 Good evening. Welcome to Perspectives on Energy. I'm Guillermo Sabatier, Director of International Services for HSI and your host. So joining us today is Dr. David Gaddy. He is the PhD and Senior Fellow at University of Georgia, also the Associate Professor of Engineering. David, welcome to the show. Thank you Guillermo. It's a real pleasure to be here. Thank you. Great to have you. I had the pleasure of hearing you speak at the Association of Rural Electric Generating Co-op conference a few weeks ago. So definitely had a lot of eye-opening things to talk about. Can you tell us more about your research area on energy policy? Yeah. So Guillermo, we are, of course I'm in the space of the energy primarily, but more specifically it's energy policy. My background is engineering. I have about 14 years of private experience for I came to University of Georgia. But over the past 10 years or so, we have kind of narrowed our energy research to one that's focused primarily on security aspects of U.S. energy and U.S. energy policy. I work with a couple of fellows at University of Georgia Center for International Trade Security. It's Justin Conrad and Josh Massey. Those two guys are international affairs experts. A few years ago I noticed and started to recognize that U.S. energy issues were really taken on some global aspects. They happened in quite a while. I got interested in the security part and was fortunate to cross paths with Justin and Josh who actually helped put this in a context that is global and situated within the geopolitical aspects of what the U.S. is doing position on global stage. So we are really right now Guillermo focused on energy security. And it's fairly topical. I mean, what's going on right now over in Eastern Europe? Energy security has risen back up or has moved to the fore of interesting aspects of energy, critical aspects of energy. So I work kind of where two hats, engineering and international affairs, international security. And I think those two worlds work real well again. Hopefully we'll get some of those topics tonight for this morning. Excuse, it's not time or time. But I think there are one o'clock over there. So they just all got back from lunch, I imagine. So again, ready for dinner over here. That's right. So I understand you've also testified for Congress at some point there. That's right. Back in December of 2019, I was invited to testify before the House Energy and Commerce Committee. And it was really on the national security and climate security aspect, primarily of nuclear power, but energy in general. But I testified things about December the fifth, six, somewhere in there, 2019. It was just before COVID hit. It was a very interesting time to be in DC. It was actually good interaction with the committee members. And they're very interesting what we had to say we're fortunate to be able to do it. But yeah, that was probably one of the highlights of the last few years was being able to do that. Well, you and I had a brief conversation about this at one point. And it was, the engineers or the calculators are finally part of the conversation, right? When it comes to making this transition to also what I'm looking for, it's environmentally friendly energy sources, right? And it is so eye-opening now, right? That a lot of the views have changed. And one of the things that was very impactful, right? From your presentation at that conference was looking at energy as having an intrinsic national security value, not just a commodity, right? Just tell us more about that. So this is where we're gonna run out of time, dear brothers. Right now, you've opened up a couple of really good talks. I'm glad you mentioned the part about transition. Because that's probably what we're locked in on right now. Over the past, and let me preface this by just pointing out, we are committed to impact and climate decisions here in our research group. That's a serious concern. It's nothing to take lightly. Climate change issues are, we consider those to be national security issues. But one thing that we've tried to draw some attention to, you just did, Guillermo, you mentioned energy transition. And oftentimes that conversation is driven for the most part by one of two things. And you mentioned them just now. If so, we're looking in the US at energy either as a market commodity, something that competes. And probably the interest that you and I have that's common here is we're primarily talking about electricity, but energy in general. It's either looked at as a commodity, market commodity or it's a climate change issue. Right now, the dominant driver of US energy and climate policy and the debate here in the US is around climate issues, around carbon reduction. What we are trying to emphasize is when we put dates, when we say that the US is gonna be at a certain CO2 level by 2030, 2035 or 2050, that if those, setting those dates is one thing, but we have to think about that there is going to be a period of transition here, where if you look back in history at the US, what we've always done, US we unlock or discover new energy resource, we always add that to our industrial based economy. And what that's done for us over time is it has increased energy diversity, which means energy technology diversity. And it has allowed our industrial base and our economy to be flexible, resilient and adaptable to changes not only domestically, but also globally. You can see now what's going on in Eastern Europe. We are able to respond to that because we have a diverse energy resource base here in the US. So our push Guillermo is to pay close attention to that transition period, because if you try too hard to change a real, the world's largest economy, the greatest military, most advanced industrial base in the world, if you try to kind of enforce in engineering what we call a step function change, something that's very, very hard to do with a complex system, you may get some results that aren't good. So we're trying to maintain energy diversity, flexibility, resilience