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Dan Michaels

Brussels Bureau Chief

The Wall Street Journal

March 12, 2021
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Ep 5: Dan Michaels - Brussels Bureau Chief, The Wall Street Journal
00:00 / 01:04

Bret Kugelmass
So we are here today with Dan Michaels, the Brussels Bureau Chief at the Wall Street Journal. Dan, welcome to the Energy Impact Podcast.

Dan Michaels
Glad to be with you.

Bret Kugelmass
Yeah. So you know, we're trying a new format where once a week or so we're trying to like look into the future with the news of today. And so it's super exciting to have you on the show. I'd love to learn about you and also about your organization and the Future of Everything series. So maybe just tell us a little bit about who you are and where you came from.

Dan Michaels
Sure, as you mentioned, I run the Brussels Bureau of The Wall Street Journal, but I also dabble in other areas, a lot of science and technology. For about 15 years, I covered aviation and aerospace. So I spent a lot of time in Airbus and Boeing factories and airports. And I'm American, but have been living in Europe for many years.

Bret Kugelmass
Where in the U.S.? Where in the U.S. did you grow up?

Dan Michaels
I'm from New York, New York City.

Bret Kugelmass
I kind of heard it. I'm from Long Island. So I heard a little bit of New York in there.

Dan Michaels
And I find technology fascinating and I'm interested in, you know, what's possible? What's a little bit science fictiony? And a couple of years ago, The Journal, which I think people know from very sober and grounded business news and other news, we started what is now a monthly section called the Future of Everything where we're allowed to write about ideas and projects that, let's say, no investor would put money on or you know, are not going to be on the financial pages in the near future. But, you know, could be sort of a bit of SpaceX or Tesla 20 years ago, or whenever Musk was getting started. So the idea is to sort of look over the horizon. But we are not bound by, we don't have to have a paragraph in there about financial returns or anything like that.

Bret Kugelmass
And where did that come from? Was that like, user generated feedback? Like, you know, do you guys poll your audience every now and then say, you know, what kind of stuff do you want to read about?

Dan Michaels
I think it's a bit of looking at what stories were doing well, and realizing that these were things that our readers were involved in. People who read the Wall Street Journal are not just on Wall Street, a lot of them are in laboratories, or dealing with scientific, technological developments, or they're in parts of businesses that are doing this. Most big companies have their skunkworks or whatever, you know, developing the technologies of tomorrow and people just love to read about this stuff, you know, they want to know what the future is going to look like, or might look like. So to some degree, this is our Popular Mechanics of the 1960s. And then one of our first stories a couple years ago was about jetpacks. We've been writing about jetpacks for decades, like flying cars, but some of these things, finally are happening at least in some limited way, but new technologies are making a lot of things possible that weren't realistically conceivable. Not that long ago maybe they won't be, well, maybe they won't make economic sense. But at least, you know, something like a jetpack is much more realistic now, because of all kinds of miniaturization and advanced manufacturing, and even technologies like the accelerometer in an iPhone that could balance you know, these are the things that have allowed drones. So if we look at what drones can do, why not a jetpack? Why not flying cars? Flying cars, we're no longer thinking about, like, you know, the one in The Man with the Golden Gun, where it's like a Ford Pinto that sprouts wings, or something like that. But essentially a drone, you know, that could have wheels or operate another way. So this is the kind of thing where we're free to look at.

Bret Kugelmass
Amazing. And maybe before we get to the meat of this article that I want to talk about today, which features mini nuclear reactors. Maybe just a little bit more about you, though you spent this time in aerospace previously, do you remember where the origin of your interest in technology and flight and all this stuff came from?

Dan Michaels
You know, probably a big chunk of it was growing up, back then, you know, later today, as we record this, we're waiting for the Mars Lander. And when I was young Viking was the thing. And, you know, there was excitement about space. I remember, I was a little kid when Skylab was up there. And it was all really cool and fascinating. I guess I'm just old enough to have come of age when people were still optimistic about technology. And you know, maybe other things like CyberPunk hadn't taken over and there wasn't this sort of Blade Runner, Matrix view of the future. I still have a little bit maybe of the 2001 view of the future where it was still clean.

