David Archibald
Following is a lecture given on 13th March at the Energy Exchange Australia convocation in Perth. It was a 20 minute slot.
This graph shows the last 26 years of the National Electricity Market which is the power grid on the east coast of Australia. The vertical blue bars are generating capacity. The orange line is demand. Demand used to closely track capacity up to 15 years ago. Now capacity is 80% higher than demand. The increased supply should have resulted in lower prices due to oversupply. Prices should have gone down, surely?
Power prices didn’t go down though, they doubled instead. The blue line is Australia’s Consumer Price Index from 1980. The red line is the Power Prices Index. They used to track closely up to 2008 where they parted company. We are now paying twice as much for power as we should be. And this is for stuff that is going straight to landfill. A power price twice as high as it should be is the price of stupidity.
The result of that is that Australia’s economy is shrinking. We have had three years now of declining GDP per capita. We are getting a lower standard of living.
This was entirely predictable, because it was predicted by a bloke called Brian Fisher in 2019. He predicted a GDP contraction of at least 10% for Labor’s then Net Zero target of 45%. We are feeling that contraction now.
Australia’s four remaining aluminium smelters account for 10% of the power demand on the east coast National Electricity Market. Almost all their production is exported. Power is their biggest operating cost. Neville Wran, when Premier of New South Wales, said that ‘aluminium is solidified electricity’.
So how do the aluminium smelters keep going after doubling the price of power? They are kept going by enormous subsidies paid by taxpayers.
With the result that our trading partners view those subsidies as an assault on their economies. Thus the US has applied tariffs on Australian aluminium equivalent to the subsidies. The same has happened to steel made in Wollongong. This hasn’t been explained to the Australian public.
The jerry-rigged power market fantasy of Net Zero has been smacked by reality. Net Zero is a house of cards.
Why are renewables and Net Zero so cursed? One reason might be that renewable energy is an ideology invented by the Nazis in Germany. Renewables was a major plank of Nazi ideology.
What you see on the left is the cover of a book published in Germany in 1933, the year that Hitler came to power.
The title says ‘Technif und Wirtschaft im Dritten Reich’ which translates as ‘Technology and the Economy in the Third Reich’.
On page 47 you read “The renewable energy is flowing and free.” You read exactly the same thing in today’s renewables propaganda. The opposite is true of course. Renewables may cost us everything.
And just like today’s renewables freaks, the Nazis were also big hydrogen enthusiasts. On page 60 you read the Nazi plan to use wind power to make hydrogen.
And why, why are we destroying our economy and the country? Ostensibly it is all about reducing our carbon dioxide output. The graph shows the carbon dioxide output of China, the United States and the EU since 1850.
What you see is China going flat out at putting carbon dioxide into the atmosphere, now outproducing the US and the EU together.
China knows that the carbon dioxide scare is a sham or they couldn’t care less, or both.
To add insult to injury, we export coal to China but don’t burn it ourselves.
In World War Two, former Prime Minister Robert Menzies was known as Pig Iron Bob because he allowed pig iron exports to Japan despite Japan’s invasion of Manchuria. We got some of that pig iron back in the form of bombs dropped on Darwin.
Next time round we will be getting some of the coal we export to China back in the form of the explosive filler of the bombs China will drop on Darwin.
China uses cheap coal power to make solar panels to sell to us. Solar panels last 20 years before going to land fill. They don’t have enough value to be worth recycling and the cadmium loading of up to 10 grams per square metre means that they have to go to an engineered repository.
Windmills are the same.
Has anyone thought this through, really? Solar panels are made in China using cheap power from coal at five cents per kilowatt hour.
Under the most ideal conditions on the planet, in the deserts of Australia, the same panels produce power at a cost of 20 cents per kilowatt hour. Then the panels go to landfill.
If you wanted to make solar panels using power from that first generation of solar panels, what would be the cost of power from that second generation of panels? It would be at least 80 cents per kilowatt hour and so on to infinity. And all the panels end up in landfill.
Solar panels are neither renewable or sustainable. They are simply an artefact of cheap Chinese coal power.
And that coal won’t remain cheap for much longer. This is a diagram from a Chinese paper of a couple of years ago. It shows how much of China’s initial coal reserves have been mined to date, by depth.
Down to 600 metres, they have mined 80% of what they started with.
From 600 metres to 1,000, 60% is now gone.
Typically in resource extraction, once you have exhausted half of what you started with, the cost of mining starts rising.
China has now burnt through half of its initial coal reserves and the cost of doing everything in China will now rise. It follows that to rely upon China as a source of solar panels to replace the ones going to landfill would be unwise.