and adaptability and focus on that transition rather than simply try to move our economy towards lower carbon. You actually use some good words. Our catchphrase for this is security-centric, globally engaged, which means working with emerging economies and climate inclusive. We're trying to pull those three together. That is a definite, it sounds like a difficult balancing act, but in reality, it's planned right. It's possible economically even and reliable, right? Yeah, I think it is. If you keep some basic principles in mind, particularly the one about diversity, that is I understand, I get the point about coal and natural gas and oil, but simply as a target or as a gold function, saying we're gonna divest from those, well, maybe we need to think a little more carefully about that before we actually try to divest. Maybe we need to let the system adapt to it first. But yeah, but your points will take a year, Michael. Well, thank you. And speaking on the topic of transition, it's noticing that more and more utilities, if they're close to a pipeline or they can build a pipeline for gas, they will then pretty much, the majority of their fleet is going to be running on natural gas. It's a lot cleaner than coal or oil, it's more reliable, but we're becoming more and more dependent on a single point failure of natural gas. And if you don't have enough storage facility on site for other fuels like liquid, they're gonna find themselves in trouble. Now go on. Yeah, no, no. In fact, you're in Florida, right? You're a Floridian right now, that's where you live. I think Florida is about 77% or 78% natural gas. And I've spent some time down there myself speaking with a lot of folks from the power sector. But you're right there. I mean, I'm a big natural gas fan and love the stuff. It's been a lifesaver when it comes to reducing CO2 emissions in the U.S. In fact, it is the primary driver of why U.S. CO2 emissions have gone down like the hell over the past 15 years. But nonetheless, you're talking about a flow resource, which is gas in a pipe. And not only, again, as long as the pipes are flowing, things are great, but when those pipes, when there are problems, and in fact, in a state like Florida and a state like Georgia, if we have a problem three states over in the Gulf of Mexico, we've got a problem in Georgia with our power sector. But if we're just, again, we're not big fans here in our research group of a single being overly dependent on a single resource. A little bit problematic, I know the folks in Florida, they look at the state of Florida, and they always like to use the phrase, that's a long, bendy pipe because out of the Gulf of Mexico, it has to head down to Miami. That's an engineer's concern right there. It is a concern. And when I used to work for one of the major utilities that was one of the things that we would always train and drill on and run simulations and even a simulation. The transition was drilled upon and done, but really it's just a matter of relying on the stored liquid fuel and then have all those combined cycle plans switch over, which you and I both know, it's not always a smooth transition. No, no, that's right. That's right, it's not. And it's just what, three pipelines. It's just three separate pipelines. And then two of them actually like join up in the middle of the state. So that's right. Of course, we know what happened with the colonial pipeline recently when you have pipeline issues. There are some very tight bottlenecks there that we don't necessarily have a transmission capacity or as we trend towards more and more natural gas. Right. Well, another aside here in Florida, almost every single business, commercial establishment and industrial establishment for sure has their own diesel generator or their own natural gas fire generation on site just enough to run their business. So as you can imagine, what happens during a hurricane here sometimes is that now they are competing for that gas resource, right? So that puts about a constraint, right? Luckily, they've been able to manage that balance pretty well when it comes to starting up generation again and the areas that are affected. But in a larger event, I could see how that could become a problem at some point. Every single facility running. Yeah, I think we had a, I mean, that sounds like a miniature Irma storm or Irma issue that Texas had forced to storm a much larger scale. But that competition that you're talking about there in those critical periods of time, not only competition for the resource itself but also the price of that competition is pretty steep at that point. Oh, it certainly is. And that becomes a market price now, right? So that gets passed on to the consumers. Yeah. So what we're doing all this, right? As a nation, I mean, we are performing this great experiment on one of the biggest, it's a vital key to infrastructure, right? And we're performing an experiment on it as it's running. So remember you mentioned that during your presentation. How is China responding or how have they responded during all this? So China sees opportunities. I'll give it just a 30 second briefing here. The way we, you and I mentioned at the top of this talk that our conversation around energies as a market commodity or climate issue, when you look at countries like China who without argument, this is a bipartisan agreement here that that is China is our greatest competitor right now. No one's gonna argue that. This competition is very ideological. That is China would like to see the US for the most part vacate Asia. Now part of what China is gonna use in this competition is they are going to use energy and energy technology resources to attract emerging economies to be collaborators and partners with them on that. China, whose energy industries are state-owned enterprises, they are using those state-owned enterprises as extensions of the state to meet geopolitical objectives. We're not set up that way. So the downside to that is as we think about rejiggering, reorganizing, restructuring