Sellout: How Washington Gave Away America's Technological Soul, and One Man's Fight to Bring It Home

by Victoria Bruce

Overview

The story of one citizen's fight to preserve a US stake in the future of clean energy and the elements essential to high tech industries and national defense.

American technological prowess used to be unrivaled. But because of globalization, and with the blessing of the U.S. government, once proprietary materials, components and technologies are increasingly commercialized outside the U.S. Nowhere is this more dangerous than in China's monopoly of rare earth elements-materials that are essential for for nearly all modern consumer goods, gadgets and weapons systems.

Jim Kennedy is a retired securities portfolio manager who bought a bankrupt mining operation. The mine was rich in rare earth elements, but he soon discovered that China owned the entire global supply and manufacturing chain. Worse, no one in the federal government cared. Dismayed by this discovery, Jim made a plan to restore America's rare earth industry. His plan also allowed technology companies to manufacture rare earth dependent technologies in the United States again and develop safe, clean nuclear energy. For years, Jim lobbied Congress, the Pentagon, the White House Office of Science and Technology, and traveled the globe to gain support. Exhausted, down hundreds of thousands of dollars, and with his wife at her wits' end, at the start of 2017, Jim sat on the edge of victory, held his breath and bet it all that his government would finally do the right thing.

Like Beth Macy's Factory Man, this is the story of one man's efforts to stem the dehumanizing tide of globalization and Washington's reckless inaction. Jim's is a fight we need to join.

Product Details

ISBN-13:	9781632862594
Publisher:	Bloomsbury USA
Publication date:	06/06/2017
Sold by:	Barnes & Noble
Format:	eBook
Pages:	304
Sales rank:	141,028
File size:	640 KB

About the Author

Victoria Bruce holds a master's degree in geology from the University of California, Riverside. She is the recipient of the Alfred I. duPont-Columbia University Award for excellence in broadcast journalism for her film, The Kidnapping of Ingrid Betancourt. Her previous books are No Apparent Danger and Hostage Nation. She lives in Annapolis, MD.

Read an Excerpt

Sellout

How Washington Gave Away America's Technological Soul, and One Man's Fight to Bring It Home

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By Victoria Bruce

Bloomsbury Publishing Plc

Copyright © 2017 Victoria Bruce
All rights reserved.
ISBN: 978-1-63286-259-4

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CHAPTER 1

Oak Ridge, Tennessee

On a January evening in 2011, in the lobby of a nondescript hotel off Route 62 in eastern Tennessee, Jim Kennedy opened his laptop and tabbed through a slide presentation. Hyper by nature, the native Missourian was coming undone. The next day was a big one. In the afternoon, he would give a talk that he knew would change the course of his life, and at the same time rescue the United States of America from the technological abyss that he believed it was hurtling toward. Kennedy had been to dozens of meetings with scientists over the last few years, but this was different. Oak Ridge National Laboratory had emerged from the hills as the largest single site of the Manhattan Project in 1943, becoming one of the greatest research institutions America had ever known. Some of the biggest brains on the planet appeared in its secret laboratories to fashion the most powerful energy release the world had ever seen. To Kennedy, the thought was mind-blowing. A self-described punk teenager who slept through five years of high school and who knew nothing about chemistry or nuclear physics just a few years back — was now invited to give a science and policy presentation to the current crop of Oak Ridge masterminds.

With Kennedy was John Kutsch, an engineer from Chicago with a built-in megaphone for a voice box who recently brought Kennedy into his inner circle of proponents for new, safer nuclear technology. Together, their mission was to convince Oak Ridge to restart its nuclear program using thorium instead of uranium for fuel, in a molten salt reactor rather than a solid fuel reactor — a design that successfully went critical in the Oak Ridge hills in 1965. The invention promised safe nuclear energy that couldn't explode because it wasn't cooled by pressurized steam. It also produced very little plutonium, mitigating the risk of nuclear weapons material making its way to countries that hadn't signed onto the 1970 Nuclear Nonproliferation Treaty — countries that included Pakistan, North Korea, Israel, South Sudan, and India. But after four years of continuous operation, the Molten Salt Reactor Experiment was unceremoniously abandoned by the Department of Energy, without a word of explanation to the Oak Ridge engineers.

