June 21, 2024

Ep 453: Reed Clay - President, Texas Nuclear Alliance

Texas Nuclear Alliance
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Show notes

Adam Smith [00:00:59] Welcome to the Titans of Nuclear Podcast. Today, we have a very exciting episode with Reed Clay, the President of the Texas Nuclear Alliance. Reed, welcome to the show.

Reed Clay [00:01:09] Thank you. Adam. Happy to be here.

Adam Smith [00:01:11] Now, can you start us off by telling us a little bit about yourself? Where'd you grow up? We'd love to hear a little bit about your background.

Reed Clay [00:01:20] Yeah, sure. I'm a proud born-and-raised Texan. I was born and raised in Fort Worth, Texas. For those not familiar with the area, it's about 30 miles west of Dallas. But please don't call it Dallas; we've got a real chip on our shoulder about that. But yeah, I spent the first 19 years there, a great place to grow up. And I went away for school, but made my way back here pretty quick.

Adam Smith [00:01:51] You missed the Fort Worth area; had to go straight back.

Reed Clay [00:01:56] Fort Worth is a great place. It's a cow town, where the west begins. It's a great combination of big city resources but that small town, easy living. If I weren't so tied to this city, I might be living there now.

Adam Smith [00:02:14] Now, guide us through your career a little bit. After college, you came back to Fort Worth. What did you start doing, and how did you get where you are today?

Reed Clay [00:02:22] So as I mentioned, I went away to school. I spent the better part of eight years in North Carolina. I did undergraduate at Wake Forest University and was a philosophy major. I didn't know what I was going to do with that in the real world, so I decided I would go to law school. I went about two-and-a-half house east to Durham. I went to law school at Duke University.

Reed Clay [00:02:46] And then actually, my first gig out of law school was in Washington, DC, working for the Department of Justice. I was there for five years and did some time as a litigator, as I like to say, and was representing federal agencies and commercial disputes there. And like I said, I did that for about five years.

Reed Clay [00:03:06] I got a great opportunity to come back to Texas, to the capital city, Austin, and work for the Attorney General of Texas, who was Greg Abbott at that time. I got an offer to work in his solicitor general's office, which is a really well-respected appellate shop, a litigation shop. And really, I was a fish out of water.

Reed Clay [00:03:32] I had incredible colleagues who had incredible pedigrees. Ted Cruz was the head of that office, and some of my colleagues have gone on to really great things. A couple of Fifth Circuit Court of Appeals judges, a Supreme Court of Texas judge. A really great place for a young lawyer like me. Like I said, I really was a fish out of water.

Reed Clay [00:03:54] Because of my time at DOJ, and because the office was embroiled in a lot of litigation with the federal government at the time, fighting some EPA regulations around greenhouse gases, actually, interestingly enough, and Obamacare and some other federal-state lawsuits that were going on... They put me on a lot of those cases because of my familiarity with the other side, or DOJ.

Reed Clay [00:04:22] And when there was some turnover in the office, I kind of got my supervisor's position and became Senior Counsel to the Attorney General, which put me in sort of a C-suite level-type position, and my job from there grew more and more outside the courtroom and more kind of advisor to the attorney general.

Reed Clay [00:04:46] And then, he was elected as governor in 2014. I moved over with him and was his Senior Advisor, Deputy Chief of Staff and Chief Operating Officer, which are all just kind of ridiculous titles for being a jack of all trades and a master of none, as people told me at the time.

Reed Clay [00:05:07] And really what that meant for him was I was helping him implement his policies at the administrative level, helping him pass his legislative priorities, and putting out the occasional fire. The last of which was managing the response and recovery to Hurricane Harvey, which was, at that time, the largest tropical rain event that the country had ever seen. And I did that for the last year I was with him and it really took a bite out of me, so to speak.

Reed Clay [00:05:43] And in October of the following year, he was nice enough to give me my leave, and I took it after nine years with him. I struck out and started Crestline Group, which is a consulting business that we run here in Austin that's really sort of a traditional government affairs consulting business and public policy advocacy business. I've been doing that for five-and-a-half years. So, that's the career.

