Transcript: Canada’s push to become an energy superpower

This is an audio transcript of the FT News Briefing podcast episode: ‘Canada’s push to become an energy superpower’

Marc Filippino
Good morning from the Financial Times. Today is Thursday, July 10th, and this is your FT News Briefing.

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There’s a new nuclear weapons pact in Europe, and the price of copper is going through some intense fluctuations. Plus Canada has all the tools that it needs to be the next energy superpower, but can it actually pull it off?

Ilya Gridneff
Do Canadians want to start ramping up fossil fuel resources? Do they want to be pumping out more oil and gas?

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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The UK and France made a nuclear agreement yesterday. The two countries said that for the first time ever, they will co-ordinate how they use their nuclear weapons should that be necessary. The announcement came out of a three-day trip to the UK by French President Emmanuel Macron. He and UK Prime Minister Keir Starmer said the two countries would jointly respond to protect Europe from any, quote, extreme threat.

This is a big deal because Paris normally does its own thing when it comes to making decisions on its nuclear programme. The UK said yesterday, the two countries would also work together on a few other weapons projects, things like developing next generation air-to-air missiles and jammers for downing drones.

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The copper market is rattled right now. US President Donald Trump threatened to put 50 per cent tariffs on the metal, and Trump said late last night they’ll go into effect on August 1st. Here to talk about the impact of the world’s most important industrial metal is Leslie Hook. She’s the FT’s natural resources editor. Hey Leslie.

Leslie Hook
Hi, Marc.

Marc Filippino
So just to start off, gimme some numbers here. How rattled is the copper market?

Leslie Hook
Well, we’ve seen copper prices shoot up right after Trump’s announcement. US copper prices rose to a record high on Tuesday evening. On Wednesday, prices settled back down and traders are expecting that these tariffs could reduce copper demand in the medium to long term, so the market effect has been more muted. But there’s still a huge difference in the US copper price and the international copper price, which is benchmarked on the London Metal Exchange.

US copper prices are about 28 per cent more expensive than the global benchmark, and that reflects the market’s expectation that these tariffs will come into place, making copper much more expensive in the US.

Marc Filippino
Now, why are the potential tariffs impacting the price of copper so much in the us? The

Leslie Hook
US imports about 60 per cent of its copper. The rest comes from domestic sources. Existing US domestic production is not enough to meet the US copper needs. Some people in the industry are worried about how this is going to impact US supply chains because you can’t just snap your fingers and build a copper smelter. It takes years, but other people in the industry do think this could be an opportunity for US producers and US smelters who are poised to benefit from this policy.

Marc Filippino
Yeah. Tell me about this relationship between the US market and the ripple effects on copper around the world. I mean, how do they interact with one another?

Leslie Hook
Well, for the past six or seven months, the copper trading community has been kind of expecting and waiting for Trump to introduce these tariffs. They didn’t know that he was going to announce them right now, but the US had said in February that it was going to investigate copper for possible tariffs.

So there was a bit of an expectation that this could be coming. And because of that, copper has been surging into the US this year, and consumers and traders have been building up copper stockpiles inside the US, basically, as much as possible. And that’s made it really hard to get your hands on refined copper in the rest of the world because the US has sort of sucked all that copper out of the market for the past six months.

Marc Filippino
Leslie, in my introduction, I called copper the most important industrial metal. Why is that the case? Why are we talking about it so much?

Leslie Hook
Well, copper is used in almost everything that you touch in daily life. It’s in electricity wires, it’s in electric vehicles, it’s in your refrigerator, and without it, the modern world would be totally different. Copper is particularly in high demand because of the build-out of electricity grids and the energy transition, which means that it’s going to be one of the fastest-growing metals in the years to come.

Marc Filippino
OK, so since copper is such an important metal, what kind of knock-on effects could we see for consumers from all this market volatility?

Leslie Hook
Well, I think the first impact is gonna be higher prices for US users of copper. And as everyone from car manufacturers to all kinds of manufacturers. We don’t yet know exactly what types of copper are going to be facing this levy, whether it’s all refined copper or just certain products. So I think the industry is kind of waiting with bated breath Now for some type of formal announcement from the White House about what exactly is going to be included, will there be any exemptions, any waivers? Will there be a quota system for countries that maybe have a free trade agreement with the US. So everyone’s kind of on edge.

