When the Bretton Woods accords were signed, Jamaica as well as practically all the newly independent countries were part of either the sterling or franc system. They had no national currencies. Needless to say they were not represented in the negotiations. Until 1973 they imported or exported based on fixed exchange rates for their own currencies. With the Oil Crisis (coup) all these countries had to buy US dollars at exchange rates that could only drive their economies into debt spirals. Meanwhile the US Treasury could issue as many dollars as it needed to buy whatever it desired. Its banks, as owners of the World Bank and IMF, could dictate terms to any country without its own oil reserves and refining capacity. As Cuba learned, US refiners would not process alternative oil supplies from the Soviet Union, forcing it to nationalize plants built and operated by US multinationals. The capacity to manipulate both energy markets and currency markets was lodged in the two biggest banking and oil cartels, those of the Rockefeller and Rothschild families. The story of the international debt crisis is to extensive and complex to elaborate here. Yet it is crucial to recognize that energy and finance are two sides of the same institutional power. There is no financial power without control over energy and no energy policy without brute financial power. —T.P. Wilkinson.

Energy wars

The West is currently waging three energy wars:

1. Ukraine. EU industries have grown uncompetitive and millions of lives have grown nastier, shorter and crueler since they urged Ukraine to attack the owner of the largest energy reserves on earth, Russia. The disastrous results speak for themselves.

2. Venezuela, with the world’s largest oil reserves, has been under relentless attack since its government renationalized its oilfields in accordance with the constitution. Sabotage, invasion, terrorism, theft of foreign assets and gold reserves, lawfare, false ‘presidents’ – all been mobilized to cripple the economy.

3. Israel, Anglo-America’s dagger at the throat of MENA energy providers, regularly bombs and terrorizes them. If those oilfields were lavender fields, Israel would not exist.

The Dream

It's amazing when you think of it," said Adell, watching the cubes of ice slur clumsily about. All the energy we can possibly ever use for free. Enough energy, if we wanted to draw on it, to melt all Earth into a big drop of impure liquid iron, and still never miss the energy so used. All the energy we could ever use, forever and forever and forever. The Last Question. Isaac Asimov.

Science fiction writers fantasize about how much nicer, longer and more civilized human life would be if every country had an inexhaustible supply of energy and everyone could afford as much of it as they needed. In this post we’ll look at post-2030 implications of China’s recent energy breakthroughs, given that it dominates all forms of modern energy generation, from efficient coal plants to wind generators to PV to pebble bed reactors and, now, fusion. 

‘Free energy’ enthusiasts, perpetual motion inventors and science fiction writers all extol the wonders of a world where electricity is as clean, abundant and affordable as town water. For them, it’s the equivalent of humanoids figuring out how to make fires in their caves. In 2012 a global consortium spent $20 billion building the ITER tokamak, hoping to generate first plasma by 2027, thus proving the concept of fusion power – even if it's not yet at the level needed for net energy production.

First Plasma

As we saw in the last post, Chinese engineers started in 2021 and spent $1 billion to achieve first plasma with their HH70 tokamak earlier this year. Like a slim laptop and a power-hungry mainframe, HH70 is 90% smaller, 95% cheaper, and 10x more energy-efficient than ITER, thanks to its use of high-temperature superconductors. More important, it turned a scientific curiosity into an engineering challenge. 

Covering its bets

China now leads in fusion research, fusion technological prowess and fusion IP and has paved the way for commercially viable fusion reactors, control of which would give it economic dominance and huge geopolitical leverage while opening a new chapter in human development. 

But Beijing has placed more energy bets than HH70. 

Decades of persistent policy support, generous funding, domestic supply chains, large-scale manufacturing experience and highly educated workforce have given China dominance of all 21st century energy technologies. Says MIT Prof. Jacopo Buongiorno, “China is the de facto world leader in nuclear technology.” Indeed, not only is China 10-15 years ahead of the US in fourth-generation nuclear reactors, it also leads in fusion power and has first-mover advantage in pebble bed reactors and thorium power.

China’s 30% cheaper power obviously gives its businesses a huge advantage, but what would universal, $0.01 electricity do? Free, clean energy gives humanity a cosmic cheat code, solves many problems, introduces new challenges and reshapes civilization in ways we can barely imagine.