Adam Smith [00:06:17] Yeah, thank you for walking us through that. It seems like you have this really deep set of relationships and experiences within the legal and the government sectors. How did you become interested in nuclear?

Reed Clay [00:06:31] I think the short answer is... At some point I just realized how self-evident of a solution it was to what I like to call "the energy Rubik's Cube." It's clean, it's abundant, and it's certainly reliable. The real world answer's a little bit longer. Through my work in government, I was exposed to some of the anti-nuclear advocacy stuff here in Texas and never really quite understood it. But I viewed it mostly as sort of a practical issue I was dealing with in my professional life and didn't think a whole lot of it.

Reed Clay [00:07:11] And then, when Uri happened here, which was the winter storm, as you probably know, Adam, that caused some major blackouts here in Texas back in 2021... I had not done a whole lot in the power market space and really got interested in that. And I think when I reemerged from that rabbit hole, I think it was just very obvious to me that we had made a big mistake as a state, and I think, frankly, as a country in stopping building nuclear 20, 30 years ago. And if we had not stopped that trajectory that we were on many decades ago, some of the issues that we faced because of Winter Storm Uri may not have been quite as bad as they were, if had happened at all.

Reed Clay [00:08:06] There's a chart that was an epiphany moment for me, Adam. ERCOT, which is our grid here, publishes a generation mix, a fuel mix. And you can almost confuse this very flat black line at the bottom of the graph as the X-axis, but it's just showing the stability of nuclear. But unfortunately, it's so close to the bottom of that graph because it's just not a huge part of our generation mix here in Texas. I think that was the epiphany for me during Uri, is that that needed to change going forward. So, that's how I became interested in nuclear.

Adam Smith [00:08:49] And now you're leading the Texas Nuclear Alliance. Can you tell us a little bit more about that?

Reed Clay [00:08:55] Yeah, sure. So I think around that time, obviously I looked around and I remembered my exposure to the anti-nuclear crowd and had gotten a little more familiar with that in my study of nuclear power generation. And I just looked up and there was no counterpoint in the state. I mean, obviously at the national level, we've got great groups like NEA and USNIC, and ANS that are doing fantastic work at the federal level. But here at the state, no one had picked up that baton to be the counterpoint to some of the anti-nuclear crowd. That's what I guess inspired me or sparked my interest in at least starting a movement to have a counterpoint to that.

Reed Clay [00:09:48] So, we started this group about a year and a half ago. And really one primary goal, which is to make Texas the nuclear capital of the US and nuclear capital of the world. I think it's a fantastic opportunity for the state for multiple reasons. We like to think of ourselves as the energy capital of the world. Obviously, a huge oil and gas state; have been for quite some time. Leaders in wind and solar; really prolific building of both, in West Texas in particular. And in my mind, there's no reason... And every reason, that we should be the leader in nuclear energy.

Reed Clay [00:10:28] So, we deploy two main strategies to try and accomplish that. And one is a grassroots movement. The history of nuclear is, unfortunately... We've not traditionally won the grassroots movement. I think we've made a lot of headway recently. And my goal is to, at least here in Texas, to make sure that we shore that up and keep it in place as the industry starts to regrow itself.

Reed Clay [00:10:56] And then, the second, obviously, is kind of what my background is, which is public policy advocacy. It's getting with the decision makers at Public Utility Commission and ERCOT, and inside this building behind me to make sure that we're enacting policies that are going to drive the industry forward here in Texas.

Adam Smith [00:11:18] Yep, that makes complete sense. And yeah, I completely agree that if there's anywhere in the US that has the greatest potential to become the nuclear leader... Certainly in the US, if not the world, it's Texas. You have the deepest energy experience, you have some of the largest construction force within the US as it relates to energy infrastructure. I mean, you have everything going for you. Friendly business policies for energy generation projects... I mean, you have everything. The stars are aligned there, we just have to be able to build.

Reed Clay [00:11:52] Yeah, couldn't agree more.

Adam Smith [00:11:53] And can you tell the viewers a little bit about what the Texas Nuclear Alliance has accomplished so far since you've established it?

