Liberation Day Aftermath: Trade Wars, Oil Prices, and Canada’s Election

Liberation Day Aftermath: Trade Wars, Oil Prices, and Canada’s Election

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This week on the podcast, Jackie and Peter discuss the significant volatility in the financial markets due to the escalating global trade war unleashed by President Trump’s “Liberation Day” on April 2nd. Economists and banks are sounding the alarm about the increased risk of a global recession. At the same time, oil prices have fallen by about $US 10/B due to fears of a recession and news that OPEC+ is adding more supply than expected into the market. In Canada, the uncertainty is further compounded by the upcoming federal election scheduled for April 28th, 2025.

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Episode 279 transcript

Disclosure:

The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.

Announcer:

This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.

Jackie Forrest:

Welcome to the Arc Energy Ideas podcast. I’m Jackie Forrest.

Peter Tertzakian:

And I’m Peter Tertzakian. Welcome back.

So we record Monday morning, April 7th at 7:22 just before the opening of the markets on Friday. Of course, the markets fell on Thursday, they fell with Tariff Liberation Day in the United States. So we’re going to talk about that. It’s really hard now where I have to timestamp the actual podcast because things are changing so quickly. So we’ll try and keep the conversation to a longer time horizon than just one day, because by the time you download this as our audience, it’s going to be out of date, even within 24, 48 hours, something’s going to change who knows what with the tariff situation, isn’t that right?

Jackie Forrest:

Well, I think the details, but I think you’re right, the broader sort of long-term trends, and for sure there’s a ton of uncertainty. I was just looking at all the information last night and being like, wow, it’s really hard to make decisions, and I think that in itself is going to result in a slowdown of the economy.

Peter Tertzakian:

Yeah, it’s the uncertainty, the anxiety creates paralysis, and people just sort of, what do we do? So tariffs, we’re going to talk about that, oil price down to the low of $60, that’s WTI oil price, and the Canadian election. A lovely set of very happy topics.

Jackie Forrest:

This is why no one can make a decision.

Peter Tertzakian:

So where do you want to start?

Jackie Forrest:

Well, let’s start with the Liberation Day, which is more been like a market shock day. I’m sure all of our listeners have been following this closely, but as you know, tariffs were announced, and on average, there’s some estimates now that when you put it all together and you look at all the goods that come into the United States, they’re looking at about a 23% tariff on everything on average that comes in. Certain countries, like Asia really got hit hard, 25% for some countries, even into the 45% for places like Vietnam and Cambodia.

I will put a link to an article from the Financial Post that does a good job of looking at the size of trade, like a bubble chart with the tariff that came down. And you can see that Asia’s really kind of taken the biggest hit. Europe is around 20%, and of course, Canada didn’t have any additional tariffs, but of course, we already had some, facing 25% steel-

Peter Tertzakian:

Yeah, the 25%, yeah, the steel and aluminum, yep.

Jackie Forrest:

And non-USMCA compliant exports also having tariff-

Peter Tertzakian:

Right. But this is, it’s not that we are without a consequence of Liberation Day. I mean, this is leading to global economic slowdown. Some economists and bank CEOs are calling for recession either globally or within the United States. So it all has very negative, at least, attitudinal consequences, I’ll call them, and we’ll see how it transpires over the next few days, weeks, and months.

Jackie Forrest:

There’s been a few articles in terms of expectations of how this will affect growth. We’ll get to that, but I did want to say one more thing worth noting that’s relevant for Canada, is that these tariffs for other countries don’t include oil and gas and refined products. They’re exempt. So I think that’s a positive sign in that the government in the US is recognizing they don’t want to put tariffs on energy imports because it’ll influence the cost of energy and inflation. And so I think that’s also a sign that Canada maybe will continue to see lower or an exclusion if they’re USMCA compliant for oil and gas imports into the US.

