Power Struggle
Improving the energy dialogue in Canada (and beyond) through honest, non-partisan, and fact- based conversations.
The energy conversation is personal: it’s in our homes, in our hands, and now, it’s in our ears. Power Struggle invites you to listen in on honest, non-partisan, and fact-based conversations between host Stewart Muir and the leaders and thinkers designing modern energy.
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Power Struggle
Can Canada Really Afford the Green Transition? | Jerome Gessaroli on Energy, Economy & EVs
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Canadians are starting to question the true cost of our energy transition. Finance professor and senior fellow Jerome Gessaroli joins Power Struggle to explain why many of our clean energy policies may be outpacing reality.
In this compelling conversation, Jerome breaks down the link between energy and economic growth, the regressive nature of EV mandates, the shaky economics of hydrogen, and why the dream of doubling non-U.S. exports may be more political fantasy than practical strategy. From BC’s energy bottlenecks to global trade dynamics, he shares a pragmatic roadmap for how Canada can balance ambition with feasibility—and why letting the market lead could help us get there faster.
Watch the full episode for clear-eyed insights on where we're headed, what we’re getting wrong, and how to avoid costly policy missteps.
The energy conversation is polarizing. But the reality is multidimensional. Get the full story with host Stewart Muir.
Reach out to us with thoughts, questions, or ideas at info@powerstruggle.ca
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Energy And Living Standards
SPEAKER_01A direct link, a direct correlation between energy consumption and living standards.
SPEAKER_00Today at Power Struggle, we have with us Jerome Gesseroli, a senior fellow with the McDonald Laurier Institute, a finance professor at BCIT's School of Business and Media, and a consistent voice on how market-based economic principles can inform public policy in Canada. Jerome holds a BA in political science and an MBA from UBC. He's co-authored a major Canadian finance textbook, and he's worked in the securities industry before bringing that real-world experience into the classroom and the commentary space. He has spent extensive time developing international business opportunities in Asia, and we're going to talk about that. And he's a member of the Resource Work Society's Advisory Council. Jerome, great to see you here. So much of the work you've been doing is relevant to the accelerating issues that the world's facing in energy, economic, and trade issues for Canada, especially. Well, every country. What do you want to leave people with who are questing to understand business? What's the most important thing?
SPEAKER_01They want to learn about business. They want to learn about their area that they've enrolled in. And what I'd like to try to do is to give them, you know, an objective, unbiased view of the economics and the finances that companies face, that governments face, the constraints that are on the different players, on governments and politicians and corporate executives, and give them the tools to be able to analyze what's important to make a good decision, to kind of cut through the chafe, cut through the noise that might be making in the headlines, but rather focus fundamentally on what will lead to a good corporate decision if they're working in the private sector, for instance. And now what kind of skills do those students need to acquire in order to succeed in that? They have to have an interest. That's probably fundamental. They have to be interested. Trevor Burrus, Jr. Like read the news, know what's going on. Trevor Burrus, Jr. Yeah, that's right. That's right. And so there has to be a little certain maturity level to that. I think part of my job is to help them to um get the get them interested also, and and see that there's a whole world out there that they can learn about, and that's quite fascinating, and they can delve into it as much as or as little as they want, but it's out there and to show why it's interesting. So always trying to tie what I'm I'm teaching in the classroom, you know, uh textbook type material, but bring in lots of real-world examples to show, look, this is what we're teaching, but here, this is how it can be applied. This is how you can use it. And they find that very interesting. If they they they really like that. They like that practical aspect of what they're learning.
SPEAKER_00Really the underlying thing we're trying to do with power struggle is illuminate this whole struggle that humanity has to get the energy that people need in their lives because it doesn't come easy. And there's some trends I'm watching, and I'm I'm just interested in uh a starting point there, because I've often heard it said that the economy is equivalent to energy.
Teaching Real-World Economics
SPEAKER_00You know, without energy, you can't have an economy. All human activity, and sometimes we forget that. Would you agree that it is something that is overlooked? And would you agree it's true to say that energy and the economy are kind of the same thing?