Reed Clay [00:12:01] Like, I mentioned, we're a pretty nascent organization, and a lot of our time is really focused on coalition building at this point. We're trying to bring as many people under the tent as possible. Our timing was... Like I said, we created ourselves in late 2022, heading into our legislative session. Our legislature meets every two years, which is somewhat unusual. We had a very modest legislative program because of that.

Reed Clay [00:12:35] And so, a couple of things that we did get accomplished... We were pretty instrumental in establishing the Texas House Nuclear Caucus, which is a caucus of House of Representatives members who are pro-nuclear and are interested in fighting for nuclear. That started with 9 or 10 members or so and it's doubled in size. It's bipartisan, and it represents, geographically, a wide swath of the state. So, I'm really proud of that.

Reed Clay [00:13:04] We did dabble in some legislation. We did pass a budget rider to essentially figure out what we could do as a state to assist our friends in South Texas who are mining uranium. That's a big asset that we have here. It's had its ups and downs over the years, and we wanted to figure out ways that we could support it. So, we did that.

Reed Clay [00:13:29] One of the first real applications of the House Nuclear Caucus was called The Nuclear Bill. That was sponsored by Senator Parker from North Texas here. And that bill flew out of the Senate. But really not because of the substance of the bill, but just because of the larger issues going on in the energy space. That bill kind of lost traction in the House. And we sort of turned that caucus on and were able to push that bill through at the very last minute.

Reed Clay [00:13:58] Unfortunately, for reasons really unrelated to the bill, it was vetoed. There were some...

Adam Smith [00:14:07] Politics.

Reed Clay [00:14:08] Yeah, I think this one... We could chalk it up to politics for sure. There were some issues about how some of the governor's key issues didn't get resolved towards the end of the session. And there was some, like you said, politics that kind of played out.

Reed Clay [00:14:26] The good news is one of the other bills that we really pushed was a bill that would have established a working group at the PUC. Not dissimilar from what we were trying to do on the uranium front, but trying to figure out how we can sort of catalyze more nuclear development here in the state. That bill was not focused explicitly on advanced nuclear or small modular or micro, it was really just nuclear writ large.

Reed Clay [00:14:50] That bill did not pass, but I think the governor, being pro-nuclear as he is, decided that he didn't need a bill to do that. And last August, he sent a directive to the PUC to start the Advanced Nuclear Working Group, which has been just an incredible conversation starter and piece here in the state. Well, that's obviously on the governor's initiative. And thanks to his leadership, that bill is something that we've started to sort of introduce the last legislative session.

Reed Clay [00:15:30] And then, as I said, I think lastly, we're really focused on coalition building. Getting new stakeholders inside the tent, organized with us so that when we head into the next legislative session, we're in a much better position to make headway.

Reed Clay [00:15:50] Some of that is traditional public awareness stuff. We sponsored a showing of Nuclear Now. We had a panelist panel discussion after that with a member of the House of Representatives, Commissioner Glotfelty, who is leading up that Advanced Nuclear Working Group. And then, Doug Robison, who is with Natura Resources, and doing great things at Abilene Christian University.

Reed Clay [00:16:18] And then, we did two panels at South by, which got great attendance and lots of buzz around it. So, just trying to continue that coalition building and drive an interest in nuclear ahead of next session.

Adam Smith [00:16:32] Absolutely. It really seems like there's a lot of, or, at least a growing body of interest within Texas for nuclear. And I believe you also just recently announced that you have a new member of the alliance, right?

Reed Clay [00:16:47] Yeah, we have two, and just in the last couple of weeks. And we're very, very excited about their participation because of just their stature inside the nuclear industry in the state of Texas. And one is the Texas A&M University System. They've got, and have had for decades, a research reactor and have done great work through their engineering program around nuclear there. They are in the research consortium, along with Abilene Christian and Georgia Tech and UT, that is doing some of the work with Natura Resources. And really, I think the chancellor of the system has got big plans for nuclear and big plans for his research institutions around nuclear. So, very excited to have them.

Reed Clay [00:17:37] And then, we have CPS Energy, which is the publicly-owned utility in San Antonio. And they are a 40% owner of South Texas Project, which is one of our two generating sites that do nuclear here in the state of Texas. South Texas Project has two large reactors, and I think it's about 2,500 megawatts worth of energy for us. And that represents half of the state's nuclear power generation. So, very excited to have them.