Bret Kugelmass
Yeah, they get a little dystopian. Do you think that's gonna switch? Do you think that's a cyclical thing and new science fiction might kind of take on a more clean and prosperous, optimistic point of view at some point?

Dan Michaels
I'm not sure I'm seeing signs of that. I mean, you look at the impact of the internet these days. I think it's, it's a tough call, whether it's been a net benefit, or you know, it's done net harm to the world. So technology is, we can do amazing things with it. But you know, so often it's like riding a tiger,

Bret Kugelmass
The narrative that you just pointed out is pretty amazing. I mean, I grew up as a kid of the internet, and I remember like, in my formative years the internet was going to democratize everything and make everything better. And as of these last few years, five years or so even I, who was the strongest internet advocate ever, I'm now like, shoot, is this a net good? Or a net bad?

Dan Michaels
Yeah, yeah, it's I mean you look at you know, what happened on January 6, and you know, organized on the internet.

Bret Kugelmass
All right. Well, for today, let's talk about mini nuclear reactors. When did you first start learning about them? How did you research this article? How did it come about?

Dan Michaels
One thing leads to another, but through my much more mundane coverage of the European Union and things that go on in Brussels. And marrying that with my, what I learned covering Airbus and technology. One of the things that the European Union tries to do is put money behind technologies. And so about a year and a half ago, I did a story about how Europe was trying to copy the US model of university spinouts. And it's finally taking off and actually Oxford and Cambridge are leaders, but universities across Europe are picking up on the idea that their labs create amazing technologies, and they might as well, someone should profit from this. And in reporting on that, I was at Oxford and wanted to meet one of their companies. So after I wrote that story about fusion, I got a couple emails from companies that are trying to bring, in fact, some of the same technologies that are theoretically going to allow fusion to the world of fission and the current generation of reactors, but sort of bringing a new wave of technology. And so we were putting together another energy issue this year, and I said, you know, there's actually something new going on in those nuclear reactors where Homer Simpson works.

Bret Kugelmass
Yeah. And, and then, so you kind of caught interest that, hey, there's some new more advanced stuff coming down the pike. What happens then? What's the, I'm outside the journalism space. What's the journalistic process?

Dan Michaels
Yeah, it's one of these things. Also, stories like this often come together when you get several elements falling into place. So I've done that story about fusion and purely by chance here in Brussels, the EU, there was a conference. It was actually, the former Secretary of Energy, Perry came through town because the U.S. actually was pushing this technology, Small Modular Reactor technology. And there are several countries in Europe, especially ones that used to be in the Soviet orbit like Estonia, Czech Republic, Poland, where they want to stop using Russian gas. They don't want to be tied to Russia for energy. They don't want to be tied to Russia for anything. And they're very enthusiastic about SMRs. And so I was like, huh, there's a technology angle here. There's a political angle to it. So it was sort of a bunch of things fell together. And it wasn't just like, because as a reporter especially you know, for the Wall Street Journal, we get pitched by a lot of business. They're like, look at my product. It's wonderful. And it might seem wonderful. But you know, unless somebody is actually going to buy it, it's only mildly interesting. But when I saw that there actually were potential customers out there for this technology I was like, okay, there's something to this story, even if it never works. It's not just someone with a press release, trying to get some column inches.

Bret Kugelmass
Absolutely. Okay, so now tell me about the meat of it. What did you find when you started looking into it? What was what was happening?

Dan Michaels
So the idea here is the technology for nuclear reactors, fission reactors that we know that we are familiar with, have been around for decades. First proposed by President Eisenhower in 1953. He gave a speech at the UN talking about Atoms for Peace. And this idea that, you know, just atomic bombs, hydrogen bombs go off, but that same power could be harnessed for clean electricity. And from there, there were years of development that went into a few decades of building out big nuclear reactors. Famous for their cooling towers, which are the most obvious part of the nuclear reactor, but actually, they're just big buckets to cool the water.

Bret Kugelmass
Yeah, that's not even where the nuclear stuff happens.

