Small modular reactors: promise and pitfalls

In this episode of The Economist Next Door, Paul Mueller is joined by AIER colleagues Julia Cartwright and Ryan Yonk for a wide-ranging conversation on the past, present, and future of American energy.

They explore how energy is produced in the United States, why the diversity of U.S. energy sources makes the system unusually robust, and how regulation and subsidies can undermine that strength.

The trio compares US and Chinese energy systems, unpacks the politics of "green" mandates and subsidies, and explains why nuclear power—especially advanced and small modular reactors—may be essential for both reliability and decarbonization. Along the way, they discuss the Trump administration's recent energy moves, the backlog of projects waiting to connect to the grid, and why letting markets—not politicians—pick winners is crucial for innovation and affordability.

Key Topics

• Why energy is central to prosperity, productivity, and everyday life
• How the US generates its electricity today (natural gas, nuclear, coal, wind, solar, hydro)
• What makes the US energy system unusually robust compared with other countries
• How global shocks (like conflict near Iran and the Strait of Hormuz) affect US prices
• US vs. China: production numbers, reliability, central planning, and data skepticism
• Why regulatory layering, permitting delays, and interconnection bottlenecks stall new projects
• The mixed legacy of subsidies and mandates for wind, solar, and other favored technologies
• The role of utilities, "natural monopolies," and why customers often lack real choice
• How deregulation and competition in some gas and power markets have benefited consumers
• Nuclear power's promise, the rise of advanced and small modular reactors, and why the US risks falling behind
• The Trump administration's recent actions on drilling permits, nuclear, and renewable subsidies
• Why technology-neutral, market-driven policy is better than "energy favoritism"

Key Takeaways

• The United States has a broad, diverse mix of energy sources, which provides resilience even when global markets are disrupted.
• Heavy regulatory layering, slow permitting, and grid interconnection hurdles have created a large backlog of viable projects that could otherwise expand capacity and lower prices.
• Subsidies and mandates—whether for fossil fuels, wind, solar, or nuclear—distort markets, pick winners and losers, and often raise costs for consumers while reducing innovation.
• Comparisons to China's headline energy statistics can be misleading; central planning, unreliable rural grids, and questionable data all complicate the picture.
• Nuclear energy, especially advanced and small modular designs, is a promising path for abundant, low-carbon power, but US policy on fuel, safety rules, and subsidies heavily shapes what gets built.
• Long-run energy reliability and affordability are best served by open markets, clear and limited safety regulation, and allowing entrepreneurs and consumers—not bureaucrats—to decide the energy mix.

Featured Guests Julia Cartwright – Senior Fellow at AIER, specializing in energy policy and technology-neutral regulation. She has recently written on ending "energy favoritism" and the risks of US policy falling behind China in advanced nuclear.

• Ryan Yonk – Senior Fellow at AIER and director of student programs, working in the public-choice tradition with a focus on energy and environmental regulation. He is coauthor of The Reality of American Energy: The Hidden Costs of Electricity Policy.

Resources & Links Mentioned

• Ryan Yonk, The Reality of American Energy: The Hidden Costs of Electricity Policy
• Julia R. Cartwright, "Ending the Era of Energy Favoritism: How Technology-Neutral Policy Can Unlock the US Power Grid," American Institute for Economic Research
• Julia R. Cartwright, "America Risks Losing the Advanced Nuclear Race to China," AZ Free News • Ryan Yonk, The Reality of American Energy: The Hidden Costs of Electricity Policy https://www.leslibraires.ca/livres/the-reality-of-american-energy-the-hidden-costs-of-electricity-policy-9781440853913
• Julia R. Cartwright, "Ending the Era of Energy Favoritism: How Technology-Neutral Policy Can Unlock the US Power Grid," American Institute for Economic Research, 2026.https://aier.org/article/ending-the-era-of-energy-favoritism-how-technology-neutral-policy-can-unlock-the-us-power-grid/
• Julia R. Cartwright, "America Risks Losing the Advanced Nuclear Race to China," AZ Free News, January 19, 2026. https://azfreenews.com/2026/01/julia-cartwright-america-risks-losing-the-advanced-nuclear-race-to-china/