The first pebble bed reactor (PBR), is now delivering 200 MW to the grid, with a second unit under construction. Its core is baseball-sized graphite ‘pebbles’ containing uranium fuel. PBR reactors are modular, for shipment on railcars. The PBR supply chain is 93.4% domestic.

Using abundant, cheap thorium as its primary fuel, the firstthorium molten salt nuclear power station will start generating 60 MW by 2029. Because it requires an external neutron source to sustain it, the thorium reaction simply stops if something goes wrong. Expect a complete thorium Chinese supply chain and orders from countries distrustful of uranium technologies.

A (Chinese) Age of Sanity and Joy?

America’s 1938 choice of uranium over thorium because it could not be weaponized was fateful. It forever associated nuclear power with Hiroshima and, since then, rare accidents and spiralling construction costs have sidelined the technology. But because China’s nuclear plants cost 60% less than ours, 1 KWh of nuclear power there costs $0.07, compared to $0.08 for coal power and $0.12 in the USA and Germany. 

China’s 30% cheaper power obviously gives its businesses a huge advantage, but what would universal, $0.01 electricity do? Free, clean energy gives humanity a cosmic cheat code, solves many problems, introduces new challenges and reshapes civilization in ways we can barely imagine. It's like upgrading from a motorcycle to a spaceship, with all the misadventures that inevitably come with it:

1. Economic Transformation:

   • Cost of living: With energy essentially free, the cost of living could decrease dramatically and electricity bills become as obsolete as dial-up internet.

   • Industry: Manufacturing, transportation, and agriculture see massive cost reductions, leading to an economic boom. Factories running 24/7 without concern for energy costs, electric vehicles going 1000 miles on a $0.50¢ charge.

2. Environmental Impact:

   • Climate Change: The shift to fusion halts or even reverses some effects of climate change. It's like giving Earth a giant, cosmic air purifier.

   • Pollution: Air and water pollution from energy production would plummet. Cities look like they've been photoshopped for cleanliness.

3. Technological Advancements:

   • Space Exploration: With abundant energy, space travel could become routine. Mars colonies, asteroid mining, or even interstellar travel as common as a trip to the mall.

   • Innovation: Free energy would fuel (pun intended) new technologies from advanced robotics to practical teleportation(?). If you thought smartphones were cool, wait until you can beam yourself to work.

4. Social and Political Changes:

   • Energy Independence: Countries would no longer be at the mercy of oil or gas suppliers, greatly reducing geopolitical tensions. Every nation suddenly has its own energy magic wand.

   • Inequality: While free energy will reduce energy poverty, and energy drives development.

5. Lifestyle Changes:

   • Sustainable Living: With energy no longer a concern, sustainable practices could become the norm, not the exception. Imagine cities where buildings are covered in solar panels, not for energy but for aesthetics.

   • Work and Leisure: With energy costs out of the equation, work hours decrease, and leisure time increases, societies focus on creativity, education, and personal growth.

6. Global Development:

   • Developing Countries: Nations currently struggling with energy access could leapfrog traditional energy infrastructure, directly adopting fusion. This would lead to rapid development, reducing global disparities.

   • Desalination: With unlimited energy, desalination becomes cost-effective, resolving water scarcity in much of the world.

7. Challenges and Considerations:

   • Resource Scarcity: While energy might be free, other resources like water, metals, or rare earth elements for fusion reactors might become bottlenecks.

   • Security: The technology might necessitate new forms of security measures.

8. Cultural Shifts:

   • Energy as a Right: Energy might be seen as a basic human right, like food and shelter, fundamentally changing our societal structures and values.

   • Philosophical Questions: With energy no longer a limitation, humanity might start pondering bigger questions about existence, purpose, and the universe.

China's 21st century energy hegemony, if we can call it that, will be Confucian: foreign states may admire and praise it and send embassies to the Forbidden City bearing paltry gifts. They will be sent home laden with valuable trade privileges and IP licenses, a 2,000-year-old pattern that is unlikely to change.

By using force and pretending to benevolence the hegemon will certainly have a large state. By using virtue and practicing benevolence the wise ruler will achieve humane authority, for the humane man has no enemies. Mencius.