SPEAKER_01Yeah, no, Stuart, that's that's an absolute fundamental point. I think that many people underestimate the impact and the importance of energy has on society, not just even the economy, but society overall and our development and our well-being. There is a direct link, a direct correlation between energy consumption and living standards. That is that is just a fact. And so if we expect to improve our living standards in the future, then we will likely be expending more energy. Now, we can do it more efficiently or um and we can allocate resources in a certain way, but we will be using up more energy. Now, do you think of it? We're already blessed in the Western industrial world. But in the developing sector, the amount of energy they use per capita per person is vastly less than what Canada or the US or the European nations use. So if they want to improve their standard of living, which is obviously a priority for them, their energy consumption will go up substantially, significantly. And that is an important aspect to look at when we're talking about energy policy, sustainability, climate solutions, climate policy. Because a lot of the growth in energy consumption will be through the third world. They've just got a huge population, and they want to pursue economic growth, have a better standard of living, and that will require a lot more energy.
SPEAKER_00Now, in your travels, you've actually spent time as an international business developer in Asia. Can you uh tell me how did you uh open that phase of your career up and what was that like?
SPEAKER_01I was with a uh relatively large industrial RD firm, and uh we were looking at expanding our our our sales activity and uh the type of products that we uh we design and sell. And so we decided to target uh the Asia Pacific region, and uh it was uh fascinating, just fascinating to see um uh you know in India the the issues they had that were so uh what we consider so um uh standard or uh or trivial in terms of communications and things like that. And uh yet for them it was a very important uh element. I raised communications because that's what uh that's the area I was uh I was involved in. Just give give you an idea is that a lot of the farmers were burning dung in order to create heat, you know, and energy. Now, that's highly polluting, uh, but they are at that type of subsistence type level. Now, if they expect to have a better standard of of living in the future, and they want to, and they're proceeding, they're they're growing uh towards that, uh then they're gonna be looking at um more uh more intensive uh uh sources of energy, like coal, coal, uh natural gas, uh, you know, nuclear, whatever. But we can see that that's the type of progress that they need. They need to use more energy in order to raise their living standards.
SPEAKER_00So there's no pathway to middle class life without more energy, and that energy has to come from somewhere. None that uh
Global Demand And Development
SPEAKER_00we've we've seen right uh to date. Yeah. A fundamental of economic development. Um, Jerome. We've seen over the last decade or a couple of decades in the West a developing culture that we are moving towards a cleaner, greener future. And the proof of that is that there is investment into renewables in particular, that there is a a cultural aversion to reliable fuels like hydrocarbons, which become derided as fossil fuels, which is a kind of an epithet term. If you hear someone using that term, you know they're about to launch into a critique. I mean, they're if it the it they're not talking about the the you know physical characteristics of different fuel types. It's more of a polemic. And so you've you've seen this thing develop where um after many years you've got an assumption, and I'm I'm sure in academia in the student body at at BCIT where you teach, you you see that in my time in uh academia, certainly abundant evidence. You've got almost a polarizing impact of this discussion. And it's based on the assumption or the belief that renewables will simply replace the uh conventional areas of energy supply. And now, in 2025, we are seeing a whole bunch of beliefs come unwound because oil, we heard from a guest recently who came on power struggle, uh under i is not reaching its peak. It is, in fact, still growing. The demand for oil is growing, and the supply of oil, both are growing, supply and demand. Natural gas is wanted all over the world. It's a big export from British Columbia, it's gonna be bigger, and you've got the world uh doing that. At the same time, uh I recently have been hearing different uh political actors make statements about the future of energy, which are not based on any trends that I can find in the real world. So um I'd I'd just like to explore how we got here, where um the the belief set around the future of energy is so polarized.
SPEAKER_01What we're seeing, what we're seeing, in my opinion, is we have policy makers and or politicians and our other interested parties, and they've got the best intentions of trying to make sure that society kind of avoids disaster in terms of climate change. They don't necessarily realize the complexity involved in restructuring an entire economy from one type of fuel source to quite a different type, okay, which would be renewables or non-carbon related. And the goal, uh, the goal can progress over time, but it will take time. And it's not just because some people are dragging their heels or they don't want to give up their interest or or whatever they have in the sector. Rather, is that there are true practical limitations to uh adopting the new energy sources uh as as fast as some would like. It's it's you know it's as simple as that. Okay, they say, well, why you know why do we still use coal? Why are the Chinese still building new coal power plants and and India is still using coal and things like that? Well, there's very practical reasons why they're doing it. It it pollutes, it's not good. Uh we under I understand that, but they have an entire infrastructure developed around building that type of energy. They know how to do it extremely efficiently. They have the local domestic sources. There's a source of energy security in that they don't have to import the product. There's a completely different technological uh gap between difference between uh building a coal plant and building renewable power that is is slowly creeping
Lessons From Asia’s Energy Reality
SPEAKER_01into the system that's been adopted, but uh it's it it takes time. It's as simple as that. It takes time. And then the type of power that is generated by a coal plant, for instance, is stable, reliable uh power. Uh unfortunately, for most of our um you know, solar wind source of type power, it's not as reliable in that it comes and goes as the sun shines and the and and the winds pick up or not. So that makes it much more complicated in terms of transitioning. I'm not trying to provide an excuse as to why we shouldn't be switching from um from a fossil-based fuel to a renewable over time. What I'm saying is that a policymaker can say, okay, we need to do this by 2030 or by 2050. It doesn't work like that. It works. How can we adopt these new technologies into our systems and replace the old ones? And we're doing it. There is a lot of growth in terms of other types of energy production. Uh, it's they're growing quite rapidly and they're improving over time. But it's just not in line uh with the time frames that that our politicians and policymakers are telling us that uh that the targets have to be met by.
