Podcast Ep. 65 – An Unending Source
Larry Olsen August 31, 2021
This week I had the chance to interview someone with a mindset of changing the future through something as surprising as nuclear power. Scott Melbye has been working in the nuclear energy industry for over 36 years and has held leadership positions in major uranium mining companies. He laid out the facts, breaking the myths of nuclear fear by showing how nuclear power could be the answer to a thriving energy future.
Larry Olsen: Welcome. I’m Larry Olsen, and what’s on your mind? Once set, it delivers your life. To change the outcomes we want, we must change the plays we’re running. Join us at Mindset Playbook with Real people – Real talk for Real insight.
Narrator: Today’s episode is sponsored by Aperneo, An Achievement Acceleration Company, whose approach to professional development enables clients to gain insights and perspectives to live, work, and engage with more success.
Larry Olsen [00:00:08] Well, welcome to the Mindset Playbook and thank you so much for tuning in today, wherever you may be. I’ve got something that I think you’re going to find very relevant, and very current. I think something that is going to be impacting all of us not only has it already, but it’s the future. So, with everything that’s going on in our world relative to climate and clean energy, I’ve invited Scott Melbye, a 36 year veteran of the nuclear energy industry, to give us his perspective, as well as bringing us up to date on the latest news in nuclear energy. Scott has held leadership positions in major uranium mining companies as well as industry wide organizations. He serves as executive vice president of Uranium Energy Corp., a US uranium mining and exploration company and chief executive officer of Uranium Royalty Corporation, the first and only pure play uranium royalty and streaming company in the uranium industry. Scott was formerly the chair of the Board of Governors of the World Nuclear Fuel Market and is currently President of the Uranium Producers of America. He’s a graduate of Arizona State University and serves as advisor to the Colorado School of Mines Nuclear Engineering Program. Scott, welcome to Mindset Playbook and thank you for investing your time to share with our listeners your leadership strategies as well as insights into nuclear energy. Why don’t we get started based on your in-depth background in uranium and give us some insights on what exactly is uranium and what is it used for?
Scott Melbye [00:02:00] Well, great. And Larry. Thank you for having me on today. It’s a pleasure to be with your listeners and viewers. I’ve been in the uranium and nuclear energy industry now for thirty, going on thirty-seven years and we’re probably more excited today than ever where we’re at with nuclear energy’s role in a cleaner energy future. But in answer to your question, uranium is an energy commodity, just like coal or gas or other ways to make energy or electricity. What’s really got folks excited about uranium and nuclear again is the energy density that’s provided by uranium. It takes a relatively small amount of uranium which is mined out of the earth and refined and refined into pellets and fuel assemblies and nuclear power plant. You’ll get more energy out of a small package from uranium than you will in any other energy commodity. We’ve always known that it’s in nuclear energy is a very resilient energy source, reliable, unlike wind and solar, which may only run 25 to 30 percent of the time. Our plants run ninety five percent of the time, only shutting down every 18 to 24 months to refuel. So, all of these aspects of nuclear and especially the carbon free, clean air aspects of uranium is really causing folks to really look again at how do we apply nuclear as an important part of our energy mix going forward.
Larry Olsen [00:03:30] All right, so with the whole concept of new clean energies and the old mindset, if you will, of it not being safe, and that’s half lives are forever, and how do you dispose of it in all of these things that I think have kind of taken the focus off of what’s really important? Certainly, we don’t want to contaminate ourselves, bring us up to speed on just how clean is it and where are we now on is it Yucca, the storage site?