Peter Tertzakian:

Yeah, no, that’s a positive thing because the price of oil, as we’re going to talk about, has dropped quite dramatically, and that reflects the sentiment of a global economic slowdown, and the number one variable that affects oil price demand on the demand side is the global economy.

Jackie Forrest:

Right. And the markets are certainly…

Peter Tertzakian:

Certainly.

Jackie Forrest:

… saying there’s going to be issues there. So as of end of day Friday, if we compare to April 2nd before Liberty Day announcement, overall equity markets globally were down around 6%. And we just see that Japan, because Monday is coming to an end in Japan now, has doubled that, so they’re down about 15% from April 2nd. I expect we’ll see more of a slide in the equity markets here.

Now, oil and gas is actually taken a bigger hit because of the price of oil has come down at the same time of the fear of a recession.

Peter Tertzakian:

Right. I look at those equity markets, I mean, we’re panicking big time, and it’s certainly not good. As I say, it affects the psychology, but they had run up very dramatically in 2024 and certainly in the latter part of ’24 into ’25 post-Trump election because of the optimism about things.

So in fact, I think we’ve shed all the gains that were made since early 2024. So in other words, one year’s returns have been wiped out in the equity markets. It’s not good, as I said, because it more affects the cost of capital psychology spending by corporations. But when you actually look at a long-term equity chart, it’s still not as if it’s a major impact.

Jackie Forrest:

Right, for people that have been in the market for a long time.

Now, the markets are reacting though to the view that we’re going to potentially have a US recession and global recession. I haven’t seen very many forecasts yet, but J.P. Morgan came out expecting that the US economy was going to grow by 1.3% in 2025 previously and will now be negative 0.3%, so a recession. That’s the average for the entire year. And so I think you’re going to see more… I looked at Polymarket last night, they have a question; US recession in 2025, question mark. It’s nice and simple. It was around 66% last night, and it had gone up a lot over the last several days. It was kind of more in the 30 to 40% range before.

Peter Tertzakian:

So we’ll see where it goes. It’s just too early in the days. I think you’re going to see some form of capitulation in the White House in terms of this tariff situation, even though President Trump over the weekend basically said, it’s the medicine the world needs to take. But we know from our own Canadian experience, so there’s a flip-flopping, and one day it’s absolutely tariffs are coming, and then the next day it’s okay, you get a month reprieve till we talk this over, and then the next, when the month goes by, there and then again it’s we’ll give you another month. And so we’ll see.

Jackie Forrest:

Well, that’s an important point. Unlike other downturns like the financial crisis or COVID, this is kind of voluntary, this is by the stroke of a pen, we could change this. We know that Trump can change his mind, we’ve seen that before. So I think there’s some bookends in terms of where this goes. One is it’s the tariff arms race scenario. I’ll call it, where there’s this escalation of tariffs, the US putting on tariffs, China, you saw that over the weekend, countering, maybe the US countering again. You see that globally with a bunch of different countries, and it could get pretty bad.

And then there’s this de-escalation sort of scenario where Trump changes his mind. We did see also those anti-Trump protests in the US and in countries around the world, and this economic uncertainty that’s being created, he starts to sort of rethink his strategy. You could see both of those happening. It’s hard to really know what the probability of either is. I know there’s a lot of pain, and because this is something that could be changed fairly quickly, it makes me think that there is potential for that.

Peter Tertzakian:

There’s potential. And the market is certainly sinking as we’ve talked about as we speak. However, if I look back at the four financial crisis that I’ve witnessed; the crash of ’87, the Enron crisis, the financial crisis of 2008, and then of course, the pandemic. Certainly the financial crisis and the pandemic, we actually saw the markets freeze up, liquidity actually dried up. And so this is not the case at the moment where the markets have frozen, the markets are just trading, and they’re just falling, and there’s a lot of liquidity, there’s buyers and sellers and so on. It gets a lot more serious if the markets, particularly the credit markets start to freeze up. And that’s not the case at the moment. So again, on an optimistic note, we shall see how this all plays out, and when we’ll see some sense of stabilization in the markets.

