Texas Governor Greg Abbott, Dow Chair and CEO Jim Fitterling, and X-energy CEO J. Clay Sell joined University of Texas at Austin’s Dr. Dale Klein for a for a fireside chat about the future of advanced nuclear technology in Texas on August 16, 2023. The event took place at the Gary L. Thomas Energy Engineering Building.
All right uh good afternoon uh welcome to UT Austin my name is Jay Hartzell and it's my honor to serve as the president of this great University and I'm really excited to have you here today it was almost fell down that would have been a bad start um it's always a great day on the 40 acres but when the governor shows up uh it it brightens our spirits and it's also a sign it's a big event so thanks governor for being here today uh welcome back to campus we've had a good week together had a big announcement on Monday and now to have you back here today so we appreciate it it's also great we get a couple of leading CEOs one of whom is our graduate uh we'll let you figure that out as we go through the the agenda today but really happy to have you here and then have one of our faculty members uh leave the discussion Professor Dale Klein uh and I don't want to steal the governor's Thunder but as you think about the state of Texas that we're in you know I think there's no doubt it is the energy State uh in his leading energy state in almost any Dimension across the board you want to name from jobs to production to importance to impact on the rest of the world and we think of the flagship of this state is University of Texas at Austin as the energy University and we've got some great parts around campus to I think back up that claim we as we've launched a strategic plan for the University and talk about where we went ahead as a university energy is one of three areas we called out along with health care what we talked about on Monday but also technology and so you think about the importance of providing Clean safe reliable energy to the rest of society it enables all of what we do and it's incredibly important as a university we're blessed with some great assets like the top ranked petroleum engineering department depending on the poll you look at the number one or two program in geology in the country one of the top nuclear and radiation engineering programs in the country which you'll get to talk about those topics today and but we have a real goal to make sure we continue to do all we can as a university in this space I think people often want to pigeonhole our energy conversations on campus as is it going to be this or that and we've come out and talked about more as an and not an or if you think about what Society needs it needs all sources that we can find that can be that clean reliable safe source of power so part of our effort then as a campus was to appeal to the legislature and this year we were very pleased thank you Senator uh to get an 18 and a half million dollars from the legislature to do work around a molten salt reactor and our campus will generate a digital version of that reactor to help we hope speed Innovation and Discovery in the nuclear space we also have our own nuclear reactor the old version I think used to be just across the street here we now have the country's newest research reactor at a university which is out of our pickle campus and is part of what we use to hopefully bring great faculty and students together to work on these important topics so with that I'm going to turn it over to Professor Dale Klein Professor Klein joined the university after graduating the University of Missouri with his PhD he rose through the ranks here became a full professor and I think the recurring theme of Professor Klein's career as we loaned him out and and so we first loaned him out to the federal government where he was an assistant Secretary of Defense working on nuclear biological and chemical defense then President Bush asked him to serve as the chairman of the U.S regular nuclear Regulatory Commission and he took that position I think around 2005. and then came back uh to the to the university and then was loaned out to the University's system uh where he became the assistant or associate sorry Vice Chancellor for research for the entire University of Texas system served there for about 10 years and then just joined back on campus last year so Professor Klein we're thrilled you're here today thrilled you're back on the 40 acres with that I'll turn over to you thank you well thank you very much president Hartzell and thank you for hosting this event uh it's nice that we're in this wonderful Auditorium it's much different than the auditorium that I had when I was an undergraduate in its appropriate since we're talking about energy that we're in the Hildebrand Auditorium although we're going to talk about a different kind of energy instead of oil and gas today but but oil and gas has to be a part of our Energy Mix just so you know what the format of the meeting is today I will introduce our three members of the program and then they will give a short opening remark and then I get the fun part of asking them questions and so I get to be a student again and ask questions so uh and then we will finish hope around three o'clock so we'll stay on target since I know the governor has another job to do and so he'll uh I always has challenges with time scheduled so let me first introduce a person who needs no introduction and that's Governor Abbott so Governor Abbott was named the outstanding governor for the nation in 2020. and he has always been striving to work hard for the values that Texas holds dear and he also has worked hard so that the people of Texas have the best place to live the work and to be employed he has several major initiatives underway to make Texas better he wants to create more jobs he wants to basically have economic opportunities he wants to educate the next generation of leaders he wants to have parents regain their control of Education he wants to enhance and maintain our liberal value or our values for a strong society and he wants to secure our border so those are just a few of the tasks that he has on his plate among many others he has a wealth of experience in terms of being a public servant in 2014 he was first elected governor in 2022 he was re-elected for the third time prior to that he served as the 50th attorney general for the State of Texas and is a long-serving attorney general for the State of Texas he also served as the Supreme Court Justice he also served as a state district judge from Harris County and the most important thing is that he's a Texan so he was born in Texas and any Wichita Falls that he grew up in Duncanville he is a graduate of UT Austin