SPEAKER_00Well, let's come back to the real progress that is being made and shed some light on that. But I wonder if we could take an example. Let's say Germany, which has gone through just a very interesting energy story. I was about to say transition, but as my guests have shown me again and again, energy transition isn't necessarily a thing if you're only adding more energy to what people use. Humans are using more energy, they're adding to it. So we're going through an energy addition rather than an energy transition. Um but Germany in particular is a fascinating example because they have uh gone and made big bets on different technologies in their economy. They've gone from being a post-war economy in 1945, where it was rubble, they built it from there to one of the most powerful industrial nations in the world. And in so doing, they have been on a bit of an energy journey. Um, let's talk about that. Um what did Germany have to do to industrialize the nation after the Second World War?
SPEAKER_01Well, I think you've already pointed to, you know, you pointed to the the main point. They needed a reliable source of power, okay, of electricity in order to power their factories and and their homes, eat their homes, etc. And they did that uh through existing sources at that time. It was a combination of uh fossil fuel and of nuclear. And uh, you know, they they did quite well um uh utilizing that energy. Now, as they decided to transition away because of the importance of climate change, they closed down their nuclear capacity, their nuclear plants. Um but it's a little bit ironic because those plants were not emitting CO2. Okay?
SPEAKER_00So they were closed down for a different reason than the climate.
SPEAKER_01Exactly. There was political protests by the Greens in Germany, et cetera. Um, but it actually didn't necessarily work towards improving their overall uh greenhouse gas reduction goals by doing that. Um it very likely probably made it more difficult overall, because nuclear power is, again, a reliable, stable source. So you need that type of source of power to complement the renewable power uh that's generated from winds and solar power that are intermittent, you know, that that come and go. You can have a combination of both and it can work. But if you don't have that fundamental base load of reliable power, uh then you're not gonna have uh uh an electricity grid or an energy grid that's gonna be able to support the type of quality of life and standards that we're accustomed to.
SPEAKER_00So they had nuclear, which they began to close down, but they also had a lot of coal.
SPEAKER_01Yeah, yeah, exactly. They had they had a lot of coal. Right now, over the last period of time, they've built a lot of wind and solar capacity in the nation. Uh, but given they've decided to uh stop using nuclear power and not use coal, well, they're still faced with a vacuum. Well, how are they going to fill that gap? And a lot of that gap now is filled with natural gas. And unfortunately, with the uh with the uh the war between Ukraine and Russia affecting all of Europe, uh now that supply from Russia of natural gas is you know very highly uncertain and problematic. And now they're scrambling
Polarized Beliefs About Transitions
SPEAKER_01to figure out well, how are we going to replace that supply that's no longer stable or certain by any means? And that's where they that's the situation they find themselves in now. Aaron Ross Powell, Jr.
SPEAKER_00One thing I know you can answer, because you've been writing papers on it, is electric vehicles, EVs, and principally one of the biggest issues you've identified is being able to power electric vehicles. If we want to drive them, how do we power them? And you've shown it's not quite so simple as just having that unlimited green power.
