The Market Ticker
Commentary on The Capital Markets- Category [Energy]

We are stupid.

We are going to get left behind.

The LFTR has the potential to unlock unlimited liquid hydrocarbon production and by doing so it places a hard ceiling on the price of oil predicated on the cost of the energy it produces that is used to drive this process.

We are fools folks.  Utter and complete fools.

The Chinese appear to be opting for a molten salt reactor – or a liquid fluoride thorium reactor (LFTR) — a notion first proposed by the US nuclear doyen Alvin Weinberg and arguably best adapted for thorium.

This in entirely different from thorium efforts in the West that rely on light water technology used in uranium reactors. The LFTR has its own problems, not least corrosion caused by the fluoride.

Yes, it has engineering issues.  But so do all forms of energy production.

However -- the higher-temperature operation of the unit along with its atmospheric-pressure operation both offer a better safety profile and the ability to use process heat to drive a Fischer-Tropsch process -- a known, proved means of turning carbon monoxide and hydrogen into liquid hydrocarbons -- that is, synthetic oil products (such as diesel fuel.)

The sources for carbon and hydrogen are simply a matter of cost.  The obvious one is coal for the carbon source, but you don't have to use coal.

We are fools if we do not take the lead on this; the winner not only gets electricity but a permanent source of liquid hydrocarbons that cannot run out, with the only determinant on whether you use it being price.

Putting a hard cap on the price of oil by guaranteeing that demand for liquid hydrocarbon products can be met is a key part of energy security, and thus economic security.  It is the reason I spent as much time and page count as I did on it in Leverage -- and it appears the Chinese are going to beat us to the goal line.

When and if that happens it changes the balance of economic power on a permanent basis.  

We had best not get left behind on this account.

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