Jackie Forrest:

All right. Well, you forgot about when it comes to the oil markets, there was a downturn in 2015, the OPEC price war downturn.

Peter Tertzakian:

Oh, right. Well, that was specific to the oil markets.

Jackie Forrest:

Specific to oil markets. So let’s move on to our next topic, which is the oil price coming under pressure here. Now, there’s two factors here. First of all, a recession is bad for oil price. It would be softening anyway because less economic growth means less oil demand growth and potentially an oversupply. But OPEC made it even worse with an announcement around the same time on April 3rd, just after the Liberation Day announcement that the eight members of OPEC have decided instead of raising their output by 135,000 barrels per day in May, they’re going to actually raise it by 411,000 barrels a day. So adding about 300,000 barrels a day of additional supply into a market that looks like it’s going… it was already oversupplied. And with this potential for a recession, that’s even getting worse, and then this isn’t helping.

And it kind of reminded me even of the COVID pandemic when, I don’t know if you remember, right around March of 2020, Saudi Arabia was proposing to make some cuts, and Russia didn’t want to make them. So they started a price war, and actually added supply into the market at a time when demand was dropping. So bad timing, this is bad timing too, and has obviously impacted the oil price, which has fallen from being in just above $70 to low 60. So pretty much $10 per barrel for WTI so far. I mean, of course, market hasn’t opened yet today.

Peter Tertzakian:

What’s fascinating to me is how 400,000 barrels a day, and I know that’s just the supply side, but 400,000 barrels a day is, we’ll call it .4% of world demand of 100, 103 million barrels a day. That .4% of change on the supply side creates a 5 to $10 drop in the price of oil.

Jackie Forrest:

Yeah. Well, and I think it’s the combination though because…

Peter Tertzakian:

It’s the combination.

Jackie Forrest:

… there’s recession fear. And I’ve only had one estimate so far, but according to the Bank of Montreal note, they reported that energy aspects has put out a note calling for a million barrel per day demand hit based on Trump’s latest tariffs. So we already had an outlook for about a million barrels of surplus supply in the market in 2025 when you consider we were having some economic growth, but non-OPEC was growing, and Saudi and others were putting more supply into the market. So now we’ve got potentially another million barrels a day of oversupply because demand isn’t growing anymore. And now this extra 300,000, and where does it go from here? This is just next month. They actually had expected to increase their supply throughout the year, and does that mean they’re going to accelerate even more supply coming back faster? So I know what you’re saying, but I think there’s kind of like this uncertainty too.

Peter Tertzakian:

What I was saying is that, okay, so a million barrels a day at demand loss, 400,000 barrels a day incremental supply. So now we’re talking 1.4% change, and the supply-demand balance leads to the price of oil going from $70 to $60, which is a seventh, which is 14%. So 1.4% change in the supply-demand balance causes a 14%… I mean, this is why we say in the business of oil and gas, it’s priced at the margin. In other words, very small changes in the supply-demand balance creates very big swings in the price of oil, and it can go the other way.

So what we’ll look out for next is what happens on the supply side in the United States in particular, because if we look back at the pandemic, we saw that the Permian and places like that where there are very steep decline rates, that the moment you stop drilling, all of a sudden you start to see the declines kick in, and it didn’t take very long during the pandemic.

Jackie Forrest:

Right. Well, and we could… if this escalates more, this trade war, and it turns into more of a global recession, we could see prices fall further. And you’re right, that’s the one thing that’s different now compared to maybe past oil market downturns, is that the supply response will be quite quick and hopefully rebalance the market.

I mean, there’s another potential change here too. According to the media reports, Saudi is adding this production because they’re unhappy with the cheaters, people that are producing over what they’re supposed to be, specifically Iraq, Kazakhstan, and even Russia. Kazakhstan is the worst offender, apparently exceeding their quota by 700,000 barrels per day in March. So maybe those countries fall into line here a bit more, and that solves the problem as well.