our entire industrial economy to meet carbon objectives, our industrial base, energy resources and energy technologies are gonna get smaller, narrower, shallower. China, on the other hand, is going in the other direction. Fossil fuels, nuclear renewables, batteries, they are going all in on all energy resources. The two concerns there, they have a more competitive industrial base than the US will. They also will have more flexibility, adaptability when there are times of domestic or global disturbances. They're also a more attractive partner with emerging economies because they have more to offer. If the US retreats from things like the fossil fuel network or worse, nuclear, we don't have as many opportunities to engage with those emerging economies. So China is gonna leverage this climate conversation to their advantage to meet geopolitical objectives while we're trying to just solve climate issues. China's not in this for climate change. That's not their objective here. Their objective is geopolitical advantage over the US and Western ally. So it sounds almost as if they're weaponizing climate policy in a way. Perfect, perfect characterization here. Now that is exactly what they're doing with their weaponizing energy policy, climate policy to meet their objective, you're absolutely right. Yeah. So that should be, at that point, that to what we have talked about at the top of the show, that's why we're trying to shift this conversation about US energy policy into the security lane so that our policy is security-centric, globally engaged and climate inclusive because first and foremost, energy is a national security issue. It just, the value of it though is not monetized. It is you don't get a deal with what is the national security value of energy. It's not in there. But your weaponization characterization, Guillermo, is spot on. Well, I took that from your presentation. So that, I mean, it makes me. But I was giving you good credit there, Guillermo, just take it. I'll take it, I'll take it, but you know. The credit is yours. So still a big concern because they, we haven't built a new, we want to build one nuclear power plant in like, it was since 1980, Vogo, and then that's behind schedule. But whereas China and Russia, China has really been investing in research and construction of nuclear facilities, right? Right, that's right. We got two reactors in the US under construction. They're here in Georgia, Vogo units three and four, been some challenges there, both on both on the time schedule and the call. We haven't, we've been out of the business. The US has been out of business since the 70s for the most part. So you're right, we're behind in that. And I think that what we're seeing at Vogo is a little bit of a reflection of us just simply being out of practice. The concern there though, to your point, both China and Russia are ramping up and have been ramping up. And they make no secret about it. Their objective is to own the market for nuclear construction, nuclear expertise, nuclear plant operation, spent fuel waste, you know, an entire full nuclear fuel cycle. They want to own that market in the duration area, which essentially is where most, if not all of the economic growth is going to occur over the next 20 or 30 years. That's a, that is a real concern because we all know what nuclear power and nuclear technology is. It's the single most important energy resource on earth. And we do not want to vacate that space and lead norms and standards up to a country like China dominating the global and essentially taking over global stewardship over it. They want to do that. And we've got to make some major inroads in our own domestic policy to essentially block them from doing it. Well, and I just saw them. I mean, it was an Australian article on Saudi Arabia, is opening beds for building their first nuclear facility. And the same Korean firm that built the ones in UAE, it seems to be the one that's leading all those bids Saudi Arabia, but you know, China has put in a bid, Russia put in a bid, and I think the French as well, right? Yeah. For now, it seems Korea is ahead of everybody else, but you know, there's going to come, there will come a point where China and Russia will be more competitive, right? Yeah. Yeah. Yeah. They were in Pakistan. Pakistan. China one, yeah. And I'm not even sure whether the US or any US firms even put in a proposal for those projects. So they, yeah, US firms did, I won't be able to name the companies generally. We have some big names to do it. I won't throw a name out there because I'm not exactly sure, but you're right. We did, but it was not a tip of the spear. Participation, it was almost like we were just going to kind of be a service aspect of like the South Korean, the bid was, but we're just not, I don't know the last time, I probably could look it up, I had a few minutes the last time that we actually partnered with a, that we were actually driving development of nuclear in another country. It used to be that we were the only players in town that has changed. Well, for me, it used to be the French and now we're going to get into a brief discussion on small modular reactors, microreactors and what place they'll have in the future because of the fact that it's dispatchability and deployability, whereas that's something that we may be, we need to be looking at. I mean, what's your take on that? I think, Guillermo, your spot on, I think that's all we're going to be looking at. My bet, I'll bet you a breakfast at your favorite restaurant in Florida, where that may be. We won't build any more large reactors like we've got going here in Augusta. You know, these are 1,100 megawatt reactors. We are, to your point, going to be moving to SMRs, 300 megawatts and down. But we still, right now, we've only, we've got two players, we've got new scales out in Utah, and we've got Bill Gates is going on out there and Wyoming. That's a molten salt, sodium cooled reactor. Very advanced reactors, really, really nice designs