions. It places a stronger emphasis on the potential risks of inaction, such as China’s growing economic and military dominance, and seeks to prevent U.S. economic engagement with China where it is deemed harmful, while allowing beneficial exchanges.

While both strategies focus on reducing dependencies on China, de-risking aims for targeted, balanced interventions, while strategic decoupling advocates for more comprehensive actions with a focus on preventing long-term economic threats. These differences in policy approaches could lead to distinct challenges in implementation and political support, with de-risking facing criticism for perceived compromises, and strategic decoupling risking backlash from trade partners and businesses.

But in all practical senses is this a word game of semantics or is there a practical difference? This article gives evidence to the thoughts presented in our podcast that no matter who wins the POTUS race, the US footprint in the world will be less and reshoring continues, it is just a question of degree.

https://thediplomat.com/2024/10/de-risking-vs-strategic-decoupling-understanding-harris-and-trumps-approaches-to-economic-security/

Summary:

In this episode, we discuss the challenges and current state of autonomous vehicle development, focusing on the role of advanced semiconductor chips. We explain the different levels of autonomous driving automation, from Level 0 (no automation) to Level 5 (full automation). We highlight the need for increasingly sophisticated chips with smaller nanometer (nm) sizes to power these advanced systems, especially for achieving Level 5 autonomy. While progress is being made, we note that standardized road conditions remain a significant obstacle to widespread deployment of fully autonomous vehicles.

Questions to consider as you read/listen:

1. What are the technological hurdles preventing widespread adoption of self-driving cars?


2. How does the current state of semiconductor technology impact the development of autonomous vehicles?


3. What are the key differences between the various levels of autonomous driving automation?

Long format:

Autonomous cars: Why don’t we have self-driving cars yet?

The current conventional nomenclature for autonomous vehicles is from the SAE.

The six levels of autonomous car automation are:

Level 0: No driving automation

Level 1: Driver assistance

Level 2: Partial driving automation

Level 3: Conditional driving automation

Level 4: High driving automation

Level 5: Full driving automation

It all depends on what level you want. As a general rule, the higher the level the lower the nm on the chip. That’s simplistic because there is a lot that goes into it beyond the chip such as hardware (LIDAR, radar, sensors, etc). But simplistically that is so.

Most automotive semiconductors are based on nodes below 22 nm. However, some vehicle designs use leading-edge 7- and 10-nm semiconductor chips, and 5-nm designs are in development.

The next generation of chips for autonomous driving systems will use technologies closer to the cutting edge, in the 1-5 nm range.

China at best is at 7nm currently. They are developing but not yet deployed 5nm. As I have written all over this community with lots of words, I don’t see China cracking into the sub 5nm reality for some time.

The current state of the art is 3nm with IBM at 2nm. No one is at 1nm but bold prediction at the 2025 conference I bet it will be revealed.

The bane of the existence of the dream of automated cars is in non standardized road conditions and non uniform lane markers. There is a great story of how Elon Musk told his engineers that he demanded to drive in a fully automated Tesla from his house to his headquarters with zero human intervention. It was a demanding timeline. For almost all hours the engineers tried and tried and tried and failed….. until they decided to go outside the box, and repair and repaint all of the roadway between his house and the HQ. Problem solved. Elon’s demand accepted. It’s a good story but a better illustration of the issues with the goal of achieving level 5 cars that will function in the wild. China is a country that would repaint all of its roads and make it supremely uniform perhaps. Will the US? Dunno. I would not bank on it.

Sources:

 https://digital.bnpmedia.com/publication/?i=667937&article_id=3726579&view=articleBrowser

https://www.embedded.com/buying-autonomous-electric-vehicles-will-soon-be-just-like-buying-a-laptop/#

https://www.synopsys.com/blogs/chip-design/autonomous-driving-levels.html#

https://www.synopsys.com/blogs/chip-design/autonomous-driving-levels.html#

Summary:

In this episode we examine the rapid growth of the content moderation industry, comparing it to the military industrial complex. We highlight the high profit margins generated by content moderation services, which have minimal production costs. We speculate on the potential geopolitical impacts of this industry's expansion, particularly in relation to information control, globalization, and international relations.

