What do President Trump’s tariffs mean for energy? | The view from Washington and Canada

Summary

Energy Gang Podcast Summary

Episode: What do President Trump’s Tariffs Mean for Energy? | The View from Washington and Canada
Date: February 18, 2025
Host: Ed Crooks (Vice-Chairman, Wood Mackenzie)
Guests:

• Samantha Gross (Director of Energy Security and Climate Initiative, Brookings Institution)
• Joseph Majkut (Director of Energy Security and Climate Change Program, CSIS)
• Andrew Leach (Energy Economist, University of Alberta)

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Episode Overview

This episode dives into the implications of President Trump’s surge of new tariffs—actual, threatened, and delayed—and what they mean for the energy sector in the US and Canada. The panel explores how these tariffs differ from those of the Biden administration, the evolving relationship between the US and Canada, the risks to supply chains and energy security, and the broader consequences for the global energy transition and climate policy.

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Key Discussion Points

1. The Rationale and Style of Trump’s Tariffs

• Tariff Proliferation: President Trump’s second administration has moved aggressively with tariffs targeting Colombia (in response to deportation flight refusals), Mexico and Canada (over border security), China (including a 10% tariff and tit-for-tat retaliation), and global steel and aluminum.
• Underlying Motives: Trump frames tariffs as a tool for "hegemony and dominance" (Samantha Gross, 03:58), as well as addressing trade deficits—even though most economists dismiss country-level trade deficits as significant problems.
• Bipartisan Shift: Both Trump and Biden have used tariffs as tools, but Biden’s were more targeted, aiming to foster domestic industries like solar panels and EVs, while Trump’s are broader—viewed as a method of revenue and as leverage for various policy concessions (Joseph Majkut, 04:56, 09:01).

Quote (Samantha Gross, 03:58):
"He sees this as a way to, I think, get back at countries that he thinks have done us dirty. He's concerned about trade deficits for whatever reason... but that's not how he sees it."

2. Congressional Power and Political Shifts

• Congressional vs. Presidential Authority: Although Congress technically holds tariff powers, it has effectively ceded much of this authority to the President, with little sign of pushback despite the drastic expansion under both Biden and Trump.
• Tariffs as Industrial Policy: Biden’s tariffs were about targeted industrial development, whereas Trump's are seen as a "much broader tool" and potential "revenue source" (Samantha Gross, 09:01).

3. Canadian Perspective & Energy Dependencies

• Canadian Shockwaves: In Canada, Trump's unpredictable tariffs (especially on aluminum, steel, and possibly energy) have created deep economic uncertainty and a sense of vulnerability (Andrew Leach, 10:16).
• Energy Integration: The US and Canadian energy sectors are highly interdependent, especially in refined products and pipeline flows (e.g., Line 5). Tariffs threaten both sides, potentially disrupting entire regional supply chains in the US Midwest and Canadian oil sands (13:09).

Quote (Andrew Leach, 13:09):
"There is this feeling of maybe less partnership... Now you amplify that with. With the president coming out and saying, you know, explicitly, we don't need their oil, we don't need their resources. And that's not true..."

4. Supply Chain Complexity and Risks

• Mutual Vulnerability: The supply chains are so tightly integrated that "supply chains [could] shut down within days" if tariffs are imposed, jeopardizing both US refineries and Canadian producers (Andrew Leach, 23:38).
• Economic Backfire: Inland US refineries and Midwest regions would feel higher costs, which is at odds with the administration’s stated aim of cheap, abundant energy (Ed Crooks, 20:14).
• Second-Order Effects: Broad tariffs risk creating unanticipated bottlenecks, raising energy infrastructure costs and potentially stalling grid modernization and AI/data center expansions.

Quote (Samantha Gross, 29:29):
"We have some goals from the Trump administration that are at cross purposes... there are goals that are difficult to achieve at the same time."

5. Tariffs vs. Energy Transition & Innovation

• Tariffs as Political Economy Tool: Panelists acknowledge some political rationale for tariffs (building domestic support for the energy transition), but warn that they may breed complacency and undermine true global competitiveness (Samantha Gross, 32:32).
• Global Innovation Race: The US is lagging behind China in clean tech manufacturing (e.g. EVs, batteries, solar), but retains innovation advantages in areas like carbon capture, nuclear, and geothermal (Samantha Gross, 34:13 and 38:18).
• The Resource vs. Manufacturing Difference: Canada’s resource advantage is fixed, while manufacturing can be anywhere; this is a crucial shift for resource-dependent economies like Canada (Andrew Leach, 35:06).

Quote (Samantha Gross, 32:32):
"It sort of ring fences the US Market and says you can have that. And I worry about US industries... sort of getting fat, dumb and happy and tariff protected."

6. Tariffs & Global Cooperation on Climate

• Risk of Balkanization: Economic nationalism and trade barriers threaten the global fight against climate change by slowing technology transfer, reducing efficiency, and eroding political trust. Joint international action may falter (Samantha Gross, 46:04).
• Alternative Approaches: Joseph Majkut argues that the UN’s cooperative model (COPs) has underperformed and that "coercive" measures—like climate clubs and carbon-based border adjustments—may be more practically effective if major markets commit (48:06).
• Canada’s Hedging: Canada is rapidly revisiting the viability of new export markets, pipelines, and regulatory reforms to avoid over-reliance on the US (Andrew Leach, 41:16).

Quote (Samantha Gross, 46:04):
"This situation where countries are becoming less economically cooperative is rotten for the climate. It almost certainly raises prices and that's the kind of thing that slows the transition."

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Notable Quotes & Memorable Moments

• On Energy Security & Misunderstanding:

  "Even though we're the world's largest oil producer today, the Canadian oil is a better fit for our refineries than what we're producing so much of here. It's not hard to understand, but it's poorly understood in the political discussions here."
  — Samantha Gross, 18:58

• On Complex Supply Chains:

  "People might know who their own suppliers are, but they don't know who the suppliers of the suppliers are... People are trying to get much better informed about all that stuff..."
  — Ed Crooks, 40:37

• On the Energy Innovation Race:

  "Maybe we have lost the race for the current technology of solar panels and the current technology of batteries. But we have some of the world's finest universities, national labs... The US is a great place to innovate. We just have to want to do it and not sort of cede the future to China."
  — Samantha Gross, 34:13

• On Political Feedback:

  "We don't know exactly how some of these tariffs will land, so we don't know who will be paying them. But it's very likely that they will have consumer impact. And the question is will they have enough consumer impact to make a difference in sentiment here in the United States and if they do, where Will the blame fall?"
  — Samantha Gross, 44:03

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Timestamps for Key Segments

• Tariff Overview & Motives: 00:56 – 04:55
• Comparing Biden & Trump Tariffs: 06:50 – 10:07
• Canada’s View & Energy Integration: 10:07 – 14:54
• Supply Chain/Mutual Dependency: 16:58 – 24:57
• Regional Economic Impact: 20:14 – 21:05
• Second-Order Supply Chain Risks: 27:32 – 31:36
• Innovation, Manufacturing & Resources: 34:13 – 38:52
• Pipeline and Export Policy Shifts: 41:16 – 44:03
• Tariffs, Globalization & Climate Policy Implications: 46:04 – 52:22