and then he obtained his law degree from Vanderbilt University and shortly after his uh work after he graduated from Vanderbilt he suffered an accident when a tree fell on him while he was jogging and unfortunately limited his Mobility but he has always said that your life is not determined by your challenges it's determined by how you react to him and I think he has demonstrated that Governor Abbott and his wife Cecilia and his wife is a former teacher and a former principal and she's also the first Hispanic first lady and were married in 1981 their daughter Audrey is in the financial sector so I think the tagline is promises made promises are delivered please welcome Governor Abbott [Applause] thank you very much and thank you all uh very importantly thank you all for being here and I want to thank these other panelists for being here uh I'm kind of an add-on and let me explain why I am involved as well as interested in what we're talking about today for one Texas is the energy capital of the world but more important than that is what are we doing with that energy and what does it mean for our future in the state of Texas very important too our state is how we use that energy to generate power for our power grid for a state that is growing massively Texas when we are at the height of our production during a day we generate more power than California and New York combined and when you look at the fact that Texas is the fastest growing state with regard to population and businesses you know that our demand for power is only going to increase I see some members of the puc who are with us today and one thing they know and that is just this summer we've already set something like seven or eight all-time records for the amount of power that we have generated to meet the demand for this state historically Texas has LED and we still do lead the nation in oil and gas production Texas if it were his own country would rank I think fourth in the world for oil production so our Bona fides for energy production with regard to oil and gas are well known less well-known is where we are in the other categories Texas ranks number one in the united in the United States for Renewables well we rank number one for wind currently number two for solar probably by the end of next year will be number one in the United States for solar we rank maybe fifth in the world for a win production one thing that we have realized and I see Senator Cole course here and she is a state senator is in well is that the house members and myself one thing we focused on this past session is ensuring that we would be able to produce more energy that would lead to power generation in a category that's called dispatchable Power what that means is to ensure that when we turn that switch on that power is going to be there to State the obvious at night time when you want to tap into solar power you're not going to get any solar power at times of the day you may not get very much wind power if you were to look at our power grid and I'll tell you one thing that a governor does that most people would not know there is an app by ercot that I have on my phone one thing I do seven days a week several times a day is to look at that app and you sounds like you look in your app and I'm going to call out something so pull it up tell me how many megawatts of wind power we are generating right now do you see it and while he's coming up with that number which is easily findable it looks like Staples is tapping into it also so here's the deal we have the capability of generating something like 35 or 40 000 megawatts of power at some times during the hottest days like today as we speak later on today at the peak power demand like at about four o'clock this afternoon we're going to be generating about two or three thousand megawatts of wind like less than 10 percent of what our capability is and there will be days when at the height of the day we will be generating even less than that whether it be the heat of winter or I mean here the summer or the cold of winter as a result we need more dispatchable power generation one form of that is natural gas and that's why hilderbrand would be so happy because we're going to be needing more natural gas but important to our conversation today one thing that we are looking at with a Keen Eye is the ability to expand maybe dramatically expand our capabilities with regard to nuclear generated power if you were to again look at the the base load power generation that we have one constant among our base load power is nuclear and we're going to be studying and evaluating uh the reliability the safety of nuclear power and if it passes all the tests we will be looking to dramatically expand nuclear power in the state of Texas for the primary purpose of providing reliable dispatchable power to our grid but thank you very much our next speaker will be Jim fitterling Jim is the CEO and chairman of Dao he's very well known in the chemical industry as well as a manufacturing industry and others and beyond for his leadership skills so Jim has spent a few years at Dow 39 to be exact and so Jim was very involved in both strategy and transformation he was very much involved in 2015 when Dao and Dupont merged and then later split again so he became CEO of Dao in 2019. he is also very involved in sustainability and leading a lot of innovative and sustainability programs he's been a very big leader in plastic recycling on the Dows recently announced initiative on plastic sustain sustainability so he had also been very involved in leadership within the industry and within Dao he's a graduate of the University of Missouri Columbia he grew up in Missouri and he joined now a month after he graduated under the small world category Jim and I grow both grew up in Missouri we both grew up on farms we both attended the University of Missouri Columbia we both had a degree in mechanical engineering and we even had the same undergraduate advisor now Rover has it I may be a little older than Tim but so would you please welcome Jim fitterling thanks thank you Dale I appreciate that Governor thank you for being here today and Clay um I'm really happy to be working with you on this project um just a little background from Dao and like why is Dow involved in in this I think one of the biggest challenges that industry faces right now is the pressure from the public to decarbonize uh its footprint petrochemical industry is no different we're one of uh you could say seven or eight energy intensive industries that make all of the things that we're going to need more of in the future think about steel aluminum glass get into the mining industry cement ourselves in petrochemicals