Questions to consider as you read/listen:

1. What is the driving force behind the growth of the information/censorship industrial complex?


2. How does the rise of the information/censorship industrial complex impact geopolitical dynamics?


3. What are the potential long-term consequences of a global expansion of content moderation efforts?

Long format:

Content Moderation, information Industrial Complex

I am increasing becoming aware of the information/censorship industrial complex. Not so much from the censorship or restrictions on free speech and “what, if anything, we should ‘do’ about the spread of misinformation and other active measures types of campaigns”. I’m focusing more on the money and its growth.

The global content moderation services market size was estimated at USD 9.67 billion in 2023 and is expected to grow at a CAGR of 13.4% from 2024 to 2030. USD 13 billion in 2024 to USD 40.37 billion by 2032.

This is just math and facts. I’m placing no judgement on it’s necessity or usefulness.

It is big big big money.

And the beautiful thing about it is that it is very very very high margin. Unlike the military industrial complex (MIC) where in the MIC it actually makes bullets and rifles and artillery shells and missiles and planes that have hard costs, content moderation has no hard costs.

If Brazil-like efforts spread to the EU, the projections above in terms of the information/censorship industrial complex will easily double.

It is big big money. The military industrial complex is old money. The information industrial complex is new money and much much more powerful.

From a demographic and geopolitical point of view, what are we seeing now with the dawning of the information/censorship industrial complex. If it continues to grow and if Brazil-like efforts against X continue to be the norm, what can we expect the impact on geopolitics to be? How does this shape or impact our unprecedented re-shoring of manufacturing? How does accelerate or decelerate the fall of China? How does this accelerate or decelerate de-globalization? How does it impact traditional alliances such as NATO? How does it impact Ukraine? Just what are the ripples?

Summary:

In this episode, we discus the importance of demographics, particularly fertility rates, in shaping the future of countries. We present data showing a dramatic decline in global fertility rates, leading to population decline in most parts of the world. However, despite this trend, we present that demographics are not the sole determinant of a country's future success. We highlight the importance of a country's position in the Global Value Chain (GVC) as an additional factor in determining future economic strength, suggesting that maintaining a strong position in the GVC may be as critical as achieving high birth rates.

Questions to consider as you read/listen:

1. What are the implications of global demographic decline for the global economy and geopolitics?


2. How do factors like global value chains and demographic trends interact to influence the future of nations?


3. To what extent does global population decline challenge existing models of economic growth and development?

Long format:

Demographics important but not everything 

There is within doubt a very large and irreversible demographic decline in the world in general. This is a problem.

I have fully drunk the Peter Zeihan kool aid that demographics are important.

However, they aren’t everything.

Consider this.

By 2100, only six of 204 countries and territories (Samoa, Somalia, Tonga, Niger, Chad, and Tajikistan) are expected to have fertility rates exceeding 2.1 births per female. In 13 countries, including Bhutan, Bangladesh, Nepal, and Saudi Arabia, rates are even predicted to fall below one child per female.

The Total Fertility Rate (TFR) in Western Europe is predicted to be 1.44 in 2050, dropping to 1.37 in 2100, with Israel, Iceland, Denmark, France, and Germany expected to have the highest fertility rates at between 2.09 and 1.40 at the end of the century. Rates are projected to be much lower across the rest of Europe and parts of Asia.

Most of the world is transitioning into natural population decline (when the number of deaths exceeds the number of livebirths); just 26 countries are still projected to be growing in population in 2100 as livebirths continue to outnumber deaths, including Angola, Zambia, and Uganda.

Source:

https://www.healthdata.org/news-events/newsroom/news-releases/lancet-dramatic-declines-global-fertility-rates-set-transform#:~:text=By%202100%2C%20only%20six%20of,and%20employment%2C%E2%80%9D%20said%20Vollset

https://www.un.org/development/desa/pd/sites/www.un.org.development.desa.pd/files/wpp2022_summary_of_results.pdf

But those 16 countries don’t make Peter Zeihan’s top 5 future winners (“Now, the shortlist of countries that could function without the Americans, Japan's far away the top of the list. Turkey makes the top four. France does really well, so does Argentina.”)

It is interesting to me to contemplate the chicken or the egg. Is it more important to stay on top of the Global Value Chain (GVC) or mind replacement rates and demographics? If a proverbial gun was put to your head and you had to choose demographic “win” of replacement rate above say 3 versus being on top of the GVC, which would you choose and why?

Summary:

In this episode we discuss the potential consequences of a nuclear attack on North Korea, highlighting the dangers of fallout and the international implications. We examine the reality of US retaliation options, emphasizing the significant risks posed by nuclear fallout to neighboring countries, particularly China and South Korea. We explore the concept of "zero tolerance" for nuclear proliferation, questioning its practicality and exploring the various measures that could be employed to prevent it, ranging from technology restrictions to military intervention.