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Conclusions & Forward-Looking Perspectives

• Uncertainty Dominates: Rapidly unfolding US tariff policy is creating major uncertainties for energy markets, especially regarding Canada-US integration.
• Tariffs are Double-Edged Swords: While politically attractive, tariffs risk raising costs, stalling domestic goals, and undermining both supply chains and international climate cooperation.
• Canada’s Strategic Dilemma: Canada is being forced to accelerate conversations on market diversification and energy infrastructure in response to volatile US policy.
• Climate Cooperation at Risk: Experts warn that a balkanized economic order slows transition efforts, though some argue for a pragmatic "climate club"/carbon border approach over global consensus-building.
• Innovation is Still Key: The US still holds significant innovation potential, but risks ceding dominance if protectionism stifles competitiveness and openness to new technologies.

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Closing Thoughts

The episode closes on a reflective note: extreme policy shifts are changing the rules for energy, trade, and climate. As one panelist put it, “the old world has died, but the new is struggling to be born.” The big question: can North American energy and climate leaders find new ways to cooperate and compete to accelerate the energy transition under these turbulent circumstances?

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For more information on future episodes or to submit questions, contact [e-mail].

Transcript

[A]

The energy industry is changing faster than ever. So to make sure we're helping you stay on top of every development, we'll be adding some extra shows to the schedule over the coming weeks. First up, we'll be at New York Climate Week, speaking with leaders in clean energy, finance and policy, and partnering with our good friends at NYU for a very special panel discussion with some big names from companies including Nvidia and Amazon. That episode will be out on Friday, September 27th, so mark your diaries now and we'll also have lots of extra shows throughout the week of September 22, so make sure you're following the show wherever you get your podcasts.

[B]

I feel like this administration are in some ways ceding the energy future to China, and I think that's just bananas.

[C]

All of a sudden, you're moving towards a world where people can get cheap, reliable electricity anywhere in the world, and that changes our advantage in a fundamental way.

[A]

Hello and welcome the Energy Gang, a discussion show from Wood Mackenzie about the fast changing world of energy. I'm Ed Crookes. President Donald Trump famously said a few years back, I'm a tariff man. And in the first few weeks of his second administration, he's been giving us a clear explanation of what that means in practice. We've had a lot of new tariffs, tariffs that have been introduced, tariffs that have been threatened, tariffs that have been threatened and then dropped, tariffs that have been threatened, but then delayed until next month and so on. And all of this has some big implications for energy, and that's why it's going to be the focus of what we're talking about on the show today. And that's why I'm particularly pleased to welcome three of our favourite policy experts onto the Energy Gang. From Washington, we're joined by Samantha Gross, who's the director of the Energy Security and Climate Initiative at the Brookings Institution. Hi, Samantha, how are you?

[B]

I'm well.

[C]

How are you, Ed?

[A]

Very well, thanks. Very well. All the better for seeing you here today. Very much looking forward to this conversation all. Also from Washington, we have Joseph Mykut, who's the director of the Energy Security and Climate Change Program at the center for Strategic and International Studies. Hi, Joseph, how are you?

[D]

Very well, Ed. Good to see you all.

[A]

And also for a view from the other side of the increasingly controversial border, we have Andrew Leach, who's an energy economist who teaches at the University of Alberta. Hi, Andrew, welcome back. How are you?

[C]

Thanks for having me. I'm well, I'm not sure if I impose a tariff on you by Simply appearing. But at least I'm here.

[A]

We're going to be very generous and we're not going to charge you any extra terrorists for being on here. I think, you know, what you get is 25% of the usual fee, I. E. Nothing. So, as I say, this is a very big topic. There are lots of different places we could start in terms of the facts because we've got to bear in mind it's a very fast moving situation. This podcast is being recorded a few days before it goes out. A lot may have happened by the time you're hearing this, so I don't want to get too caught up in the weeds of exactly what tariffs have been announced and what have happened. But some of the key points. We had tariffs announced on Colombia because Colombia was refusing to accept deportation flights or military planes from the US that sort of arose as an issue went away again. Then very quickly then we had tariffs threatened on Mexico and on Canada essentially as leverage to try and get them to do more on border security. Those tariffs got postponed and they're meant to take effect now next month. If the administration doesn't think it's had enough action from Canada and Mexico on border security by then, then we've seen new tariffs of 10% on China and those have taken effect. We've seen retaliatory tariffs by China on its imports from the US and just recently we've seen announcements of new tariffs on steel and aluminium imported into the US Wherever in the world they come from. So my big question, I think, to start off with is why is President Trump pushing ahead with all these different tariffs so aggressively as he has been doing?

[B]

Well, yeah, he did say that tariff was his favorite word in the English language, which is quite something. I mean, I really think President Trump is focused on hegemony and dominance and he sees this as a way to, I think, get back at countries that he thinks have done us dirty. He's concerned about trade deficits for whatever reason. I mean, a trade deficit with a particular country is not a big economic problem, but that's not how he sees it. He thinks if we have a trade deficit with a country, that there's somehow screwing us over. And so he's trying to change that through tariffing the their products. And so I think it's a combination of wanting to assert muscular dominance and show countries what we can do to them and this economic idea that a trade deficit with a country is somehow a bad thing, whereas it's actually they have a product that we and our consumers want to buy.

[A]

Joseph, what do you think?

[D]

I think Samantha's right. Like there, there is an obvious explanation here. The President of the United States thinks tariffs have positive effects. There's a wide variety of reasons why he thinks that relative about issues of trade balance, issues of political power. And so to me, what we're seeing in this first period of the administration is attempts to get concessions from other countries on all sorts of priorities that the President has. And I would imagine, though I don't claim to know the inner workings of the administration, I would imagine there's the thinking in there that, you know, eventually we're going to be using tariffs in the United States for revenue, for as part of a broader economic strategy. And so why not get stuff out of it while we can? And then when we fail to get the concessions we want, tariffs are imposed and we move forward with life as we had planned to do. I don't know that that's the thinking, but empirically that seems to be where things are going. Energy Secretary Chris Wright was on TV over the weekend and was asked specifically about this question. He said something which very much informed how I'm thinking about what the administration is trying to do with these tariffs. He said the President in the first term came in and threatened tariffs, raised tariffs. And over the entirety of that administration, we still had low inflation. And so I don't think that they necessarily believe the sort of scaremongering stories that we hear about the costs that are going to be imposed by tariffs. And the most important thing that we can watch for as we settle into this new economic strategy for the United States is what actually happens to prices, what happens to trade flows? And what does Congress, which has ultimate authority over the trade policy of the United States, decide to do?