Scott Melbye [00:04:14] Yeah, yeah. That’s you’re absolutely right, Larry. I think the industry’s done a very poor job of communicating these strengths that we bring. And it doesn’t help to that back in the 70s and movies like the China Syndrome and things like this have kind of caused people’s imaginations to really take the dialog around nuclear to a completely place which is very different from the reality as we stand today. We’ve used nuclear energy since to make electricity since the nineteen fifties. It stands as the safest form of energy in terms of injuries or fatalities of any energy source that that man knows today. And waste, which is often held up as a major impediment, know we’ve been the most responsible energy industry in the fact that we’ve contained and stored every gram of waste we’ve ever produced since the nineteen fifties. We haven’t put it out of a smokestack. We haven’t dumped it in a river or lake or ocean. And we’ve kept it to do one of two things, either reprocess that fuel and to make new fuel and extend the energy efficiency of the uranium or stored in a permanent geologic repository in a very high-tech engineered facility in a geologic formation that hasn’t changed for a million years. So, either one of these are not a scientific and technical challenge. It’s really been a political challenge to cite the facility. Yucca Mountain, as you mentioned, Nevada has been studied with a lot of dollars put into that site. You have 49 states in favor of using Yucca Mountain as that repository. But you’ve had politicians in the past who have opposed that coming to Nevada. Again, I think if we look at the science and technology around this waste repositories or eventually retrieving that waste to recycle uranium into new fuel in the future, I think will come as a society to a real optimal solution. But we probably been the most responsible of any industry in that regard. And again, the energy that we produce being completely carbon free and not permitting, just I think the debate is interesting. We could get into the whole climate change and manmade climate change and carbon reduction. I think if you’re someone living in Beijing or Delhi or Mumbai, you’re probably more concerned just about clean air pollution, free air. And that doesn’t mean you don’t have to wait and see whether the earth will go up or down a degree in warming if you can’t breathe the air today and a lot of those major cities. So, if they’re going to grow their economies and provide it, there’s never been a growing economy in human history that hasn’t been accompanied by an increase in energy use. We need to find a way to deliver that electricity to society without adding to the pollution and carbon impact.
Larry Olsen [00:07:27] So what would be the hold back for China, which seems to have an unlimited amount of financial resources based on how they structure their government and what not be leaders in nuclear energy?
Scott Melbye [00:07:43] They really are, and their growth is quite phenomenal today. I think the installed nuclear capacity of Chinese nuclear power plants will reach 70 gigawatts within the next three years and exceed the installed capacity of the US nuclear power program, which is about ninety-four reactors within this decade, and it’ll still only be 10 percent of their electricity supply. They have that much in terms of total energy demand and a growing economy, but they are very much embracing and building reactors. And I think it’s surprising to folks to hear that the robust growth in our industry can be measured by the numbers of reactors that have been added to the grid in the last eight, nine years. We’re now up over fifty for a very large-scale reactors. Many of them have been and in China, India. But we now. That’s 30 different countries building nuclear power plants to produce electricity in their country. So, China is definitely a leader and continuing to build those plants as a way to deliver clean electricity and serve as a bit of a stimulus and construction in many areas where they’re still relying on very dirty coal fired power generation, especially in some of the interior cities of China.
Larry Olsen [00:09:11] Is that because it’s easier for them or it’s less expensive for them? What is the hold back of taking some of these areas and putting plants in?
Scott Melbye [00:09:26] Yeah, I mean, I think the Chinese, you know, they are a command economy. And so, when they set the Chinese Communist Party five-year plans that are updated every few years, they are emphasizing energy projects and nuclear priorities. So, they line up the educational and skilled trades needed to advance these projects. They’re siting them in much faster way than we are in the West. I mean, obviously, we go through much more of a democratic process. We want to cite plants in a place where communities want them. Not we don’t just stick communities with major projects like that. So, you know, they do have some advantages. The construction, they’re getting very good, like we were in the 70s and 80s with Westinghouse and GE. We could build nuclear power plants quite quickly