Questions to consider as you read/listen:

1. What are the political and military implications of a "zero tolerance" policy towards nuclear proliferation?


2. What are the potential consequences of a nuclear strike against North Korea, and how could these consequences impact regional stability?


3. How might the US address the challenge of nuclear proliferation in a way that balances deterrence and the avoidance of unintended consequences?

Long format:

Counterattacking North Korea with nukes: the reality

What can’t be lost in a doomsday scenario of a NK nuclear spasm is that in reality the US retaliation options are very limited in reality. Here is why:

Depending upon the yield of the nuclear weapon, how high up in the atmosphere it is detonated and winds, at a distance of 20-25 miles downwind, a lethal radiation dose (600 rads) would be accumulated by a person who did not find shelter within 25 minutes after the time the fallout began. At a distance of 40-45 miles, a person would have at most 3 hours after the fallout began to find shelter.

Here, it's important to stress that even if the nuclear event doesn't happen in your immediate area—even if it's hundreds of miles away—the fallout could still potentially reach you in a day or less.

Why does this matter?

China

If we think for one nanosecond that China is just going to sit idly by when we nuke NK into oblivion and just tolerate nuclear fallout on their land and to their people no matter how minimal and not lose its mind???? Then we are crazy. On the other side there’s SK an alley and irradiating their land is not going to be popular and never mind our 28,500 troops and approximately 48,000 US Citizens.

So in reality nuking the hermit kingdom back is very very dangerous.

Sources:

https://www.epa.gov/radtown/radioactive-fallout-nuclear-weapons-testing

https://www.atomicarchive.com/resources/documents/effects/wenw/chapter-2.html#:~:text=At%20a%20distance%20of%2020,fallout%20began%20to%20find%20shelter

https://www.mirasafety.com/blogs/news/survive-nuclear-fallout#:~:text=Here%2C%20it's%20important%20to%20stress,in%20a%20day%20or%20less

I am in with folks who say there should be a “zero tolerance” for nuclear proliferation. Nuclear proliferation especially into states or actors who do not play by generally accepted international standards of behavior is to be avoided.

When folks advocate "zero tolerance" what does that look like?

Are we talking ITAR like restrictions on the technology involved in uranium enrichment such as photoexcitation equipment/technology, and gaseous diffusion and gas centrifugation equipment? This we already do. But in a global market, there are other spaces to get these items from. Do we drop bombs on foreign manufacturers of these technologies if they continue to export these items?

Do we occupy all uranium mines?

Do we pressure countries to close their existing nuclear facilities so that enriched uranium or plutonium cannot be as easily made? Do we bomb them if they do not close?

What about targeted assassinations of folks like Abdul Qadeer Khan or other scientists?

Do we put boots on the ground in this zero-tolerance stance for NK or Iran or others to stop them?

What in practical reality does zero tolerance mean in reality?

Summary:

In this episode we present a debate surrounding the Jones Act, a US law requiring goods transported between US ports to be carried on US-built, owned, and crewed ships. We highlight arguments both for and against the law. Those arguing against the Jones Act claim it leads to higher transportation costs, inhibits economic development, and burdens the US economy, particularly in regions like Puerto Rico. Conversely, supporters argue the Jones Act bolsters the US maritime industry, supports jobs, and enhances national security by ensuring the availability of US-flagged vessels in times of crisis. We discuss the need for its repeal.

Questions to consider as you read/listen:

1. What are the key economic arguments for and against the Jones Act?


2. How does the Jones Act impact US domestic trade and national security?


3. To what extent does the Jones Act promote US maritime industry and employment?

Long format:

The Jones Act: A time to reform

Peter Zeihan has been railing against the economic inefficiencies of the Jones Act since he’s been doing his videos and in several of his books.  https://zeihan.com/the-jones-act-and-american-economic-development/

Besides his great books which are must reads, if you are interested in the economic inefficiencies of the Jones Act, here are some sources I liked reading. You might enjoy them too…

