The article below is an excerpt from our Q2 2025 commentary.
President Trump’s recent executive action targeting reform at the Nuclear Regulatory Commission (NRC) may well go down as the most consequential of his presidency.
At our semi-annual natural resource conference last October, one of our speakers asked over dinner what single policy change could meaningfully improve America’s long-term prospects. The answer was simple: radically overhaul the NRC to unlock the development of Gen IV Small Modular Nuclear Reactors (SMRs). Trump’s May 2025 executive orders do exactly that.
(Interested in watching the semi-annual natural resource conference last October? Click here).
The directives compels the NRC to meet an 18-month deadline to evaluate license applications for the construction and operation of new reactors, including advanced SMR designs. Since the 2011 Japanese tsunami, the NRC has grown excessively risk-averse amid public anxiety over nuclear safety. In a bid to shed any appearance of regulatory coziness, the agency adopted a posture toward the nuclear industry that often verged on adversarial. In the years since, it has greenlit only one project—Vogtle Units 3 and 4—and rejected the only SMR application to date: Oklo’s Aurora reactor in 2022.
The new order clears a path for the first generation of advanced reactor designs in decades. Among the most promising are molten-sodium cooled SMRs, championed by Bill Gates backed TerraPower and Sam Altman’s Oklo Inc. These designs are rooted in technologies developed as early as the 1940s. And the case for their adoption is strong.
Traditional pressurized-water reactors use water to cool the nuclear core, where fuel rod surfaces reach 350°C. Because water boils at 100°C, the system must operate at 155 times atmospheric pressure to prevent steam formation and the risk of core meltdown. This pressure requires costly materials: thick steel, reinforced concrete, and high-spec valves and welds.
Molten-sodium cooled SMRs replace water with sodium, which boils at a far higher 883°C— well above the core’s operating temperature. As a result, these systems are unpressurized. The benefits are twofold: dramatically improved safety and significant cost reductions. Lower pressure allows for up to 70% less steel and concrete per megawatt than conventional reactors. They also produce far less waste per unit of power.
But perhaps most importantly, molten-sodium SMRs deliver a quantum leap in energy efficiency. All energy systems must be judged not just by their output, but also by how much energy they consume in construction, fueling, and operation. We’ve spent years analyzing energy return on investment (EROI)—akin to return-on-investment in finance, but for net energy.
Human progress has been marked by four major energy transitions, each one yielding a higher EROI. The first came when we shifted from hunting and gathering to domesticated crops and livestock. This moved the EROI needle from 4:1 to 5:1 and enabled the first human settlements.
Agrarian systems persisted for millennia, but with meager surplus. It took 2,000 years for real GDP per capita to double—a mere 0.01% annual growth. The largest cities never topped a million people. In the 17th century, England, having taxed its forests to exhaustion, turned to coal. The EROI doubled again to 10:1.
That increase from subsistence-level energy unlocked a revolution. Economic activity boomed. The Industrial Revolution ushered in modern civilization. With oil and gas, EROI soared to 30:1. Populations exploded. Today, Tokyo hosts over 37 million people, and 37 cities exceed 10 million.
Renewables promised a new era of abundance, but their energy economics tell a harsher tale. Due to low energy density, wind and solar require massive inputs—steel, copper, and concrete—to function. When fully accounted for the battery systems needed to back them up, their EROIs fall below 10:1. That’s not much above the 15th century. No wonder countries like Germany are rapidly deindustrializing.
Molten-sodium SMRs, by contrast, combine nuclear fission’s inherent efficiency with a simplified, non-pressurized system. Our estimates put their EROI as high as 180:1. From an energy perspective, this is perhaps the most transformative development in human history. The carbon-free output is simply a bonus.
But the implications go beyond energy. SMRs could help solve America’s most pressing macroeconomic threat: the national debt. In This Time is Different, Reinhart and Rogoff show that countries surpassing 100% debt-to-GDP often spiral toward crisis. In Ferguson’s Law (2025), Niall Ferguson warns that a superpower in which debt service outpaces defense spending risks collapse. The U.S. now meets both criteria.
Fortunately, there is precedent for escape. After the Napoleonic Wars, Britain’s debt-to-GDP peaked at 173% by 1822. By 1857, interest payments exceeded military outlays. Yet Britain flourished. Historians often credit industrial efficiency. But in truth, the adoption of coal— an energy source with an EROI of 10:1, double that of agrarian systems—fueled the turnaround.
The earliest steam engines were powered by wood but failed to scale because of wood’s poor energy return. It was only when coal entered the equation that the industrial flywheel began to spin.
If Britain’s doubling of EROI rescued it from its debt trap, imagine what increasing today’s 30:1 grid—largely powered by natural gas—to 180:1 with molten-sodium SMRs could achieve. Short of AI or quantum computing, there is no innovation more likely to restore U.S. industrial competitiveness. Green steel produced through molten-oxide electrolysis, for instance, demands cheap, abundant electricity. SMRs could make the U.S. not only a leader in clean steel, but also a formidable exporter again.
Until now, the only thing standing in the way w
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