with the sort of skills and knowledge that we had acquired. And now countries like Korea, China, Russia are building plants and building them on schedule and on budget. We just saw that the country of the United Arab Emirates built four reactors on schedule and on budget. And this is a country that has enormous oil and gas resources but are choosing to produce electricity from nuclear power and preserve the oil and gas for export markets and produce cleaner electricity in their country. So, we’re seeing it as a very widespread mentioned. Russia, their atomic energy company is building reactors and 12 I think it’s over 30 reactors in 12 different countries today. So, it is quite widespread. I think in the developed economies, we’ve seen the growth rate slow in Western Europe and the United States because we’ve kind of been blessed with energy abundance and with the onset of fracking and directional drilling. And we’ve been blessed with oil and gas. In our case in the United States, we’ve also seen wind and solar to be subsidized to such degrees that it’s really damaged sort of the deregulated market structures. So, the nuclear power plants that we have in our grid are some of the cheapest sources of electricity we have. And as I mentioned, the most reliable. But they’ve been really struggling against the 30-mile head start that wind and solar gets. But I think we’re seeing that change dramatically in states like Pennsylvania, Illinois, where they’re modifying those sort of dysfunctional marketplaces to value clean energy and reliable energy. But I think in developed markets like ours, we’re also seeing the advancement of small, modular, and advanced reactors. These are not the fifteen-hundred-megawatt massive power plants are being built around the world. They’re more the fifteen-hundred-megawatt reactors that look a lot more like the reactors we have in our aircraft carriers and submarines that can be built in factories, shipped on site, lower upfront capital, faster payback periods and can co-exist on a grid that might be heavily burdened by intermittent renewables and can load follow in that manner. So a great example is two weeks ago I was up in Cheyenne, Wyoming, on with the governor of Wyoming on the announcement of the sale of a reactor by TerraPower out of Seattle, Washington, which is Bill Gates advanced reactor company, that he started selling a reactor to his friend, Warren Buffett, who owns PacifiCorp Rocky Mountain Power in Wyoming, where they will cite this three hundred megawatt reactor on the location of a retiring coal fired power plant. So, I mean, that certainly touches all the buttons, whether you are environmentalists or capitalists or you want just clean energy and affordable 24-hour electricity and you want to see some jobs replaced from retiring coal fired power plants. This is a great example of what we’re going to see in the United States and around the world, the market for these small and advanced reactors. Really just incredible and growing market.
Larry Olsen [00:13:45] Beautiful. So, is there still a reluctance, do you see or has that mindset been changed regarding embracing nuclear power plants in the United States?
Scott Melbye [00:13:56] Yeah, I think it has changed. I mean, like I said, our safety record of reactors that we’re building in Western Europe, the United States, I think the record stands for itself. You know, there’s always the same not in my backyard. But I think what we’re finding is communities that have hosted nuclear power stations have loved the jobs, the tax benefits and the and the positive economic impact on their communities. And we really see it if a plant shuts down, is retired, which is the end of its useful life and it shut down, the communities really suffer. So, I think you’ll have communities fighting to have these especially these small margin plants if they can continue the economic and energy benefits of those nuclear power plants into the future. I think in Wyoming, you see the four communities that are slated for this nuclear power plant are all fighting to get it located in their communities. So, I think we are in a different phase. And let’s face it, as a society, if we are going to, I mean, in the European community and certainly in the Biden administration, you know, if we’re going to kind of put the boots to fossil fuels and not use coal and oil and gas the way we perhaps should be using, then you’ve got to come up with alternatives. We have to think about the 70 percent of the time that wind and solar doesn’t run. And we’ve got to still keep the lights on and in factories and homes around the country and around the world. And I think that’s why nuclear is really getting reduced and its prospects these days.
Larry Olsen [00:15:31] So with the naysayers that, you know, they had that documentary out not too long ago on Chernobyl and bringing up all the inconsistencies and the buffoonery that really went on. Nobody wanted to admit there was a problem because they had been by their leadership. How do you talk to people who still have that Chernobyl could take place in the United States?
