Category Archives: Markets

Worse than the Dirty Bomb? Mobile Nuclear Military Reactors

In January 2019, the Defense Department issued a call for information in support of the aptly titled Project Dilithium. It seeks to develop a tiny, readily transportable, yet virtually indestructible nuclear power reactor for use at forward operating bases, the military facilities that provide logistical and troop support to the front-lines of conflict zones.

To be sure, the type of reactor it is seeking could be a great military asset: all the benefits of nuclear energy with none of the risks. The costly and dangerous process of trucking diesel fuel to bases, sometimes through hostile territory, may eventually be a thing of the past. Unfortunately, the need to store and ship irradiated nuclear fuel in a war zone will introduce different problems. And the odds that a meltdown-proof reactor could be successfully developed any time soon are vanishingly small.

The Defense Department…is seeking a nuclear reactor capable of producing 1 to 10 megawatts of electricity. …The reactor, at a minimum, should be less than 40 tons total weight; small enough to be transported by truck, ship, and aircraft; able to run for at least three years without refueling; and capable of semi-autonomous operation… The reactor should have an “inherently safe design” that ensures “a meltdown is physically impossible in various complete failure scenarios;” cause “no net increase in risk to public safety … by contamination with breach of primary core;” and have “minimized consequences to nearby personnel in case of adversary attack.

 An Octrober 2018 report commissioned by the army’s Deputy Chief of Staff admits, quite reasonably, that exposed mobile nuclear plants would “not be expected to survive a direct kinetic attack.” If commanders need to expend significant resources to protect the reactors or their support systems from military strikes, such reactors could become burdens rather than assets.  Can one really invent a reactor robust enough to suffer such a strike without causing unacceptable consequences? …If a severe accident or sabotage attack were to induce more extreme conditions than the reactor was designed to withstand, all bets are off. How long would passive airflow keep nuclear fuel safely cool if, say, an adversary threw an insulating blanket over a small reactor? Or if the reactor were buried under a pile of debris?

Moreover, it is hard to imagine that a direct explosive breach of the reactor core would not result in dispersal of some radioactive contamination. An operating nuclear reactor is essentially a can filled with concentrated radioactive material, including some highly volatile radionuclides, under conditions of high pressure and/or temperature. Even a reactor as small as 1 megawatt-electric would contain a large quantity of highly radioactive, long-lived isotopes such as cesium-137—a potential dirty bomb far bigger than the medical radiation sources that have caused much concern among security experts. 

At best a release of radioactivity would be a costly disruption, and at worst it would cause immediate harm to personnel, render the base unusable for years, and alienate the host country. For any reactor and fuel design, extensive experimental and analytical work would be needed to understand how much radioactivity could actually escape after an attack and how far it would disperse. This is also true for spent fuel being stored or transported.

The 2018 report describes several existing reactor concepts that it thinks might meet its needs. One is the 2 megawatt-electric “Megapower” reactor being designed by Los Alamos National Laboratory. But a 2017 INL study of the design iden­­tified several major safety concerns, including vulnerabilities to seismic and flooding events. The study also found that the reactor lacked sufficient barriers to prevent fission product release in an accident. INL quickly developed two variants of the original Los Alamos design, but a subsequent review found that those shared many of the safety flaws of the original and introduced some new ones.

Building Mobile Nuclear Reactor LANL

The other designs are high-temperature gas-cooled reactors that use TRISO (“tristructural isotropic”) fuel, which was originally developed decades ago for use in reactors such as the now-decommissioned Fort St. Vrain plant in Colorado. TRISO fuel consists of small particles of uranium coated with layers of different materials designed to retain most fission products at temperatures up to 1,600 degrees Celsius.

TRISO fuel enthusiasts have long claimed that reactors utilizing it do not need containments because each particle essentially has its own. This would seem to make TRISO an ideal fuel for small, mobile reactors, which can’t be equipped with the large, leak-tight containment structures typical of commercial power reactors. The army report buys into the notion that these “encapsulated” nuclear fuels can “avoid the release of radioactive volatile elements” and prevent contamination of the surrounding area, either during normal operations or accidents.

TRISO fuel contained in pebble

TRISO fuel’s actual performance has been inconsistent, however, and much is still not known. The Energy Department has been carrying out a program for more than a decade to try to improve TRISO fuel, but final results are not expected for years. In addition, if the fuel temperature rises above 1,600 degrees Celsius, fission product release can rapidly increase, making it vulnerable to incendiary weapons that burn hotter, such as thermite. The Defense Department may have already realized that TRISO fuel is not as miraculous as it first thought.