[A]

Some of this feels a little bit familiar, though, doesn't it, in terms of what we saw under the Biden administration. And President Biden also had this idea about wanting to build up U.S. manufacturing. And you think particularly about energy. He wanted to build a US Solar manufacturing industry actually with certain amount of success. Right. We have seen quite a lot of new factories being built to build solar modules in the US Same with batteries again. And in order to make that happen, he used tariffs, increased tariffs on imported solar modules, increased tariffs on batteries, very high tariffs on imported EVs. I think then the Biden administration introduced 100% tariff on imported EVs from China. This is quite a bipartisan thing, really, isn't it? And as I say, when you just talk about it as this is something that President Trump likes to do. It's something all politicians like to do now in America, isn't it?

[D]

I think that's a great question. And in particular, one of the things we want to try to understand is President Trump's approach to tariffs, to borrow a phrase, weather or climate. Right. Is, does he just have a particular personal attachment? Obviously he does. But is there an underlying shift in American politics or in the global political scene? Maybe America is just early to the.

[A]

Party control of tariffs constitutionally as a power of Congress. In practice, though, Congress has delegated a lot of that authority to the president. And in fact, American presidents have all kinds of powers to impose tariffs in cases of national emergency and when US Industries are being threatened and so on. And those powers were used by President Biden as they have been used by President Trump. Do you actually think there might come a point when Congress would sort of step in and say, hey, this whole thing has gone too far and actually we've given too much of our authorization away and we want to rein the president back in, or is it the case that I say, given this is just sort of the consensus now that tariffs are kind of a good thing and it's a good idea to build up US Industry by using tariff barriers. Actually, you're not fundamentally going to see a lot of opposition to what the president is doing.

[B]

When you look at the Biden administration, they use tariffs as a tool also, but their tariffs were much more targeted and were focused on specific products where the administration wanted to develop an industry here in the United States and where it felt like China was subsidizing or maybe even over subsidizing different products that the United States wanted to keep here. So you mentioned tariffs on solar panels on Chinese electric vehicles. And those are areas where I think the US Wants to develop an industry, or in the case of the auto industry, doesn't want to lose the industry it has to Chinese electric vehicles. And so the Biden administration had very specific policy goals for its tariffs, and they were focused on specific products, whereas I feel like the Trump administration is using them as a much broader tool, thinking of them as a revenue source, which I don't think the Biden administration ever did, and putting them in place over a much more wider range of products. And so that's a really important difference between the Biden strategy and the Trump strategy.

[A]

Right, got it. So, Andrew, I want to bring you in here and give the perspective from Canada. How has Canada viewed all this activity in the U.S. well, I think in.

[C]

Canada's case, there's a number of things going on. The tariffs obviously created an economic shockwave. The level of uncertainty. They were on again, they were off again. Now they're kind of half on because we have aluminum and steel tariffs, which affects us dramatically. But then there's Also this overriding 51st state sort of Canada can't exist as a viable nation without the U.S. and that's, I think, really shaken people. In his Fox interview in advance of the Super Bowl, Trump, President Trump said, you know, the US Might not defend Canada in the case of an attack, which is, you know, pulling our, the NATO commitments into question and all of these sorts of things which, you know, we haven't really heard before. And so as, as Canadians, I think, or we haven't heard for a long time, if ever. And so I think Canadians are, are trying to process all of it. And then, you know, every Sunday night or Monday morning we get a new dose of, of whatever the new thing is. And so it's hard to say where, where we're at right now. And you said, well, it, it might be the border, but then President Trump will give a number of interviews where he doesn't mention fentanylat all at the border and you know, it's the trade deficit. Okay. But then he gives an interview about fennel or about illegal migrants or about something else. And as Canadians, you feel like you're playing a game of whack a mole where, you know, there's a million problems we're trying to solve and we can't solve them. And I think another piece that does play in here, and you mentioned the Biden administration. I think if you, if you think of how our energy relationship has evolved with the U.S. you know, go back to the early 2000s when the U.S. is very clearly thinking about Canadian resources as Domestic resources and Energy Policy act, trying to sort of bring more capacity to refine Canadian resources, more integration. And really since the Keystone XL fights, etcetera, We've seen that disconnect a little bit. We've seen the US obviously produce a lot more oil and gas, become more energy independent. And so I think we are still trying to feel out that, that new relationship. And this just throws a lot of wrench into that.

[A]

Yeah, that's really interesting. And again, that's a point I want to dig into soon. The Keystone XL saga. For anyone who's fortunate enough to have missed that this was a pipeline which was going to, or pipeline expansion really, that was going to carry more Canadian oil from the sands of Alberta for refining in The US that became a huge issue in the climate movement in the US in particular, and there was a tremendous effort mounted to stop it and to turn it into a big political issue, which in the end was successful by essentially creating delays first in the Obama administration and then finally getting it killed off in the Biden administration. And you're saying that since that campaign, how has the world changed, Andrew, in terms of what's different about energy relations between Canada and the U.S. that that.

[C]

Large refining sector in the Gulf coast, for us, that was very much a natural fit for our resources, and we could keep producing more and keep expanding production or shipments to the US and. And it was a natural partnership. And also a lot of our domestic oil flows through the US So our main pipeline system from west to east flows not over top of the Great Lakes through Canada, but it flows through Michigan and into Sarnia and N OKE and up to Montreal through the US and so we've had fights over Keystone xl. As you said, it was on and then it was off, and then it was on and then it was off. And I don't. There's still people talking about it today, so you. You never know. It may come back. And then there was saga with the Line 5 pipeline through Michigan and this question of whether that pipeline would be allowed to continue in operation, which puts our domestic energy security at risk. And so I think there is this feeling of maybe less partnership over time, and the US May be needing us a little bit less. And now you amplify that with. With the president coming out and saying, you know, explicitly, we don't need their oil, we don't need their resources. And that's not true, particularly regionally, but it's still something that's really sparked a very different conversation. And to be frank, we don't know what the stakes might be. So is Line five in play for different reasons? For President Trump, that's a pretty natural flex. Is, you know, is that the fact that we move, we transship a lot of our oil, is that going to be subject to tariffs in some future Trump world? And so all of this is on the table, and it's really changed the conversation domestically in Canada. Ian, it's amazing that it's only been three weeks or not even quite three weeks, but it's changed the conversation dramatically.

[A]

Yeah. And the impression I get is that really right across the political spectrum, there's been pushback against what President Trump's been doing. And it feels like I'm hearing voices from both the right and the left. And the centre of Canadian politics all kind of saying this is outrageous, this is illegitimate, he shouldn't be doing this to us. And kind of looking for various responses to that. It's not really kind of a partisan thing. It's kind of bringing Canada together in a way that it perhaps hasn't been united for quite a long time.