Peter Tertzakian:

That’s a movie we’ve seen before too, and eventually there’s an end to the movie, and there’s discipline starts to fall back in.

But look, I think it’s going to be a rough year for the oil price because there’s just so much uncertainty. And so now we’re in the 60 to $70 range. We’ll see if the economic numbers start coming out worse. Certainly there’s a chance it’ll go below 60. But if it goes below 60, now all of a sudden we have definitely the prospect of production declines and the self-regulating mechanism, because the large part of oil supply growth has come from these highly elastic fields, from the shale producers, the oil producers in the United States, and even here in Canada, there’s some of that.

So the ability for the supply side to react to the demand side is much greater than it used to be. The price signals, in other words, will self-remedy the price. And I think the long-term price of oil doesn’t change. I think it’s still around in the high 60s to low 70s in that range. That’s what you need to keep the production to meet the baseline of demand in the world these days.

Jackie Forrest:

Yeah. Well, and this is opposite by the way of what Donald Trump wanted. He wants to see the US grow production, and this is if we see prices at this range, and especially if they go lower, we’re going to see non-OPEC, including the US, which has been a big part of non-OPEC growth, go the other direction here.

Peter Tertzakian:

So what do you think of this theory marginally, a conspiracy theory that the Trump administration has asked the Saudis to open up the spigots so that the price of oil comes down, the price of gasoline comes down, and helps to mitigate some of the inflationary effects of the tariffs?

Jackie Forrest:

Well, they’re inconsistent because they want that, but they also want supply to grow. So I guess we’ll have to choose which is more important.

Peter Tertzakian:

Yeah, well, drill, baby, drill was already a contentious issue within the oil and gas industry, the American oil and gas industry, because $70 is not really enough to drill, baby, drill, in other words, aggressively ramp up drilling. So now we’re at 60. There’s no way that either there’s the cash flow available or the appetite to drill a lot more because the returns just aren’t there.

Jackie Forrest:

Yeah, yeah. So competing priorities here.

I mean, the one silver lining maybe of this whole thing, if there can be one around the oil markets, is that we’ve had an overhang since COVID where OPEC has just been sitting on a whole bunch of spare capacity, and non-OPEC, including the United States, mostly the United States, has been growing too much and not allowing OPEC to get their barrels on the market. So if this kind of period of where non-OPEC declines a bit, allows OPEC to get more of their supply onto the market, maybe that sets the oil market up for a more healthy, balanced scenario going forward.

Peter Tertzakian:

Well, I think it sets it up for, as I said just a few minutes ago, a more responsive supply side, which is where I think we’re at. And that is the big difference between today and past eras, is that the amount of unconventional or shale drilling that is out there with very steep declines is enough that when the drilling stops, the declines kick in.

Jackie Forrest:

Yeah. And it doesn’t take many, many years to balance to market.

Peter Tertzakian:

And by the way, in 2014, ’15, the world had just come off a big spending, probably a 10-year spending binge, including in the Canadian oil sands where there was some, at that point, I think cumulatively $250 billion spent, and all these new facilities were coming on in the market. We don’t have that right now. There hasn’t been, other than places like Guyana and a few other places in the world, there hasn’t been a lot of big spending to create a surge in background capacity.

So I think that the oil markets today have been relatively balanced. Yeah, OPEC at the margins manage that supply, but I think the supply-demand balance is such that the pricing at the margin can work the other way. In other words, a few hundred thousand barrels of production loss will kick that price right back up.

Jackie Forrest:

Yeah. I think you’re right, but I do think there’s a period here where they’re sitting on a lot of spare capacity. I’m just looking at the latest numbers. I know not all of this is real, but the official numbers are like 6 million barrels a day of spare capacity in the OPEC+ group right now. So I think we need to get that down lower. And then I think I agree with you that for sure the non-OPEC side is going to respond to low prices, but for a while, OPEC will have enough spare capacity to fill the void. But eventually the market, I think, will be in.