Scott Melbye [00:15:59] Yeah. So, the Chernobyl accident was an old-style Russian reactor, which we would never license or build in the United States or Western Europe or anywhere else. And it was just built on, it was almost like building a sports car without having adequate brakes on it. And so, one, even Russia is not building those plants anymore. But I think the real lesson we learned there was the way the government handled it and covered up the accident and was not forthcoming with information. And, you know, we’re in the United States with the Nuclear Regulatory Commission and the regulatory bodies in Western Europe and elsewhere, where we have a much greater safety, culture, and openness of information. So again, I don’t think we have to worry about Chernobyl type incident. I mean, our big incidents we’ve had in the West have been Three Mile Island and Fukushima. Fukushima were just our vision of the horrible devastation of the tsunami and earthquake. No one was injured or killed by radiation from the reactor. And we kind of forget about that, that needless to say, they could have done a lot more to provide backup power and keep that plant in stable condition. But really, in terms of industrial accidents, that probably ranks very low on the on the global scale with no one injured or killed. So, again, I think we’ve just got to look at the record that nuclear has both safety and operationally. I think we also see it, too, in public opinion polling, where recently I think. Seventy six percent of Americans favor nuclear energy as a way to deliver reliable electricity and clean electricity going forward. And that’s up considerably. We’ve always been at about 50 percent. We’ve had people either absolutely for nuclear and you’ve had people adamantly against it. But I think we’re now beginning to see the public opinion really change. And again, I think it’s you’ve got to look at nuclear in terms of the alternatives. There’s no magic tree or unicorns that give us energy. We need to produce it and produce a lot of it. If we’re going to go to more computerization of society, we’re going to go to electric vehicles. Our electricity demand will likely have to double to meet these needs going forward. So not only do we have to deal with where we’re at today, but where we’re going. And I just I hate to pick on you because you’re in California, but, you know, California wants to go to all electric vehicles by 2035, yet cannot deliver electricity reliably to businesses and homes in 2021, so I think we have some real serious issues that we have to deal with math and science and not ideology and kind of emotion. And I think that’s where we’re seeing real progress.
Larry Olsen [00:18:57] Well, and that’s probably where the greatest challenge lies, is the you know, my generation is kind of coming up with the burden being brought up in Washington with Hanover and the issues they had in storage and or at least a perception that was created out to the public. It was so disappointing that there were so many naysayers, you know, that was like dealing with maybe one percent of the issues and all. You hear it. And so, you think it’s such a major deal. But one of the things I think is happening that’s positive, too, is that graying out. I think there’s a lot of people that aren’t even alive now or having a voice that had experienced that attitude. And when you get an attitude, a man, it doesn’t matter whether it’s based on the truth or not, but we can see that in our own lives. So, you can get an attitude about an individual and whether they change in front of you or not is in material. You’ve still got your mind made up about it. So, what are you most optimistic about in what you’ve seen in the transition of people now embracing over 70 percent of Americans are pro?
Scott Melbye [00:20:12] Well, where I see it, the most is I serve as an adviser to the Colorado School of Mines nuclear engineering program. And so, I’ll often meet with parents and their kids as they’re coming out of high school or they’re in university now and they’re looking to go into their studies. And I’m seeing this younger generation, one very much questioning and want to know how everything works. But they do embrace technology and they do understand that the computerization of everything and the electrification of everything, including transportation, is something they really believe strongly in. And again, whether some of the old people are still fighting the climate change argument or not doesn’t matter. Society’s moving into a carbon free or a lower carbon future. And youth are really recognizing that coming out of school into the university years. And we’re seeing people want to get into especially these small modular advanced reactors as a way to make an impact on society. And I mean, being able to deliver clean energy to countries in Africa or India, in many cases, the moves by the Indians to really embrace nuclear energy. China is emerging as the engine of their economy and keep things moving forward for India to deliver a basic human need, which is electricity. I mean, there’s millions of people in India that live without the equivalent of a light bulb in their home. And how can you study homework at night if your kid if you don’t have electricity at night during the winter? And so, we’re seeing lives change because of of of energy and this notion that we need to use less energy. I disagree with I think we need to use more energy energies, provides a cleaner environment, can provide medical advances, can provide an education, everything else. So, I think we’ve got to be able to deliver energy in a way that meets all those goals. And I’m not saying nuclear is the answer to everything, but it can be a big component. I mean, in the United States, it’s fifty five percent of our carbon free energy, even though it’s only 20 people, only 20 percent of our electricity supplies. I think globally, nuclear is about 10 percent of our electricity supplies, but a full third