about 98 of everything you use today or come into contact with today will be touched in some way by our industry and yet there's a lot of voices out there that say well we don't we don't need that industry in the future actually the opposite is true if you want more electric vehicles if you want more wind power if you want more solar power if you want more nuclear power you're going to need more of us and as the world develops and the middle class develops and population continues to grow we need more so our challenge has been how do we decarbonize our footprint and grow the company because we need to do both those things um as we look at it we generate about eight gigawatts of power ourselves about half of our power and steam um you know power and steam is used is natural gas and then the other half of the natural gas we use are furnaces to fire ethylene crackers to make ethylene and propylene two of the biggest building blocks in the chemical industry on the power and steam side what the governor talked about is rateable reliable dispatchable power is job number one we have billions of dollars of heavy equipment hanging on the end of that power supply and we can't stand even a millisecond of an interruption in that power so while most of the discussion around decarbonization has been around the utilities industry and what you use at home the reality is the challenge in the industrial sector is just as big if not bigger we use a lot of Renewables today we use we have contracts for almost a gigawatt of Renewable Power as a company however we Face the same issues the governor talked about we can't access that all day every day and so we have to have our own base load reliable power because we run 24 7 operations so as we look at the future we developed a plan during covid we just took advantage of that time to look at all of our assets and say how do we buy 2050 get to the point where our scope one or two Emissions on carbon are zero not how do we move away from oil and gas but how do we get our carbon emissions to zero because oil and gas and hydrogen will play a part of that future and nuclear will pay a play a part of that future most of the energy assets we have are designed to work about 30 to 40 years and then they reach end of life and so the normal thing that industry would do at the end of life is replace them in kind but with this challenge in front of us we've got to look at replacing them with the power needs of the future and small modular reactors for nuclear I believe is going to be the best way for us to have low carbon power now look the rest of the world is going to need our oil and gas because if we don't Supply LNG to the rest of the world they're going to build their Rural Electric grids say India China on the basis of coal-fired power and if they do that we won't do anything to solve climate issues so it's important for us to realize the balance in the two one of the reasons we decided to work with X energy on this project and to do it here in the state of Texas is because it's a good fit for us our site at Seadrift Texas has a good mix of power and steam needs we will use about 320 megawatts of electricity and so that will be 480 megawatt x energy units those are high temperature gas reactors that are helium cooled one of the beauties of that is that that technology allows us to create about three times that amount of steam equivalent and when I say steam I mean greater than a thousand PSI steam which is what we need to run our operations so it's very unique to that technology four of those units to generate 320 megawatts of power will take up the space of about 30 Acres um a one gigawatt nuclear plant but a big utility scale would have about a 10 mile radius surrounding it from a safety perspective very different safety profile very different operating profile fits that site very well and allows us to take the sea drift site with a couple of other changes that we need to make on site take the entire site to zero scope one and two emissions that's dramatic and I'll talk a little bit later about a couple of other things that we're doing but I believe that nuclear energy because of the energy density and because of the low carbon nature of it is the way we have to go for energy intensive Industries and I also think because of the increment of scale that you can bring on the utility sector is going to want to look at it seriously for incremental expansions of that rateable dispatchable power that they need to keep the lights on for homeowners especially when we're in heat waves like we're in right now thank you Jim our next speaker is claycel Clay is currently the CEO of xenergy he became CEO in 2019 2019 must been a good year for CEOs it saves prior to joining X energy he was president of hunt energy Horizons and then prior to that he served over 14 years as a public servant in Washington DC or I guess we could say the swamp from uh how it appears in the summertime what what's interesting about serving as a public servant in Washington DC is that the time is really measured in dog years so while clay spent 14 years in our time it was really 98 years as a public servant in Washington D.C clay had one of the most remarkable careers that I've seen of a public servant he joined the area of Washington DC as Chief of Staff to Mac Thornberry and when he finished several years with Mac he moved over to the energy side of the Senate where he worked closely with Senator Pete dominici on Energy natural resources then he took a slight diversion and became a Special Assistant to President George W bush did that for a few years and then he became deputy secretary of energy and then after that he came back to the Country of Texas where he now has a stable life so Clay is originally from Amarillo he received his law degree from the University of Texas at Austin I think the school we've heard about and he also received an undergraduate from Texas Tech University please welcome play cell [Applause] thank you Dale that was Kinder honestly than I expected thank you Governor it's a pleasure to be on stage with you it's a pleasure to be with you it's my honor and Jim thank you so much for your partnership and it's always a pleasure to appear with you uh I I feel so fortunate to be here to get to address you I want to tell you about X energy think of us we are a developer of advanced Nuclear Power Systems and we are a manufacturer of fuel one of the special things about our technology is this special ceramic and graphite in case fuel the department of energy has called this the most robust fuel in the world and it is the beginning of this extraordinary safety case that is our x-energy technology this