[C]

Yeah, I think that's true to some degree. I think you also have, everybody believes that the solution that they think will work or the thing they've been advocating for for 10 plus years is now going to get built. And so they're happy about it. So I think as we get into what the real reactions are, what the actual policies happen to be. So if we do see tariffs on, on March 1st, I think you'll see some of that start to come unraveled as with the pressure that that would impose on our, on our economy. So right now it's, you're right, we're all together, but I do think there's a, there's a risk down the road or almost all fighting together in our different ways, but there's a risk down the road where when you do see, for example, the supply chains break down in Ontario, manufacturing in a really big hurry, that and same being true in Michigan, for example. But when you see those break down in a real hurry, then there's going to be questions of okay, how do we react? What's the social safety net look like? And that's where I think the left and right coalition could, could start to fray a little bit.

[D]

You know, Andrew, I'm, I'm so fascinated to hear what you think the conversation is in Canada on political pushback. The US Is an enormous economy. It's a very asymmetric relationship in a trade war. I can't imagine that the imposition of these tariffs is just going to be taken sitting down. Having been in, spent some of my wayward youth in British Columbia and various youth sporting events, I know Canadians got backbone. So what do you think? I mean, what, what does that conversation actually look like?

[C]

Yeah, it's. It. So it's an interesting conversation right now because I, I think that Samantha's point earlier, we're starting to think through what are the areas where we could react without sort of deciding to shoot ourselves in the foot while someone else is shooting us in the, in the leg or something. But the, you know, the, the, the overriding challenge that we have is we're kind of heading towards a federal election. Our prime minister has announced his resignation. The leading, having a leadership race as we speak. And so we will have a new prime minister at some point in the next six weeks. And we have provincial premiers that have almost taken center stage, but one of them is also in the midst of an election. And so you have this very interesting political time where there's, you know, multiple strong voices pushing different types of responses. But we haven't had a coordinated. We saw a little bit from the prime minister announcing a set of countermeasures which had that targeted aspect. Not trying to do everything, certainly not trying to cause physical shortfalls in the US for electricity or natural gas, which I think is important, but trying to pick those pain points, Kentucky whiskey, Florida oranges, that type of thing that would, that would have a very targeted response. And we started to see some impacts. I don't know if you saw the Irving oil that ships from St. John, a lot of northeast heating oil, and sending out notices to customers saying, you know, despite the fact that you thought you were on a fixed price plan, those fixed price plans apparently don't hedge you against tariffs. And so here's your, you know, 25 years for the billing increase that's going to come across you if these tariffs go into place. So I think you do see some. Now, whether that stands up, I haven't read the fine print on Irving's contract. But you saw some of that as well from Canadian companies. And you're seeing a buy America or by Canadian push. Excuse me, you're seeing a relabeling. You're seeing companies rebrand their products very quickly around that by Canadian.

[B]

I think it's really poorly understood here in Washington why we buy Canadian oil. And give me two minutes in an elevator with somebody in the White House and I can explain this. Even though we're the world's largest oil producer today, the Canadian oil is a better fit for our refineries than what we're producing so much of here. It's not hard to understand, but it's poorly understood in the political discussions here. But somebody needs to find that two minutes in an elevator with these folks in order to explain why this is so important and why we won't just substitute American, American oil for Canadian oil.

[C]

And that you spent billions and billions of dollars of taxpayer subsidy to retrofit a lot of your refining fleet in the, in the mid 2000s to be able to, particularly in the Midwest. Right. To be able to handle that Canadian crude. It was a big energy security play for the U.S. and so you have a match that was a policy driven match between these two Sectors, the pipelines, the refineries, the resource development. A lot of big American firms doing the resource development. So it is very much a partnership. And to pull rug out is. Is not going to be smooth. You look at where the crude comes in in the, in the Midwest, and there's not a lot of imports moving up from the Gulf coast anymore as there used to be.

[B]

No, it's nutty. And I mean, I'm a Midwesterner. That's a key part of the Trump coalition.

[A]

Yeah, absolutely. So that's a huge difference between the refineries on the coast that essentially can get their oil from anywhere in the world, anywhere where it's seaborne crude. So they have options. If the cost of imports from Mexico goes up by 25%, they can get oil from the Middle east or Africa or wherever. They're fine. But as you say, those inland refineries in the Midwest, in the Rocky Mountain region don't really have a lot of an alternative. And so when the tariff comes on Canadian oil, if and when the tariff comes on Canadian oil, that's increasing their cost directly, that's going to increase the cost of fuel. That means the cost of everything goes up in the Midwest and the Rocky Mountain region, which feels like exactly the opposite of what the Trump administration has been trying to achieve. Right?

[D]

I think that's true, but I think they know that. The reason why I'm guessing There was a 10% tariff placed on Canadian energy as opposed to the 25% rate on all other products, is a recognition that this is going to cause price increases in critical inputs.

[A]

Right.

[D]

We are so unaccustomed to thinking about the effects of tariffs like this that I would imagine that there's a little bit of experimentation that's going on, that it's not just absolutely this is going to cause price increases. Of course it's going to cause price increases. But where those tariffs fall, who eventually eats them, they very much could be, well, could be eaten up by Canadian producers. And after three, six months, the US Feels no real price increase. Even in regionally sensitive areas, that is a plausible outcome. Goldman Sachs had a note just on that earlier this week. And so as we are entering this new dynamic environment, as a person who's argued for carbon pricing for a long time, I sort of sympathize with the Trump administration. They have goals. I may or may not agree. Tariffs may or may not be a good way to get about them. But if you want to make a change, you have to impose price changes, and you have to impose Costs on people. Really changing the economic orientation of the United States to its trading partners is not going to be a frictionless process.

[B]

The trick here is that I'm completely unclear on what change they want to bring about. That's the question. There's no question that changing relative price levels changes behavior and changes the business landscape. But it's not clear to me what it is that they want from this. That's my overarching question on many of the tariffs.

[D]

Yeah, I mean, I think they see them as a long term revenue source, a path to smooth out or to rebalance trading. I may or may not agree with those goals, but I think they're actually pretty clear about them.

[A]

Yeah, I feel like explaining to people, hey, don't worry about it. These tariffs on oil and gas are just like a carbon tax. That may not be a winning message for Republicans, so.

[D]

Well, and they're not. But you saw some of the same political dynamics, right. In the first Trump administration. There were tariffs placed on US Farm exports to China. As we were collecting more revenue from Chinese imports, those were rebated to farmers. Now, does voluntary exchange between two parties, trading soybeans or trading oil have the externality associated with greenhouse gas emissions? No. So it's an imperfect analogy. But the political dynamics are not necessarily that different.

