Nathan Myhrvold: The Full Xconomy Voices Interview

Episode 3 of our new podcast, Xconomy Voices, features a conversation about nuclear power with Nathan Myhrvold, the founder and CEO of Intellectual Ventures.

The former Microsoft chief technology officer is now vice chairman of TerraPower, a Bellevue, WA-based spinout of Intellectual Ventures that aims to revive commercial nuclear energy. The company is researching next-generation reactor designs, including the traveling wave reactor and the molten chloride reactor, that would be cheaper to build and operate than previous generations of reactors—as well as safer.

Myhrvold believes nuclear power has to be part of the answer to the challenge of greenhouse-gas-induced global warming, even if the U.S. government isn’t showing much leadership in clean energy R&D.

“The oil age will end when we invent something better, which we will do, we just haven’t yet,” Myhrvold says. “And the challenge with energy is that the current infrastructure is so cheap, and there’s no leadership from the government, or very little anyway, to help support nascent technologies before they’re economic. So we’re going to have to keep doing that ourselves.”

Here is the full transcript of our interview. (Only about half of this material made it into the podcast.)

Xconomy: Nathan Myhrvold, thank you so much for joining me today.

Nathan Myhrvold: It’s my pleasure.

Xconomy: So, what are you working on that has you excited these days?

NM: Well, I just finished my bread book, which is a 2,500-page book all about bread. I just opened an art gallery for my food pictures. And our nuclear company is doing really well.

Xconomy: OK. We could go in any number of directions, but I think nuclear power is incredibly interesting and incredibly important. So can you talk a little bit about that. You’re talking about TerraPower, right?

NM: Yes. So if we really want to make meaningful cuts in carbon dioxide in the atmosphere, we need a carbon-free source of baseload power. Baseload means stuff that runs 7-by-24. And today baseload power that is renewable doesn’t really exist. Hydroelectric is great, but hydroelectric does actually have some global warming consequences, at least for the first few hundred years after you build the dam. So new hydro actually is not a great thing from a global warming perspective. Old hydro is great.

Most baseload power is still fossil-fuel-based, so it’s coal. I think that nuclear is a terrific technology for this, but we have a problem. The problem is, in the 1970s the United States and a bunch of other places kind of freaked out about nuclear power. I say freaked out because although there are some possible dangers—there are some real dangers—the perception of the danger was wildly out of whack with the actual fact. A great example is that a couple of years ago there was a disaster in Fukushima. 15,000 people were killed by a tsunami. To date, zero people died because of the reactor [radiation]. But it’s portrayed as a horrible nuclear accident, and viewed by some as a reason we shouldn’t do nuclear.

Xconomy: All right. But to be fair, there’s a giant exclusion zone around Fukushima, and Chernobyl for that matter. And both of those incidents are expected to add measurably to the cancer load. So it’s not as if there was no impact. But you’re just talking about the visible sort of deaths and injuries?

NM: Well, it turns out that the cancer load from Chernobyl that was predicted hasn’t actually transpired. That’s largely because we don’t know what the impact of low radiation dose is. People have made worst-case predictions, and the worst case has not turned out to be true for Chernobyl.

The exclusion zone around Fukushima has higher radiation than it did originally, but it has lower radiation average than the state of Colorado or the country of France. And actually the reason is pretty simple. Mountains are radioactive, because rock is. And if you have the Rocky Mountains in the middle of your state, if you have the Alps go in your country, you’ve got more radioactivity than Fukushima does.

Now I don’t mean to minimize those things, but because no plants were built United States for the last 30 years, no one tried to use modern technology to sort of rethink what a nuclear plant could be. And that’s exactly what we’ve done in a company called TerraPower.

So TerraPower has rethought nuclear energy. It has some amazing designs that are much, much safer than the designs of the past. And they also have the property that really can scale to make a credible dent in our energy needs. In fact, you could actually run 80 percent of America’s energy needs—I pick 80 percent because that’s the percentage of energy that France gets from nuclear, so it’s certainly possible—we could run 80 percent of America for 125 years just based on nuclear waste we already have, using that waste as fuel. I think that’s pretty cool.

Xconomy: Is that one of the key innovations of TerraPower, building plants that can use spent nuclear fuel as their fuel?

NM: Yes. One of our key innovations is that we use the uranium very differently, and spent fuel that you couldn’t use in a conventional reactor looks like fresh fuel to us.