Peter Tertzakian:

I’ve always commented in the past, that spare capacity, I mean, it’s gone as low as 3%. So 6 million barrels a day is about 6%. But if you think about the global oil supply chains as a manufacturing line, 6% spare capacity is really not very much. In the manufacturing world, you try and have that 10 to 15% because you have downtime, you have maintenance and repairs and all those sorts of things.

So 6% is still pretty thin, and we know all of that 6% isn’t the best quality oil. As you draw down on that spare capacity, you get into the lousier and lousier grades and qualities of oil. So not all oil is the same.

Jackie Forrest:

Yeah.

Peter Tertzakian:

Jackie’s looking at me as if I’m overly optimistic, but I think this is a different market, this is a very different market that has evolved for oil going forward. I think it’s much more elastic to the price signals out there. It’s price at the margin, and so stay tuned.

Jackie Forrest:

Okay. Well, with that, I just got breaking news on my phone that North American stock markets are plunging, but let’s move on to topic three, which is the Canadian election and some of what we’ve learned about energy policy so far. There’s so much going on with the election, and I’m not going to talk about some of the broader policies that are out there, but I think it’s probably worth just revisiting the poll numbers and a little bit about what we’ve learned about energy policy so far.

Peter Tertzakian:

Okay. So I’ve been the barrel half-full optimist or cautious optimist on what’s going on here, so I don’t know what to say about the Canadian election.

Jackie Forrest:

Well, it does appear that the Liberals continue to be pulling away here in terms of the polls. So latest numbers from that three-

Peter Tertzakian:

338Canada.

Jackie Forrest:

Yeah. So I’ll put a link to that in the show notes. Mark Carney at 44%, and Pierre Poilievre of the Conservatives at 37%, and it will take 172 seats to form a majority. And they have a seat projection for the Liberals at 195, and then there’s a range, 167 to 226. So it’s looking right now like they have a pretty good chance of getting a majority. And the Conservatives right now are 122 in terms of the seat projection, which wouldn’t get them anywhere even close to a majority.

Peter Tertzakian:

Yeah. Well, I’m not going to call it because as we know, anything can happen in these elections, especially in the last week or two. We’re not in the last week or two yet. What are we actually? We are…

Jackie Forrest:

I think we’re two weeks in, so the actual date is April 28th.

Peter Tertzakian:

The 28th. So we’ll see. Maybe the next couple of podcasts, we’ll start to make a call on the election. What about the energy policies? Is there anything new there?

Jackie Forrest:

Yeah. Well, I think there are. I mean, Pierre Poilievre and the Conservatives have come out with a bit more clarity in terms of some of their energy policy.

I would say with Mark Carney and the Liberals, there’s things he’s saying in media reports and things like that, or when he came to Edmonton a couple of weeks ago, but not as formal, but I thought we could go through some of the five major topics. The oil and gas emissions cap, the Conservatives have clearly said they’re going to repeal that policy. Mark Carney says he’ll keep, but when he came to Edmonton a couple of weeks ago, he said he will want to work for increased flexibility working with industry and funding carbon capture storage. So it’s not like he’s got it… These were media reports. It’s not like he’s got a written position on this, but it does look like there might be a little bit more flexibility in terms of how it works.

The next one topic is just generally clean energy and the carbon tax. So Pierre Poilievre and the Conservatives want to repeal the industrial carbon tax, but they’ve made no statements on other policies. However, potentially things like the investment tax credits, clean fuel rags, and the Canada Growth Fund, and things that we’re supporting subsidies around clean energy, maybe they’re at risk. Just they haven’t said anything, but it’s uncertain.

With the Liberals, they’ve made no specific statements on any of those things either, the ITCs or Canada Growth Fund, but we can assume they’ll be supportive since those are policies the Liberals put in place. They have said they’re going to keep the industrial carbon tax, but Mark Carney wants to even tighten it more. He wants to put a carbon border adjustment mechanism in, he wants to explore strengthening of methane rules, and mandate corporations to do more climate risk disclosure. So I think we can assume there’s still going to be a carbon focus from a new Liberal government here.

