France Wants Nuclear and Nat Gas Classified as Green

Paris sees nuclear and natty as green; Germany disagrees. Were you forwarded this email? [Sign-up to Rude Awakening here.]( [Unsubscribe]( [The Rude Awakening] France Wants Nuclear and Nat Gas Classified as Green - France and Germany lock horns over nuclear power and natural gas classification in the EU’s sustainable energy taxonomy. - France is the bloc’s largest nuclear power producer. - Germany panicked after the Fukushima disaster and is in a pickle, thanks to Europe’s soaring energy prices. Recommended Link [The Metaverse Story You’re NOT Hearing…]( [Click here for more...]( Everywhere you turn, people are raving about the Metaverse. Facebook’s now called Meta. Microsoft’s CEO says, “The Metaverse is here.” Apple’s all in too. But there’s a critical piece of the Metaverse story you’re NOT hearing about… [Click Here For More Details]( Sean Ring Editor, Rude Awakening Happy Monday on this fine morning from the Far Eastern Colonial Office! I had a lovely weekend. Pam and I watched Casablanca Friday night and indulged in two bottles of red. It’s our favorite movie, one that makes us nostalgic for Europe. How nice of France and Germany to oblige us with this kerfuffle over nuclear and natty. It’s a tangled issue, so I’ll do my best to lay it out neatly. Singapore: March 11, 2011 Pam and I were living together on Fort Road in Singapore, about five months before we got married. Our apartment was in an older building, but we had a lovely view of the Singapore Straits and the ships crowding their way into Tanjong Pagar port. We had a huge living room with a big bare wall. My 32” television just wasn’t going to cut it. But instead of getting a larger TV, we bought a projector and a 90” HDTV screen. It was heaven watching Arsenal - they were still good then - on my recliner. I felt like I was at the Emirates Stadium in London. I also hooked up my old Mac mini to the screen, so we had all sorts of entertainment going on. And then, on this Friday night, the news alert came in. A tsunami was hitting the Japanese coast, well north of Tokyo. On my super-duper 90” screen, it looked like a disaster movie was on. But it was real. No CGI was needed. Of course, the wave wasn’t the size of a disaster movie wave. It was big, but it wasn’t a mountain of water. Or so it seemed. The wave just ran over the coast, taking everything with it. My jaw hadn’t been on the floor like that since 9/11, nearly ten years earlier. The Inevitable Overreaction Three days later, Germany decided to shut down its nuclear industry. I thought it was an asinine decision then, for these reasons: - Germany doesn’t have earthquakes. - I remember that while Three Mile Island caused Americans to have their usual tantrums, the fact is no one died because of the partial meltdown. - In only three days, the German government couldn’t possibly have figured out how to replace that lost energy. Prices must rise. Yes, the Chernobyl memories played a part. But let’s face it: [the highest estimate of deaths Europe-wide from Chernobyl is 16,000]( mainly in Russia and Belarus. And finally, nuclear is just a bad word in most of Europe, thanks to the Cold War. But nuclear is clean, cheap, and effective, and it’s plain silly not to use. Heck, the Japanese even reversed their decision to shut down their reactors. And so did the French. France, Europe, and ESG In an earlier [Rude]( I called ESG Investing, or Environmental, Social, and Governance Investing, “the most Egregious Shit Going.” It’s mindless box-ticking to impress blue-haired lobbyists who threaten bureaucrats with electoral oblivion if they don’t comply with their environMENTAL wishes. For now, ESG is a reality, so we have to deal with it. In a nutshell, France wants nuclear energy and natural gas classified as green investments in the EU’s sustainable investment classification map. It makes complete sense for France, as it’s Europe’s largest producer and user of nuclear energy. And the reclassification would unleash perhaps billions of euros in capital in nuclear investment. Germany opposes this, despite Nordstream 2 being ready to pump loads of Russian natural gas into Germany. Credit: [Geopolitical Futures]( And that’s where Jim Grant’s Office of Unintended Consequences comes in. German politicians - perhaps the world’s ultimate bureaucrats - can’t figure out how to quell energy prices. Apparently, there are no mirrors in Berlin. Because if they just let German business take care of German energy, there probably wouldn’t be much of a shortage. Unfortunately, they