Xconomy: OK. What other kinds of innovations are embodied in TerraPower’s design? Because I think when people think of nuclear power, they probably are thinking of the post-World War II generation of light water reactors like the ones we built at Three Mile Island, and practically every other commercial reactor. They’re complex and they require a lot of redundant safety systems. And that’s part of the reason they fail once in a while. It’s the classic Charles Perrow argument about tight coupling. Is there a way to build an inherently safe nuclear reactor, and how hard are the people at TerraPower thinking about that particular problem?

NM: Well, that’s what we’ve done at TerraPower, is to make a much safer reactor. Here’s a good example. At Fukushima the type of reactor that they built really needs to have the power running constantly, and it gets into a bad way if power is cut off for as little as 15 minutes. Really stupid design. It was designed in the slide rule era. They should have replaced it a long time ago. They didn’t.

A state of the art, still under-construction reactor like the Westinghouse AP 1000 can go three days without power. If you have a disaster, you have three days to go back in and hook power back up so you can cool things down. And the TerraPower reactors—you can just turn the power off and walk out the door and nothing bad will happen. The reason for that is we designed it so that it will use natural convection of the atmosphere to cool down what’s called the afterheat.

The thing that really kills you in a reactor is that even after you turn it off there is something called afterheat that goes for a while and it’s that afterheat that can get you in trouble if you don’t have cooling pumps doing active cooling. I’m pretty sure we’re still going to have an atmosphere. And if we have an accident where we no longer have an atmosphere, nuclear power is the least of our worries. But that’s a good example of something where, because of a different design, you have very different margins for safety. So you don’t have to worry at all about having emergency power and duplicate, triplicate kinds of systems to ensure it doesn’t fail. It’s kind of fail-safe to begin with.

Xconomy: What stage is TerraPower at, in terms of the development of this design?

NM: Well, we are designing the main reactor. We’re negotiating with various parts of the world to build it. You know, a nuclear reactor is an interesting thing because on top of all of the technical risk you have in any technology company, you also have a political risk. Are people going to want it in their backyard or not? And frankly, if the whole world was like the United States, we might not have ever done this, because [the U.S. has] gotten so risk-averse that we don’t want to try anything new. Which, if the status quo was acceptable, that would be fine. But the status quo is we are putting more and more CO2 into the atmosphere. We’ve not had a single year where CO2 emissions were flat, much less declining. So at present you have to say look, we know we’re going to get into a problem in the long run. We can’t take a risk free approach. We’re risking a lot with what we do now! So that means let’s look at nuclear again. Let’s look at with fresh eyes and come up with something new.

Xconomy: Does that mean that you’re focusing first on international markets rather than the U.S.?

NM: Yes, that’s right. If the president and every member of the Senate and the House all said, “Yes, go, go, go,” a project will still be tied up in courts interminably for God knows how long. A lot of the reason that nuclear costs more is so many people have been burned in building nuclear plants. They built a plant and then they don’t let them turn it on, or various other delays stop them for a long period of time. It’s hard to get people to lend you the money to do it.

Xconomy: What are the most nuclear-friendly markets or countries? Where might you build your first plant?

NM: Our focus is on places that have the most energy demand. So in China they are building more than a gigawatt of new capacity every week. Almost all of that’s coal. There are 14 nuclear power plants under construction right now. More than anybody else in the world. So that’s a place where they really need to make a tradeoff and say, OK do we keep going on this unsustainable coal thing or do we build some increased nuclear?

In the United States, our energy demand is not growing by very much. It’s maybe 3 percent a year… Yeah maybe some of that’s coal. But you know we’ll just ride that one out for a while. We don’t really need to build a lot of plants of any sort.

So China, India, other developing economies around the world—those are the places that are going to have the biggest need and therefore that’s where you’d like to build the plants.

Xconomy: Intellectual Ventures, which is the firm you run and where TerraPower is one of offshoots—you guys don’t make small bets, do you?

NM: No, it turns out there’s plenty of people in the world who make small bets. So if we were making small bets alongside them, we’d be the ten thousandth set of guys doing small bets. Instead we try to pick problems that are big and problems that either other people haven’t had a good idea on or other people are scared away, or both. So that’s kind of what we like to do.

Xconomy: To ask a somewhat cheeky question: you come from a technology background. What makes you think that you know how to make nuclear power work, against all odds? You mentioned the political and regulatory backdrop. This is a really hard problem to solve. What resources, what answers, what kind of mindset can you bring to it that might help break the impasse?

