Our Future Energy Economy
Sir, the rather pedestrian title of this Bill—Statutes and Miscellaneous Amendments Number 2—belies, as others have noted, the import of elevating energy into a core ministry function in the government.
I will offer some thoughts on why I agree with taking energy even more seriously in our economy. I will move on to discuss some broad contours surrounding the future of one specific source of energy—nuclear—in our economy.
Energy as a factor of production
Modern economics often focuses on just three main inputs to production: physical capital, human capital, and labor. This is inherently logical: we wish to capture how demographic changes alter the size of the labor force, and how this workforce is complemented by education and experience on one hand, and equipment, machinery, and structures, on the other.
Land is often glossed over, as we transition from an agricultural economy, where such an input is paramount. Energy often is, too, because it is often a minor cost, which simply scales up as production rises. To the extent that we seriously considered the impact of energy, it was in the context of how it would affect the business cycle.
The reality, of course, is that energy is not only important, it is essential: it is difficult to imagine any modern economic process that does not require energy as an essential input. Indeed, this thermodynamic reality has returned to the forefront with the advent of the artificial intelligence and robotics revolution, where data centers and industrial robots exhibit voracious energy needs.
We have a ministry dedicated to labor and human capital—the Ministry of Manpower—and capital had fallen under the oversight of the Ministry of Trade and Industry (MTI). In reality, energy had always been part of the overall portfolio of MTI, and elevating energy into the ministry’s official name formalizes the increasing centrality of this input in our economy. In light of this, the Workers’ Party supports the Bill.
Nuclear energy as part of our energy mix
Sir, elevating energy’s role in our public institutions implies the need to seriously consider all forms of energy, including nuclear. I understand that this Bill is not fundamentally about how the government plans to enfold nuclear into our energy supplies of the future. Still, the issue has previously been flagged by the government—including PM Wong in May this year—and questions have been raised from both sides of this House on the matter. It is also of substantial public interest, including for residents in Sengkang, whom I represent.
There is little need to remind Members here that as important as energy is in our economy, our supplies are all imported, and that this supply is not always secure. Indeed, recent diplomatic frictions that emerged over the transboundary haze were accompanied by a curtailment of natural gas exports to us, despite their distinctive nature.
This action underscores how our own economy often resides in the shadow of the largest one in Southeast Asia, and that this neighbor is not averse to deploying geoeconomics—that is, the exercise of economic relationships and instruments to meet geopolitical ends—to meet those goals. Events elsewhere in the world—such as the challenges Europe has faced in meeting its energy needs following the invasion of Ukraine, and the global price spikes in fuel related the shutdown of the Straits of Hormuz—also speak to the importance of energy security in an age of rising geopolitical risk.
Broad considerations for nuclear energy
Now, the government has remained relatively tight-lipped about its detailed plans for nuclear energy, typically deferring to the completion of the Integrated Nuclear Energy Review. This is fair. Nevertheless, the occasion of this Bill offers an opportunity to sketch out some broad considerations that I hope that the government will take into account in its ongoing review.
I will declare, at this stage, that I had previously received funding from the Public Policy and Nuclear Threats program at the Institute of Global Conflict and Cooperation at UC San Diego, as well as the Nuclear Scholars Initiative at the Center for Strategic and International Studies in Washington, DC. I have also, in the course of my work for ESSEC Business School, consulted for the EDF Group, France’s state-backed nuclear power utility. However, I have no direct financial interest in nuclear energy companies.
The first point I will make is that the supply chain for nuclear, while potentially more secure than that of gas—currently our overwhelming source of energy—is not necessarily assured. The Nuclear Suppliers Group is diverse, and includes many countries that have historically been respectful of international contracts and maintain strong diplomatic and business relationships with us, such as Australia and Canada. But uranium yellowcake is subject to export control guidelines, in line with safeguards set by the Nuclear Nonproliferation Treaty.
For small modular reactors (SMR)—the likely technology our country will pursue—the supply chain for raw fuel, haleu, is even more tenuous, being mainly supplied by China and Russia, countries that have not been shy with wielding geoeconomic weapons. Beyond the reliability of suppliers, issues such as counterfeit supplies and vendor reliability for SMRs have to be evaluated seriously.
Similarly, waste disposal presents its own post-use supply chain difficulties, as overseen by the International Atomic Energy Agency under the rubric of the Joint Convention on the Safety of Spent Fuel Management and on the Safety of Radioactive Waste Management. I will observe here that Singapore is not currently a party to this convention, but I expect that we would participate, should we do go down the road of peaceful nuclear power generation.
Perhaps the most critical question here is who we will end up partnering with for spent fuel management, given the absence of safe disposal facilities here. This opens up a whole Pandora’s box of cross-border challenges that could emerge, if we fail to take this seriously in advance of rollout.
Second, it is worth pointing out that the economics of nuclear power—as challenging as they had already been, even prior to recent advances in battery storage and renewable energy generation—has continued to work against the technology. This is even more so for the SMRs that we are considering, where cost estimates are especially shaky, and demonstration projects have routinely overrun budgets. Moreover, at least one study has pointed to how the technology is most economically competitive in industrial applications—such as the production of ammonia, steel, and oil refining—which are but a small share of our economy.
While some renewable options, such as offshore wind and solar, may be less reliable in our local context, it is hard to ignore the ever-increasing value proposition that these alternative energy options offer. It is clear that any benefits from energy security from nuclear power will need to confront this tradeoff dynamically.
This is because energy and sustainability, ultimately, are two sides of the same coin. Yet this Bill will hive off one of these functions into the renamed ministry. This need not be an irreconcilable problem—after all, as Minister Grace Fu reminds us, final positions adopted by the government undergo cross-agency and cross-ministry consultation—but I would nevertheless seek a reassurance that the Ministry of Sustainability and the Environment will not shirk in holding METI to account for sustainability considerations and national net-zero ambitions.
Third, as much as we seek to emphasize energy security, we must also be cognizant of existential security, which is foremost on the minds of the man or woman on the street, when we raise the topic of nuclear power. For many, accidents in nuclear power plants still conjure up images of Chernobyl, Three Mile Island, or Fukushima, notwithstanding how those accidents involved older-generation, conventional reactors.
I grasp the psychological benefits of siting a future small modular reactor on the new Western Island, but the reality is that, should there be a serious meltdown, the footprint of our nation is sufficiently small that the mainland would almost invariably be affected.
The reassurance that would truly be required is therefore less about the precise geographic location, as much as ensuring that any reactor technology adopted exhibit, as Gen-III and Gen-III+ plants do, robust, multi-layered containment and encasement systems that will limit fallout in the event of an accident or attack.
This speaks to the issue of physical security. Nuclear facilities require protection, both in the case of conventional warfare as well as terrorist aggression. Given how our region has a potential for instability and may even become a locus for Great Power confrontation, we could inadvertently expose ourselves to collateral damage, should warring parties decide that radioactive contamination be an acceptable tactic to deny sea-route access to an adversary.
Locating a plant on an island will also imply the need to also bring in our navy to defend the asset. This is, inherently, more complicated relative to a facility located deep within land.
Mr Speaker, I understand that these points on nuclear energy, while within the spirit of the Bill, go somewhat beyond its scope. Nevertheless, I hope that this House will be in a position for sober, considered debate on the future of nuclear energy in our country, when the time arrives for such a discussion.