In a matter of minutes, Kutsch went from confident about the following day's meeting to completely unnerved. "I started getting all these texts and e-mails about China, and I'm wondering what the hell is going on," he remembers. A barrage of expletives erupted from his giant mouth just as the head of the Oak Ridge nuclear energy department arrived in the hotel bar. Jess Gehin planned to meet Kennedy and Kutsch the next day, but he'd come by the hotel to greet the two, over beers, beforehand. Gehin, so mild-mannered and soft-spoken that he's barely audible at times, had something that he wanted them to see. Without the slightest dramatic lead-in, Gehin opened his laptop to an article published in the South China Post out of Hong Kong, along with a rough Google translation. The photo at the top showed a smooth-faced Chinese man with frameless glasses and graying temples: Dr. Jiang Mianheng, vice president of the Chinese National Academy of Science. "Yesterday, as the Chinese Academy of Sciences started the first of the Strategic Leader in Science and Technology Projects, 'The Future of Advanced Nuclear Fission Energy — Thorium Based Molten Salt Reactor System,' was officially launched. The scientific goal is to use 20 years or so to develop a new generation of nuclear energy systems, all the technical level reached in the trial, and have all intellectual property rights."

As bad as the translation was, the message was clear. "Our first reaction is like, 'Holy shit. We're fucked,'" says Kutsch.

The Chinese were going to develop the exact technology that he and Kennedy and were trying to get the United States to revive — technology invented right here in Oak Ridge and paid for by the U.S. government. Then China planned to patent the technology and sell the final product to the rest of the world.

The United States would be buying its own nuclear energy technology from China.

When Kennedy and Kutsch wondered aloud how China could be pursuing the same thing that Oak Ridge invented in the 1960s, Gehin told them something that rendered even Kutsch speechless. "He said there had recently been a bunch of high-level visits by Chinese scientists to Oak Ridge," Kutsch says. The head of the delegation was Jiang, the man in the article. Not only was Jiang one of the most prominent scientists in China but his ties to the Chinese government couldn't be any tighter; his father, Jiang Zemin (in China, last names come first), was the former president of the People's Republic of China. To Kennedy, the visit to Oak Ridge seemed more like an act of espionage than a scientific exchange of ideas, but Gehin seemed unconcerned and unforthcoming. "It was like an inside secret," said Kennedy. When pressed for details, Gehin downplayed the visit. "'It's no big deal. Don't panic. It's fine,' he told us."

Having grown up in a violent home, as the third of eight punching bags for a volatile Irish American father, Kennedy was quick to assess a threat and execute a survival maneuver. As with his early home life, there was really no bright side to look on. Still, he gave it his best shot. Having China in this race could be bad news, yes. But if Oak Ridge would get moving and be competitive, like in the old Cold War days, the United States could restart its own molten salt nuclear program and revolutionize safe nuclear energy. The U.S. would own the intellectual property and patents, and perhaps not spend the coming century dependent on buying Chinese nuclear reactors. Regardless of how Kennedy spun it in his head, knowing China had been right here in this national lab, ground zero of thorium molten salt technology, was a hard pill to swallow.

The next morning, the Chinese elephant that Jess Gehin introduced into the room followed Kennedy and Kutsch into the car and onto Route 62 toward the national laboratory. Kennedy drove the rental car past half-empty strip malls and abandoned buildings. Back in the mid-i940s, the town of Oak Ridge had a population of 75,000 and the feel of a bustling city. But as the need for massive human resources to work in the lab plummeted in the years after World War II, the town began a unidirectional spiral downward. By the turn of the century, Oak Ridge was a place of abandoned malls and few gastronomic resources beyond fast food chains. Soon after arriving, spouses and partners of young researchers landing gigs at the laboratory began to count the days before they could leave. Grown kids of emeritus scientists rarely returned for a visit. Grandchildren living elsewhere in the country were seldom seen on the local playgrounds.

Part of the reason for the decay of modern Oak Ridge was exactly what brought the Army Corp of Engineers here in 1942. Just after being named Manhattan Project commander, Lieutenant General Leslie Groves chose the remote hills of this unpopulated region for a secret lab that would turn uranium from its natural state to fuel-grade, which could then be converted to plutonium for nuclear weapons. The scientists were cracking the most basic form of matter for first time in human history, and they knew they could be in for some colossal accidents. For Groves, the four high mountain ridges in the seventeen-mile-long valley offered a natural barrier to explosions. Another bonus was that the Tennessee Valley Authority just finished the nearby Norris dam project, and electricity came cheap.

At the lab's security entrance, an armed guard wearing a bulletproof vest checked Kennedy and Kutsch off a list of prescreened visitors. When they were let through the gate, part of Kennedy was still wondering why they would even let someone with his complete lack of scientific credentials into the national laboratory. As they passed the guard booth for the two-mile ride to the main campus, "All I'm thinking is, 'Some idiot just let me into Oak Ridge,'" he says.