Dan Michaels
Not at all. The part where the action takes place, you know, it looks more like a small bunker, it looks, you know, maybe the size of say a fuel tank that you'd see like at an airport or something. I, and one of the things that happened over the years as reactors were built and as they started aging was the discovery that nuclear power is pretty tough. And the realities of nuclear fission and what's going on inside there really put a lot of strain on the physical equipment. So in a lot of industries, the more you know, and the more you do, you go down the learning curve, and the economies improve. You know, car production is a perfect example, or even say, airplane production. Boeing and Airbus produced, in a good year, 10 times as many planes as they used to and at lower price. Wasn't working like that with nuclear energy, that, you know, it continued to be quite expensive. And one of the things, one of the ways that reactor builders and utilities got around this was to make the reactors bigger because the cost per kilowatt hour improved, you know, faster, because the cost of running the reactor didn't increase as quickly as the cost of building and maintaining it. So over time, there was a shift towards bigger reactors. Well, that bumps up against Three Mile Island, Chernobyl and the Japanese near disaster in Fukushima and so nuclear power really kind of hit a wall. I mean, you know, a few years back Germany, after Fukushima, Angela Merkel said we're getting rid of nuclear power. And it's almost impossible to get a nuclear reactor project approved in most countries these days. Because people are terrified of what happens if something goes wrong. So while this was going on, people who were still in the industry started looking at like, okay, how could we adjust the technology? You know, how can we address these concerns? At the same time, you get a totally different group of people, environmentalists saying something has got to be done about greenhouse gas emissions. And we've got to get down, we have to get rid of coal, we probably need to get rid of natural gas also. And while we may not like the idea of radioactivity and radioactive waste from nuclear plants, still, it's better for the atmosphere than fossil fuels. So maybe we need to look more seriously, a nuclear power. And this is not just executives from GE and Westinghouse, it's also people like Bill Gates.

Bret Kugelmass
Yeah, his book that just came out is like pronuclear, every chapter pretty amazing.

Dan Michaels
You know, and I mean, there was this Netflix series about him, I think about a year ago, and one of the segments was about this company that he's put a lot of money into developing nuclear technology. And the whole idea behind that was we need to make nuclear power safe, or at least make the risk of it manageable, so that we can protect the atmosphere. And so these two forces come together, and the US Department of Energy, partly to promote U.S. technology, U.S. leadership in the field, to counter funding and developments in China and Russia in the field. Put quite a bit of money behind research in these areas that are next generation nuclear. And so what you've gotten over the past few years is proposals, ideas for new types of reactors. And there's quite a wide variety, the simplest is essentially a scaled down version of current fission reactors, then you get some that, rather than using water circulated through it, they use things like molten salt, which sounds a little bit science fictiony. But it's something used actually in big solar arrays because it's just a liquid that retains heat really well. And operates under lower pressure than water, so there's less risk of explosion. And one of the things that the designers of these systems have done is from the outset, look at safety issues and say, okay, how can we design these so that if something goes wrong, when something goes wrong, we don't have a situation like we've seen happen. And so a couple of designs, the reactor is actually underground. And so the idea is, you know, one design, it's actually all the time sitting in a basically a bathtub of water, so that if everything goes wrong, at least there's water there to cool it. Another idea is similar. And you know, they just have to, like, pull this stopper out and the base it's sitting in floods with water.

Bret Kugelmass
How come these ideas? It seems like there's a resurgence of it in recent years. How come even at the dawn of the nuclear era, they didn't try all these concepts out, put them underground, put them in a tub of water, that kind of stuff.

Dan Michaels
I don't know the history that well, but I can only imagine from what I know of that is that they didn't quite understand how tough it was going to be. And I think, you know, they didn't understand how corrosive radiation is. The wear that it puts on metal, concrete. There was just a, you know, a naivete about or let's say, just lack of information. I mean, think about those 1950s, 1960s Civil Defense films like duck and cover, you know, the Soviet thermonuclear bomb goes off, and you're supposed to duck under your schoolroom desk, you know.

Bret Kugelmass
So silly.

Dan Michaels
You know, some of it was propaganda, some of it, you know, so it sort of deliberately downplayed the threat, but some of it was just a lack of understanding. It took time for and experience for people to really understand. Know what happened over time. And, you know, remember, you know, now we can do computer modeling of things, you know, which all of which isn't always perfect, but at least we can do it. But back in the 50s, and 60s, it was slide rolls and you know, t-squares, so they just tried it.