technology is a game changer because of its safety we will build a plant that is physically impossible Governor to melt down when you start with a plant that is physically impossible to melt down it completely changes the nature of your engagement in the community judge Meyer it's good to see you here as well as how we engage with the regulator and and uh and the functionality it gives us among the things that this safety case gives us is the ability to operate on a very small footprint and so as Jim indicated we don't have to deal with 10 mile radius emergency planning zones the emergency planning zone for this plant will be about 400 meters if I can get commissioner right to agree with this on that and uh and that means even within the property boundary of our plant will be the emergency planning zone but not outside that property boundary the small footprint also allows us to locate close to customers like the Seadrift side at Dow to provide steam as Jim indicated in his earlier comments we produce very high quality high temperature steam out of the reactor it's Unique to our high temperature gas reactor design and we will be able to deliver that to the site at sea drift where it will be you know sorted into five or six different specs and used implant operations each of the four reactors we build there there will also produce electricity for both to meet the Power needs of the plant and the difference will be available to inject into the Texas grid now two days ago I was sitting in my office in my hometown of Dallas my current hometown and I was reading the front page of the Dallas Morning News and it quoted the head of urcot who said Texas has become too dependent upon Renewables I love Texas's leadership in energy and oil and gas in wind and in solar but the grid needs reliable dispatchable spinning reserves in order to stabilize and improve the grid and make and ensure no matter what happens in what temperature environment at any hour of the day when you flip the switch the power is going to be there it's my view that based on this incredible technology that we will first bring to the marketplace with Dao in in Texas that we this technology will change the way the world thinks about clean firm dispatchable power that will provide the reliability that the grid needs and the sustainability that customers are demanding from their energy providers I'll just close with one final comment Dale The Unofficial or official slogan of the University of Texas is what start Starts Here changes the world Texas has always been the global leader on energy Houston is the energy capital of the world it is with tremendous Pride that we bring this Innovative technology to a short drive from the energy capital of the world to the state of Texas I do believe the technology that we will demonstrate here will be the first of many many hundreds of plants that are built not just in Texas but around the United States around the world what is happening here in Texas really will change the world thank you well thank you clay [Applause] well let me start with the first question uh from uh for Jim and for clay and we'll let Jim answer first but tell us a little bit how this project got started you know clearly there are several small reactors that are available you had some choices and uh I know Clay is very energetic and so he probably made a good sales piece but just if you can start Jimmy and Clay if you could talk how did this project really get developed really it started more than a decade ago when this was a research project in the department of energy and that was in the Chlor Alkali business for the longest time that was the the chemistry that started the company and Chlor Alkali is a very energy intensive process about 70 percent of the cost of making chlorine and caustic is electricity and so we were looking at longer term how to have low-cost reliable power and working with Doe you know I would say 14 15 years ago not necessarily looking at low carbon emissions but looking at more low cost power and then obviously as the world has changed the pressure on low carbon has increased and so it really fit both bills um I mentioned before you know we also have to take a look longer term at all of the energy uses we've we've been big proponents for many years of an all of the above energy policy so there is a role for oil and gas to play and I mentioned you know half of our energy needs are direct fired furnaces direct fired with natural gas making ethylene and propylene is kind of an interesting process because when you crack ethane to make ethylene you make ethylene you make two byproducts methane and hydrogen and so with the addition of one unit operation really on an auto thermal reformer we can take the byproduct methane and hydrogen off that Cracker convert it to hydrogen pure hydrogen and fire those furnaces with hydrogen so at our at our big sites where we crack ethane and Propane and we had a route to decarbonize the production of ethylene but we didn't really have a route to decarbonize power to try to strip CO2 off of a combined cycle gas plants very expensive Capital wise and so as we look at it we said what are the other alternative Technologies we could look at for power and steam generation and it took us right back to this technology with X energy and Clay I'll I'll add to the story you know X interview as a company was founded 14 years ago and uh and so we we've been developing the technology doing trade studies a key moment for us happened in 20 20. whenever we won uh a major award from the Department of energy then under the leadership of secretary Dan briette who's here in the crowd and uh and and they decided to make a substantial investment north of a billion dollars of public dollars into X energy to bring our fuel manufacturing capability and our reactor to the marketplace so that was a huge moment for our company not long after that uh as as Jim and and the group at Dow were internally making their decisions and since they had become familiar with this technology due to our previous research project at the department of energy you know we got together I think it was I think it was a lunch in May of 2021. and uh and Jim laid out his vision for what they needed what they required we got our teams working together about 15 months later they had the they had wire brush just pretty hard and they'd come to the conclusion that we were worth working with and uh and so in August of of uh 21 we are in August of 22 we announced that or or Dow announced that they were going to build a uh an xc100 on the U.S Gulf Coast at which time the competition broke out was it going to go to Louisiana was it going to go to Texas and