SPEAKER_01Trevor Burrus, Jr. Yeah. And that that's that that's a that's exactly a point. And that's a good kind of example of how you know a policy person that's very removed from the day-to-day activities and doing business will say, okay, uh, we can reduce greenhouse gases substantially by uh not driving gas-powered vehicles anymore and electric vehicles instead. So that's what we're gonna do. And we're gonna set a target in the next 10 years, we're gonna go from whatever to 100 percent new electric vehicle sales. But what they don't realize is uh the the activity, the investment required to actually make that happen. Where is all that extra power going to come from, that electrical power going to come from to power the EVs? Well, that will require, if it's in BC, you know, more dams or uh or more renewables, or it could be more natural gas or whatever to uh to power those vehicles. But those are very large billions of dollar uh you know and capital investments. And we're talking in a very short period of time to try to try to increase that amount. The numbers um we'd be looking at uh to try to uh to try to meet the British Columbia EV mandate uh standards. Now, we would be looking at requiring another three times the amount of Site C in terms of Site C being one newly built large hydrodam. That's right. That cost about $15, $16 billion. Trevor Burrus, Jr. And took a lot of years to build. And then on top of it, if you want to decarbonize other parts of the economy, well then they're going to have to switch to electricity. So, for instance, large industrial projects like mines that might run on diesel, well, if they're going to electrify, run on electricity instead, well, we're going to have to find the electricity to power those large industrial facilities. How quickly can we create all that power? And how expensive will it be? But it's not even just the power. It's how do we get the power from where it's generated to where it's needed, right? Into the charging port for the EV vehicles. There's these large transmission lines that will be needed, and we'll have to invest in those. And these are very complex projects. A big regulatory process to go through takes years and billions of dollars. And then once we get there, it's still not enough. Then we need how do we get the power at the end of the transmission line, like great to say the lower mainland, the beginning of the city, how do we distribute it to all the neighborhoods and all the houses and apartment units and everything that would need it? Well, that's where the distribution network and all the substations and transformers, they'll all have to be modified and added to to handle the extra capacity, and it goes right through to the neighborhood level where all this has to be done. And again, this is on a large scale in a short period of time. So if we include generating the power, getting the power to the major centers, and then adapting the infrastructure, the distribution grid to get the power to the actual charging stations for the EVs and the houses that use heat pumps and things like that, well, that will uh uh that whole undertaking can be done, but just because a policymaker or a politician says that we have to have it done by 2030 or 2035, it doesn't mean we can do it by then.
SPEAKER_00So you got this trend where there's more demand for the generation of electricity. It has to be a certain kind of electricity, it has to be termed clean rather than. I guess the if it's not clean, it must be dirty. That's kind of the binary here. Yeah. So that means what is being taken out that can't be used if it's only um hydro.
SPEAKER_01If it's if it's only clean power, well then uh anything that will emit uh carbon uh you know would be would be precluded, uh carbon dioxide, and uh that would be coal, oil, diesel, um uh natural gas, uh, you know, all of those. Uh but then it gets a little bit more complicated. Well, should we be abandoning natural gas usage in in in BC altogether? Well, if we're using it to um to replace some other dirtier source, then it's an improvement, okay? It could be a transition. And if the um power is needed to provide a certain baseload stable amount, then you know that has to be that has to be considered. And if we don't use any natural gas um to power large plants or large industrial facilities or what
Reliability Limits Of Wind And Solar
SPEAKER_01have you, then what's the alternative? If it takes years and years to build the transmission lines out to the new facility, or if it takes years to generate the electricity from new hydro sources, so it is available to these plants, um, is you know, can we get it to there in time before they abandon their investment? And if they do abandon their investment, well then what have we lost? What have we lost in terms of economic prosperity, economic growth, um by not considering using perhaps natural gas as a transition fuel until we can fully electrify things?
SPEAKER_00Now, we had years and years of hype in Canada, in British Columbia including, uh around green hydrogen. The future was going to be this vista of unlimited hydrogen as a fuel that would be available by using processes that didn't produce any uh greenhouse gases. And uh now looking back on it in 2025, it seems to me as if after years of that that narrative, a lot of excitement, investors, six or seven projects were being mooted for British Columbia. Suddenly, um, where are those and and what happened?
SPEAKER_01Aaron Ross Powell Yeah. What are the issues with with hydrogen as as a power source? It can it can be uh quite flexible, you know, in in a way to use hydrogen, but it's very energy intensive to create itself. So you need energy to create the hydrogen that will be used to power vehicles or facilities. And that's where we ran into the problem here was that, well, we can't use, if the goal is to reduce greenhouse gases, then it's not really appropriate to use natural gas to create hydrogen because we'll be emitting greenhouse gases in the in the process of creating the hydrogen. Um, but we don't have enough power in terms of clean power from the hydro dams and from renewables in order to uh generate the the hydrogen that that that's needed. We just don't have, it's not, it's very energy intensive. And so companies originally looked at BC and thought this could be a good place to do that because we had some other infrastructure and elements in place to make this uh successful. Um, but then when it when these when these proposals progressed, uh there became a realization that unfortunately the clean electricity that in large quantities that would be required uh weren't going to be available. And that's one of the significant reasons that led to a number of suspensions and cancellations of the projects.
