In this week’s issue, we discuss an emerging U.S. strategy on countering China's ideological and economic influence. We also note a recent paper from the Columbia Center on Global Energy Policy discussing the strategic national security implications for the U.S. in maintaining its leadership in the civil nuclear arena. Finally, we draw attention to the Nuclear Energy Institute's latest fact sheet detailing that nuclear power is responsible for 54.8 per cent of the U.S. carbon-free electricity in 2019.
Converging Strategy on China
In an analytical and ideological convergence, atypical for official Washington these days, the Republican-led House of Representatives China Task Force (CTF) and the Democratic Chairman of the House Intelligence Committee have simultaneously, but separately, concluded that China is the leading national security and economic danger to the United States. Both determined that the country is unprepared for this new reality – “by a longshot.”

The two congressional reports led a raft of new analyses on the intensifying competition between the U.S. and China, from clean energy to nuclear power to strategic minerals.

The intelligence committee assessment honed-in on a central reality of the 21st century – “China views competition with the United States unfolding in ideological and zero-sum terms.” It also noted that the U.S. must be prepared to respond to “soft threats” including those related to climate change. And it made clear that, “the United States cannot give up on global leadership, because if it does, China will gladly step in with its malign intentions.”

The CTF recommendations primarily focus on building higher barriers against China’s ideological and economic influence in the U.S., countering them militarily, and restoring and enhancing domestic supply lines and R&D.

But it also addressed some of the core issues highlighted by the other analyses. It specifically identified the Made in China (MIC) initiative as “a direct threat to U.S. economic and national security.” In part this is because of the potential for China to “dominate international standards development” and institutions. It noted that, “U.S. experts have traditionally been leaders in international standards development” but that, “there is a concern that the U.S. is losing its edge.”

Related to this was a key finding that China is pursuing aggressive efforts under the Belt and Road Initiative (BRI) to, “dominate long-term energy relationships,” creating a “geostrategic and economic threat to the U.S,” and that ceding the global nuclear export market to China will result, “in an increase in proliferation and safety risks.”  

The confluence of China’s increasing power in setting international standards and the lagging ability of the U.S. to strongly compete in the international nuclear market is the potential knockout punch for any effort to modernize global nonproliferation standards as a new generation of nuclear technology approaches deployment.

While the two political parties in the U.S. seem to be coming to a meeting of the minds on the new threat environment, the financial community is still living in the past.

The CTF called on the Development Finance Corporation (DFC) and Export Import Bank among other government entities to “robustly counter” the BRI. And DFC has recently eliminated its restriction on financing overseas nuclear projects. But the government and investment worlds are out of synch on the value of nuclear power.

An example is the Vanguard Group’s launch of its new environmental, social, and governance (ESG) corporate bond exchange-traded fund. ESG index funds recently hit $250 billion as corporations and investors pursue socially conscious profits. But the Vanguard fund specifically screens out investments with “substantial revenue” derived from nuclear energy.

If one of the key concerns of ESG funds is the impact of climate change, then the Vanguard managers should be aware of the fact that nuclear power in the U.S. generates 54.8% of its carbon-free electricity. Next generation nuclear power is also a means of providing clean energy to developing economy nations that are facing growing populations, increasing energy demand, and the escalating ravages of climate change.

The challenges of this year have been an accelerant to the extreme partisanship that now dominates American politics and society. But there seems to be a slow dawning of reality on national security leaders in both parties that the country is facing a very new challenge from China. It is not like the U.S.-Russia Cold War and it cannot be managed by military means alone. The soft threats like the COVID-19 pandemic, climate change, and eroding international standards can impose significant economic and security damage without a shot being fired.

At the moment, we are governmentally, financially, and societally unprepared for this new danger. But, if the warring Democrats and Republicans can come to similar, if separate, conclusions about the threat, maybe they can find a way to collectively navigate the country through this new challenge. It is essential that they do.

Ken Luongo, President, Partnership for Global Security
The Columbia Center on Global Energy Policy has released the second and final academic paper of its series focussing on the impact of potential American disengagement from nuclear power development. ‘Why the United States Should Remain Engaged on Nuclear Power: Geopolitical and National Security Considerations’ offers insights into the strategic national interest benefits that a thriving nuclear power industry would have for the U.S.
Nuclear Collaborations
The U.S.-based X-energy has agreed to collaborate with Canada’s Hatch to promote small modular reactor (SMR) development. The agreement comes as X-energy continues to advance the development of its Xe-100 SMR design, which it hopes to deploy in a Canadian political environment that is growing increasingly optimistic about the possibilities of nuclear energy.

The United Kingdom Atomic Energy Authority has selected Texas-based Jacobs to support its nuclear fusion project through research, design and engineering. The project is based at the Remote Applications in Challenging Environments facility in Oxford, and is seeking to replicate the nuclear reaction that powers the sun.

In a sign of growing interest for offshore nuclear reactors, two South Korean entities have signed a Memorandum of Understanding (MOU) to advance floating nuclear reactor technology. Kepco Engineering & Construction Company and Daewoo Shipbuilding & Marine Engineering will seek to combine their knowledge of advanced nuclear technologies and shipbuilding to develop a floating BANDI-60 Pressurized Water Reactor (PWR), an SMR design that has been under development since 2016.
Nuclear Policy, Governance, and Geopolitics
The Chinese State Power Investment Corporation has announced that it has completed the development of its CAP 1400 third generation nuclear reactor, almost 12 years since it began development. The reactor, known as the Guohe One, joins the famed Hualong One reactor as China’s second Generation III reactor to be developed.