uh and I spent a little bit of time in the in senator's offices and I kept telling them it's not my decision it's a Dallas decision But ultimately they decided on the sea drift side we announced that they announced that in May of this year we had our first community meeting on May 31st of this year and uh and and we'll we'll make our our license application to the NRC in the first quarter of this this year just after the first of the year and uh and and with with a plan uh to support Dal and its aspirations to have the project online by the end of the decade great thank you well Governor the state of Texas has always been an energy pioneer how do you see this Advanced nuclear playing the role for Texas being a leader in the energy field what can play a pivotal role an essential role for the future of the State of Texas kind of like what I was talking about earlier and that is because of the growth that we have we know for a fact we have to generate more power to generate more power we have to get that energy from somewhere and even though wind and solar are growing rapidly in part because of marketplace sectors in part because of federal base incentives in order for us to have access to the dispatchable power that we need we want to increase what I call Base load capacity so on an ongoing basis there's going to be this base load that would be constantly available for us to keep the lights on and I think the best way that we can expand what we're doing in the state of Texas as we increase the power that's going to be available is to look into this issue about nuclear power let me just give you some numbers so we currently have the capability of generating somewhere between 90 000 and 100 000 megawatts of power when you look at the growth that we have whether it be businesses or homes whatever the case may be we will need to increase that to a hundred and ten thousand to a hundred and twenty thousand megawatts of power generation where is that going to come from and where's it going to come from reliably and as we search for answers to that again one thing that we're looking at it could be nuclear but to narrow down so we already have two nuclear primarily two nuclear facilities in the state of Texas there's the South Texas nuclear project and then there's Comanche Peak which is a facility kind of a little bit south of Fort Worth those are the two large-scale nuclear facilities that we have what they're largely talking about here is one thing that we're taking a look at and that's a small modular nuclear reactors which would not be as broad scale as what we already have in place but would be more Nimble about where it could be located it may be I'm guessing and hoping quicker to make right and and you can answer that yes all right good uh because we we have a Need for Speed and a need for power and a need for the power to be available in in different areas and so what they're talking about sounds like exactly what Texas is looking for to add to our energy portfolio so that we are going to be able to increase our base load power to provide to all of you all and all of our fellow Texans to make sure that you were able to keep your lights and your power on well thank you governor well clay you talked a little bit about the the safety of your plant could you just talk a little bit more about the safety and how your plant works and then what's a business case yeah again it's it starts with the fuel and I told you it's made a you know this has little kernels of uranium in it not this one but but surrogate material in this one and they're wrapped in in encoded in in Ceramics and graphite and that does two really important things the ceramic and graphite material cannot melt at any temperature it would see during the reactor life number two that ceramic and graphite coating retains all of the waste products that are produced during burn up it keeps them retained in this fuel form which eventually becomes the waste form and it keeps them out of the biosphere in which you and I live and that is extraordinary and then part of the physics of the core it has a self-regulating function to it if the core were to heat up if it lost coolant it would automatically shut down the nuclear chain reaction and cool the reactor off so it's really amazing technology it's been proven around the world this technology has a long operational and Regulatory pedigree one of the most one of the reasons we were viewed as the Next Generation technology closest to the marketplace was because the tremendous amount of work the department of energy did with Dao and other partners 15 years ago this fuel form is qualified the NRC has spent a lot of time addressing the issues that they will have to resolve in the case of our permit and it really puts us on track to be the first SMR deployed anywhere in the world outside of China or Russia and if Jim would prefer to buy a U.S technology rather than a Chinese or Russian technology we're the place to go and we are very pleased that they chose us well thanks Clay what what clay talked about as the reactor gets hotter it is more difficult to make those chain reactions to occur and for those recovering Regulators like me that's called a negative reactivity and so it does a little bit self-correcting now the counterpart of that is Chernobyl Chernobyl had a positive reactivity on temperature so as it got hotter there were more reactions which made it hotter which made more reactions and so that particular reactor had a very unstable form of operation that X energy reactor does not so that's good for you I appreciate that important distinction okay the next question is for you Jim and it's a two-part question one is you know what really drove you to go this route you talked a little bit about the CO2 and being Net Zero by 2050 which is going to be challenging but could you talk about what drove you to that decision and also the timeline that you're looking at you know I think two things um we use about half of the hydrocarbons we use are as feedstock so they don't get combusted they actually get converted into Plastics Foams other materials that you use every day and the other half we use in combustion and so as we look at energy balance long term we look at energy and feedstocks both you know we have to look at what's the best use of those materials I think the world would like to see us combust less of the fossil fuels but we're going to need more fossil fuels for feedstocks for the products that we make so I think nuclear helps us take a competing demand out of there and helps us look at Power and steam and say we can satisfy that and decarbonize that in the most efficient way the other thing I mentioned before