NM: Well, first of all I actually was a physicist before I went into software. So arguably I’m more qualified to work on a physics-intensive project than I ever was to work on software. That’s the first thing.

The second thing is you can’t solve any giant problem alone. I don’t care who you are. We have a great team of people at TerraPower. We have great relationships with lots of other folks in the nuclear business. That includes national laboratories in the United States, universities, places overseas.

So we’ve had a lot of expertise and we have convinced ourselves that we can do it. Now, after the fact you’ll be able to judge whether I was right or wrong. But so far we have created a company and I think most people in the nuclear business would say it’s absolutely one of the most exciting things going.

Xconomy: This is a long-haul kind of venture. It’s not something that will pay off on a time scale of a software startup. You guys know that. How do you design a company around that kind of time scale?

NM: Well, you need to set expectations appropriately. Both with the people in the company—if they think that it’s going to be like WhatsApp and you’ll get bought for billions of dollars next week, it isn’t—and you need to set expectations with investors that this is something that is a long-term investment that we think has enormous positive financial results and enormous positive results for the world. So it’s worth supporting but it isn’t for everybody.

So in our other ventures we’re not quite as extreme as nuclear, but it does, I think, show that if you put your heads to it right, and you can make the right partnerships….I’m vice chairman of TerraPower. Our chairman is Bill Gates, who of course I’ve worked with for a very long time. Well, Bill’s idea of what an investment horizon is, is perhaps different than others’. He doesn’t need to worry about what’s going to put food on the table for his family next week, or maybe for the next century. Instead, the idea of trying to do something really hard that would positively impact the whole world and be a good investment—that appeals to him.

Xconomy: We’re speaking a week and a half, maybe two weeks after President Trump announced that he wanted the U.S. to pull out of the Paris accord. And I’m curious about whether you and Bill Gates and the people you talk with feel that there might be ways for us to still meet, or for the world to still meet, the goals outlined in the Paris accord, even if the federal government isn’t pulling its weight?

NM: I’m a little jaded about the Paris accord. Fundamentally the Paris accord was a group of countries that got together with a bunch of lofty goals and essentially no plan to actually do anything. In fact, for several years, the background of these climate accords is there was a set of countries that said, “We really want to cut CO2, but we’re not doing anything.” And another set of countries that said, “We’re going to develop our economy, screw you.” And fundamentally the first set of countries said to the second, “No, no, come on. Pretend, just like we do. Do you see us hurting our economies? No, of course not. It’s not going to be a big deal.” Because I can’t really point at any action of the U.S. government, even in the Obama administrations, which were behind it. Where was the teeth in it? Where was the enforcement? Where was there anything that would actually make the CO2 go down? And I think you’d be very hard pressed to find anything.

So we’ve gone from a state of pretending we were doing something to a state where we say no, we’re not going to do anything. But it’s really not that different than pretending. A different way to say this is, I don’t think the world is ready to cripple our economies to try to instantly meet the goals that you would need to [to stop] climate change. There are lots of optimists who say, “Oh we can meet all of those goals without any crippling effect.” I love to say, “Well, show me the country that’s done that,” because I’m not aware of any.

A lot of the Paris accords were actually specifically framed in a way that European countries didn’t have to do any big, radical cuts. A country like Germany could comply simply by modernizing old plants from eastern Germany that were very inefficient to begin with, and should have been modernized long ago.

So I can’t look at the Paris thing by itself as a great tragedy. The private sector is the one that creates the technology that people use. The power plants are made of components that private companies make. So you get your turbines from G.E. or Siemens or Toshiba, you get your boilers from this company and your other things from that company. That’s true for nuclear, it’s true for coal, it’s true for natural gas. And we need to create technologies that allow us to very effectively deploy power.

Now renewables are one answer, but to a first-order approximation, the way you determine if a country or region is serious about renewables is, you ask about how they’re changing their grid. Because it turns out that most of the wind blows in places people don’t live. The sun goes down at night but of course it’s night in a different time in different parts of the country. The only way you can get a substantial amount of renewables used is to change the grid. But that’s a messy political problem in the U.S., because that’s something that is given over to the states. The states in turn gave it over to public utility commissions. And we’ve seen no American administration, Democrat or Republican, that has shown any leadership at all in the grid.