of the carbon free energy. So, we’re already contributing quite a bit, which surprises people to look at those numbers. But the amount of growth really is something exciting and we need it. And we need to look at other energy forms, too. And we shouldn’t stop looking at fusion and all the other ways. But as it stands today, we need nuclear energy. And if we go down this green energy path without nuclear, we kind of go the same path as Germany took 10, 15 years ago where they wanted to be green. They threw hundreds of millions of euros at renewable energy, but they moved away from nuclear over this decade. And it’s only resulted in electricity prices being 50 percent higher than neighboring France, which is seventy five percent nuclear. And most importantly, I think from the Germans is they’ve made no meaningful impact on carbon emissions over this period, which was the whole purpose of doing this in the first place. And so, if Germany can’t do it with hundreds of billions of euros investment, how do we expect China or India to do it? And we’ve got to. To provide nuclear as part of that solution, and we’re really excited that it’s beginning to you know, we’re seeing politicians, investment community, environmentalists, all kind of making one hundred and eighty degree turns in some cases, and previous opponents now being proponents as opposed to opposing. So, I saw it firsthand having the real privilege to testify before the US Senate Energy and Natural Resources Committee five, six weeks ago and in D.C. and speed must have been a pretty clear leadership. And I sat in front of a committee of Republican and Democrat senators and was prepared for all kinds of difficult questions that might be thrown at me. But I saw from both sides of the aisle incredible support. And even those that haven’t traditionally been pro nuclear senators were asking really legitimate questions and good questions about, you know, how do we how do we regain this leadership? How do we produce more uranium in the United States and how do we build these reactors here and abroad? And so, I’m very encouraged that we are in a period where we’re actually an industry that is bipartisan, which is very hard to find many of those areas of cooperation these days. So, we’re embracing that. It’s good to be loved by both sides of the aisle. And so, I think it’s exciting times.
Larry Olsen [00:25:10] It’s pretty rare air. When people hear nuclear, they and I’m very pro-nuclear, by the way, I have got to ask these questions. People hear of nuclear; they think of nuclear war. They think of arms race. They think of fusion. And what happened, what could possibly happen. They think of nuclear bomb, atomic and these are such gladiator kind of terms. As you said, they with help with some of the movies have been out there. It’s fun to take the wrong approach and then kind of popularize. So, when you’re sharing with people, how do you go about dispelling that and helping them understand? I don’t know if if it can be simplistic, because to me it seems rather complicated to create fusion to begin with, it’s not something you’re going to do in your garage necessarily or I’m not. How do you not so much dispel that, but replace it with the right information?
Scott Melbye [00:26:18] Yeah, well, it goes back to the origins of nuclear energy, and it doesn’t help that our technology was born out of the weapons program and the development of the atomic bomb. But we you have to go back to Dwight D. Eisenhower in 1950 that started the Atoms for Peace, where there was a recognition that while the peaceful uses of nuclear energy in medicine, electricity, desalination, of water, production of hydrogen, all these things far outweigh the weapons. And I think what you’ve seen in more recent years, and I’ve been directly involved in it, is we’ve actually seen nuclear disarmament between the United States and Russia result in the dismantling of nuclear weapons. In fact, it was called the Swords to Plowshares, Megatons to Megawatts program that saw twenty-one thousand nuclear warheads in Russia dismantled and blended down from the very high enrichments. I mean, the enrichment levels that we need to make electricity in a power plant are five, six percent and nuclear on nuclear weapon is ninety six percent. So that’s just been kind of it. We can have the same kind of explosive properties, but we can blend down that uranium, which we did throughout the 90s and early 2000s. And we literally put we eliminated twenty-one thousand warheads and instead took that uranium and turned on the lights in Charlotte, in New York City and Chicago and Miami. So that’s really been a great step. And I think also a strong America in terms of nuclear technology and nuclear leadership allows us to have a seat at the table in terms of nonproliferation and providing peaceful uses of nuclear energy for countries and discouraging the military applications.
Larry Olsen [00:28:20] This may seem very, very basic to you and great information, but either way, thank you for that. But I want you to back up a little bit because you said something that really struck me as profound and perhaps, I should have been aware of this. You mentioned the difference between the nuclear energy within a bomb compared to lighting a power plant. Kind of talk a little bit about that because that really dispels this whole mythology.
Scott Melbye [00:28:52] So uranium, as it occurs in the earth and deposits throughout the western United States and around the world, the U. Thirty-five isotope, which is what is the ingredient you need to to sustain the fission process. And that comes at a natural level of point, seven percent. So when we mined the uranium and we refine it, convert it to a gas, we want to put it in a centrifuge to increase that you to thirty five concentration to five percent. And again, that’s just enough for the uranium to fission to create heat,
Larry Olsen [00:29:29] Comes out at seven percent and you reduce it to five percent?