is energy density um if you think about where we're going you know natural gas is a direct fuel and and natural gas direct fired combustion for like a furnace like we would use in an ethylene cracker is a pretty dense form of energy hydrogen actually goes the opposite direction from an energy density standpoint it's about the third the energy density but in some applications like if you're in a petrochemical complex or a hub with refineries around you've got pretty good hydrogen generation hydrogen is going to make sense in that situation it doesn't make sense maybe where you're in a standalone facility like you get out to sea drift you're standalone hydrogen probably doesn't make sense so nuclear plays a bigger role and so our view is that nuclear definitely because of the energy density has a huge role to play in decarbonizing power and steam it's spinning reserves as clay mentioned it's available reliable dispatchable think about this for a minute the governor talked about wind and solar one of the things that's happened in both the United States and Europe is we're the only we're the only regions that have reduced our CO2 footprint and I would argue that the United States is the only one that's reduced its CO2 footprint and increased its GDP output Europe is kind of going the other way right now on GDP China Asia are all increasing CO2 footprint all increasing GDP but it's on the back of coal we take a thousand megawatt coal-fired power plant out of the grid that's 900 megawatts plus of available dispatchable power if you replace it with a thousand megawatts of wind and solar that's maybe 200 240 megawatts of available dispatchable power and to your point at some points of the day net much less than that and so where are we going to get available power one of the reasons Texas has such you know is the energy capital and one of the reasons it's got population growth is business wants to be here business wants to be here because energy is Affordable and because they like living in Texas and so you've got a great problem to have I would say but we're not we're not alone there's a lot of parts of the United States right now that have huge population growth they're having the same challenges that you mentioned and you won't incrementalize your way out of it with more wind and solar you've got to address the base load power cost is another big reason now one of the reasons we're working with clay and I think the industrial application needs to come first is nuclear has gotten a bad wrap for two things we have dressed the safety concern already with this technology but it's gotten a bad rap because of cost overruns and cost overruns and time Horizons that are very long like think 20 years to get a one gigawatt reactor up and running we're talking about having this up by the end of this decade so if we can do that and demonstrate that I think that resets the gain for nuclear power and now we can do it one of the reasons energy intensive Industries like ours generate our own power and steam is because we need affordability we're in a globally competitive market and and our costs are number one for us so I could not afford for example to go pay the same rates that somebody would pay through an energy market and make the products that I make and have the ability to make profit and turn that back into growth I need to generate it myself and in order for us to do that we have to de-risk the project and so we've got a great partnership right now with X energy ourselves doe and now the state and the county working on everybody playing a role in how to de-risk this and get it up as quickly as possible the department of energy is making it possible because they will foot the bill for part of the capital for this first demonstration reactor we obviously are going to bring our engineering expertise into it and I mentioned to Dale earlier when Shale gas took off here in Texas we were a first mover in big investment down in Freeport Texas for an expansion of capacity one of the first expansions of capacity that happened in this country for almost two decades and it has been one of the most successful projects that was done during that time period I think Bar None we have the ability to execute big projects and that's the reason clay chose us and we'll we'll divide and conquer obviously on this Clay's team has taken the lead on the nuclear Corps of operations we're going to take the lead on the non-nuclear side of things we're going to work heavily with the doe and the NRC to make sure we get through the permitting process and do all those things right and we've had great support from the state of Texas and from Calhoun County in order to bring this project here I think it's a real recipe for the future of small modular reactors and I think small modular reactors are a huge part of the future of nuclear energy going forward and I hope that some of the things that we demonstrate will also make it possible for even large-scale nuclear to be viewed in a different light than it is today well thanks Jim well Governor uh clay had mentioned earlier about the role the federal government played in providing some of the sport Jim just indicated this really is a a public-private partnership that includes the state what what other kinds of things do you think the state could do to help bring industry and Advanced Technologies to the state well there's several first let's use the word partnership so one thing about Texas that Jim and others have alluded to and that is that Texas has ranked number one for the most New Economic Development projects for 11 years in a row we lead the nation for the most job growth and the reason why I highlight those factors is there's a reason why Texas has proven to be more successful than other states as it concerns Economic Development and one of those factors is that Texas truly partners with our businesses because one thing we realize is an easy fundamental fact when Dao succeeds Texas is going to succeed we had a conversation before this and I was urging him to move as fast as possible and what he's doing because we need him to be able to generate that power because that's either going to be more power on the grid or less power taken from the grid and so we're kind of working Partners in this as we are with regard to other endeavors in the state that said there are several let's say more concrete things that we can do the first is we need to publicly open the door to the public about the interest the state of Texas has in small modular reactors when I first became Governor this was something that I really don't recall people in the Capitol talking about I don't recall the private sector talking to me