Peter Tertzakian:

Well, I think so. However, then there’s a reality of what the government can afford. There is a lot of talk about infrastructure from both parties, and there’s no question infrastructure has to be built, especially to diversify our export markets. And that includes ports, and I think from rail and pipes and so on.

Jackie Forrest:

Rail, transmission.

Peter Tertzakian:

And so it’s going to come down to, okay, what can we afford and what can’t we afford?

Jackie Forrest:

And what’s the priority?

Peter Tertzakian:

And what’s the priority? So I think a lot of these, they’re not even promises, they’re just sort of platform statements that are being made I think are going to necessarily probably change. But on things where you have anything related to the carbon tax, there’s no question in my mind that things are going to have to change there because as we’ve said many times on this podcast, it’s very complex and dense and inhibits investment.

Jackie Forrest:

But do you want it to be more strict? The liberals are implying it.

Peter Tertzakian:

No, no, well, no, no, we certainly don’t want that.

Jackie Forrest:

Improve entirely.

Peter Tertzakian:

And on the Conservative side, they’re definitely saying they’re going to get rid of the industrial carbon tax. That in itself does not repeal the carbon tax on a provincial level because the Greenhouse Gas Pollution Pricing Act is the federal carbon tax policy, both retail and industrial. And on the industrial side, there’s also the provincial equivalence. So each province has elected to take all or part control of the carbon taxation.

Saskatchewan, when was it, last week. I can’t keep track of time, but whatever, it was the last week or two, basically said they’re getting rid of their industrial carbon tax. None of the other province have said that. So in the event we get a federal conservative victory and they get rid of the industrial carbon tax, Saskatchewan has already said they get rid of theirs, but none of the other provinces have said they’re going to do that. So the industrial carbon tax endures at a provincial level, and each province is different regardless of whether or not the feds get rid of it.

Jackie Forrest:

Right, yeah, so provincial leaders, and many of those have been in place quite a long time, like the Alberta one, it’s been in place for more than decade.

Peter Tertzakian:

And getting rid of industrial carbon tax is not an easy thing because there’s been billions of dollars of investments in the various provinces on the assumption that there’s value in things like carbon credits.

Jackie Forrest:

Right. Of course, those carbon credits have to have a predictable price, and that’s been an issue too.

Peter Tertzakian:

Well, that’s a whole other issue, but I’m going to say it’s not easy, but there’s no question that the whole thing needs to be cleaned up, and we have to set the stage for investment into all these infrastructure projects. So that brings us to Bill C-69.

Jackie Forrest:

Yeah, so when it comes to major projects, there’s different views. The Conservatives want to repeal Bill C-69, which is, doesn’t really exist anymore. It’s now the Impact Assessment Act, and Bill 48, which is that tanker ban, and they want six-month approvals for applications.

Meanwhile, the Liberals want to improve Bill C-69 for one project, one approval. So get rid of this overlap between needing to do all the work with the province and then do it again with the federal government process.

So I would just say the Liberals look like pretty modest changes, where the conservatives look to kind of be more radical. And six-month approvals, we’ve talked about this, I think this would be really important for driving more investment into the country. So I do think the conservatives have a better approach at least on that.

Peter Tertzakian:

More concrete for sure. And ditto on the oil and gas export projects.

Jackie Forrest:

Right, yeah. So the conservatives are saying they want to do national energy corridor, fast-track LNG and pipelines to the Atlantic and Pacific, go ahead with indigenous loan guarantee programs to help make that happen so that indigenous partners can be part of those projects.