(as always with all critical reading consider the source and look for any bias)

https://www.cato.org/publications/policy-analysis/jones-act-burden-america-can-no-longer-bear#introduction

https://www.ntu.org/foundation/detail/the-jones-act-paradox-why-is-a-law-that-is-deemed-essential-so-frequently-waived#:~:text=Critics%20of%20the%20Jones%20Act,Hawaiian%20family%20$1%2C800%20per%20year

https://brownpoliticalreview.org/2022/11/the-jones-act/#:~:text=The%20result%20is%20a%20shrinking,does%20not%20go%20far%20enough

https://www.sciencedirect.com/science/article/abs/pii/S0022199620300933#:~:text=This%20paper%20examines%20the%20economic,Jones%20Act%20impedes%20domestic%20trade

https://maritimesafetyinnovationlab.org/wp-content/uploads/2019/05/mercatus-grennes-jones-act-v2-2017.pdf

https://www.hoover.org/research/how-jones-act-harms-america

https://www.nber.org/digest/202402/jones-act-and-energy-prices

I think it’s always important to at least consider “the other side”. Therefore, here are some resources to consider from those who argue the Jones Act is still “needed”:

https://www.americanmaritimepartnership.com/u-s-maritime-industry/jones-act-overview/#:~:text=The%2040%2C000%20Jones%20Act%20vessels,%2441%20billion%20in%20labor%20compensation

https://www.defensenews.com/opinion/commentary/2020/06/05/why-the-jones-act-is-still-needed-100-years-later/

Have a great day everyone. What a great community. Great tribe we are building here. Cheers and high fives to us.

Summary:

The sources provide an assessment of the United States' oil and natural gas reserves, suggesting that the country has abundant resources. The Institute for Energy Research (IER) estimates the U.S. has 1.66 trillion barrels of technically recoverable oil, which is enough to fuel transportation for over 500 years at current consumption rates. Additionally, the IER estimates that the U.S. holds 4.03 quadrillion cubic feet of technically recoverable natural gas, sufficient to meet current demand for over 130 years. The sources highlight the substantial increase in these estimates compared to previous studies, indicating a growing understanding of the U.S.'s potential for oil and gas production.

Questions to consider as you read/listen:

1. What are the current and potential reserves of oil and natural gas in the United States?


2. How does the United States' oil and natural gas reserves compare to those of other countries, particularly Saudi Arabia?


3. What factors have led to the significant increase in estimated technically recoverable oil and natural gas resources in the United States since 2011?

Long format:

How much oil and natural gas does US have….

We are very very good. Very. Did I say very.

(Main source technical article: https://www.instituteforenergyresearch.org/fossil-fuels/2024-north-american-energy-inventory/?amp=1)

Quoting from one of the industry’s best sources:

Total technically recoverable resources of oil in the U.S. amount to 1.66 trillion barrels.

That’s according to a new report from the Institute for Energy Research (IER), which was sent to Rigzone recently, which noted that, at current rates of consumption, that’s enough oil for 227 years. If the oil is devoted exclusively to gasoline production, it is enough gasoline to fuel the transportation sector for 539 years at 2023 usage levels, the report stated.

The 1.66 trillion barrel figure is 15 percent higher than the estimate of technically recoverable oil from IER’s 2011 report, and more than 5.6 times the proved reserves of Saudi Arabia, the study outlined.

Total technically recoverable resources of natural gas in the U.S. amount to 4.03 quadrillion cubic feet, according to the report, which stated that, at the current consumption rate, that’s enough natural gas for the next 130 years.

The 4.03 quadrillion cubic feet figure is a 47 percent increase in the estimate of technically recoverable natural gas since IER’s 2011 report, the study highlighted. The report also pointed out that the U.S. has over 65 quadrillion cubic feet of in place natural gas resources.

“If just half of that amount becomes recoverable, the U.S. has over 1,000 years of natural gas supply at 2022 consumption rate,” the report noted.

Source:

https://www.rigzone.com/news/how_much_oil_and_gas_does_the_usa_have-16-may-2024-176766-article/#:~:text=That's%20according%20to%20a%20new,enough%20oil%20for%20227%20years

Summary:

The source criticizes the BRICS (Brazil, Russia, India, China, and South Africa) alliance, arguing that despite its goals of challenging Western financial institutions like the World Bank and IMF, its members are too diverse in their economic philosophies to achieve a unified vision. The source emphasizes the crucial role of the SWIFT (Society for Worldwide Interbank Financial Telecommunications) network in facilitating international financial transactions and argues that without a viable alternative to SWIFT, BRICS initiatives like BRICS Pay and BRICS Bridge, which are still in their theoretical stages, are unlikely to be successful. The source describes SWIFT as a vital part of the global payment system, enabling secure communication for international money transfers and facilitating global economic activity.