Marc Filippino
Leslie Hook is the FT’s natural resources editor. Thanks, Leslie.

Leslie Hook
Thanks, Marc.

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Marc Filippino
Nvidia broke a major record yesterday. The company became the first to hit $4tn in market value that beat the $3.9tn mark Apple reached in December. Nvidia stock soared in May when US President Donald Trump cooled the trade war with China. Overall, the company can thank the boom in artificial intelligence for its success. AI relies on the kind of processing chips Nvidia produces. Investors say that as long as demand for AI grows, so will the company’s bottom line.

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Canada wants to make some major changes to its oil and gas industry.

Mark Carney voice clip
Today I’m announcing a comprehensive new approach to make Canada the world’s leading energy superpower.

Marc Filippino
That was Canadian Prime Minister Mark Carney. Up to now, almost all of the country’s liquefied natural gas or LNG has been exported south to the US. But Canada is firing up a series of LNG terminals along its west coast. It wants to ramp up LNG exports overseas, and Canada actually started shipping to Asia earlier this month. I’m joined now by the FT’s Canada correspondent Ilya Gridneff. Hey Ilya.

Ilya Gridneff
Hi. How you doing?

Marc Filippino
I’m doing well. So as I said, we just heard from Prime Minister Mark Carney touting the new direction of Canada’s energy industry. Tell us a little bit about the change in strategy here.

Ilya Gridneff
Well, Mark Carney came to power in April, so it’s a new government and it’s a new direction. He came to power pretty much on the back of the threats made by US President Donald Trump, threats to annex Canada, the tariffs, all these measures that sort of woke Canada up and Canada needed to sort of diversify its economy and pivot away from over-reliance on the US.

So at the present, you know, 90 per cent of its oil goes to the US and it never really had exploited its LNG reserves. Now, a lot of that comes back from the previous liberal government under former Prime Minister Justin Trudeau. There were numerous reasons why they were reluctant to exploit natural gas, in particular environmental policy regulations. They also said there wasn’t a business case for it when the gas price was where it was at. And that has just changed under the new prime minister and due to the hostilities from President Trump.

Marc Filippino
So Ilya, as far as I understand it, it’s not just that, you know, Canada decided that it wanted to pick up and become this energy superpower. There are some natural advantages that it has going for it, right?

Ilya Gridneff
I mean, the reality is Canada has huge reserves. They have oil, natural gas, coal, they have uranium. There is an abundance of hydropower, natural resources and renewables, solar and wind. That really makes Canada already an energy superpower, some would say. But I think where the shift has been is about exploiting and ramping up the potential there.

Marc Filippino
Ilya, how is the progress going? You wrote about Kitimat in British Columbia making a bit of a comeback. Are there other projects like it?

Ilya Gridneff
Over the last 15 years, there has been about 20 LNG projects proposed in Canada. But so far the Kitimat facility is the only one that is functioning. It has started sending gas this month. There are smaller projects in Canada at the moment. What makes them so significant is that they’re majority owned by the First Nations and they’re under construction and they’re set to come online soon, but they’re much smaller considering the current LNG projects that we saw come online this month.

Marc Filippino
So what is the hold-up?

Ilya Gridneff
I mean, while there is rhetoric for Canada to become an energy superpower, the challenge has been, is the infrastructure. It just there hasn’t been any push or political will to build more pipelines. And that’s no simple task. That requires political consensus. That requires consultation with First Nations. It requires environmental regulations. The other reality is do Canadians want to start ramping up fossil fuel resources? Do they want to be pumping out more oil and gas? That’s a conversation that’s still yet to be had. The idea of building more pipelines was unthinkable, you know, maybe a year ago.

But in the current climate with the Trump administration and the tariffs and the economic uncertainty, Canadians are sort of shifting their views and are becoming much more pragmatic about their role and their place in the world.

Marc Filippino
That was Ilya Gridneff in Toronto. Thanks, Ilya.

Ilya Gridneff
Thanks.

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Marc Filippino
Before we go, I wanna ask you a favour. I host another podcast at the FT called Swamp Notes. It’s all about US politics and the economy, and I know that all the news in Washington can get pretty confusing. That’s why I want your questions. Send me your biggest questions about what’s happening in DC to the email in the show notes, and I’ll get you some answers on Swamp Notes. If you send us a voice recording of your questions, we might even play it on the show.

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