SPEAKER_00I know people who have busy lives and are doing a lot of things, they're not necessarily in the details every day of energy, are are watching all this and have available and have all the information in the world available at their fingertips to find out. What do you think the emerging public view is in Canada amongst the electorate of of what these trends add up to? You know, it seems like we've been exploring the great potential of something, then suddenly it's gone. And also we're seeing the um reality of electric vehicles not translating into Canadians buying very many of them. That just it hasn't materialized. So what what are people thinking?
SPEAKER_01Yeah. I think what people are realizing now uh they're they have listened to the hype, and now they're actually seeing the reality. And the reality is that it's expensive to make this type of transition in at the scale that you know policymakers and and government officials want, and in the time frame that they're asking for will significantly add to living costs for the average person, significantly. And what's unfortunate too is that, especially with the EV policy, it tends to be quite regressive in that it hurts the lower-income people more than middle or higher income uh households for various reasons. You know, for instance, if you're middle income or higher income and uh you have a house, you can park your EV in the garage, power it up every night, take advantage of BC Hydro's overnight uh uh electricity rate, which is very, very low, six cents per, I think, kilowatt hour or something, and uh and there you go. But if you're assuming you're if you're a lower income household, you likely don't have your own garage. So you're living in an apartment where there's very limited power charging uh options in most apartments right now. Some have none. And uh some of them are very difficult to, they have to change all the wiring around in these apartments and upgrade electrical systems in order to put some in. So it's not going to happen soon for a lot of them. So that means that even if they are able to acquire an EV, which is more expensive than a regular vehicle, they'll have to use uh public charging. And uh a public charging
Germany’s Nuclear Exit And Gas Gap
SPEAKER_01would be at a gas station where they charge much higher uh electricity costs, uh charging costs. This is what happens. The purchase incentives that the government used to have for EVs, the vast majority of them, 75% of them, were consumed but were used by middle income and higher uh uh individuals to buy electric vehicles. And they actually didn't need that incentive. They took it because it was available. But they could afford them even without the incentive. Unfortunately, lower-income individuals they can't afford EVs because they're too expensive compared to the equivalent gas-powered vehicle. And even with the purchase incentive, they're still too expensive, so they can't utilize it. So here's another policy, the uh uh EV purchase incentive that the provincial and federal governments had until very recently, that it would hurt. It was it was uh more beneficial to higher-income people than lower-income people who couldn't even use it, could take advantage of it. There's a number of issues uh with regard to these policies that make it uh make living costs uh you know higher. And uh and we're gonna continue to see that. Um and I believe that what's been going on is that as the carbon tax was increasing, again, that was had to be had to be eliminated under under much public pressure. Um they saw that that the increasing costs of this of this carbon tax was getting more and more into their overall budget, and their budget's becoming strained. It's tough to make ends meet for significant uh portions of the population. Um and I think that's what now people are realizing, and they're focusing on look, look, we understand climate change, we know that things have to be done, but the way it's going now, our policies, it's not working because you're squeezing us too much. You're just squeezing us too much in terms of the costs.
SPEAKER_00We have seen investments by the Canadian government, for example, in large electric vehicle battery plants. I think if you total it up investments of that kind, it's over $50 billion in recent years. And most, if not all, of those have come unstuck. They haven't had the desired impact. We've had uh at least one of those has gone bankrupt. There have been others that have been postponed or canceled. So none of that is happening to build out this large-scale transition of the Canadian automotive manufacturing supply chain. It's just going back to where it was. I noticed uh in the in the news a day or so ago, Porsche has said, you know, we were going to pivot our vehicles to electric, but we've reconsidered that. It turns out our customers who are wealthy for the most part are wanting a different kind of vehicle. They want the kind of vehicle we've been selling them for the last hundred or so years. Um, Ferrari, again, not the average person's car, but they also have said, well, we're not going to be doing EVs either. But you're seeing it as well at the consumer level. You have a president in the United States who's outright hostile to EVs. It's really quite something. Um it adds up to kind of an interesting situation where in a large part of the world you've got this happening, but then in China, you have a proliferation, it would seem, of electric vehicles. I've heard it recently said, well, look, if North America, if Canada pulls back from innovation in EVs, it's only going to make the Chinese push stronger. And then one day when we wake up and say, well, we better get back on course to decarbonize the vehicle fleet. We're going to have to, by that time, the Chinese will have such a huge lead, we will have no choice but to open the floodgates and we'll all soon be driving EVs. We'll all soon be driving EVs from China in that argument. Um what do you see as a likely trajectory of what will happen?