[C]

You know, we talk a lot about where the US Refineries have no other option, but I think that's true on the Canadian side of the border too. Right. It's not like we're sitting, you know, we have 4 million barrels a day of. A little bit, a little over 4 million barrels a day of production in Alberta. And almost all of that has pipeline egress to or through the US So in the same way as it's difficult to operate your Flint Hills refinery without feed from the oil sands, it's pretty difficult to operate your oil sands project without having that offtake from Flint Hills and the other big US Midwestern refineries. So they're, they really are an integrated supply chain. And the analogy to I heard Linda Hassenfratz, who runs Linamar, an auto parts manufacturer in Ontario, talking about, you know, if these tariffs go in place, you're talking about supply chains shutting down within days because it just doesn't, it no longer makes sense to, to have that integration across the border. And I think people may underestimate how integrated our supply chains are, whether it's project direct to refinery. So, you know, the Imperial Oils curl mine directly to ExxonMobil refineries on the Gulf coast. And One doesn't operate very well without the other. And so I think there is that question out there of who is going to eat the cost of those tariffs. It's not obvious.

[A]

Yeah, I think it's a great point. It reminds me of that meme, you know, about I'm not locked in here with you, you're locked in here with me. It's like there's a mutual dependency and kind of if you mess with that, if you try and overturn it, there could be bad consequences for both sides. Probably will be bad consequences for both sides. And exactly how those bad consequences fall is not at all clear.

[D]

Well, it's definitely clear that as we reduce tariffs and move to more free trade globally, economies got more integrated, grew fast, and if we're going to enter a new regime, we're not really sure what it's going to look like. And I'm not sure that the administration trusts the expert class diagnosis. And I'm not sure any experts really know how these things are going to play out.

[B]

We're in a strange new world.

[A]

And so then thinking a bit more about what this means directly for the administration's energy strategy, I wanted to go back, Joseph, to what you were talking about hearing from Chris Wright and the kind of things he's been saying when he talks about wanting to increase energy production of all kinds in the US and wanting to increase oil and gas production in particular, and also a lot of talk about needing to boost power supplies for AI in particular. This issue we've talked about on this podcast quite a bit in the past about how AI is essentially a national security issue. It's a dual use technology with civil and military applications. There's an AI race that the US is in with China, as it was in a space race with the Soviet Union in the 1950s and 60s. And it can't afford to get left behind in that race. You can quibble about whether those are the right priorities, but those, it's very clear, are what the administration's priorities are. If you then do things like putting a 25% tariff on steel imports, which means that the cost of all the pipes and tubes that are used by the oil and gas industry go up by 25% if you put tariffs on countries that are some of the key suppliers of vital bits of electrical equipment, the U.S. i think, imports something like 80% of its large transformers from other countries. And including, I think Canada and Mexico are among the big suppliers of transformers to the US and we've talked at great length again in the past on this podcast about how serious the transformer shortages for the US Power industry, how long you have to wait to get one. If you make it even harder for people to get hold of that crucial equipment, all of that is just making it harder to achieve the administration's other goals, isn't it?

[C]

And I think we learned in Covid, right, how much one little bottleneck in a supply chain can disrupt everything. And I think when you talk about these types of broad based tariffs, whether it's all imports from Canada and Mexico, or whether it's all steel and aluminum, or we saw Taiwan discuss discussion or, or whatever the case may be, you're going to drop some bottlenecks into your supply chains. And be it other countries substituting away, moving volumes of trade flows, shifting to other destinations, et cetera, you're going to have some disruptions. Now you might end up as, as Joseph, you said a lot, you might end up with that adjustment over time towards what you want. But it's not going to be a smooth adjustment, right? It's not going to be something that is without these, these big bumps and bottlenecks. And the more you're talking about energy infrastructure or, you know, whether it's oil, gas, electricity, etc. We don't deal very well with those periodic disruptions. If you're short. We experienced this last year here in Alberta where a six month delay in the construction of a new natural gas plant, a major new natural gas plant, was enough to put us into a pretty big reliability crisis during the winter months because we just didn't have the supply growth to match our load growth. And, and so I think if you start to see that in a number of places as you roll out these, what are massive economic policies? Right. 25% tariffs and they might go up. That's, that's huge.

[D]

Yeah, I think that's a really great point. It echoes what Samantha was saying earlier because you know, you can't think about the second order effect. So it's like it's almost hard to identify them. Right, because you don't know what critical supply chain breaks down, how that reverberates throughout the economy. And so even if the stance is, well, if we move too far, we'll pull back in one place or another. You might do more damage along the way than is reparable by just taking a tariff rate back down.

[B]

That's exactly right. And I feel like we have some goals from the Trump administration that are at cross purposes. He's said very strongly that he wants to encourage AI development Which is really important. And we're seeing power demand in the US grow for the first time in about 15 years because of demand from data centers and AI. But this demand for low energy prices, but the tariffs on steel and aluminum and there are just a lot of things that just don't go together. There are actions that are at cross purposes or there are goals that are difficult to achieve at the same time. And yeah, back to my comment on second order effects. I don't think they're thinking about how their goals interact or how one action in one place goes against another goal in another place. Like there's just not enough integrated thinking in all of this.

[A]

So what do you think, Samantha, about the point Joseph raised about, hey, well, maybe the experts don't know anything or that there is in a sense one of the things we're hearing from the administration is sort of a rejection of conventional economics. And if you polled 1,000 sort of mainstream economists, you'd get 999 of them probably would say things similar to what we've been saying here about, about the costs and dangers of tariff escalation.

[B]

We are in a bit of a different world here. We're doing things that we haven't seen done in a very long time and that haven't happened since the world became as integrated and interdependent as it is right now. And so I think there's some truth in that, that experts are having a hard time modeling how some of these effects might play out. But I will say that some of these are pretty simple cause and effect. Like if you put a bottleneck in the supply of transformers, it will slow electric development. You don't need a fancy model to figure that out. Or if you tariff steel and aluminum and we import a lot of those products, that it will make it more expensive for a while to build. And because our power demand is growing now, we need to build. And so I think some of the long term effects are uncertain and we are in a different world. But I think some of the short term effects are more Econ 101 than high level economic modeling.

[A]

And what about the argument maybe that the sort of, even if the economics aren't perfect or there is a lot of uncertainty about the economic impact, there's a kind of political economy argument in favor of tariffs that you need to build support for whatever you're trying to do in economic policy. And certainly this was the case with the Biden administration and it was something the Biden administration talked about very explicitly, was in order to build support for the energy transition, you needed to show that the transition to low carbon technologies was creating good, well paying jobs in America. And the way to make sure that happened was through tariffs. And you're not quite hearing exactly the same rhetoric, but we're hearing something a bit like it. Right. That the rebuilding manufacturing base, creating good middle class jobs, that's what the Trump administration is trying to do. Is that something? Well, you're shaking your head, Samantha. What do you think about that argument?

[B]

Tariffs can help US Businesses in the short run protect them from imports. We've seen multiple administrations do this, particularly against China. The thing I worried about with using tariffs as the primary tool for our industrial policy is that it doesn't really encourage innovation. It doesn't make the US More competitive globally. It sort of ring fences the US Market and says you can have that. And I worry about US industries. I mean, in the worst case scenario, sort of getting fat, dumb and happy and tariff protected. So it helps to a point, but it doesn't make US global leaders, which you hear that's something that's very trumpy, that the US Is energy dominant. And if we're going to be energy dominant all the way into the future, I don't think tariffs are the right tool. They're a tool, they're not the tool.