Reed Clay [00:18:13] They've been doing traditional nuclear for quite some time. I think Rudy Garza, who's CEO of CPS Energy, has got his eye on the future and advanced nuclear and what San Antonio may be able to bring to bear with respect to the development of this advanced nuclear stuff. So, it's very exciting; we're happy to have both of them. And I think, hopefully in the next couple weeks, you'll see a couple of more big announcements out of us. So, lots of momentum, and we're thrilled about it.

Adam Smith [00:18:46] Absolutely. It sounds like you really have a ton of tailwinds from different directions at this point pushing you all forward ahead on nuclear.

Reed Clay [00:18:55] I think so, yeah.

Adam Smith [00:18:58]  I'm curious because when you think about nuclear, it's typically some large, government-led, gigawatt-scale project that got to go through the NRC. These are all things that happen at the federal level. How can the efforts that you're putting forth, locally, at the state level... How do those fit into the project deployment that's typically been a federally-driven process?

Reed Clay [00:19:27] Yeah, I think a couple things. That's a great question. I mean, obviously, the work that NEI and USNIC and ANS and others are doing in DC is fundamental; it's of fundamental importance to the industry. And one of the things that we want to do our part of is supporting that. And that's where I think our grassroots strategy comes into play.

Reed Clay [00:19:50] Obviously, Texas is one of 50 states, and it is a particularly large one of the 50 states. And we want to make sure that we have our backyard shored up, so to speak. So, that grassroots effort that we're pushing... All politics are local. We want our representatives in DC, our two US senators, and our 38 congressmen and women to know that they've got the support back home to make the decisions that they need to make to push nuclear forward at the federal level to continue with the reforms that we're seeing out of the NRC. So, that's one thing.

Reed Clay [00:20:25] But I think the second is... You mentioned this at the beginning, Adam. We believe Texas is particularly well-suited to lead this resurgence in the nuclear industry and the development of nuclear in particular, because the sheer number and type of offtakers that the state of Texas has is pretty staggering. It's everything from the Permian Basin needing 16 gigawatts of electrification to Samsung's $200 billion development outside of Austin manufacturing chips. It's the AI revolution that's coming. Texas has always been a big home to data centers, and I think we'll continue to be, so long as we've got the electrons to power it. To space exploration, with SpaceX, to the large industrial manufacturing complex on the coast where Dow and X-energy have got their partnership brewing.

Reed Clay [00:21:28] One of the things that we can do here is start talking about the marketplace while the DC reforms proceed on a parallel track to make sure that we're creating as fertile a development ground as possible here for businesses to choose nuclear when they start to look for their future power needs. Because there's no shortage of options that are available here from an offtaker perspective.

Reed Clay [00:21:56] So, Adam, I guess to sum up... It's really looking at the marketplace, right? There are things that we need to be doing here in Texas. Going back to Uri for a minute... We have allowed the marketplace to favor wind and solar to our detriment. I'm not going to say too much bad about wind and solar, but the heavy federal incentives have led to a pretty over-reliance on that. And the marketplace needs to be rebalanced towards reliable energy sources like natural gas and, in our case particularly, nuclear.

Reed Clay [00:22:35] Obviously, in this state everybody's a fan of natural gas. This building behind me is very supportive of natural gas. And one of our main goals is going to be to get them to be as supportive of nuclear as they are to natural gas. The two are, frankly, very complementary. Natural gas can act as a peaker, very easily. That's the path that Texas is pursuing in the short run.

Reed Clay [00:23:01] Nuclear offers the ability to provide incredibly stable, long-term base power. And those two can also work hand in hand from a time perspective. You'll see a lot of natural gas deployed in the state over the next 10 years. And that gives us the opportunity to really pave the way for nuclear to pick up shortly thereafter.

Adam Smith [00:23:26] Yeah, I think you pretty much nailed that on the head from an ideal energy mix perspective. You have nuclear doing all of the baseload generation, and then you have just a fleet of peakers coming online as needed. So, that gets you to a pretty stable electrical grid, and clean, at that point.