about it it did not seem to be an issue that was on the table and so the the first thing we need to do is to let everybody whether they be in the industry the public sector the private sector know that this is an issue that Texas has a keen interest in second thing we need to do is something that I did earlier today I issued a executive directive to the Texas Public Utilities Commission to immediately commence a working group to study the feasibility the reliability the safety of smrs as well as what would be the ability to take power generated from smrs and get it plugged into the ercot power grid with the goal for the puc to be working with urcot and others to ensure that we can use these small modular reactors as a way to dramatically expand our power grid capabilities and then the last thing that we can do that we have done in the past time and again and that is to incentivize the generation of Base load power one thing that Texas has done since long before that I was governor Texas has provided different types of incentives for different types of economic development in the state those economic incentives were realigned in this last session to be a little bit more narrow and focused to focus on strategies that will truly benefit the future of the state especially in smart strategies such as improving the power grid we want to incentivize more power generation and the reason why we want to incentivize it is because we need more of that dispatchable power right now not five years from now and the only way to get it going is to kick start it in the way to kick start it is with that executive directive to the puc Public Utilities Commission today and then Texas working very aggressively with again both the public and private sectors to make sure that we are working as swiftly as we can to evaluate the ability of adding SMR generated power to our grid thanks Governor yeah maybe the other thing you could do is sign a directive to encourage clay to move his manufacturing facilities for the small modular reactors to a Texas made in Texas is the Brass Band best brand in America CEO already lives here well the next question is both again for clay and Jim and we'll let clay go uh the First on this one what do you uh think uh the future holds for smr's both in uh the U.S and abroad and what keeps you awake at night what do you think the biggest impediment to success is same thing for Jim in terms of what the biggest impediment for success I I think small modular reactors will change the way the world thinks about base load detachable dispatchable clean firm power that's what I believe and I've believed that for a long time and I knew the moment that we were in today was coming those of us at X energy saw it perhaps before others did and we planned for this day to have our technology ready Governor I wish we could have it to you in in in less than five years but we'll we'll get here as quick as we can but we were ready for this moment uh and and the the again what starts here in Texas is going to go to cross the the Gulf Coast petrochemical sector the project that we're doing for Dao we can we can do for others that need both Steam and electricity so I see a future of tens and tens of projects without even leaving the state I see projects with electric utilities in the U.S in the UK and Canada those are the three markets where we are today governor and uh and and again data centers for example one of the biggest areas of growth data centers need clean firm 24 7 power and their customers again are demanding that it should be clean nuclear is a great solution many how many data centers are under construction in Texas today and so that that's a huge opportunity what keeps me up at night what keeps me up at night is the very issue which Jim identified in his last comment the ability to build these projects on time and on budget that has what is what has held the nuclear industry back in North America we name that problem we acknowledge that problem so that we can go about every day solving that problem and the way we solve it is with a very different kind of machine again when you start with a machine that can't melt down it allows it us to reduce the required number of safety systems on that reactor by 80 to 90 percent so it's a simple simpler more elegant design fewer Parts it is built in a factory the components are delivered to site and construction really becomes a assembly measured in a period of months instead of stick Built construction measured in the period of years or decades so our technology lends itself to solving the project delivery problem but the number one thing on Project number one is the opportunity to work with an organization like Dow Chemical Dow builds Mega projects multiple macro projects every year and uh and and they are motivated for economics quality and reliability uh it's it's it's an extraordinary opportunity to get to work with them and and I think there is no entity in the world that is better qualified to de-risk the delivery of these projects on unit number one then Dao that with our part along with our partnership with the Department of energy to mitigate these first of a Kind risks gives us great confidence that the project here in Texas will be wildly successful and replicated hundreds of and hundreds of times before I leave my position as CEO at xenergy yeah I am Dale the thing I would add you know so first safety is first and foremost and so we wouldn't be looking at the technology if we didn't think it was absolutely safe and remember our people live in the communities where they operate so they want to make sure that they're usually using safe technology I would say the the thing that we have to work on uh through this project is to make sure that we have really smart regulation out there any time that regulation gets driven too much to the extreme so let's say an ideological extreme that wants to ban you know everything and and says no to solutions that are actually viable Solutions before they ever have a chance to prove them out I think is one of the things we have to guard against that sometimes is what drives up the cost of Regulation you put so many hurdles on a project that you have to jump through that nobody could ever overcome them or nobody could ever afford them we have to find the right balance the science is very strong for this technology and we got to make sure that there's a good meeting of the minds between the science and the politics on how to do this in a way that satisfies everybody's needs so that's what we're trying to do with this project the industrial sector doesn't surprise me with lead first because a lot of the things that have led to cost overruns