Jess Gehin met them at the visitors' center with several other researchers. Their first stop was to tour the lab and the original Oak Ridge nuclear reactor, or "pile," so named because of the way the graphite blocks were piled on top of each other. The X-10 Graphite Reactor was the world's second man-made nuclear reactor, after Enrico Fermi's Chicago Pile 1. In only ten months, the reactor was designed and built and converting uranium-238 into intensely radioactive plutonium-239 for the first nuclear bombs. Kennedy and Kutsch were now able to get up close and personal with the X-10, which was now a museum display, with dusty mannequins inserting faux uranium fuel rods into a wall of graphite blocks.

The next stop on their tour was what they had really come to see: the Molten Salt Reactor Experiment. The underground reactor had been mothballed since 1970, but it was still a thing of beauty to Kutsch and Kennedy, who were just toddlers when it had "gone critical" — that is, begun its self-sustaining generation of power. They were positive they could convince Oak Ridge management to bring this very reactor concept back to life. With China hot on molten salt technology, how could Oak Ridge not be as well?

A bright spot that day for Kennedy and Kutsch was that one of the original inventors of the Molten Salt Reactor had come to join the tour and hear Kennedy's talk. Dick Engel, like Kennedy, wore a bright green badge that prominently pronounced him a "visitor." Security was so tight at the lab that, unless escorted and preapproved, Engel couldn't even enter the office where he spent the majority of his career, and where he oversaw the Molten Salt Reactor Experiment as it went critical in 1964 — a day many at Oak Ridge believed would change the course of America's energy future. With Engel was the sparkly-eyed and always optimistic Uri Gat, a German-born nuclear engineer who previously managed the Oak Ridge thorium program and was one of Engel's biggest supporters. Both men had retired two decades earlier, and were happy to have an invitation to come back to Oak Ridge. It didn't even matter that today's talk would be coming from some Midwestern yahoo with cowboy boots and zero scientific credentials.

So what exactly was Jim Kennedy's business there?

Kennedy arrived uneasily in the complex world of next-generation nuclear energy in 2009, when he found himself with what he called his "thorium problem." He was originally a little put off by Chicago engineer John Kutsch and his cast of quirky characters, for whom thorium had become a panacea for nuclear energy's dangerous aspects: proliferation and reactor explosions. While these guys lusted after thorium like conquistadors after El Dorado, Kennedy was just looking for a way to get rid of it.

Lecturing to a room of about seventy scientists and engineers, Kennedy explained how his "thorium problem" had come about. An iron mine he bought in 2001 had a significant ore deposit of a mineral called monazite. Monazite, it turned out, was full of rare earth elements that are essential to all modern technology — including American defense technology. It also contained radioactive thorium. Somehow, the United States and all the world's advanced nations had capitulated the supply and manufacture of rare earth elements to China, leaving no fully non-Chinese source for rare earth magnets, lasers, and many other high-tech products.

The rookie mine owner was now sitting on over $2 billion worth of some of the most important metals in the age of technology. Unfortunately for Kennedy, the U.S. Nuclear Regulatory Commission, responding to proliferation fears in the 1940s, classified thorium and uranium as "source materials"; that is, radioactive materials that could be made into nuclear fuel. Source materials are among the most strictly controlled substances in the world. So when the regulations began to be enforced in the 1980s, mining operations had to shelve high-value monazite and other rare earth resources to avoid costly regulatory issues. The thorium in his mine essentially made Kennedy's heavy rare earths a nonstarter economically; hence, his "thorium problem."

Kennedy and Kutsch's strategy to solve the problem — which they'd been promoting to anyone who would listen — was to get the U.S. government and industry interested in thorium nuclear energy again. With Gat and Engel in the audience, Kennedy felt like he was holding court with scientific warriors from a better, bolder America. These were the chosen few who rode the country's wave of innovation, when men dared to unlock the inner workings of an atom and launch men to the moon. In the following decades, they also witnessed a painful and calculated war against funding for science and exploration — the very things that had made the United States the economic and military superpower that it was.

Kennedy's presentation was not typical of most scientific talks at Oak Ridge. He waved his hands. He punctuated his delivery with colloquialisms. He called out bad government policies that he said buried good research deep in the Oak Ridge catacombs and overregulated a harmless rock because it contained traces of thorium. His audience wasn't jumping up and down, but his enthusiasm was still infectious. When Kennedy brought up the idea of restarting Oak Ridge's thorium molten salt reactor project, something he now believed in as feverishly as John Kutsch and the other thorium aficionados, "these two old scientists — Gat and Engel — were smiling from ear to ear. They looked like kids," he says.