weren’t bold enough against Mutti’s rash, slipshod, ill-considered reaction to Fukushima. And the bureaucrats probably thought Washington wouldn’t mind some Russian gas coming into Germany just because there are loads of American servicemen in Europe protecting it from… Russia. And they wouldn’t have had any idea Russia would retake Crimea from Ukraine in 2014. Oopsy! So when Germany finally suspended the pipeline because of American pressure on November 17, 2021, European gas prices rose 17%. Recommended Link [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on [claiming this new upgrade to your Strategic Intelligence subscription,,]( you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. [Click Here To Claim Your Subscription Upgrade]( Now What? Northern Europe can be colder than a mother-in-law’s kiss for a good six months of the year. So Germany needs cheap energy, especially in the winter months. But admitting the French are right - goodness, it was painful just writing that - is not likely to happen in nuclear-frightened Germany. And the US is livid Germany gave Nordstream 2 the go-ahead from the get-go. To me, it’s time for a deal, which looks likely. First, the Germans will give in to the French, but through the EU. The EU’s Joint Research Centre, its scientific arm, just released a [draft legal memo]( stating: - nuclear energy can make a substantial contribution to the climate change mitigation objective and meanwhile does not do significant harm to the other four environmental objectives of the Taxonomy Regulation provided that it meets the proposed technical screening criteria; - deep geological repositories can be considered at the state of today's knowledge appropriate and safe means of isolating spent fuel and other high-level radioactive waste from the biosphere for very long time scales and the necessary technologies are now available; - where and when the environmental impacts are potentially harmful, appropriate measures to prevent the impacts or to mitigate their consequences can be implemented using existing technology; and - compliance with the provisions of the Euratom legislation and licensing processes provides sufficient confidence that the impact of the nuclear energy full lifecycle, including the back end of the nuclear fuel cycle, to humans and the environment remains below harmful levels. Essentially, nuclear is fine for now, but we’ll reclassify it in the future. Highly unlikely, if you ask me. Now, Germany may not start building reactors themselves, but you can be sure the French will ramp up production. Second, the US is easing up on Germany. The last thing Biden needs right now is another new German chancellor. But Chancellor Olaf Scholz has another problem on his hands: Poland. On 9 December 2021, Polish Prime Minister, Mateusz Morawiecki, called on Scholz to oppose Nord Stream 2 and not to give in to pressure from Russia. He said, "I will call on Chancellor Scholz not to give in to pressure from Russia and not to allow Nord Stream 2 to be used as an instrument for blackmail against Ukraine, an instrument for blackmail against Poland, an instrument for blackmail against the European Union." Poland is still rightly frightened by Russian intentions and German indifference. But the US stipulated a few terms to allow Germany to import Russian gas. While the US thinks Germany will become too dependent on Russia, it’s got to let the pipe start pumping. Germany can use that gas as long as they make sure Russia doesn’t pull too much gas away from Ukraine. Ukraine gets transfer fees on the gas going through the country and some of the gas as well. Germany must also ensure that Russia doesn’t “weaponize” its energy supply against the rest of Europe. Boy, if all these governments just got out of the way, we’d probably have had the same solution years ago. And Germany would’ve had some nuclear plants to take the pressure off their crazy energy prices. For me, the conclusion is clear: command-and-control government is like trying to play whack-a-mole. As soon as you solve one issue, many more spring up. Essentially, it’s Hayek’s Knowledge Problem, over and over again. Until tomorrow. All the best, Sean Ring Editor, Rude Awakening [Whitelist Us]( | [Archive]( | [Privacy Policy]( | [Unsubscribe]( Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [unsubscribe](. Please read our [Privacy Statement.]( If you are you having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting us.]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. 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