The RFI also specifies that the reactor should be capable of being transported within seven days after shutdown, presumably with the irradiated nuclear fuel still inside. While this requirement is understandable—if forces need to retreat in a hurry, they would not want to leave the reactor behind—it is unrealistic to expect this could be met while ensuring safety. Typically, spent nuclear fuel is stored for many months to years after discharge from a reactor before regulators allow it to be shipped, to allow for both thermal cooling and decay of short-lived, intensely radioactive fission products. Moving a reactor and its irradiated fuel so soon after shutdown could be a risky business.

Finally, the proliferation risks of these reactors and their fuel is a concern. The original RFI stipulated that the reactor fuel had to be high-assay low-enriched uranium (HALEU), which is uranium enriched to levels above the 5 percent uranium-235 concentration of conventional power reactors, but still below the 20 percent that marks the lower limit for highly enriched uranium (HEU), which is usable in nuclear weapons….If the Defense Department goes forward with Project Dilithium, other nations, including US adversaries, may be prompted to start producing HALEU and building their own military power reactors.

Excerptsf rom Edwin Lyman The Pentagon wants to boldly go where no nuclear reactor has gone before. It won’t work, Feb. 22, 2019

Radical New Potatoes

Potatoes are already a staple for 1.3 billion people… but unlike other major crops, however, the potato has not had a breeding breakthrough of the kind that helped dramatically boost yields during the Green Revolution of the 1950s and 1960s. The reason is that creating a new potato variety is slow and difficult, even by the patient standards of plant breeders…Readying a new potato variety for farm fields can take a decade or more.  Many countries continue to plant popular potato varieties that have remained essentially unchanged for decades. But new approaches, including genetic engineering, promise to add more options. Potato breeders are particularly excited about a radical new way of creating better varieties. This system, called hybrid diploid breeding, could cut the time required by more than half, make it easier to combine traits in one variety, and allow farmers to plant seeds instead of bulky chunks of tuber

Solynta Hybrid Potato Seeds

To breed a better potato, it helps to have plenty of genetic raw material on hand. But the world’s gene banks aren’t fully stocked with the richest source of valuable genes: the 107 potato species that grow in the wild. Habitat loss threatens many populations of those plants. In a bid to preserve that wild diversity before it vanishes, collectors have made their biggest push ever, part of a $50 million program coordinated by the Crop Trust, an intergovernmental organization based in Bonn, Germany.

The Crop Trust has provided grants and training to collectors around the world. The effort on wild potatoes, which wraps up this month, has yielded a collection representing 39 species from six nations: Peru, Brazil, Ecuador, Guatemala, Costa Rica, and Chile. Zorrilla’s team alone found 31 species in Peru, including one for which no seeds had ever been collected. They plan to continue to search for four other species still missing from gene banks. “We will not stop,” she says. The plants are being stored in each nation’s gene bank, CIP, and the Millennium Seed Bank at the Royal Botanic Gardens, Kew, in the United Kingdom. The stored seeds will be available to potato breeders worldwide.

THE HARDEST PART comes next: getting desirable genes from wild species into cultivated potatoes….Other researchers are skirting the limitations of traditional breeding by using genetic engineering. CIP’s Marc Ghislain and colleagues, for example, have directly added genes to already successful potato varieties without altering the plants in any other way—an approach not possible with traditional breeding. They took three genes for resistance to late blight from wild relatives and added them to varieties of potato popular in East Africa.

Potato Blight , a disease affecting potatoes

The engineered varieties have proved successful in 3 years of field tests in Uganda and are undergoing final studies for regulators. Transgenic potatoes that resist late blight have already been commercialized in the United States and Canada….

Pim Lindhout has been plotting a revolution that would do away with much of that tedium and complexity. As head of R&D for Solynta, a startup company founded in 2006, he and his colleagues have been developing a new way to breed potatoes….Breeders reduce the complexity either by using species with only two sets of chromosomes (known as diploids) or by manipulating domesticated potatoes to cut the number of chromosomes in half. With persistence, diploid potatoes can be inbred. In 2011, Lindhout published the first report of inbred diploid lines that are vigorous and productive. More recently, Jansky and colleagues also created inbred diploid lines.