After the presentation, Gehin invited Kennedy and his colleagues to a small conference room. It was a meeting that Kennedy had been lying awake at night preparing for. Here's how the scenario played out in his head: with funding from the Department of Energy, which was responsible for the budget of all the national labs, Oak Ridge would lead the commercial development of safe nuclear energy using thorium. Thorium would then be taken off the "source material" restricted list, so it could be mined and stored for future energy use. Kennedy's rare earth elements could be mined at a profit, and the United States would no longer be completely dependent on China for them. Kennedy had fantasized about it a thousand times over. His wife and best friends in St. Louis got so sick of hearing about it that they would run out of the room when he started in.

Also in the conference room was a young NASA engineer named Kirk Sorensen. Sorensen had become thorium's biggest advocate in the United States, and he was as fired up as Kennedy. He pounded the table, imploring Oak Ridge to get their nuclear research program back on track. "The conversation was, 'We're going to get this done. It's going to happen,'" says Kennedy. Almost exploding with anticipation, Kennedy held back for a moment until Gehin leisurely entered the conversation. In his Southern drawl, "Jess looks at me and says, 'So you really think you can build a commercial thorium reactor?'" The blood drained from Kennedy's face. He looked across at Uri Gat and Dick Engel. "You could see the joy drop from the faces of these two, because they were thinking that Oak Ridge was actually going to get behind this and make this happen."

Kennedy took a moment to answer. He did not believe that Gehin was being demeaning or sarcastic. His impression was that Gehin was truly asking them to build the next-generation nuclear reactor. However much Kennedy tried to scrub off his upbringing and make nice in a politically correct world, he couldn't.

"I lost it," he says. "I said, 'What the fuck did you just ask me?' And he asked me again, 'You guys really think you can develop this commercially?' And I just flipped out on him. 'What are you talking about? You're a national lab. This is what governments do! We're just a bunch of advocates who want to see the national labs get this done!' And he just looked me right in the eye, and he looked at all his teammates, and he goes, 'It will never happen here. Not in a million years. If you don't do it, it's never going to happen.'"

It was hard to know how much Kennedy's highly unscientific outburst rattled Gehin. Gehin was the guy running the thorium program — but the thorium program didn't exist anymore for Oak Ridge. No one should have been angrier about it than Gehin, Kennedy thought. But Gehin seemed defeated, resigned to working out his days as the leader of a brilliant team that would never get the funding it needed to create and innovate.

(Continues...)

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Excerpted from Sellout by Victoria Bruce. Copyright © 2017 Victoria Bruce. Excerpted by permission of Bloomsbury Publishing Plc.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Contents

Prologue, ix,
1 Oak Ridge, Tennessee, 1,
2 Inconvenient Ideas, 10,
3 The Misfit, 23,
4 The Biggest Puzzle, 36,
5 The Recruit, 53,
6 A Better Mousetrap, 66,
7 Homecoming, 82,
8 The Student, 89,
9 Indigenous Innovation, 99,
10 Kennedy Capital, 112,
11 The Acquisition, 120,
12 The Cowboy, 128,
13 The Engineer, 141,
14 Pay Dirt, 149,
15 The Vision, 155,
16 War, 161,
17 A Meeting of Minds, 168,
18 Rough Waters, 177,
19 China Inc., 186,
20 Smoke and Mirrors, 192,
21 The First to Eat a Crab, 205,
22 Maneuvers, 216,
23 Zero Sum Game, 227,
Epilogue: On the Shoulders of Giants, 239,
Acknowledgments, 253,
Notes, 259,
Bibliography, 265,
Index, 281,

Editorial Reviews

03/13/2017
Time to reclaim America’s technological base—and military capabilities—from the Chinese, argues this anguished saga of industrial decline. Journalist Bruce (Hostage Nation) profiles brash entrepreneur Jim Kennedy as he lobbies Washington to bolster U.S. production of “rare earth” metals that are critical to advanced weaponry; China has cornered the global market on them, leaving America’s high-tech military vulnerable to embargo. Her admiring profile recounts Kennedy’s battles with an abusive father, dyslexia, and congressional staffers and Pentagon bureaucrats who shrug off the threat, but skates unsatisfyingly past his murkier business wranglings. (Kennedy owns rare earth deposits in Missouri and has a financial stake in government preferments for domestic sources.) Still, the book adroitly examines crucial aspects of economic and national security; it’s an homage to America’s lost military-industrial complex, exploring abandoned mines and factories that once epitomized manufacturing prowess and revisiting breakthroughs at national laboratories from a post-war era of vigorous federal support for advanced technology. The author gives an interesting account of the “molten salt reactor,” a revolutionary nuclear reactor pioneered at U.S. labs but then mothballed; it’s now being developed by the Chinese government. Bruce makes an absorbing and timely plea for government leadership in reviving America’s technological supremacy. (June)