[A]

Yeah. And that energy dominance point, does it feel like the US has kind of already lost that race? Now in terms of low carbon technologies, the US Is dominant in oil and gas, certainly by far the world's largest producer of oil and gas. But in terms of EVs, lithium ion batteries, solar modules, the whole solar supply chain just feels like China is now so far ahead, it's really hard for the US to catch up. And it's actually not just in terms of sort of sheer volume of production, but actually Chinese technology is the best. The Chinese EVs are among the best in the world. Chinese companies are pushing back the frontiers of what can be done with lithium batteries all the time. It kind of feels like the US has got a vast distance to go if it wants to achieve that same position.

[B]

I would say I'm an optimistic American. I can't help myself. Maybe we have lost the race for the current technology of solar panels and the current technology of batteries. But we have some of the world's finest universities, national labs, our capital system, all the way from venture capital to private equity. I mean, the US Is a great place to innovate. We just have to want to do it and not sort of cede the future to China. And so I feel like we're kind of almost losing our sight of ourselves here and losing who we are by saying, oh, we've lost this race. We'll just do oil and gas. We're an excellent place for these technologies to develop. We just need to decide that we want to own the future. And I feel like this administration, as much as they talk about hegemony and dominance, are in some ways ceding the energy future to China. And I think that's just bananas.

[C]

We've been playing this game a little bit in Canada trying to attract some battery manufacturing and trying to attract different, we've gone through different vintages of this. But I do think there's a, maybe we're back to the Econ 101 world that Samantha was talking about. But there's a fundamental difference here. Industries you can do anywhere and the tech is mobile from industries that you can't do anywhere. So, you know, there's no one who's imagining that China wouldn't have a 20 million barrel a day oil industry if they had the resource. They just don't have the resource. And so, you know, there is that concept of rents and ability and to, to extract rents from manufacture as opposed to, you know, you think of battery manufacturing. We paid billions of dollars in Canada to try to get these firms to locate in Canada. We see it with the auto industry where you're jurisdictional infighting or data centers where you have jurisdictional infighting because you could build them anywhere. And that, that to me is what, you know, when I talk to Canadians about solar, this is how I tell, this is what I tell them. I said, it's like, it's a terrifying thing as a resource rich economy because all of a sudden you're moving towards a world where people can get cheap, reliable electricity anywhere in the world. And that changes our advantage in a fundamental way. But I don't know that we're 100% there. So I don't, I think there is that still. You know, if you, if you said, would China trade a lot of their manufacturing supremacy right now for the resource base that the US and Canada has? And, and I think that the answer is probably they take the, the resource base.

[D]

Yeah, Very few people make a lot of money selling solar panels. Oil, by contrast, I don't agree that the US is giving up on the innovation agenda. I mean, yes, we're not going to have competitively priced in the global market, solar manufacturing, solar panels coming out of the US The US is not going to be producing solar panels. That are price competitive in the global market. But everything from the last 10 years on a bipartisan basis that we've done on climate and energy in the United States has made significant investments in places where comparative advantage for the US might actually work out. High capex projects with high service sector requirements, carbon capture and storage, advanced nuclear, next generation battery tech. If you look at the trend that we have in American politics toward a sort of more mercantilist, we want to capture these value chains approach, I do think there's an understanding that innovation plays a large part and the frustration on the part of policymakers is that is exactly as Samantha says. The United States invents these things and then they are manufactured elsewhere.

[C]

Right.

[D]

There are technologies that were invented at US universities, the frontier of lithography, all that technology was invented in the United States. There is not an American engineering company that can install that stuff here in the United States. And so much of the task of industrial policy is trying to reclaim not just the economic benefits, which might be suboptimal, but the security benefits and the workforce benefits that come from having a full stack of engineering talent in the United States. And that is something that does have bipartisan support here in America.

[B]

Dan, I would add there are some areas of new energy where the US just has some real advantages. Geothermal, carbon capture and storage. And I spent some time a couple of weeks ago on the west coast visiting several facilities associated with fusion, both the national lab and a startup company. And it's amazing what we're doing there. Like, we really do have some inherent advantages in some of the areas that Joseph describes and some areas where we really are ahead in the technology. And so I don't think we've seeded the future either for sure, but we need to make sure we keep our eyes on the prize.

[A]

Yeah, that is really interesting. Just on a footnote, quick geology lesson I'm going to share with you because I was taught this the other day and I think it's absolutely fascinating about why China doesn't have the resource base or one reason why China doesn't have the resource base in oil and gas is it's about the Indian subcontinent, which, as I'm sure you will know, was once a giant island and with tectonic drift, basically drifted across and smashed into Asia. And the result is the Himalayas, of course, and all these huge mountains. But one other effect it had was it kind of crumpled up, sent shockwaves through China, crumpled up the rock layers there. So you don't get what you have in the US These nice kind of straight, flat strata that you can hit with horizontal drilling and produce a lot of oil and gas out of using hydraulic fracturing. China just doesn't have that. And so it's much, much harder to get the same kind of shale oil and gas production there the way you can get it in the US So I want to think finally about where we go from here and what responses this is leading to. One of the things we've been doing at Wood Mackenzie is to a lot of businesses. We have a lot of clients, of course, who are kind of scrambling to find out what does this mean for their businesses. You hear a lot of people looking at alternative sources of supply, as you say. One of the really interesting things about us not kind of really fully understanding what all the impacts of this are going to be is that these modern global supply chains are incredibly complex and goods can cross the border multiple times as they're being assembled into finished products. People don't know exactly. People might know who their own suppliers are, but they don't know who the suppliers of the suppliers are and the suppliers of the suppliers of the suppliers and so on. People are trying to get much better informed about all that stuff in order to try and understand just for their own businesses at the individual micro level, what the impact of these tariffs might be. Andrew maybe talked to you about this, going back to this point about Canada and Canada's mutual dependence with the US Is Canada going to seriously look at new export markets for its oil and gas? Are we going to see much more interest now in new pipelines and so on? It's been obviously very hard in Canada to get new pipelines built, just as it has in the US but is that debate going to change because people want to just end this complete reliance on the US that you've got at the moment?

[C]

Yeah, I think it's changed immeasurably in three weeks. It's been, it's been really surprising to watch where you've seen whether it's on the, on the eastern, the eastern provinces, particular in Quebec, you've seen a big movement from the premier of Quebec. You see big movements in the premier of British Columbia on approving and fast tracking resource projects. Now, you know, what will that mean in terms of getting new pipelines built? And if it means compromising existing pipelines, I think that's the, that that's the conversation we haven't really had. Right. We don't build infrastructure, large regulated infrastructure with a design to take away the market from existing infrastructure. And how do you manage that? That's, that's not something that our energy regulators have ever contemplated. And so if you were trying to create or even, even building excess capacity to create optionality. So I want to have a pipeline system where by design I could ship the marginal barrel west or south. That's a different regulatory framework than we thought about before. But I do think you're going to see some push to accelerate projects in the, in the spirit of the Energy east pipeline which was all within Canada pipeline to the east coast or Northern Gateway which was a pipeline to northwestern B.C. something in those spirits and you'll see. You know, back to the discussions we had in Canada in the 1950s that got us pipelines built in a big hurry. Our cross country natural gas pipeline was, you know, piece of legislation that deemed it approved and deemed it with having leave to build and it was done sort of stem the stern in a couple years by a government corporation. So I think those are the kinds of conversations you're seeing here now in in a big hurry.