in the utilities have been the mode of operations and so I think from an industrial perspective one of the benefits of us leading first is we're going to have a pretty sharp pencil on the cost and the timeline to make this happen um now the other side of that is if we don't do this we will be forced into a situation where we'll have to continue to burn a fossil fuel to make that power and steam or you know we'll look at going elsewhere to build these factories and I don't think that's what we want to do so those are the things those are the things that we're trying to balance safety's first and foremost there's no compromises on safety and then it's operability reliability and cost that have to be balanced it probably does help to have a tough customer driving those nuclear companies to do it right and do it on time yeah it's a look it's tough imagine after after situations like you mentioned Chernobyl we've had the experience here with Three Mile Island a whole raft of regulations came out when I started in Dao one of my first jobs I was based in Atlanta and we had 43 nuclear plants in my territory and I call them most of them and they're very very safe operations but the amount of regs that came down on top of them just made it impossible to do anything cost effectively and so it in that case we weren't really balancing what they needed and I think you know people need to take the opportunity to take a step back and say long term if we want low carbon energy then we're going to have to think about the density of that energy and the cost to decarbonize it and I mentioned before if you take a combined cycle gas power plant which has been a very efficient form of energy low cost and you say I want to scrub the CO2 off of that that's a tremendous Capital burden on top of that I mentioned using an auto thermal reformer on the back of an ethylene cracker to take that methane and hydrogen and convert it to Pure hydrogen to fire the furnaces with one of the reasons we can do that is in an auto thermal reform where we concentrate the CO2 up to a level where we can scrub it out more quickly and that's why hydrogen carbon capture has a tremendous role to play that actually makes good use of our natural gas and allows us to continue to produce a form of hydrogen the United States did a fantastic job with the IRA and if I compare and contrast Europe and Europe's incentive programs with the United States you all noticed when the IRA bill passed you know Europe was very concerned and they they were very to some extent critical but then thought we were trying to take their investment away but Europe was very narrow in the definition of hydrogen they said we will only support the development of green hydrogen and certain types of green hydrogen as part of the future they don't support drilling for oil and gas to any great extent they would only support certain kinds of green hydrogen a big support for wind and solar which don't meet this the rate ability and dispatchability that we need and no support for nuclear right I mean several States in in the European Union have said no to nuclear contrast to the United States program which is we need more Alternatives we need more nuclear we need all forms of hydrogen and by the way when you do that Innovation happens and when Innovation happens it draws Capital dollars in from the marketplace and the marketplace is flush with capital to go after these kinds of solutions and they're going to go after the solutions with Partners who are going to help them de-risk the technology and prove it at scale and when we do that United States wins Texas wins because we take advantage of our capitalist Market and we put together the kinds of Partnerships that we can replicate and scale faster than any Nation on Earth that's what's going to make a big difference here thanks Jim well Governor you get the last question obviously Texas has been a leader in a lot of areas you've got an example here of two great companies bringing new technology to Texas what other kinds of things could you and other institutions including the Cockrell school do to help bring more Technologies to the state of Texas you know it really is collaboration and it reminds me of something that can remember if I think you were here with me at the time for the Army Futures Command right yeah so so there are several examples of how this has operated before we collab we the state of Texas collaborated with the University of Texas as well as Texas A M and other universities across this region to move the headquarters of the command headquarters for the Army where they were going to design the way they engage in future warfare future warfare is not going to look like it does in locations that you see now future warfare is going to be taking place in cyberspace in the outer space it's going to be involved in Ai and cyber security and things like that and the Army wanted to find a location that would tie in with the type of Workforce that they could tap into that would Aid them in the development of the next generation of Robotics the next generation of AI the next generation of cyber security and with the collaboration of the State of Texas the university as well as the private sector downtown Austin on top of the University of Texas system headquarters is where the headquarters of the army Futures command was located we do things like that all the time and this is the type of scenario where we could have universities like this and our other outstanding universities in the state of Texas work in collaboration with these two incredible private sector leaders and this is you know one thing Texas stands for Texas is it is the leading Innovation state in the United States because we've got innovators in down what they're doing innovators in ex-energy and and what they're doing and then we put wind at their back whether it be the state or the university whatever the case may be so this is a perfect example of how Texas brings all these folks together and again I want to thank Senator Cole course if I recall Calhoun County is in your District which is what one may be one reason why she's here so she's going to be able to get a c firsthand exactly what's going on and if it goes right you will never have a stronger Advocate on your side uh then then Senator Cole course but I see the time is out uh and I get to close things down so I'm going to do what I really want to do more than anything else in honor of my friendship with Jay hartsell I think the best way I could close it down here being just a few weeks just a few weeks before opening kickoff close it down by saying Hook em Horns
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