Scott Melbye [00:29:33] Point seven percent. So, we need to enrich it up to five percent. And to sustain a nuclear explosion, you’re up in the nine to six percent. So, one, that’s a good thing because the enrichment process is very complicated and costly and is a barrier to entry to to people that would want to go down that path. But you see folks like Iran and North Korea going down that path. But, you know, it’s a far cry from a power plant, basically boiling water from heated fuel assemblies from that five percent enrichment than the ninety six percent chance that you see now. Yeah, it’s very much the industry these days is about electricity and essentially, it’s a different way to boil water down to a turbine.
Larry Olsen [00:30:25] Yeah. If you keep it simple like that. This has really been fascinating I like I’ve got a drink water out of a fire hose. So much of this is just normalizing for you and your background and your understanding. And you’ve cleared up so many, so many things within my mind. And hopefully for our listeners, what are what is there a way for people to invest in uranium? I mean, if that’s where we are going, and I don’t think anybody would disagree with that. I mean, I drive a Tesla for crying out loud. Let’s not run out of energy. What would you share with them as far as the ability to invest in uranium, for instance?
Scott Melbye [00:31:19] Yeah. So, when it comes to investing in uranium, you have this megatrend, which is obviously driving the demand for uranium. We’re back to pre-Fukushima levels of nuclear generation worldwide. We’re growing in in new reactors. But you also have to look at just the nuts and bolts of supply and demand, as you would with copper or any commodity. And we’ve gone through a very extreme bear market over the last 10 years where Fukushima did impact demand and it did impact supplies to a point where uranium prices went to a very low level. I went from seventy dollars a pound down to seventeen dollars a pound and well below what was needed to incentivize new production. Sure. And so here we are today. Demand is back to pre-Fukushima levels, but we’re still producing probably 40 to 60 million pounds a year below global consumption. We consume one hundred and eighty-five million pounds of uranium around the globe to make electricity. And we’re producing for mines at a rate 40 to 60 million pounds a year below that and have done so for the last four years. Covid made it even worse because the nuclear power plants were essential services and ran 24/7 throughout the whole pandemic. But minds were impacted. As much as 50 percent of global production was impacted at the height of the pandemic. So, we have a wonderful supply and demand story. And it would be you could overlay that if that story applied to cotton or copper or orange futures or it would be just as compelling. But in this case, it’s uranium. And so, where investors would look to is to be able to invest in the uranium story because we need new mine production. Demand is strong, but we need to advance mines in the United States, Canada, Africa, Australia, Kazakhstan. These are all countries where uranium is produced and we’re not producing enough of it going forward. So, we’re already seeing the uranium price moving from that low of seventeen dollars a pound in twenty sixteen to doubling to essentially around thirty to thirty-three dollars today. But we still need it to go to about forty fifty dollars a pound to really stimulate that new production. And so unlike copper or gold, which is a much more efficient market where there are mines that will come on much quicker with higher prices and come off more quickly, uranium is a little bit less efficient and it’s a lot harder to bring on a uranium mine quickly. And they tend to take them off more slowly because of the Hegde contracts that are a feature in our business. So, I guess what I would recommend is looking at companies. I mean, my two companies are great examples. Uranium Energy Corp. is a US uranium miner and developer out of Corpus Christi, Texas. We have very straightforward what’s called in situ recovery mines. These are. Minds that even environmentalists can love because they’re not extensive, open pit, underground drilling, blasting waste rock mill tailings. We’re actually going into the sandstone and reversing the natural process to extract the uranium as a solution out of the sandstone and pump it to the surface. So, it’s become about 50, 60 percent of global production. We have the biggest positions down in South Texas, which is one of the most prospective uranium districts in the world. But we’re also in Wyoming as well. So we’re at NYSE traded company and the ticker symbol, you see, and you can go on our website and see what we’re doing to develop and mine uranium, uranium Royalty Corp. My other hat that I wear is a capital provider to mine developers, not only in the United States but around the world. And we have a portfolio of 16 royalties in developments and mines that allow investors to participate in production of uranium through royalties and streams. And we also are able to provide capital to bring those mines into production. So, it is an interesting market. You don’t have hundreds of ways to invest in uranium. There are probably 10 or 20 really good investable names, in my opinion, that that, you know, that’s a lot of capital going through a very small number of doors. So, you’ve seen already a very significant appreciation of the uranium equities. I think the U.S. is up 500 percent from its covid low of last year. But we’re still very much in the early innings of a uranium recovery. Uranium prices really started to move and the growth in reactors is just really underway now. So, I think you haven’t missed anything if you haven’t invested in uranium. But it is one of these commodities like copper or, you know, we’re in a commodity super cycle, in my opinion. And our supply and demand fundamentals are probably as compelling as any other commodity out there right now.