Questions to consider as you read/listen:

1. What are the key challenges and opportunities facing the BRICS nations in their efforts to establish a global payment system that rivals SWIFT?


2. How does the reliance on SWIFT impact the global economy, and what are the potential implications of a shift to an alternative system?


3. What are the political and economic motivations behind the BRICS nations' pursuit of an alternative to SWIFT?

Long format:

BRICS viability and SWIFT

Right now from October 22 thought October 24, 2024, BRICS countries are holding their conference in Kazan in the Russian Federation

Whenever I hear about BRICS, I cannot help but scroll. Here’s why.

For those who may not know (and apologies for those that do) BRICS is an acronym for Brazil, Russia, India, China, and South Africa.

BRICS was created to “counterbalance the influence of Western-dominated institutions like the World Bank and the International Monetary Fund (IMF).”

Those 5 countries are culturally very very different countries with entirely different views of capitalism and the role of the state and how currency or economics should be managed. For them to come to consensus other than “we should do something” is well a bit outside my wildest optimism.

One could stop there, but I don’t because I want to be fair.

But let’s suspend our disbelief for a moment and suppose that they will come to a consensus of how this new thing ought to work and what it should look like. They still have a major problem in that there is no alternative to the SWIFT system. Until they have developed one that exists in reality and is appealing to the rest of the rest of the world or even each other, I will scroll when I see BRICS.

For those who do not know, the Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a secure messaging network that banks and other financial institutions use to send and receive information, primarily for international money transfers. SWIFT is a vital part of the global payments system, but it doesn't hold funds, issue or manage accounts, or settle transactions. SWIFT is a member-owned cooperative that allows banks to send and receive encrypted messages about international transactions. Today, SWIFT is used by more than 11,000 banking institutions in over 200 countries. SWIFT helps banks comply with international regulations and regulators use it to track illicit activities. SWIFT has been used in international sanctions, such as US sanctions against Iran. It is how we make global and even within country transfers happen. Without it, the system does not work.

To put it mildly, without the SWIFT system, the global economy would likely be significantly disrupted, with international transactions becoming much more complex, time-consuming, and expensive, essentially resembling a world where cross-border payments are significantly hampered, potentially causing economic instability due to the lack of a standardized communication system for banks to facilitate transactions across borders; it would be akin to trying to operate without the internet in the financial world, making it extremely difficult for businesses and individuals to move money internationally with ease and security.

I understand that some folks within or without BRICS have supposed alternatives like BRICS Pay or BRICS Bridge of a Distributed Ledger Technology, but it is not even in prototype let alone available let alone widely accepted.

BRICS pay is a theoretical blockchain-based system that aims to make trade between BRICS nations seamless and allow real-time transactions. BRICS Pay could enable members to use a specific currency amassed in one country to trade with another.

BRICS Bridge is a payment and settlement platform that would allow member states to transfer money directly. The system would be based on three currencies: the digital ruble, Chinese yuan, and Brazilian real. Again in theory. No prototype.

So BRICS=scroll in my book…. for now

Source:

https://www.investopedia.com/articles/personal-finance/050515/how-swift-system-works.asp#:~:text=What%20is%20SWIFT%20in%20Simple,such%20as%20money%20transfer%20instructions

https://stripe.com/resources/more/what-is-swift#:~:text=%E2%80%9CSWIFT%E2%80%9D%20stands%20for%20%E2%80%9CSociety,million%20SWIFT%20messages%20per%20day

https://tipalti.com/resources/learn/what-is-swift/#:~:text=SWIFT%20(Society%20for%20Worldwide%20Interbank,electronic%20funds%20transfers%20(EFTs)

https://corporatefinanceinstitute.com/resources/career-map/sell-side/capital-markets/swift/#:~:text=of%20each%20course.-,What%20is%20SWIFT?,passing%20through%20the%20system%20daily

https://www.peakframeworks.com/post/swift-global-banking#:~:text=SWIFT's%20Role%20in%20Compliance%20and,SWIFT%2C%20demonstrating%20its%20geopolitical%20significance

https://www.northerntrust.com/middle-east/insights-research/2024/weekly-economic-commentary/a-brics-alternative-to-swift#:~:text=Since%20its%20inception%2C%20the%20bloc,of%20the%20global%20payment%20system

Summary:

In this episode we examine the reasons behind Cuba's recent widespread power outages, specifically focusing on the country's dependence on unreliable oil suppliers. We highlight Cuba's reliance on Venezuelan oil, which has significantly decreased due to international sanctions and internal problems, leading to a shift towards Russian oil. Additionally, we criticize Cuba's choice to rely on Pemex, Mexico's dysfunctional state-owned oil company, as a supplier. We emphasize Cuba's lack of diversification in its energy mix, heavily reliant on crude oil, and the lack of investment in modernizing its power infrastructure. This combination of factors is presented as a major contributor to the ongoing power outages in Cuba.