Bret Kugelmass
So in, in researching this and looking into this, and now you've got this really nice comprehensive understanding of, you know, where things are going, the political forces, the economic forces, the changes to technology. What are you most excited about? What you know, and I know, it says the Future of Everything. But you know, if you were to say, hey, based on my research and what I've done, where do you put the odds of us seeing this type of technology emerging in the next few years?

Dan Michaels
I think you will see it, I think there's enough momentum. And there are enough places like say, Estonia that are quite excited about it. Estonia is a very small country, million and a half people, I think. So they, you know, even on a good day, they wouldn't need a giant reactor, but maybe they could take a small one. And there are some utilities in the United States that are also looking at it to replace coal. And I think, if when that happens, and it probably will get heavy government subsidies, then it'll be really interesting to see if the economics work, because there are big debates, and it's one of the things I got the most reader mail about is whether, by scaling down a reactor, you actually can make it economical, because there's a kind of almost counter intuitive argument of it big is more efficient, think about like, you know, you got a Walmart, you know, the the family size wheaties, you know, is cheaper per unit than, you know, the the personal size, right? Most things we know, the bigger, you know, the per unit cost goes down with size. And what SMR makers, that is modular reactors, small reactor makers are saying is no, we've redesigned these things so thoroughly that in fact, on a per unit basis, they're cheaper than a giant one.

Bret Kugelmass
And that kind of makes sense. To me. It's like, you know, solar panels, you never see one giant solar panel, they come in these modules modular and they snap them together on site, is that the basic concept with modular nuclear as well.

Dan Michaels
It's an element of that, yeah, because a part of it, and one of the areas where they say they can get economies is an economy of scale and manufacturing that, yeah, to produce it, you know, a mammoth solar panel would be expensive and be expensive to transport it. Right. So with SMRs, what they say is if we can make these things smaller, we can produce them in factories and turn them out. Or at least you know, the elements, and then they can either be assembled and put on the back of a truck or big pieces of them can be assembled and put on the back of a truck and shipped. Unlike current reactors. One of the problems, I think it's in Finland, there's a reactor they've been building for just far too long, because they build and then they discover there's a flaw in it, and they have to break it down and build it again. And so if you can do it in a, on a smaller scale, in a factory under controlled conditions, the idea is you can meet the necessary tolerances for safety, but do it with economies of scale.

Bret Kugelmass
Yeah, it makes sense to me. I mean, my last business was in the drone space, so funny you mentioned drones earlier, and there was just so much learning that happened in our manufacturing process. So thank god, our early drones, they were industrial drones. So you know, they cost $5,000 to make, but we had to throw a bunch out because they didn't perform well, or they didn't make it through safety testing or quality testing. And if they were 500,000 apiece, and we weren’t getting our processes or manufacturing in order, it would have sunk the business. And so I kind of, maybe this is a little bit of what I'm hearing from you as well, that if you make it smaller to start off with, your mistakes are cheaper to fix, and then you get to be a bigger better company, and then all of a sudden the economy start working out better.

Dan Michaels
I think, you know, that's part of it. It's also just the fundamentals of it, too. And this gets into some of the physics of nuclear power. And that has to do with the pressure and the heat. And that with just a smaller reactor you don't need as much shielding, you don't need as much protection. So the gizmo itself can be simpler. And because and the risk for it, oh another thing is like the risk of a small reactor having a meltdown is much smaller than the risk of a big one. So all of these things, at least the way advocates present it, make it allow you to simplify things and redesign in a way that cuts out a lot of costs. Now, critics say that's, you know, sort of those people are fooling themselves.

Bret Kugelmass
And isn't, but isn't I mean, I love when you know, private companies jump in and try things out and some of them work and some of them don't work. And sometimes it's a business reason, sometimes it's a market reason, but isn't that the beauty of it? If it's small, a bunch of companies who think that they can make the economics work all try and maybe one or two of them succeed?