Reed Clay [00:23:49] The other reason that we're so bullish on the alliance is... Some of the main things happening in nuclear are happening in this state right now. I alluded to Natura Resources. They're moving at "the speed of Texas," I like to say. I mean, they're moving very, very quickly to bring their molten salt reactor online. That's obviously one of the most promising things out there right now. We've got the partnership with Dow and X-energy.

Reed Clay [00:24:23] And lastly, Texas A&M announced recently that they've put out a request for information, soon to be followed by a request for proposals for a nuclear testbed at their RELLIS Campus in College Station. Really to sort of be, like I said, a testbed for new nuclear technology. So, really exciting stuff happening here. And that's why we're doing the things that we need to do to create the marketplace here in the state of Texas that can proceed on a parallel track with the reforms that are going on in DC. And that's why we're excited to be doing the work that we're doing.

Adam Smith [00:25:10] It's amazing. Amazing. And can you talk a little bit about the goals for this year, and maybe the next, for the Alliance?

Reed Clay [00:25:20] I think it's continued coalition building. We've got great momentum with bringing people inside the tent, organizing that group so that we can... Like anywhere, in this building across the street here, strength in numbers goes a long way. So, trying to organize the industry as the legislators start to look at other types of energy. There's interest in hydrogen, geothermal. We need to have a presence, and an organized presence, over there to make sure that they see that nuclear is a tested technology that is real ready for the taking, and they need to start enacting the policies that are going to really support its development here in the state of Texas.

Reed Clay [00:26:09] And then, I think I alluded to this... In the marketplace, we've got to do some things to rebalance the playing field, so to speak, so that nuclear is not disadvantaged by the incredible subsidies and other sorts of preferences that wind and solar have enjoyed over the years so that we're properly pricing in the value of a reliable baseload that lasts for decades. And right now, the marketplace doesn't really show that. So, certainly we want to work on that.

Reed Clay [00:26:46] And then, the state, as I mentioned, has been very supportive of natural gas peakers. The Texas Energy Fund has been a very successful thing that they've done to try to attract the development of natural gas peaker plants. And I think one of the things that we'd like to see happen is something similar for first-of-a-kind development of advanced nuclear projects here in the state of Texas.

Reed Clay [00:27:10] And frankly, I still have this fanciful... Maybe it's fanciful, I don't know... Dream that we can have Comanche Peak 3 and 4 and South Texas Project 3 and 4. So really, it's just trying to get the state engaged on catalyzing the development of nuclear.

Reed Clay [00:27:28] As you know, Adam, it is a technology that's been around a long time; it's very safe. And the best time to start building nuclear was 20 or 30 years ago; the next best time is is right now. So, that's what we're going to really be trying to impress upon the folks across the street come January of next year.

Adam Smith [00:27:51] Could not agree with you more on that one. And I believe the first ever Texas Nuclear Summit is coming up, right? When is that and where is that happening at?

Reed Clay [00:28:02] Yeah, we just announced it yesterday, formally. If you want more information, I'll do a little plug for the website, nucleartexas.com. It's got all the information about so-far confirmed panelists, which I can run down in a minute. And obviously, some additional information about tickets and sponsorship options and things of that nature.

Reed Clay [00:28:22] But yeah, so it'll be in November, the 17th through 19th, right here in Austin, Texas. We've already got a good list of participants. The goal here is to bring public policymakers and legislators into the room with industry to have that collision of ideas ahead of the next legislative session. And then, I think the other part of this is really what I call a pep rally, which is getting everybody very excited about it just as we head into the legislative session.

Reed Clay [00:28:52] It should be around the time of a couple of things that I think will make it an even more energetic atmosphere, which is the release of at least a draft report from the Advanced Nuclear Working Group that Commissioner Glotfelty is heading up. And then, the lieutenant governor has asked the Senate Committee on Business Commerce to look at advanced nuclear as a power generation source, so they should have a report to the legislature around that time. And so, we're excited about the ability to talk about the recommendations in there and how we can push those forward in the legislative session.

Reed Clay [00:29:30] So far, we've got great attendance. We have Chief Nim Kidd, who is the Chair of the Texas Energy Reliability Council. We've got Commissioner Jimmy Glotfelty, who as I said, is running the Advanced Nuclear Working Group over at the PUC. Representative Cody Harris, who's the Vice Chair of the House Nuclear Caucus. Senator Perry, who is the head of the water committee in the Senate. And several others who are going to be participating with us.