[A]

Joseph, what do you think in terms of responses? What are we seeing and what are we going to see in the future?

[D]

It's hard for me to say. I think it will depend on how much, you know, my hypothesis that that we are moving toward American stance of large permanent tariffs actually affects material flow. I think the politics of this are actually really challenging and are reflected in Andrew's comments. We've had very tight economic integration with Canada and now I think the Canadians are going to start looking for hedging as they hedge the ability of the US to do coercive economic policy is lessened. And so I'm not exactly sure where we'll see things go. I do wonder, given the value and the essential nature of the energy industry, whether that's going to be one where we see faster shifts compared to a lot of the other areas of bilateral trade. But I just don't know enough about outside of the energy world to really make a strong statement there.

[B]

I agree with everything that I've heard from Joseph and Andrew. The one thing I haven't heard said yet that I'll bring up is how consumer sentiment and voter sentiment, they're the same people, might play into this. We don't know exactly how some of these tariffs will land, so we don't know who will be paying them. But it's very likely that they will have consumer impact. And the question is will they have enough consumer impact to make a difference in sentiment here in the United States and if they do, where Will the blame fall? Will consumers say we see these tariffs and we don't like them because we think that's why we're paying more, or will they see it differently that the energy companies are scoring them over or some other explanation? So the one thing I would add to the earlier comments is how it plays out on consumers and then how consumers read it, how they incorporate that into their thoughts politically.

[D]

Yeah, I think I fully agree. As we get voter and consumer feedback, what effects this has in democracies will be both fascinating and very important to the long term political economy of this kind of stuff.

[A]

Stuff. And what about its impact finally on the long term health of the climate? If we are moving into this world where countries are increasingly trying to be self sufficient, where they are kind of refusing to cooperate, maybe becoming a bit more adversarial in economic terms, Maybe a lot more adversarial in economic terms. This absolutely does not feel at all like a world that is going to be able to cooperate and where countries can work together on reducing emissions and certainly not able to work together on reducing emissions, in which obviously implies a lot of international trade and adopting the most efficient technology wherever that's available. So is this another reason to become more pessimistic about our ability to do anything about climate change? What do you think?

[B]

If you look at some of the modeling that various folks who model the energy transition has done, one of the things that they use as a signpost or an ingredient for a slower transition is a lack of cooperation among countries and an economic, you know, economic balkanization. And so yes, I think this situation where countries are becoming less economically cooperative is rotten for the climate. It almost certainly raises prices and that's the kind of thing that slows the transition. It's unfortunate, but that's what I think.

[C]

I was just looking up and I feel like this is the ghost of scenarios past. But I show my students at the beginning of my energy economics class, I show them the old shell scramble and blueprints videos because it takes them back a couple of decade or a decade and a bit and they're looking ahead to what today might look like. And that's almost what we're talking about, I think, where we're starting to feel like we're not going to have that sort of coalition of the US and the EU and maybe a couple of other major trading countries with Canada in the mix pushing for global action. We're going to have something that's a little more scrambly. But I think we also have this thing where, well, what is the cheap energy source going to be? And I remember when we're having these conversations before, it's like, well, people are going to do gas to liquids and people are going to do all of these other like, like outrageously emissions intensive technologies. But I don't know that that's where we are today. For a lot of countries in the world, right as technology moves, there are a lot of cheap energy sources that are actually reasonably clean. So I don't think you have the nightmare scenario that you would have had back a decade and a half ago from, from a more autarky kind of world. But I mean losing the US as a driver of, of global emissions reductions, both on the technology side and the international community relations push side, I think is, is massive. Even if it's just for four years and if it's like eight or 12, then, then that's a, that's sending us on a different trajectory.

[D]

I think I will play devil's advocate and say I don't know that a more coercive world is worse for the climate. The cooperative world was utterly failing. Cops have accomplished near zero in terms of emissions reductions. We're burning more coal, using more oil, more natural gas in unabated ways than we ever have before. One may think we've reached the ceiling of what the UNFCCC process can actually accomplish. If you look at what are the other ways to handle global climate change, Things like climate clubs, carbon based tariffs, whether you're going from the sort of Bill Nordhaus model to the more practical EU CBAM style policy implementation, these are things that if done well, create coercive pressure on emissions rather than cooperative kumbaya pressure on emissions. And it is to me entirely feasible that that world, if there is a large enough market dedicated to decarbonization, actually decarbonizes faster. Because that's a way to implement market mechanisms which we still sort of generally agree is the faster path to emissions reductions. The qualifier there is very important. You need a market that wants to drive decarbonization. And outside the European Union, the question that we face is that going to be the United States or is that going to be China? Because no one of those blocks is big enough to do it by themselves. You need at least two. And I'm not clear which scenario we find ourselves in, whether it's who's going to team up on that project. On the technology front, being realistic about the political economy of the energy transition, I think is important. In the United States, famously, we don't have a Lot of political consensus around whether or not it's good to reduce greenhouse gas emissions through public policy implementation. One of the leading things that opponents of climate action in the United States talk about is the fact that reducing emissions is good for China because those, that's Chinese technology, those are Chinese supply chains we're subsidizing CCP affiliated companies. And so a world where we have to have a more diverse US based low carbon supply chain in a political economy sense, though it might be more expensive, at least initially, from a macroeconomic sense, from a political economy and strategy sense might not be the worst long term world.

[C]

I was just going to say I couldn't agree more on the smaller club, get out of the COP process. And I remember at Copenhagen you had one moment late in the conference where there was a small coalition of the us, the eu. I remember thinking that Canada wasn't at that table and that was problematic because I thought that was where we were going to go. But that world, if you try to imagine it without the us, without China and without India, then it's, you know, it's the EU and a couple of other partners trying to lever change that. They don't have the heft to lever. So you got to have some bigger player at, at the table. And you know, that question of do we get low carbon protectionism? So think back to Waxman Markey, where that was sort of the motivator that was driving some people to be in that tent, or we having a more high carbon, which seems like where President Trump is a, you know, renewed focus on all of the above. Which means, you know, what do we. Solar and wind don't even count as energy sources now. Right. So, so there's no sign that the US is driving to it, at least from, from where I'm sitting, that we're driving towards a low carbon protectionism storyline. We're driving towards a, you know, common sense back to the coal and the oil and the gas and ignore those other sources. And I think that's really problematic.