Such diploid inbred plants are at the heart of Solynta’s strategy to revolutionize potato breeding. Other firms, including large seed companies, are also working to develop hybrid potatoes. HZPC in Joure, the Netherlands, has begun field trials in Tanzania and in several countries in Asia.

Excerpt from Erik Stokstad, The new potato, Science, Feb. 8, 2019

Can Gucci Save the Steppes of Mongolia?

 Essential to the identity and economy of Mongolia—more than half of the country’s 3 million people live there—the grasslands are under increasing threat from overgrazing and climate change. Multiple studies over the past decade have shown that the once lush Mongolian steppe, an expanse twice the size of Texas that is one of the world’s largest remaining grasslands, is slowly turning into a desert. An estimated 70% of all the grazing lands in the country are considered degraded to some degree…. 

The collective here of a little more than 100 families is at the center of an unusual effort, run by the Wildlife Conservation Society (WCS), to turn space-based maps of the grasslands into a tool for making grazing more sustainable. Supported by the world’s largest mining company and a luxury apparel giant, the pilot effort uses data gathered by NASA and Stanford University in Palo Alto, California, to help herders find places where the vegetation is healthy enough to sustain their voracious herds.

 Meanwhile, development, especially mining, has exponentially increased water usage. Twelve percent of rivers and 21% of lakes have dried up entirely. An increasing number of people, vehicles, and heavy equipment put additional stress on the land.  But one factor stands out: overgrazing, which, according to a 2013 study by researchers at Oregon State University in Corvallis, has caused 80% of the recent decline in vegetation on the grasslands.

Mongolia is now the world’s second-largest cashmere producer, after China. Goats, which account for more than half of all grazing animals on the grasslands, can be more lucrative than other livestock, but they’re also much more destructive than the sheep they’ve replaced because they eat roots and the flowers that seed new grasses=s.

WCS’s Sustainable Cashmere project may offer part of the solution. The project, whose budget the organizers won’t disclose, is funded by mining giant Rio Tinto, which runs a massive copper mine not far away, and Kering, the French luxury apparel giant that owns Gucci, Balenciaga, and other brands that need cashmere. Both aim to help offset their impact on the Mongolian environment, a requirement of Rio’s mining agreement and part of Kering’s corporate social responsibility program.

Excerpts Kathleen McLaughlin, Saving the steppes, Science, Feb. 1, 2019

Premature De-industrialization in Africa

“Name any country in Africa, and I could have found a world-class firm there a decade ago,” says John Page of the Brookings Institution, a think tank, the co-author of a forthcoming book on African manufacturing. “The problem is, two years later, I’d go back and still find just the one firm. In Cambodia or Vietnam, I would go back and find 50 new ones.”

To be sure, many countries deindustrialise as they grow richer (growth in service-based parts of the economy, such as entertainment, helps shrink manufacturing’s slice of the total). But many African countries are deindustrialising while they are still poor, raising the worrying prospectthat they will miss out on the chance to grow rich by shifting workers from farms to higher-paying factory jobs.

Thi is not just happening in Africa—other developing countries are also seeing the growth of factories slowing, partly because technology is reducing the demand for low-skilled workers. “Manufacturing has become less labour intensive across the board,” says Margaret McMillan of Tufts University. That means that it is hard, and getting harder, for African firms to create jobs in the same numbers that Asian ones did from the 1970s onwards.

Yet deindustrialisation appears to be hitting African countries particularly hard. This is partly because weak infrastructure drives up the costs of making things. The African Development Bank found in 2010 that electricity, a large cost for most manufacturers, costs three times more on average in Africa than it does even in South Asia. Poor roads and congested ports also drive up the cost of moving raw materials about and shipping out finished goods.

Africa’s second disadvantage is, perversely, its bounty of natural riches. Booming commodity prices over the past decade brought with them the “Dutch disease”: economies benefiting from increased exports of oil and the like tend to see their exchange rates driven up, which then makes it cheaper to import goods such as cars and fridges, and harder to produce and export locally manufactured goods.