Larry Olsen [00:36:31] You know, first thing that comes to mind is, this concept of reusing the old uranium, if you will. Is that like, not profitable or is it too expensive to do that to make it worthwhile? Or do you have unending supplies of uranium in the rocks still?
Scott Melbye [00:36:56] Yeah, I think it’s I think the real barrier to that being advanced more than it is certainly France being the champion of reprocessing. I think it’s a victim of low uranium prices. It’s just cheaper to mine uranium and store the waste in a repository than it is to reprocess. But I think we have to think we have to think in 50 hundred-thousand-year terms, and we recycle everything in our society. Why wouldn’t we recycle spent fuel? There’s still 80 percent of the energy still in there. So even if a facility like Yucca Mountain in Nevada is built, it’s my opinion it should be a retrievable storage, not a permanent, because we may find ourselves one hundred years from now if the magical unicorn hasn’t brought us abundant electricity. And we have to look at every possible method that we can to produce electricity, that fuel could be an enormous resource down the road. So, I think, you know, that’s how we need to look at it.
Larry Olsen [00:37:57] Yeah. And these smaller units you were talking about, is that like something that would run a large company, a Google company, for instance, or a small city or what capacity to those have?
Scott Melbye [00:38:11] It can be it can be both. I had a meeting yesterday through Colorado School of Mines with a company called Ultra Safe Nuclear, which is demonstrating a micro reactor. It’s up to, I think, 10 to 15 megawatts. And the design for that is remote locations, communities, and mining operations, say, in northern Ontario and Quebec, Northwest Territories, where the cost of electricity of diesel oil being shipped on ice roads to these mines in the far north, diamond mines, gold mines, silver, zinc, uranium mines is just prohibitive. And it’s getting harder with the climate changing. And the ice roads have shorter months of the year to get supplies up and back. So, we’re looking at those five, 10, 15 megawatt reactors for mining applications. But the 50-hundred-megawatt reactors certainly can be built in a scalable manner. I would encourage you to look at a project in southern Idaho that’s being developed between the Department of Energy and New Scale, very innovative company that’s building these one-hundred-megawatt scale. Both units, which can be built up to 12 in an hour in one station, but in this case can. Power, southern Idaho and much of Utah as part of their electric grid, and you’re probably wondering why would electric utility companies in Utah sign up for such a project, which they have? They can’t use coal anymore because of the clean air mandates. It just is they can’t buy by law and just societal pressures. Gas is always an option for electricity and is a really great way to make electricity when gas is cheap. So, what happened during the Texas cold spell and when gas prices spike, you price electricity out of the out of the means of businesses and individuals so they can’t rely too much on gas. They could go down the renewable route. But because Utah sits next to California who already have so much renewables on their grid, California is either spinning off excess electricity when the sun is shining and the wind is blowing from renewables, or they’re sucking energy from six states surrounding California. And so, they’ve already got too much intermittent supply on their grid. So nuclear was the option for them, which can provide baseload but also scale up and down to fit the neighboring renewable energy fluxes that they see out of California. So, it’s just you could look at the applications. Hawaii in twenty twenty-one is producing most of its electricity from diesel oil, which is shipped in by tankers. When it’s incredibly dirty, it’s expensive, and it’s not really a way to make electricity. In twenty, twenty-one, Puerto Rico with enormous energy challenges and delivering electricity, these small modular reactors with a very small footprint could power much of these island needs. But they can also be sited in in larger grids as incremental supplies. Now, if you’re India or China, you need baseload power in massive quantities. You’re going to continue to build 15, 16 megawatt units, but maybe in some of these more developed markets or specialized markets for 50 hundred megawatt reactors, a better fit. Wow.