Publishers Weekly

"'Sellout' mines an important topic: the national-security risks arising from our loss of industrial expertise and manufacturing capacity." - Wall Street Journal

"a compelling narrative. . . . Readers will share Kennedy's considerable frustration with the shortsightedness of profit-driven stakeholders and the hubris of politicians." - Library Journal

"Bruce provides a concise, inspiring story of personal transformation and dedication to American technology production. An instructive tale of one man's 'burning mission to bring back manufacturing and innovation to America.'" - Kirkus Reviews

"A master of her craft, Bruce (Hostage Nation, 2010) combines intellect and a no-nonsense tone to tell a complicated scientific and global story through the lens of one determined man . . . Bruce's thorough work explains the historical context for Kennedy's mine, the evolution of nuclear energy at the Oak Ridge laboratories, and the globalization process, all balanced with Kennedy's biography. This book will, no doubt, spur policy change." - Booklist

"Heart-stopping . . . A gripping disaster story [and] a scathing account of human folly, arrogance, and ambition." - The New York Times Book Review on NO APPARENT DANGER

"Harrowing . . . Offers rich insight into the untidy workings of volcanologists and science in general." - Discover on NO APPARENT DANGER

"Scientist and journalist Bruce traces the fascinating recent history of Colombian volcanoes and the scientific community's politics, wherein intellectual property generates fame and near-fortune, in an insightful, spellbinding account." - Publishers Weekly on NO APPARENT DANGER

From the Publisher

03/15/2017
Journalist Bruce (No Apparent Danger) tells the story of Jim Kennedy, a retired securities portfolio manager who purchased a mining operation only to learn about China's rare earth monopoly. Kennedy tried to convince the U.S. government to return to domestic supply chains, especially for rare earth elements, which are critical to many consumer electronics and 70 different military weapons systems. He partnered with engineer John Kutsch to lobby for a much safer alternative to nuclear power: molten salt reactor technology, which is based on thorium, a byproduct of rare earth mining. Together, they presented a win-win solution for technological and energy independence to various government staffers and the U.S. Department of Defense. Tangential narratives about the various players with whom Kennedy interacted during his quest provide helpful backstory, but their breadth and depth often take the focus unnecessarily far from him. Though the subject matter may seem daunting, Bruce manages to extract a compelling narrative from a formidable amalgam of land histories, geological surveys, patent applications, and foreign trade policies. Readers will share Kennedy's considerable frustration with the shortsightedness of profit-driven stakeholders and the hubris of politicians. VERDICT For those interested in solving world economic and energy problems.—Ricardo Laskaris, York Univ. Lib., Toronto

Library Journal

2017-04-30
An award-winning science journalist charges that the United States is ceding first place to the Chinese in the development of technologies invented by American scientists.As Bruce (No Apparent Danger: The True Story of Volcanic Disaster at Galeras and Nevado del Ruiz, 2001, etc.) writes, "the tsunami of science and tech companies rolling into China," is well-known, but free market ideology has blinded us to the political consequences of allowing the Chinese to achieve international hegemony in global markets. She dates her personal interest in the story from her college years as an undergraduate majoring in geology. During a field trip to the Mojave Desert in 1994, she received a rock containing a rare-earth metal from a geologist who contended that the Chinese were putting American mining companies out of business. They were appropriating our technology and selling it at bargain prices in order to capture the world market. Bruce thought about this incident again in 2011 when she met Jim Kennedy, who had invested in an iron mine that turned out to contain radioactive thorium mixed with rare-earth elements. Consequently, his mining operation was subject to strict nuclear regulatory measures, which reduced the profitability of his operation; American investors, in particular, were wary of "the nightmarish costs and complications around the disposal of nuclear waste." Ultimately, Kennedy could not compete with Chinese investors, who have become the leading global suppliers of the rare-earth elements needed to produce semiconductors. They are also at the forefront of the development of next-generation nuclear technology. Not only does the Chinese government encourage private investment, but it offers financial incentives to investors in high-end nuclear technology. In contrast, Kennedy has spent hundreds of thousands of dollars of his own money as an investor and political activist. Bruce provides a concise, inspiring story of personal transformation and dedication to American technology production. An instructive tale of one man's "burning mission to bring back manufacturing and innovation to America."

Kirkus Reviews