A bloke called Santayana said way back in 1905 that “Those who cannot remember the past are condemned to repeat it.”
So what is the best historic analogy that we can draw guidance from in terms of what Australia is doing to itself with Net Zero?
That would be the cattle-killing frenzy of the Xhosa tribe of South Africa in 1858.
A teenage girl called Nongquause had gone down to the river to fetch water. When she got back, she told the tribal elders that spirits had told her that if the Xhosa killed all their cattle, the spirits would replace them with bigger and better cattle.
So the Xhosa tribe killed all their cattle and three quarters of them promptly died. These are people who had been farming cattle for thousands of years but it did not stop them from doing something very stupid with their food supply.
We are doing the same with doing the same with our energy supply and it is within the realms of possibility that the result could be the same with 75 percent of Australians dead.
That is because Australia won’t be able to defend itself when the economy keeps shrinking due to an idiotic cost burden.
Two hundred years after the Enlightenment, we have chucked over science and gone back to a form of paganism.
And for what? We can quantify what would be achieved in destroying our economy.
This is a graph I popularised 20 years ago. The greenhouse gasses, water and carbon dioxide, keep the planet 30 degrees warmer than it would otherwise be.
So the average temperature of the Earth is 15 degrees instead of minus 15 degrees. Carbon dioxide contributes 10 percent of that which is three degrees.
The graph shows the heating effect of carbon dioxide in 20 ppm increments. Lo and behold, the first 20 ppm is worth half the heating effect to date. The heating effect of carbon dioxide is logarithmic, not arithmetic, so it drops away rapidly after that.
From the current level of 421 ppm in the atmosphere, each extra 100 ppm is only good for 0.1 degrees of heating.
When we have dug up all the rocks we can burn, and burnt them, that will add another 200 ppm to atmospheric carbon dioxide. That will be only 0.2 degrees of warming. If you are scared by that prospect, you are beyond saving and I can’t help you.
So, we have established that renewables and Net Zero are ultra-stupid and we should be doing something else. The situation is a bit more complicated than simply going back to fossil fuels. The fossil fuels are running out and we need to leave fossil fuels faster than they leave us.
Take the case of oil which lubricates every activity in our economy. What this graph shows is US tight oil production since 2007. It started out with the Bakken Formation in North Dakota and now most production is from the Permian Basin of Texas and two counties in New Mexico.
Peak oil was supposed to arrive in 2005 but the supply increase from tight oil kept the oil price cheap for another 20 years.
Let’s look at Texas in particular. This graph shows the production profile of the top eleven oil-producing counties of Texas along with the rest of Texas. The biggest producing counties have tipped over into decline while total Texan production continued to rise.
In particular, Howard County tipped over into decline from May 2023. And the rate of its production decline is a lot faster than the rate of production increase up to May 2023. There was no production plateau for Howard County and that implies no production plateau for the whole of the Permian Basin.
This graph shows why Howard County tipped over into decline so abruptly. The X access shows the monthly gas/oil ratio from January 2018 to November 2024. This is the amount of gas that has come out of solution in the oil, in thousands of cubic feet of gas per barrel of oil produced. The Y axis measures total oil production for Howard County.
The gas/oil ratio was rising slowly until oil production peaked and then broke the trend shown by the red line. After that the gas/oil ratio rose rapidly as oil production fell. All this is explained by the reservoir pressure falling below the bubble point after which gas bubbles form in the reservoir. The energy that pushes oil out of the formation starts dropping faster and oil production falls.
And this is another graph of Howard County showing that gas production, the red line, held up for a while as oil production, the blue line, plunged. The two biggest oil producing counties in Texas, Midland and Martin counties, have now also broken through their bubble points.
The implication of all this that US tight oil production, which kept oil cheap for the last 20 years, has tipped over into decline and that there will be no happy plateau in production. The decline will be as fast as the rise at about one million barrels per day per year. As someone who lived through the oil shock of 1973, I can tell you that this has profound implications.
Now look at a bigger picture in terms of the energy available to humanity. This graph shows US oil and production, and Chinese coal production, from 1900. All in oil equivalent barrels so that apples can be compared with apples.
The US tight oil and gas phenomenon, big as it is, is dwarfed by the increase in energy supply due to Chinese coal production. In energy equivalent terms, Chinese coal production equates to oil production of 55 million barrels of oil per day. This is almost twice the energy from US oil and gas production. The rest of the world gets some enjoyment from Chinese coal production in the form of cheap goods. That will be no longer and standards of living will effectively fall.