Excerpt from Industrialisation in Africa: More a marathon than a sprint, Economist, Nov. 7, 2015, at 41

How to Kill One Million Fish: Murray-Darling

But it took a viral video posted on 8 January 2019 to drive home the ecological catastrophe that was unfolding in the Murray-Darling river system in Australia. In the footage, Rob McBride and Dick Arnold, identified as local residents, stand knee-deep among floating fish carcasses in the Darling River, near the town of Menindee. They scoff at authorities’ claims that the fish die-off is a result of the drought. Holding up an enormous, dead Murray cod, a freshwater predator he says is 100 years old, McBride says: “This has nothing to do with drought, this is a manmade disaster.” Arnold, sputtering with rage, adds: “You have to be bloody disgusted with yourselves, you politicians and cotton growers.”

Scientists say McBride probably overestimated the age of the fish. But they agree that the massive die-off was not the result of drought. “It’s about taking too much water upstream [to irrigate farms] so there is not enough for downstream users and the fish,” says Quentin Grafton, an economist specializing in water issues at Australian National University (ANU) in Canberra. The Australia Institute, a Canberra-based think tank, blamed “policy failure and mismanagement” in a 19 January 2019 report, but called drought a catalyst.

Excessive water use has left river flows too low to flush nutrients from farm runoff through the system, leading to large algal blooms, researchers say. A cold snap then killed the blooms, and bacteria feeding on the dead algae sucked oxygen out of the water,   This wasn’t supposed to happen. In 2012, the national government adopted the Murray-Darling Basin Plan, touted as a “historic” deal to ensure that enough water remained in the rivers to keep the ecosystem healthy even after farmers and households took their share.

In 2008, the federal government created the Murray-Darling Basin Authority to wrestle with the problem. In 2010, a study commissioned by the authority concluded that farmers and consumers would have to cut their use of river water by at least 3000 but preferably by 7600 gigaliters annually to ensure the health of the ecosystem. Farmers, who saw their livelihoods threatened, tossed the report into bonfires.  The final plan, adopted as national law in 2012, called for returning just 2750 gigaliters to the rivers, in part by buying water rights back from users. “It was a political compromise that has never been scientifically reviewed,” Williams says, adding that “climate change was never considered in the plan, which was a dreadful oversight.”..

Grafton says there are also suspicions of widespread water theft; up to 75% of the water taken by irrigators in the northern part of the system is not metered. Farmers are also now recapturing the runoff from irrigated fields that used to flow back into streams, and are increasing their use of ground water, leaving even less water in the system, says Mike Young, an environmental policy specialist at the University of Adelaide in Australia.

In February 2018, such issues prompted a group of 12 academics, including scientists and policy experts, to issue the Murray-Darling Declaration. It called for independent economic and scientific audits of completed and planned water recovery schemes to determine their effects on stream flows. The group, which included Williams and Grafton, also urged the creation of an independent, expert body to provide advice on basin water management. Young, who wasn’t on the declaration, wants to go further and give that body the power to manage the basin’s water, the way central banks manage a country’s money supply, using stream levels to determine weekly irrigation allocations and to set minimum flow levels for every river.

Excerpts from Dennis Normile, Massive fish die-off sparks outcry in Australia, Science, Jan. 22, 2019.

Natural Gas and Freedom

[A] tanker chartered by Cheniere Energy, an American company, left a Louisiana port this week with the first major exports of U.S. liquefied natural gas, or LNG. This shipment isn’t going to Europe, but others are expected to arrive by spring.  “Like shale gas was a game changer in the U.S., American gas exports could be a game changer for Europe,” said Maros Sefcovic, the European Union’s energy chief.

Many in Europe see U.S. entry into the market as part of a broader effort to challenge Russian domination of energy supplies and prices in this part of the world. Moscow has for years used its giant energy reserves as a strategic tool to influence former satellite countries, including Lithuania, one of the countries on the fringes of Russia that now see a chance to break away.

Some are building the capacity to handle seaborne LNG, including Poland, which opened its first import terminal in 2015. In Bulgaria, which buys about 90% of its gas from Russia, Prime Minister Boyko Borissov said last month that supplies of U.S. gas could arrive via Greek LNG facilities, “God willing.”… Deutsche Bank estimates the U.S. could catch up with Russia as Europe’s biggest gas supplier within a decade, with each nation controlling around a fifth of the market. Russia supplies about a third of Europe’s gas via pipeline….The U.S. will compete with Russia, Norway, U.K., Australia and others in Europe’s gas market. Germany, for example, gets half its gas and Italy a third from Russia.Low prices also mean natural gas could compete with coal and help Europe achieve its commitment to reducing greenhouse gas emissions .In Lithuania, officials have accused Moscow of engaging in a campaign of espionage and cyberwarfare to keep its share of the lucrative energy market….