Larry Olsen [00:41:46] That is such optimism, I mean, in the sense of a bright future, you know, there’s so many questions I want to ask you and we’ve run out of time. But I want you to share with the audience what you’d like them to take away from the work that you do and what you see coming in the future so that they can put this into the right perspective.
Scott Melbye [00:42:13] Sure. Well, I think much of the life lessons that I’ve learned as being in the mining business resource business for the last thirty-seven years, and if you talk to your friends and neighbors, whether they’re in oil and gas or copper or uranium, anything else, one thing you learn is the cyclicality of commodities. We’re either producing too much and prices drop or we’re not producing enough. And you go through these boom-and-bust cycles. But it’s also taught me as an executive to really embrace those down cycles and really be patient and persevere through the down cycles and really look at it as an opportunity like we have in green energy. For the period since Fukushima, our company has grown dramatically because we were able to go in and see value where others didn’t. And we’ve been able to pick up assets at 10 cents on the dollar, permit them, license them to drill them and prepare them for production. While we have the luxury of time and the downturn of a market in mining, great mining companies are defined by not what they do. When you’re when commodity prices are high, it’s too late. It’s like the farmer. You can’t sow seeds and grow more at harvest time. You have to have been you know, that’s got to be done well in advance of harvest. And the same is true in mining. So, we’ve really embraced that to grow our company and prepare not only our company but our shareholders for to benefit when commodities inevitably always cycle. That’s one thing that we know that no commodity will stay down forever, and no commodity will go up forever. So, we’re prepared to kind of meet that cyclicality and really profit and thrive under that. But it also gives life lessons, too, and that even if you’re the most blessed person in the world and I feel like I’m one of them, life throws at you challenges and downturns. And it’s how we’re defined as people is how we deal with that. And it’s not easy at times. But I think if we look at those downturns as something the challenges that we can stay focused, stay positive, stay engaged, don’t feel sorry for ourselves, but say, OK, how do I know, how do I take this and make an opportunity out of it? We’ll all be better people for it. So, it’s something that’s worked in the mining business. Some the uranium industry specifically and certainly has some life lessons as well for us personally.
Larry Olsen [00:44:38] Boy, oh, boy, we certainly peel that onion. That was wonderful. And you are really a breath of fresh air. I very much appreciate you taking the time, Scott. And I know how valuable your time is with sharing with us. Give us a new, fresh perspective on what a positive influence nuclear energy be in all of our lives and when handled in the way that you’ve described and with the laws that have been put into place. You know, we’re probably in no danger of seeing any of these explosive media events or new movies on it of how tragic it could be because it’s nothing but positivity. And you very much reflect that. And I thank you so much for being on my show. I would love to go now into another segment on how the mind works and how you’ve been able to transition through your downsides. But we may have to do that in a future show.
Scott Melbye [00:45:38] No that would be great. And if people are interested in our company, uraniumenergy.com is our website & you can see what we’re doing in Texas, Wyoming and uraniumroyalty.com, but also go on the World Nuclear Association website out of London or the Nuclear Energy Institute of the United States. And you can really learn a lot more about nuclear energy and all the advantages that it brings to our grid going forward.
Larry Olsen [00:46:05] Beautiful
Scott Melbye [00:46:27] Excellent. Well, thank you, Larry. It’s been a pleasure to spend some time with you.
Larry Olsen [00:46:30] Well, you as well. Have a great rest of your weekend. Keep us lit.
Narrator: Thank you for listening. If you’ve enjoyed this episode, we ask that you please subscribe and share with your friends and associates. Larry’ next guest Christina Walls is as bold as she is delightful. She shares her passion for land investing while coaching others to passionately live the life they desire. She may ask this of you, “What is the price you are paying for not following your dreams?”
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