on the one at Wyoming. But we still are going to have to get, you know, in order for us to come up, go up the learning curve and down the cost curve, we've got to build numerous of those reactors, which means we need to book the business out there. We've got to have a demand signal. We've got to have somebody that wants them. We've got, we still got a lot of room to make up, but I agree with you. It's going to be SMRs for the foreseeable future. And it will be interesting because, I mean, I hate to say it, but I think we are behind. We are behind China and definitely behind Russia as well. I mean, definitely behind the French as well, because the French for the majority of their fleet is nuclear and it's dispatchable. Yeah, yeah. And I think here, it's, you know, this might be a point of contention perhaps a little bit, but I think here in the U.S., it is not a technology issue we're dealing with. We can, if you unleash our U.S. nuclear industry, they can do just about anything. There's nothing they can't do. We've got political problems with nuclear in the U.S. And we have a somewhat, generally, if you want to call it a populism problem, there has been a narrative that's been anti-nuclear for many years out there. And the general public, they are not to blame for any of this, but they have generally been led to believe that renewables are equal on equal terms with something like nuclear that you simply are not. Renewables are a replacement for nuclear power. So we've got some work to do. And I'll say we, those of us in engineering, nuclear engineers, you name it, we've got work to do to go out and make a case to the general public and policy makers that nuclear is not just be a side dish in this moving forward to address climate change. It needs to be at the tip of the spear. The tip of the spear. And, you know, that is an important challenge to face while at the same time, we're going to face one of the biggest knowledge and talent drains there will be for the engineering discipline. I was listening to a podcast the other day. Well, we're looking at 1.2 million job vacancies in the next five, six years for engineers. And it won't just be our industry. It'll be other industries and the engineers. So they'll be poaching engineers, you know, away from ours and that sort of thing. So we have a challenge ahead of us. We do it's interesting you bring that up because I know when I talk with students about electric power sector, it's not the shiny object that used to be when I was coming along with you, maybe when you were coming, you're still a young whippersnappers. I don't know. But when I was coming along, it was a shiny object. It's not that anymore. So to your point, we have got to address this brain drain and gap that we're probably going to face sooner than later. And I think it's here because, I mean, I look at the different universities, right? And the enrollment rates, forget about graduation rates, just the enrollment rates in these programs in some places have severely declined over the last five, six years. Yeah, yeah. And they're all shifting away to other STEM fields, but it's not quite what it used to be and certainly not where it needs to be. No, we got some sales work to do. We got to sell them. And we got to elevate it as the important issue that it is, and that students can really engage in a critical sector here. Oh, yeah, especially where we are to compete in a national security stage when it comes to energy. And that's kind of where I think we want to conclude our closing message for our show today is what would you say in this last minute that we have left? Yeah, I think the challenge that we are trying to address here at the University of Georgia is to simply shift the conversation about U.S. energy, U.S. climate policy from the market commodity lane, from the climate lane, over into the national security lane. To get that point across that energy is part of the core national security issue in our country apart from the military. Nothing is more core to our national security than energy. Right. And I definitely agree with you on that. And I have to tell you that this is, as more people hear it, it becomes more impactful and this is definitely a change that we need to make. Climate change is real and we're working towards solving those problems. But at the same time, we just can't get there at any cost, but we have to make this transition bearing in mind our national security. And what our geopolitical position is and will remain to be as we move forward. Right. I think we have a few questions here, but I'm not sure we have time to answer them. I think the clock ticked almost there a year or month. All right. But again, this is a great topic and it is something that is, I know that it's the looming summer that's coming here with the heatwaves and how some places have announced that they're gonna have energy shortages. Just another example of this national security issue, right? If enough of an area has short on energy, we're gonna see some problems. So that's luckily us and the Eastern Interconnection were okay, but in the Midwest and ERCOT and even on WAC, they're facing some challenges this summer. So that's for a reason. Yeah. Yeah, it is. It is. Okay. I think that's all the time we have today. I'm gonna go ahead and thank you so much for being on the show today. It was a great discussion. We clicked quickly around a time. I wish I could have treated everybody. Well, I appreciate you having me. I just appreciate you having me here. Well, that's for being here. And again, we really cut it short because that presentation you gave was amazing and really eye-opening and it gave me a play to anybody who watches it. So again, thank you. You have to give it anytime to anybody, just follow. Yeah. Thank you. Thank you so much. And thank you, Think Tech Hawaii, for having us today. And again, great to be on perspective on energy. Thank you. Thank you so much for watching Think Tech Hawaii. 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