SPEAKER_01Partly your your what you what you forecast or what you're describing has already occurred. Because when the federal government decided to make these massive um commitments, you know, $50 billion commitments towards uh subsidizing these battery plants and EV car assembly plants and and things like that, uh, the Chinese had already secured a very dominant position in the technologies and the volume, the capacity of manufacturing these items. That quite frankly, even when subsidies were given to North American firms to do this activity here, they still weren't competitive price-wise compared to the Chinese. Okay? So that leads to the question: well, well, is that an effective use of $50 billion? Taxpayer money? Is that an effective use of it? They estimated, they go around touting, oh, we're going to be uh supporting UMicor for battery, uh for battery manufacturing, and we're gonna be giving you know uh X hundred millions of dollars towards their capital cost of building
EV Targets Versus Grid Capacity
SPEAKER_01the facility, and and the the interesting part here is actually subsidizing every battery that is produced, the operating costs, helping them subsidize it over a 10-year period. And we're gonna be creating a thousand jobs here, two thousand jobs there, or wherever. Well, if you add up all those jobs that would be created, those direct jobs that would be created, and you divide it by that uh that $50 billion or that that amount of commitment, it came to roughly approximately $4.5 million per new job, direct job created. Now, I understand about wanting to protect the auto sector and maybe help it uh reposition itself, um, but one truly has to ask if $4.5 million commitment per direct job created is a wise uh use of funds.
SPEAKER_00As we sit here, it's about a week until the federal budget in the fall of 2025. Last week we heard the Prime Minister of Canada, Mark Carney, address the dire political, economic, trade situation that Canadians are facing because of what's gone on with the U.S. relationship. And it it to me, uh it's quite a quite a daunting or uh scary situation uh to what we're looking at when we have these mounting tariffs on our most economically fundamental uh export industries, uh, what are we gonna do instead? So uh the Prime Minister, obviously highly conscious of this, has proposed the following that over the next decade the amount of non-United States exports be doubled. So if that's uh in the case of British Columbia, $55 billion is the value of all the goods exported from British Columbia last year. And of that, about $29 billion went to the United States, leaving $26 billion that goes to other countries, not the United States. So if you had to double that, you'd be doubling it in $2024 to $52 billion. So quite a jump. So that's the the magnitude of it. But the second thing is who would we do more trade with? And I looked into the trade figures, and it turns out that the largest trading partners for British Columbia and being a port province, it's not just the goods that we make or grow or mine in British Columbia, it's what come from other neighboring provinces through us because we have the Pacific port. So where do we ship those goods? We ship them to number one, China, number two, Japan, number three, Korea. So that's what we do now. And then the final thing, the third piece of this, which I think is very important, is what are those things? And it turns out, when you look at the stats, that most of those things and those big numbers are things we all use every day in some form, not usually in a unadulterated form, but uh copper concentrate is huge. Coal is a huge export, uh, the vast majority of it, if not all of it, metallurgical coal. In other words, uh high-grade special coal used for making metals, uh, making steel. And then gold is a very valuable export commodity. Natural gas wasn't until 2025 an export commodity outside of the United States for Canada because it was landlocked. But as of July this year, or late June, I think, it became an LNG value added. And that is now something we can send and are sending to countries across the Pacific. And again, it's China, Japan, Korea, Malaysia, other countries that are getting the benefit of having this. Um these are the things we are exporting. You know, we're not Switzerland, we're not exporting uh Swiss watches. That's not a big big thing here. Uh we found our niche in these areas. So you've got the this phenomenon. Uh what what do you think the options are for Prime Minister Kearney's dream to double foreign exports outside the U.S.?
SPEAKER_01His his obviously his his wish to diversify and increase exports away from the United States, relatively speaking, uh, you know, it makes sense. It's it's sound. Again, the timeline that any politician puts on something on how much has to be done by when, you know, is it grounded in reality? Is it grounded in reality? And I I while I can't say categorically, one way or another, whether that doubling in 10 years target can be met, and may or may not be, what I can say is that is very aggressive. And it's not a matter of just selling more software lumber to uh Asia. I mean we sell uh a significant amount of of lumber to the Japanese market, but it's still, relatively speaking, not huge compared to our capacity. But it took easily over 20 years to develop that market so that we understood the market, what they needed, what was required, the type of dimensions, the type of quality of wood, things like that for their environment. And we, you know, finally we established uh some reasonably good sales numbers. Now, people are talking about selling software lumber to India. Sure, absolutely, we should look into it. But India's got a very, very different climate. And in terms of moisture and heat, uh the characteristics of their wood materials, you know, are may well be somewhat different than the other thing.