Reed Clay [00:30:01] I forgot... Brooke Paup, who chairs our Texas Water Development Board. We're excited about how nuclear can help solve another big issue that's facing the state of Texas, which is meeting the water needs. So, it's going to be a great event, and we hope everybody listening will buy a ticket and be there.

Adam Smith [00:30:21] Yeah, it sounds like you've got a real A-list team for that.

Reed Clay [00:30:25] I think so.

Adam Smith [00:30:26] And do you have any insights about the goals for the next session?

Reed Clay [00:30:35] We're watching that report very closely that's going to come out of... We're engaged with the PUC and Advanced Working Nuclear Group. We want to see what the industry comes up with out of that. I think that's the primary platform right now. What's so exciting about that is it's the first time we've really been able to get everybody in the same room. We know there are going to be some great ideas out of there.

Reed Clay [00:30:59] But going back to what I was mentioning a minute ago, Adam... I think really what we need is the state to look at catalyzing first-of-a-kind development, or new development of nuclear. Whether that be small modular nuclear or whether it be large-scale nuclear. We need some initial investment from the state, so that's certainly one of the things that we're going to be looking for.

Reed Clay [00:31:26] And I think really just creating a regulatory certainty around it. It's been a long time since we've built nuclear here in the state, and making sure that we've got the regulatory environment streamlined and ready to go for the industry is going to be an important thing. The advent of distributed small modular creates some new issues in the electric electricity market that we'll have to work through. I don't think it's anything we can't work through, but there are some reforms that probably need to take place there.

Reed Clay [00:31:58] And then, if we've learned anything from the great work that's going on in Georgia, I think it's that we've got to have a workforce that's ready to go and is skilled and understands how to execute on these projects. So, we'll be looking at ways to shore up the workforce here and ensure that we've got the best workforce possible as we start to develop these projects.

Adam Smith [00:32:24] Sounds like you've got a lot on your plate.

Reed Clay [00:32:27] It's a lot; a lot to do.

Adam Smith [00:32:30] Well, if you had ultimate authority here or you could just wave a magic wand and change anything within the nuclear industry or the energy market at large, what would that be?

Reed Clay [00:32:44] Well, I'd go back in time, I think. That's the first thing I would do. I'd go back in time and talk to the folks who decided we were going to stop building nuclear and wave my magic wand and say, "No, we're not." There were lots of lessons to be learned from Three Mile Island and Chernobyl and Fukushima, but one of them was certainly not that we should stop building nuclear.

Reed Clay [00:33:08] But failing that, if we're looking ahead, I think it's.... I think it's right-sizing and leveling the playing field here in Texas. We have the offtakers, and if we can level the playing field in a way that recognizes nuclear's reliability and longevity, I think that's going to go a long way. And then, as I mentioned, some state investment on first-of-a-kind projects, I think is going to be pretty key. So, if I was king for day, those are probably the two or three things I would be looking at to make sure that we're advancing nuclear here in Texas.

Adam Smith [00:33:56] Sounds like a pretty good set of magic wand wishes. Well, this has been great, first off. Thank you for the insights here. Thank you for coming on the show and telling us more about what the Texas Nuclear Alliance has been up to. Before we go, do you have any messages that you'd like to leave with our viewers?

Reed Clay [00:34:20] First of all, thanks, Adam, for having me. I love the podcast; I love what you guys are doing. And I'm not sure I'm a titan of nuclear, but I'm still thrilled to be here.

Reed Clay [00:34:32] I would say just pay attention to what we're doing in Texas and try to get involved. Like I said, we want as many people under this tent as possible. Strength in numbers is the way to get things done. Check out our website, texasnuclearalliance.org. Check out the Summit website, which is nucleartexas.com. And just sign up for staying abreast of what's going on here. And reach out if you have any questions or any desire to get involved in anything we're doing.

Adam Smith [00:35:09] Reed Clay, thank you for coming on the show.

Reed Clay [00:35:11] Thank you, Adam.

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