Dan Michaels
I mean, you've got at one end, you've got, you know, there's a joint venture of GE and Hitachi, who have been in this business for decades since the beginning. And what they're trying to do is just scale down what they've got. Then you've got yeah, startups like this one that Bill Gates is behind called TerraPower, where they've got a much more kind of cutting edge approach to things, and then there are ones that are even further out in the future, which I didn't really get into for my article, because, you know, I was only looking a little bit beyond the horizon, not far over the horizon. But yes, I mean, there are people, you know, coming up with all kinds of ideas, you know, for what to do with, with this technology, and how to, you know, how to make it economical and safe. So, you know, that's yeah, that's the, you know, it's gonna be one of these classic situations. Like we've seen in space, and we're continuing to see in space, where maybe we say something like the Hyperloop where it's a great idea, too expensive. A lot of fundamental questions out there, you know, maglev trains, you know, these things. It's like, Who's gonna spend the money? And can it actually be economical in the long run? The jury's still out?

Bret Kugelmass
Yep. Okay. And so we talked a little bit about, there's some geopolitical traction. Obviously, these forces at play, you know, you don't want to be dependent on Russian gas, Estonia, which is right there near Russia, they're excited. So I see that happening. Are there any other like market pull forces and the other companies that are interested in maybe cleaning up their industrial energy with this that you've seen?

Dan Michaels
I think there are a lot of companies who would be interested, and there are a lot of applications, I think, if you are a business person, and trying to decide whether you're going to put your money into buying an SMR, you're probably still not quite at that point yet. But for example, there are a lot of utilities that now use coal and gas for what's called the base load. I'm sure your listeners know all this. But you know, a power grid needs a certain basic level flowing down as wires, you know, that wind and solar aren't yet at the point of being reliable enough to provide. And so if, if that's now being provided by fossil fuels that are not great for the environment, those need to be taken out. Well, one of the advantages of SMRs that proponents are touting is you could almost drop in an SMR to replace a coal fired power plants and just, you know, then hook it up to the same generator because both of them essentially are very large, expensive kettles, you know, who's boiling water that turns a turbine. And so if you can produce that boiling water in a more ecologically friendly way, you've accomplished something. So there are a lot of people out there who are excited about this. Other applications include splitting water into hydrogen, fuel and oxygen. And that because one of the issues that, you know, people who are looking to remove fossil fuels from the economy face is what do you do about gasoline and all the other derivatives that are, you know, our liquid fuel we need? Well, hydrogen is being touted as a potential replacement, but it's expensive and requires a lot of electricity to get hydrogen out of water. So if you can use nuclear power to do that, you're creating liquid fuel for transportation. Without adding to greenhouse gas emissions, anything.

Bret Kugelmass
As we wrap up here, maybe you can just tell us what's next for you. What other topics are you going to write about? And is this a topic that you're going to continue to revisit in the future?

Dan Michaels
I'll definitely keep an eye on this especially because the geopolitics or technology assigned to the politics of it are fascinating for Europe. I also want to come back to fusion at some point because here in Europe down in the South of France, the world's largest fusion reactor project is coming together. It's called ITER.

Bret Kugelmass
Yeah Bernard Bigot runs that I can make an introduction if you haven't met him already.

Dan Michaels
I did have the pleasure of interviewing him for my article last year. Really fascinating guy.

Bret Kugelmass
Yeah he's awesome. He's like a French all star, they pulled him in when that project was in trouble. And they're like, this is our number one guy in the country.

Dan Michaels
Yeah, he's done an amazing job. And he's got quite a task ahead of him. Because they were explaining it to me that they, in a classic sort of international project, they source every country that's involved, like 35 countries contributing something. And they're all sending these parts. But there's no assembly manual. This is not like you open up the box from IKEA. And they're gonna have to figure out how to put this thing together kind of like, as these parts arrived from Korea, or Russia or wherever. But they say they're going to get it built in, I don't know, five years or so and hope to be smashing atoms together in 10 years and we'll see. But that's one that's sort of in my greater backyard. That is going to be really interesting.

Bret Kugelmass
Awesome. Well, Dan, thank you so much. If there are any other energy topics you ever want to come on the show and talk about we'd be happy to have you. So thanks again and look forward to talking more.

Dan Michaels
It's been a pleasure talking to you. Thanks.

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