Going back to coal won’t help much even for those countries, like Australia, that have a lot of coal. We know this because of a lesson from the 2008 commodities boom.
In 2008 there was a cargo of LNG that was imported into Thailand at above the then oil price. And the lesson learnt was that during tight oil supply, things that can substitute for oil will go to the oil price less the cost of conversion.
For a big chunk of the world, the cost of natural gas, imported as LNG, has gone to the oil price in energy content terms.
Coal is destined to also go to the oil price one day because coal can be converted to diesel and petrol using the Bergius process. So if you are relying on coal to keep the lights on and the wheels of industry turning, you will end up with a cost of doing that much the same as if you were burning diesel.
Now we need diesel to keep the economy lubricated and so making it from coal is a good thing to do. Bergius discovered how to do that via hydrogenation in 1913 and this figure is from his 1931 Nobel Prize acceptance speech. Simply, adding 5 kilos of hydrogen to 100 kilos of coal produces 100 litres of liquid fuel and another 20 kilos of hydrocarbon gasses.
A big chunk of the capital and operating cost is the steam reforming of part of the product stream to make hydrogen.
Thanks to nuclear power, we can skip that bit and make hydrogen from the electrolysis of water instead. This will make our coal reserves last 20 percent longer. We should do what we can to conserve our coal so that we can convert it to what which is most precious – liquid hydrocarbon fuels.
In the 1960s, Australian taxpayers used to subsidise oil exploration because everyone knew that having your own oil supply was essential to national survival. When the Bass Strait oilfields were discovered in the late 1960s, they weren’t competitive against cheap crude from the Middle East so Australian motorists happily paid a levy on petrol to get them developed. That paid off in spades during the oil crisis of 1973 when the rest of the world had shortages and Australia didn’t.
The last time we were near self-sufficient was 25 years ago as shown in this graph. The green is Australian oil production in millions of barrels per day and the orange is the balance of demand that is imported. Most of those refined product imports come from the same region where our next war will be fought, which is a very stupid situation to be in.
Note that once we start making enough for ourselves, we can start exporting diesel and petrol to our friends. Instead of being just another mendicant begging for supply, we can be a saviour to our neighbouring countries in the Pacific, which will bring a lot of diplomatic leverage with it.
In fact, if Australia’s current level of coal exports were converted to diesel and petrol, that would amount to seven million barrels per day – over half the rate that Saudi Arabia is producing oil at.
This graph illustrates how it would be achieved for the lowest capital cost and operating cost. In hydrogenating a reactive coal such as the Latrobe Valley lignite, you are adding another 5 percent hydrogen to something that is already 8 percent hydrogen to make diesel which is 13 percent hydrogen. Diesel is 13 percent hydrogen by weight but contributes 39% of diesel’s energy content.
The electrolysers which will convert nuclear power to hydrogen can be turned down to 25% of capacity without affecting conversion efficiency. That allows us to run our nuclear reactors at a steady state despite the big diurnal fluctuation in demand from the power grid. As demand from the grid drops off with the setting of the Sun, the electrolysers can step up and store hydrogen in gasometers.
This graph isn’t diagrammatic. It is scaled to Australia’s daily power demand and current fuel demand. We need 50 gigawatts of nuclear.
We have established that what we need is our nuclear future as soon as possible. There is no alternative, as a famous lady once said. It is a case of either going nuclear or it’s back to horse drawn carts and a seventeenth century standard of living at best.
But what sort of nuclear? It should not be the current dominant nuclear technology of U235-burning light water reactors. These have dominated since the original one in the first nuclear submarine, the USS Nautilus of 1956. The technology of nuclear reactors hasn’t changed much in the last 70 years.
This graph shows why that is such a bad thing. Producing one gigawatt of power continuously over a year requires the fissioning of one tonne of something. To achieve that in light water reactors, you start with 250 tonnes of uranium as mined out of the ground.
You then concentrate the U235 component up from 0.7 percent to 3.5 percent in 35 tonnes of what you started with. This is done at some expense and relies upon the 1.1 percent mass difference between U235 and U238. Nevertheless, 29 percent of the U235 you started with gets thrown out in the other 215 tonnes of uranium which is then called depleted uranium.
The 35 tonnes of enriched uranium are made up into fuel rods clad in zirconium. After three years in a reactor, they are pulled and put into long term storage. They contain one tonne of fission products, 300 kilos of unburnt U235 and another 300 kilos of plutonium that has bred from uranium atoms capturing a neutron. By the time the rods are pulled, half the energy being produced is coming from the plutonium created in the rods.