[B]

Yeah. The question for me in this world is I agree that smaller groups are the way to get things done, but is there too much antagonism to bring those smaller groups together? I hope the answer is no, but I'm a little nervous for all the reasons you've just brought.

[A]

I do think this question of, as you say, where does climate policy go now? What new shapes evolve? It kind of feels like, what's that thing about, you know, the old world has died, but the new is struggling to be born or Something, it kind of feels like something new is going to have to happen to take us forward and we don't yet know what that is but definitely there is a lot of change underway now and it does feel like something new is going to be needed. So unfortunately do have to just about leave it there. Andrew, I know you've got to go. Just before we go though, I think we've got time for free electrons. Some personal items that people have brought in. The two things that I've been struck by. One is so I'm, I'm here in India as it happens right now. I'm here at India Energy Week which is sort of massive. India's biggest energy conference. Really kind of interesting, fascinating thing. India's coal consumption in particular just been talking about that, right. It's a really significant thing and very much still on a rising trend. And so lots of as they fascinating conversations. The thing that I've been most struck by is the air quality here in Delhi, which is where they're having the conference. Of the world's 10 cities with the worst air quality, nine are in India. The other one is Lahore in Pakistan. That poor air quality has a number of causes, including burning coal for power generation, including agriculture, cars on the roads and trucks and so on. So it's a complicated issue to address. But it does feel like at some point this is something India is really going to have to get to grips with. And certainly as living standards rise, there's going to be increasing demand, I think for people to do something about it. Because if you think about what China's done, obviously China a richer country, more resources to be able to address air pollution. But they've made huge strides in the past 10 or 15 years in terms of cleaning up the air quality in their cities and just feels kind of urgent for India to do the same thing. So there's one thing that struck me and the other thing I was very interested by was the asteroid that may be striking us In I think 7 years time like 2032. This the asteroid 2024 yr 4 which I think is not people are saying an extinction level event, but could absolutely destroy a city if it hits. And they're saying now I think it's, I think a 2.3% chance at the moment, concurrent estimate. So 1 in 43 chance that it will hit the Earth, which seems quite high to me.

[C]

I think Higher than I would like.

[A]

Exactly. Higher than we would like it. And NASA's just announcing that it's kind of stepping up activity in terms of monitoring this, trying to understand, you know, exactly how big it is, how dangerous it is and so on, on. And obviously the analogy people withdraw between asteroid strikes and climate change and this kind of global threat. And what can we do to, as we've been saying, what can the world do to cooperate to address these global threats? This is another interesting test case, right? What are we going to be able to do as a planet to look at this thing which may be more likely than not. It'll miss us and it won't be an issue. But there is this very, very significant tail risk, as they say, of really devastating impact. And it's a challenge for us as a world. Are we going to be able to take that on board and do something about it?

[D]

It's also relatively binary. I agree, it's a really interesting example of how to think about climate change. But if we can get our stuff in gear and you know, the theory of gravity holds, we can do a deflection and you know, suddenly the lifetime of the human species is dramatically increased because asteroids are eventually going to happen it on the other hand, with probability one, over the next 30 years, the effects of climate change are going to get yet worse. There's no sink, you know, Bruce Willis can't get us out of this head.

[B]

I had the same thought, Joseph. I'll continue the calamity theme a little. I have definitely been in Delhi on those bad air days and it's air you can chew. I cannot imagine living with that on a daily basis. So there are reasons other than climate change in order to stop burning coal and to cut back on fuel powered vehicles. And so that's a good reminder on the lighter side of calamities. I'm sitting in Washington D.C. right now and we're expecting 2 to 3 inches of snow this afternoon and the city has already shut down, so certainly a lighter flavor of calamity. But I have to laugh at how poorly we deal with snow here. I don't know, maybe we're getting less snow than we have in years past. I've lived here 22 years but I have to laugh at our inability to deal with calamities. So hopefully we don't get too many more of them.

[A]

So Andrew, how do you manage with 2 or 3 inches of snow up there in Edmonton?

[C]

Well, I think much better than DC is the. I don't be too smug about it but, but I do think, you know, we don't deal particularly well with it in some parts of Canada, but in Edmonton we do okay other than deciding not to clear the streets very much. I want to pick up on one thing that we haven't talked about yet, but it links, I think Joseph and Samantha's points a little bit, which is the question of insurance and the question of wildfires. And I think we're seeing this, I mean LA obviously we've seen the calamity there, but you know, this is one in a list. And in Canada we've had, you know, every summer now for the last little while. We have a community that is deeply affected or a region that is deeply affected by either fire directly or by smoke. And I think one of the interesting things I'll be watching and I don't know how well this to make it a free electron. I'll plug John Vayant's book Fire Weather, which is a great story of the Fort McMurray fire. But when you think about the interaction between how the insurance industry is going to react to this and I feel like that's stepped out of the lens a little bit and maybe some of the collapse of the global financial sector has pushed for net zero, but the insurance industry is going to be in some deep trouble here and that's going to be one of the ways that this hits people. And you're seeing it in California first, but we're going to see it all across North America, going to see it on the coast. And so I think the question will be interesting to see how the Trump administration reacts to those questions as they come in California and certainly how our administrations here react to them. So I'll leave John's book with you for the for today.

[D]

I also have a free electron. As Samantha said, it's been a little chilly in Washington over the past few months and the kitchen in our house gets really cold. So we've been thinking about different solutions to this problem. And I found online the infrared heating panels that you can now mount on your wall, plug them directly into the socket and they warm the things in the room with infrared radiation as opposed to warming the air in the room with a traditional space heater or something like that oil filled radiator or these other desperately energy inefficient things and fire hazards. Hazards, they're all imported. They come from Poland, the uk, China. So I think I'm going to buy one before the tariffs hit and hopefully next winter our kitchen will be a little more comfortable and I'll have this sort of energy efficient gadget to report back on if I'm ever invited back on the energy gang.

[A]

Yeah, that is fascinating. Well you've ensured that you will be invited back now because I hadn't heard of these things at all. They're completely new to me and I'm really interested to find out how you get on with it and if it's.

[D]

Worth it having oh, they're super cool. You can go down an Internet rabbit hole, but I'll give it a shot and report back.

[A]

Fascinating. We'll get you on definitely to talk about that. So unfortunately we do though have to leave it there for the time being. Many thanks Samantha.

[B]

Always a pleasure.

[A]

Many thanks, Andrew.

[C]

Thank you so much.

[A]

And many thanks Joseph.

[D]

Yeah, no better group to weather uncertain times with.

[A]

Absolutely been great talking to you all. Thanks very much indeed. Thanks to our producer Toby Biggins Gilchrist and above all, many thanks to all of you for listening. We do really value your feedback, so please keep it coming. Leave us a review, get in touch on social media, email us however you want to reach us. That's great by us. It is always great to hear from you. And we will be back in two weeks with all the latest news and views on the energy transition. Until then, goodbye.