With Mark Carney and the Liberals, actually, it was a couple of weeks ago, I don’t think he’d even said oil and gas, but in media interviews, especially when he came to Edmonton a few weeks ago, he did say he supports building pipelines to displace foreign oil and building infrastructure and energy corridors to new export markets. And he even talked about building export infrastructure to the Arctic, which is kind of curious because we haven’t talked much about that. That actually is going to be a topic of our next podcast, is talking about the potential to have a big terminal out of an Arctic port, and there’s some issues with that, there’s ice and things like that. So we’re going to learn a bit more about is that feasible considering ice, ice breaking, cost of all of that?

Peter Tertzakian:

Yeah, it’s a big issue. But on the other hand, it’s not like it’s new, building northern latitude, oil and gas facilities, and Norwegians do it, and certainly the Russians do it. So it’s certainly something that I think we need to consider. That consideration of making LNG terminals in the north in Canada dates back actually to the 1970s where there was proposals. I think it was by Dome Petroleum.

So it’s not like this is new, and I think this is a Canadian problem, is that we talk about a lot of stuff, but we never actually get it done. And so we hope whichever party gets in, we start to get things done.

I certainly support this national energy corridor. I think that’s what we need. It’s a corridor for all sorts of infrastructure, whether it’s pipes, wires, and even digital wires. We need a corridor where you don’t need to have… well, it’s pre-approved in terms of the regulatory requirements, that you go straight from one end of the country to the other. But I would say the priority is getting to the west coast that offers us the fastest and quickest optionality for diversifying our export markets.

Jackie Forrest:

For oil and gas.

Peter Tertzakian:

Certainly for oil and gas, but not exclusively oil and gas. We have port expansions that are necessary for agriculture products, minerals, you name it. And the railroads probably need some help too in terms of creating the ability to transport more volumes, more tonnage.

Jackie Forrest:

Well, so when you say pre-approval, so basically a private developer would come along, and they could just start building tomorrow, and because the environmental review has already been done and the indigenous groups and all of that…

Peter Tertzakian:

That’s it.

Jackie Forrest:

… stakeholders have already bought it.

Peter Tertzakian:

Well, I don’t know about tomorrow, but it’s certainly not 10 years.

Jackie Forrest:

Yeah, like six months or less. I do like this six-month thing. I mean, we had some great podcasts. We heard with TC Energy and with PETRONAS talking about how we really need to shorten this approval timeline to get rid of the risk associated with building major projects.

Peter Tertzakian:

And I think it’s important what you just said is that whomever can come along and build. We want to leave the competitive nature of the business, or we want to maintain some level of competitiveness. In other words, it should not be up to the government to pick and choose individual projects. They should approve the corridor, pardon the pun, but lay the groundwork for investment, and then companies can come in and get the capital, raise the investment capital to actually build, so it is not wholly dependent on the public purse to build these sorts of projects either.

Jackie Forrest:

Right. Well, I will say the Conservatives right now have the most detail around what they’re going to do here. And the Liberals, it’s pretty high level at this point, and we don’t have anything other than just sort of some comments in the media. So I do hope from the liberals, we start to see a bit more tangible plans about how we’re going to build this infrastructure in a way that attracts capital, because we can’t afford for the government to be paying for all of this stuff and addresses some of the issues that we’ve heard from on the podcast of people that want to spend money in this country, but they see it as too risky.

Peter Tertzakian:

Prime Minister Carney is talking a lot about building the infrastructure to be the biggest economy in the G7 ultimately, and certainly we would have the resources and things. It’s the potential to do a lot to grow our economy. So there’s a lot of the right signals, but on energy, you’re right, the Conservatives have more clarity in terms of what they would do.

Jackie Forrest:

Yeah. Well, with that, I think we’ll probably talk more about the election, obviously, as we get towards the big date here at the end of April, but I think that’s a wrap for today.

Peter Tertzakian:

Okay. And hopefully we don’t have to timestamp the next podcast because I’d like to think that what we say in endures more than a couple days.

Jackie Forrest:

Yeah. Well, it hasn’t been that way so far this year, so my prediction is at least the next many months might still be this way.

But thanks to our listeners for following the podcast. If you like this podcast, please rate us on the app that you listen to and tell someone else about us.