Questions to consider as you read/listen:

1. What factors contribute to Cuba's recurring power outages, and what are the underlying causes of these factors?


2. How has Cuba's dependence on crude oil impacted its energy security and economic stability, and what are the consequences of their reliance on unreliable suppliers?


3. What are the potential long-term implications of Cuba's failure to diversify its energy mix, and what are the challenges and opportunities associated with transitioning to alternative energy

Long format:

Cuba power outages, whose fault is it?

The island of Cuba has undergone a series of unplanned and involuntary blackouts island wide. Cuba blames the US for its sanctions policy and the lack of access to modernizing technology as the reason for their plight. While that may be a contributing factor to a degree is it the sole or even most impactful reason?

Cuba has a lot of power infrastructure problems.

I don’t know enough about that.

But I do know how to read export charts. And know mistakes when I see them.

Historically, Cuba got most of its crude from Venezuela.

Venezuela's oil exports to Cuba so in 2023 dropped to 55,000 barrels per day (bpd) from almost 80,000 in 2020 (Pandemic lows). So far this year as of June the delivery is only at 27,000 barrels per day (bpd), compared with 51,500 bpd in the same period of 2023.

This year PDVSA (Venezuela) failed to deliver on almost all of its commitments due to its ships being under international sanctions, US sanctions and holes (yes holes) in boats which ya know isn’t good.

So they chose a horrible supplier to rely upon.

So it seems they doubled down on imprudence by turning to…. you guessed it….Russia!

Wow. And further compounding that it seems according to those in the industry is that there was a lack of foresight that crude API and characteristics matter in refining. Venezuela is very heavy. Very. Russia is considered a medium-sour crude oil that's a blend of heavy oil from the Urals and Volga regions and lighter oil from Western Siberia.

Again, beating the drum. Crude is not crude for refining purposes. Your set up for your input matters. You have to set it up right for the refinery to produce efficiently.

And when all doubt appeared about the ability and stability of Russian crude, Cuba went to arguably the most dysfunctional and self harming international oil company, Pemex

A series of bad decisions. You add in whatever problems from their infrastructure…..

Sources:

https://www.reuters.com/world/americas/venezuela-resorts-dark-fleet-supply-oil-ally-cuba-2024-06-25/

https://www.csis.org/analysis/2023-year-mexican-oil-cuba#:~:text=A1:%20For%20decades%2C%20Venezuelan%20oil,over%20a%2030%20percent%20decrease

https://www.reuters.com/markets/commodities/russian-oil-arrives-cuba-after-year-long-hiatus-2024-03-31/#:~:text=Pi%C3%B1%C3%B3n%20said%20it%20was%20too,Sign%20up%20here

https://www.eia.gov/international/overview/country/CUB#:~:text=Cuba%20imports%20most%20of%20its,under%20a%202000%20energy%20agreement

Cuba's total energy supply mix in 2022 (must current year available) was: 0% coal, 80.6% crude, Biofuels and waste 11.6% and everything else including hydroelectric 7.8%.

Cuba's domestic energy production in 2022 was: 52.9% crude oil, Biofuels and waste 28.2, everything else 18.9%

Cuba's electricity generation mix in 2022 was: crude 83.5% and natural gas at 12.5 and everything else 4%

Energy mix meaning total final consumption in 2022 was: 4% crude oil, 50% crude refined products, electricity 23.4% and everything else 22.3%.

So you overload your crude oil basket and "secure" your crude partners who are anything other than reliable and you do not diversify your energy mix (the .... I mean how can you not see this as a mounting problem? Obtuse really.

Icloud link to some charts of value to me including the charts that show a complete non-responsiveness to diversifying out of crude oil into other means of power production since 2000: https://share.icloud.com/photos/0a5WDcRcv4YFBPQSMBiFW-TIw