The whole process only uses 0.4 percent of the energy contained in the 250 tonnes of as-mined uranium. This is one two hundred and fiftieth.
Nobody could be proud of such a wasteful technology. Thankfully, there is a better way.
Before we get to that, there are two problems with nuclear energy that nobody on either side seem to want to talk about.
The big one is that once a reactor has settled down to a continuous power output, seven percent of that power is coming from nuclei that have absorbed a neutron but have yet to split and release energy. They will split, perhaps months or years later. That means you can shut a reactor down by with its control rods but it will still be producing heat.
So a 1,000 MW thermal reactor, which would produce 300 MW of electrical power, will be producing 70 MW of heat from delayed fission reactions. That drops away rapidly but remains significant. If the coolant pipes are broken or the coolant pumps have lost power, or the generators to power those pumps have run out of diesel, then the core heats up and the remaining steam reacts with the zirconium of the fuels rods to produce hydrogen. The hydrogen accumulates in the containment building and explodes.
That is what happened to the three operating reactors at Fukushima after the earthquake and tsunami on 11th March, 2011. Reactor No 1 exploded the following day with No2 and No 3 a couple of days later. Making your reactors bigger to achieve economies of scale makes the problem of shedding heat harder to overcome.
Also, most of the spent fuel rods produced each year around the world are not reprocessed. In the United States they are piling up at 2,000 tonnes per annum with the total now at 98,000 tonnes.
There is one reactor type that solves both those problems as well as the problem that the current dominant technology only uses 0.4 percent of our uranium endowment.
This is the plutonium breeder reactor which has been successfully operated in Russia for decades, and also successfully put into operation in France.
There is no waste. Everything is recycled until it is burnt up. They can be online two years after the concrete foundations have been laid. There are several designs available. We should install them all and see what works best.
The economics of plutonium breeder reactors are competitive with current coal-fired costs.
Adopting plutonium breeder reactors will unlock an even bigger energy resource. As well as breeding U238 to plutonium, thorium can be bred to U233.
Breeding U238 to plutonium has a theoretical margin of 30 percent. That is, under ideal conditions, you will produce 30% more nuclear fuel than you started with. Breeding U233 from thorium has only an eight percent margin which might disappear with neutron losses to the containment vessel and so on.
Every spare neutron from breeding plutonium from uranium should be applied to breeding from thorium. This means that our nuclear endowment would last 1,250 times longer than if just used the current U235-burning technology.
There is a better future, and there is an even better future. That is the promise of thorium.
Nuclear technology hasn’t changed for 70 years. We are just using variations of the first nuclear reactor that went to sea. The space business was the same with cost of getting stuff into orbit unchanged for decades. Then Space X came along and dropped costs by 90 percent. The same potential for much lower costs also occurs in nuclear power.
How fast can we do the nuclear reactor rollout we need to do as soon as possible? Let’s take the example of France after they decided to go all-in on nuclear in the 1970s.
This graph shows the contribution from hydro power in blue, yellow is the nuclear component, brown is fossil fuels and green represents the hopeless renewables. The blue bar is 245 terra watt hours which is Australia’s current power consumption.
France was able to install 245 terrawatt hours of nuclear capacity over the twelve years from 1980 to 1992. To suggest that Australia couldn’t also install 245 terrawatt hours of nuclear capacity over twelve years would mean that the French are better than us, even the French of 40 years ago before all the improvements in manufacturing technology since. That is just not possible so we can also do it in twelve years.
The four pillars of civilisation are diesel, plastics, steel and concrete. All those things need carbon if made with current technology. So, when the fossil fuels run out, where will the carbon come from? That will require plantation forests of eucalypts. This graph shows the square metres of eucalypt plantation required per capita for each pillar of civilisation. All up it is about 300 square metres or less than a small suburban block, and eminently doable.
In summary, we will be going to Net Zero whether we like it or not. Because one day we will run out of coal and oil and all the other good stuff from the Earth.
But we have a perfectly wonderful future to look forward to with nuclear power by the breeder reactor route.
Instead of burning coal in power plants, it should be saved for making synthetic diesel. Our motto should be ‘conserve to convert”.
Hydrogen enables the conversion of electric power from nuclear reactors to chemical potential. Hydrogen will be a big part of our future.
Carbon is the carrier molecule that enables hydrogen to be used at room temperature and pressure. The sooner we start down that route, the safer we will be.
David Archibald 13th March, 2025
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