Bulgarian officials allege Russia bankrolled a wave of street protests in 2012 that forced the government to impose a moratorium on shale gas exploration. In 2014, Anders Fogh Rasmussen, then-head of NATO, told reporters that Russia was covertly funding European environmental organizations to campaign against shale gas to help maintain dependence on Russian gas.

Until 2014, Gazprom owned 37% of Lithuania’s national gas company, Lietuvos Dujos, and dominated its boardroom, said current and former officials.“There was no negotiation about gas prices,” said Jaroslav Neverovic, Lithuania’s energy minister from 2012 to 2014. He said Gazprom would send Lietuvos Dujos a list of gas prices, which the board automatically approved..  In 2015,  [though] Lithuania began receiving Norwegian LNG, reducing Gazprom’s gas monopoly to a market share of less than 80%. In the months before the terminal opened, Gazprom lowered Lithuanian gas prices by 23% and it remained cheaper than Norwegian gas. Still, Lithuania plans to increase its purchase of Norwegian gas this year. The U.S. is next….

Klaipeda’s mayor, Mr. Grubliauskas, said during a recent interview at his office, decorated with photographs of U.S. naval drills in the port: “U.S. LNG is more than just about gas. It’s about freedom.”

Excerpts With U.S. Gas, Europe Seeks Escape From Russia’s Energy Grip, WSJ, Feb. 26, 2016

Shut-out, Cut-off and Suicidal: Aliens v. America

The United States leads the world in punishing corruption, money-laundering and sanctions violations. In the past decade it has increasingly punished foreign firms for misconduct that happens outside America. Scores of banks have paid tens of billions of dollars in fines. In the past 12 months several multinationals, including Glencore and ZTE, have been put through the legal wringer. The diplomatic row over Huawei, a Chinese telecoms-equipment firm, centres on the legitimacy of America’s extraterritorial reach.

America has taken it upon itself to become the business world’s policeman, judge and jury. It can do this because of its privileged role in the world economy. Companies that refuse to yield to its global jurisdiction can find themselves shut out of its giant domestic market, or cut off from using the dollar payments system and by extension from using mainstream banks. For most big companies that would be suicidal.

But as the full extent of extraterritorial legal activity has become clearer, so have three glaring problems.  First, the process is disturbingly improvised and opaque. Cases rarely go to court and, when they are settled instead, executives are hit with gagging orders. Facing little scrutiny, prosecutors have applied ever more expansive interpretations of what counts as the sort of link to America that makes an alleged crime punishable there; indirect contact with foreign banks with branches in America, or using Gmail, now seems to be enough. Imagine if China fined Amazon $5bn and jailed its executives for conducting business in Africa that did not break American law, but did offend Chinese rules and was discussed on WeChat.

Second, the punishments can be disproportionate. In 2014 bnp Paribas, a French bank, was hit with a sanctions-related fine of $8.9bn, enough to threaten its stability. In April ZTE, a Chinese tech firm with 80,000 employees, was banned by the Trump administration from dealing with American firms; it almost went out of business. The ban has since been reversed, underlining the impression that the rules are being applied on the hoof.

Third, America’s legal actions can often become intertwined with its commercial interests. As our investigation this week explains, a protracted bribery probe into Alstom, a French champion, helped push it into the arms of General Electric, an American industrial icon. American banks have picked up business from European rivals left punch-drunk by fines. Sometimes American firms are in the line of fire—Goldman Sachs is being investigated by the doj for its role in the 1mdb scandal in Malaysia. But many foreign executives suspect that American firms get special treatment and are wilier about navigating the rules.

America has much to be proud of as a corruption-fighter. But, for its own good as well as that of others, it needs to find an approach that is more transparent, more proportionate and more respectful of borders. If it does not, its escalating use of extraterritorial legal actions will ultimately backfire. It will discourage foreign firms from tapping American capital markets. It will encourage China and Europe to promote their currencies as rivals to the dollar and to develop global payments systems that bypass Uncle Sam…. Far from expressing geopolitical might, America’s legal overreach would then end up diminishing American power.

Excerpts from Tackling Corruption: Judge Dread, Economist, Jan. 19, 2019