We also don’t have good energy storage. That’s another thing, where renewables would be way easier to deploy if we could store the energy. So, use the solar energy generated during the day at night, for example. Battery systems aren’t very effective. Batteries just aren’t very good for the extreme reliability and the extreme cost constraints that the grid has now.

That’s a problem I believe we could solve with lots of R&D. The technology world comes up with miracles all the time. But the problem with this kind of R&D is it really gets funded only by the government, and then it only gets funded during a blip when oil prices are high where everyone thinks there’s a crisis.

My first energy crisis was in 1973. I was in high school and there was the Arab oil embargo and that led to a big energy crisis. And every night on the news they would talk about more research on alternative fuels. And as soon as the price of oil dropped, that stopped. And it’s one of these things, it just makes no sense to me, because we know we can achieve enormous things like we’ve done in computing, but only because we kept investing in it for a long period of time. Gordon Moore came up with Moore’s Law first in 1959, the year I was born. And it was over a long period of time that people figured out how to make all of this work. If you fund research intensively for three or four years and it dries up, you’re screwed.

Here’s another thing that has been unfortunate. Venture capitalists and entrepreneurs in Silicon Valley set out to change the world of energy. They raised enormous investment in cleantech. And they said, “We can revolutionize this.” Well, here’s the funny thing. The world of energy was totally revolutionized by technological discovery.

Xconomy: Fracking.

NM: Fracking. Exactly. It turned out it was not the smart guys in Silicon Valley. It was a bunch of hardscrabble wildcatters in Texas tinkering away, and they figured out fracking, and it did revolutionize energy. Unfortunately doesn’t help with global warming because you still get CO2 emissions. In fact, most folks think actually it’s almost as bad as coal to use natural gas, at least the way we’re currently using natural gas.

So the cheap, cheap price of gas has undercut all of the work in renewables. So even companies that had a renewable that might have been able to get there on an economic basis have kind of had the rug jerked out from under them by the damn fracking revolution. And you know, my hat is off to the fracking people. From a technological standpoint, one invention took the total amount of energy in the United States that we thought we could access and boosted it by a factor of three, and actually all around the world the same thing. So it’s an incredible boon—if only it weren’t going to make global warming worse.

Xconomy: So, granting your point that the Paris accord, because it was voluntary and didn’t have a lot of built in enforcement mechanisms, you can maybe argue it was a masquerade. So we’ve taken off the mask. Are you still optimistic that entrepreneurs and innovators might be able to make up some of that gap, even if the federal government, even if governments around the world are not necessarily taking a leadership role and supporting the decades of R&D that accounted for things like Moore’s Law? I mean, Moore’s Law didn’t come about by accident. It was partly the result of massive federal, defense-driven investment for decades.

NM: Yes. And the best way to do it would be to have that massive investment by the government, but that’s not happening. And I think the private sector can make a huge difference. I’m trying! I’m trying. And look, I wish there were 20 more people trying whether it was advanced nuclear or energy storage. And there are a lot of those companies out there. I wish there was more.

But the thing that makes it challenging is that none of these technologies are likely to work super well on day one. By the way, computers didn’t work super well on day one. But the thing that made computing and made Moore’s Law work was, even pathetic computers were useful. There was nothing where people said, “Oh look, we’re going to do a fundraise here, a bake sale to make sure that Gordon Moore can keep making chips.” They were actually able to sell those chips. So the thing that would be fabulous is if the private sector invented, developed, and produced technologies that people would adopt just because it was in their interest.

Many years ago Sheikh Yamani, who at the time was the head of OPEC, gave a brilliant speech where he said, you know, the Stone Age did not end because we ran out of stones. It ended because we invented something better. We invented metals and smelting and all that kind of stuff. And the oil age—there’s people who thought we’d run out of oil.

And the answer is no. The oil age will end when we invent something better, which we will do. We just haven’t yet. And the challenge with energy is that the current infrastructure is so cheap, and there’s no leadership from the government, or very little anyway, to help support nascent technologies before they’re economic. So we’re going to have to keep doing that ourselves until it’s economic, naked, without any extra subsidies, without any cap and trade or any other incentives. And that’s difficult. But I don’t think it’s impossible. I’m not giving up.

Xconomy: Please don’t. Hats off to you for having the courage and the fortitude that is going to be required. And thank you, Nathan, this has been a fantastic conversation. I really appreciate your time.

NM: Well, thank you.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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