SPEAKER_00So they might not be aligned up to be the next big buyer of Canadian lumber.
SPEAKER_01Yeah, or it could take years and years and years to make sure to that we have something that makes sense for them and can and to educate them that this will work. Okay? So so yes, it can be done over time, but it takes what it takes in terms of the timing, no matter what any one politician might might say on
Clean Versus Practical Power Choices
SPEAKER_01how fast they want to uh diversify their exports. The other thing is that we should definitely look, you know, Asia has got higher growth than Europe. Simple as that. Mature economies in Europe growing relatively slowly overall, uh still rapidly growing economies in the Asia-Pacific region. I mean, we have a real comparative advantage in our ports and in BC on shipping to Asia, both Vancouver and further north, where our shipping times are lower. And we need to take advantage of that. So we've got great port facilities, which we can even expand, and we're strategically located that we can get product to the Asian markets faster than the Americans normally can. Um that's where we should be looking at how can we extract as much value from that comparative advantage that we have.
SPEAKER_00Now, you're suggesting that the lumber market for Japan took a long time to ramp up to where it is now, to the point where it's a very good customer. And, you know, maybe they're building all the houses of wood that they're ever going to build, and they they don't really need too much more of so so maybe doubling it to Japan is is not gonna happen, and India maybe isn't ready or might never be ready for certain kinds of materials we offer. So we have to change up that game if we're to succeed in that market, maybe diversify the kind of products that we're offering. You look at um some things that have been success stories recently. Canada started shipping crude oil to uh California in larger volumes than ever. There were small amounts in the past, but now, because of the completion of the Transmountain Pipeline, it's much bigger. A lot of that oil, the stats show us, is going to China because they apparently have a real desire for Canadian oil. And in fact, we heard a high official from the Chinese government only a few days ago say, hey, we could take double. So there's a double right there for oil. Um I noticed that propane. Now, years ago, there wasn't really much propane leaving Canadian ports on the West Coast, except then Prince Rupert got into the game. They are now, they are there are three ships, I'm told. All they do is go back and forth across the Pacific. It's like a milk run. We're just filling up in Prince Rupert, we're taking the propane to Japan. Apparently a quarter of the propane used in all of Japan is from Prince Rupert, British Columbia. If they don't get it from there, they'll apparently get it from Russia, which they would rather not do. And I completely sympathize with them. I think we should replace all of their Russian propane from Canada. And they they want it. So we've done that well. There's two, oil and propane. Liquefied natural gas is going rather well. But critical minerals too, you know, copper, copper concentrates, moly or molybdenum. And there are uh mappings of I think gallium and germanium, which are these esoteric rare earths that you need for these things that that exist in British Columbia and in parts of Canada that that are in the future. I'm seeing a lot of potential, but the things that are most likely to take off, I'm gonna suggest, and please tell me if I'm wrong, are the ones that are already taking off.
SPEAKER_01The products that have potential, you're correct, in naming them, no doubt about that. The problem is that we've had that potential. We could make this exactly the same argument 10 or 15 or 20 years ago. And this is what's so frustrating. Watching the the Blue Jays Dodgers game, uh Ontario has an ad uh during the game saying our growth is going to come from the ring of fire area where we're so rich in all these minerals, and we'll be able to use them for all sorts of our products, uh, the same type of minerals you're you're talking or talking about. And it's true. But it's been 15 to 20 years since they've discovered those minerals, and they still haven't gotten any out of the ground yet. So in order to realize that potential, we need to figure out what are what's taking us so long, and how can we get it out of the ground faster? Okay, so so yeah, there there is there is that opportunity. Um and the same thing
Hydrogen Hype Meets Power Constraints
SPEAKER_01in BC. We've got significant deposits of some of these critical minerals. Well, how long will it take it to get it out of the get it out of the ground? Um, I don't know. The politicians are trying to talk a good talk about expediting some of the proposals, but are they going to expedite the right ones? Do they know what the right ones are that are going to provide the greatest value for uh you know BC? I don't know. But right now, the policy they're being set up, it gives the provincial government, the cabinet, the authority to decide what ones will go ahead and what ones won't, either through um assessments and permitting or through which ones get priority to the uh BC hydroelectrical grid to power their facilities or mines as as they're developed. Um and that's I find is a little bit problematic because what we're saying is that the government knows best in terms of what some of the economic decisions should be. And uh generally speaking, the government tends not to do a great job. And I'm not talking just about the provincial government, I'm talking about the federal government, too. And I'm also talking about non-political, I would say any government will have a tough time in terms of making correct economic decisions.