Plans to develop the Wylfa nuclear power plant (NPP) in Wales may not yet be over, after Horizon Nuclear Power penned a letter to the U.K. government asking for an extension on its decision to ditch or continue development of the plant.

The Czech State Office for Nuclear Safety has granted utility ČEZ a 10-year license extension for Unit 1 of the Temelin NPP. Having begun commercial operation in June 2002, the plant is now expected to operate for at least 60 years, to beyond 2060. 
Domestic Civil Nuclear Developments
Donald Trump last week declared a national emergency over the mining of critical minerals, before signing an executive order aimed at boosting domestic mineral production. The move comes amidst concerns over the reliance on imports from China, and includes a focus on uranium production.

The Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation has been extended to 2040, after the U.S. Department of Commerce (DOC) and Rosatom finalised the extension on Monday. The update was announced by D.C.-based law firm Hogan Lovells, and will see reduced uranium imports from Russia to the U.S.

A recent report by the AFL-CIO and the Energy Futures Initiative has concluded that workers unions will fight for natural gas and nuclear energy to remain part of Joe Biden’s energy plan, should he secure the Presidency. The Democratic nominee for President has already released a climate plan that calls for carbon-neutrality in electricity by 2035 and has expressed his support for both natural gas and nuclear energy.

Three Utah cities have opted out of a nuclear power plan, led by NuScale, to develop and deploy up to a dozen Small Modular Reactors (SMRs) at the Idaho National Laboratory, sparking concern amongst the nuclear industry. Kaysville, Lehi and Logan cities cited financial risk for their decisions, despite having already spent hundreds of thousands of dollars on the project.

The National Reactor Innovation Center has launched a new website to help users navigate their work in the advanced nuclear energy sector. The Center’s goal is to facilitate the construction and demonstration of advanced reactors through assisting companies in navigating permitting and regulatory pathways as well as help with contracting and local stakeholder engagement. 
Nuclear Security and Emerging Technologies
A recent series of research papers has renewed hopes that the Massachusetts Institute of Technology’s nuclear fusion reactor is ‘very likely to work’, as the College seeks to begin its Commonwealth Fusion Systems project next spring. Researchers from the institution claim that the reactor will mimic the energy production process of the sun, and expect the reactor to be operating before the International Thermonuclear Experimental Reactor (ITER) project.

According to a recent report from the Stimson Center, the amount of spent nuclear fuel in storage across the globe is expected to grow for decades to come, prompting calls for a more centralized storage system. Currently, more than 400,000 metric tons of spent uranium and plutonium is stored at sites across dozens of countries.
Noteworthy Research
In the latest Foreign Affairs Issue, Adam Schiff – Chairman of the House Permanent Select Committee on Intelligence and Representative for California's 28th congressional district – offers an unsettling analysis that the U.S. intelligence community is ill prepared to respond to the ambitious rise of China as a global power. Failing to predict and understand the Chinese leadership will prevent U.S. leaders from developing responsive and sound policy towards China. 

The Republican House Foreign Affairs Committee has released its 'China Task Force Report', which calls for the U.S. to act as a "global counter" to China's nuclear energy export program.

The ‘2020 World Nuclear Industry Status Report’ has revealed that there are 9 fewer nuclear reactors online than last year, with the total number of operating reactors on par with those in 1988. This is the basis of the report’s sobering takeaway that the global nuclear fleet has remained stagnant for roughly 30 years.

The Nuclear Energy Institute has released a ‘Nuclear by the Numbers’ fact sheet, displaying the electricity generation and capacity factors of nuclear power plants across the U.S for 2020. The fact sheet outlines the environmental, economic and industrial benefits of nuclear energy expansion, providing a neat and digestible snapshot of the current state of the U.S. nuclear fleet.

The University of Sussex Business School has released a report titled, ‘Differences in Carbon Emissions Reduction Between Countries Pursuing Renewable Electricity Versus Nuclear Power’. The report argues against the low-carbon appeal of nuclear energy as it is deployed in tandem with renewables, such as wind and solar, claiming instead that renewable power sources should be prioritized to achieve deep decarbonization.

A recent report by the Energy Information Administration (EIA) has concluded that of the top 10 generating power plants in the U.S. throughout 2019, 9 were nuclear power plants. The 10 plants generated nearly 6 per cent of all U.S. electricity, with nuclear power maintaining its 19-21 per cent of total electricity generation share.

The Netherlands government has released a report on the potential role that nuclear power could play in its future energy mix, in preparation for the country’s proposed energy transition. Titled, ‘The Report on the Possible Role of Nuclear Energy in the Dutch Energy Mix of the Future’, the report is expected to act as a precursor to government negotiations with industry experts to assess the commercial interest of nuclear development in the country.
The Nuclear Conversation
The Atlantic Council, October 7
The 4th Generation, October 6

The Herald Scotland, October 4

The Telegraph, October 4
Oil Price, October 4

Hackaday, October 1, October 1

Center for Strategic and International Studies, October 1

Quartz, September 30

The Nonproliferation Policy Education Center, September 29

RealClear Energy, September 29

Bulletin of the Atomic Scientists, September 25

Bloomberg, September 25

ESGToday, September 24
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