SPEAKER_00Trevor Burrus, Jr. You're just saying that in general, governments shouldn't pick winners and losers because they tend not to be able to do that. As effectively as a market does. Exactly, exactly. Yeah. Yeah. Okay. Um so what will be required in order to reach that lofty aspiration of doubling Canadian exports to places that aren't the U.S. in a decade?
SPEAKER_01Yeah, no, I'm that that that's a that would be the great next question to ask. And um what we need is that we need a streamlined environmental assessment, streamlined permitting that we to protect our the environment in in a in a in a you know in a safe manner, but not get bogged down by uh uh by uh legal determinations or legal uh uh conflicts that certain interest groups might bring just because they don't want to see the thing proceed, and uh uh by government uh tripping over itself to making sure the same thing gets done by by one assessment then has to be redone by by another, uh, you know, per permitting red area. Cut red tape. Yeah, absolutely. That had you know that has to be done. The other way, the other thing is if we want to electrify these new major facilities, these new mines in the future, well, are we going to have the power available? Okay, and not just have the power, but are we able to transmit the power, get it to where it's needed? And again, the provincial government has tried to make some new policy changes towards that, uh, and that's certainly a good first step. That is a good first step, but uh they even admit that they'll have to ration power to certain type of projects, and they'll do that prioritizing themselves. Well, as an example, why don't we why don't we allow private enterprises to generate power sources themselves that are off the grid, that directly supply a mine, for instance. And therefore you don't need to worry about all the transmission wires, the facilities to be built. And we could say, since you're only powering to one major customer, we're gonna exempt you from the BC Utility Commission public utility regulations. Right. Because they don't really need to. They're not on the grid. So they they can operate independently. They still will have to abide by all the safety regulations, environmental regulations, uh uh consultation, accommodation towards indigenous communities. So none of that goes away. But we're saying let's cut a bunch of this red tape that would add years and millions of dollars to uh a project to try to self-supply power. Trevor Burrus, Jr.
SPEAKER_00So that could be through what, uh a small hydro dam or maybe
Public Pushback And Regressive Costs
SPEAKER_00uh for a larger need, a small modular power plant or a natural gas turbine. Trevor Burrus, Jr.
SPEAKER_01We would keep it uh we could keep it uh fuel agnostic. Right. Let's let the market figure that out. Let the market decide what's best. And uh I think that you would see that it could attract much more and much more investment. You're you're allowing them to do what they want to do, but quicker.
SPEAKER_00Aaron Powell That would allow us to not have to do an end run against all the regulations that exist. It would it would be um a move that allows the market to decide what the best solution is. And it's probably going to be a greener solution, too, isn't it?
SPEAKER_01Well, uh you know, uh the the cost of generating solar power, wind power is actually quite cheap. The expense that where the car real cost comes in towards renewable or non-carbon emitting uh power generation is how to make it reliable. Okay, so how do you stabilize that? Would you be using um perhaps a uh gas turbine on a periodic basis, on an ad-needed basis, or could you use geothermal in certain areas, or small modular reactor is definitely a source, something that we should look at in the province to potentially lifting the ban on using. Um I think that's very important with the uh the um the size of the province that that we have and the limited transmission uh capacity that that we have to get to remote sites. So that would be that would be, I think, very important. Uh the other thing is that if you allow commercial businesses to create their own independent power off-grid to supply a specific uh mine, well then you're saving BC Hydro all these capital costs of having to come up with the power themselves and have to create the transmission facilities to get the power. BC Hydro being a publicly owned utility.
SPEAKER_00So that's really taxpayer money they're gonna be able to do that.
SPEAKER_01That's exactly it. So it actually helps to ease a little bit of the fiscal pressure off. And you don't have to worry about the impact on having to subsidize power to these large industries and then having to make ratepayers pay, you know, uh you and I pay pay more because that would all be off-grid. So you're you're removing some of that risk from from the ratepayers, too, by by allowing, encouraging more off-grid energy sources.
SPEAKER_00Aaron Powell Well, Jerome, that's about all we have time for. It's clearly going to be a very significant and interesting 2026 ahead. So thanks for coming to Power Struggle.
SPEAKER_01Well, thanks for having me. And uh and uh as you can see, there's a huge number of uh of issues and uh no shortage that we have to deal with going forward.
SPEAKER_00I'm Stuart Muir, your power struggle host. Thanks for being here.
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