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Powering the Future: How Close Are We to Fusion Energy?

Powering the Future: How Close Are We to Fusion Energy?

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This week, Brian Appelbe, Research Fellow at the Centre for Inertial Fusion Studies (CIFS) at Imperial College London, who specializes in Inertial Confinement Fusion (ICF) and High Energy Density Physics, joins the podcast.

Fusion energy aims to create a miniature sun on Earth, utilizing the same process that powers the sun, where tiny atoms fuse together to release a massive amount of clean energy. Recent breakthroughs in fusion include experiments achieving net energy gain and private developers pledging to have grid-connected fusion electricity generation units by the mid-2030s.

Here are some questions Peter and Jackie asked Brian: What are the advantages of fusion energy? How does it differ from nuclear fission? Realistically, how long before fusion is a commercial reality delivering electrons to the grid? How has the entrance of private companies and almost $7 billion in total private investment changed the pace of innovation? Do you think fusion energy will eventually be low-cost, and if so, what are the potential new uses of this abundant and cheap form of electricity?

Content referenced in this podcast:

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LinkedIn: @ARC Energy Research Institute

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Episode 278 transcript

Disclosure:

The information and opinions presented in this ARC Energy Ideas podcast are provided for informational purposes only and are subject to the disclaimer link in the show notes.

Announcer:

This is the ARC Energy Ideas podcast, with Peter Tertzakian and Jackie Forrest, exploring trends that influence the energy business.

Jackie Forrest:

Welcome to the Arc Energy Ideas podcast. I’m Jackie Forrest.

Peter Tertzakian:

And I’m Peter Tertzakian and welcome. Well, we are releasing this podcast, not recording it on April Fool’s Day. And I can’t help but think there are a lot of fools around these days given the uncertainties in everything. But we’re going to talk about some serious things here and tomorrow is tariff day.

Jackie Forrest:

That’s right. And we also have lots of news with the Canadian election and tariffs and we will get to that all next week. But this week we want to have a different topic

Peter Tertzakian:

And it’s no joke, it is no joke at all. And we’re pursuing nuclear fusion, which used to get a chuckle as if it was so far out. But I follow the fusion news quite closely because I’ve long been a fan of the technology and now it’s really starting to get serious. Like if you go to websites like the Fusion Industry Association, and I think we should put a link to that. I mean just weekly, if not daily, it just seems like there’s breakthroughs in this space and I know that it garnered the subject of nuclear fusion. The potential of containing a sun on the earth to create almost an unlimited amount of energy is starting to become real and is even in mainstream discussions at conferences.

Jackie Forrest:

Yeah, so the big CERAWeek conference held a couple of weeks ago, we had an actual panel session on it, like if you’d gone to CERAWeek five years ago and you just did a poll of the people attending, I’m not sure anyone or half the people would even be able to describe fusion energy. And now, we have a panel and the Virginia governor basically said the US must speed up its development of fusion or risk falling behind China in energy dominance. And on this same panel was a company called Commonwealth Fusion, which is one of several private fusion start-ups.

They are saying that they’re going to have their first grid scale fusion power plant in Virginia by the early 2030s that actually connected to the grid. They’ve already raised $2 billion and of course they’re going to need a lot more to make that a reality. So, the fact that this is happening is I thought worthy of us revisiting. And we did have only one podcast on this in the past, and that was in November of 2021 where we had Arthur Turrell, the author of the Star Builders: Nuclear Fusion and the Race to Power the Planet, which I still recommend for everyone to read. And I will put a link-

Peter Tertzakian:

Yeah, that’s a great book.

Jackie Forrest:

… in the show note too, right?

Peter Tertzakian:

Yup. 2021, I can’t believe it was 2021. So, it’s high time we had someone back and guess what? We do. We have with us the distinct pleasure, Brian Appelbe, research fellow in the Centre for Inertial Fusion Studies at Imperial College straight from London. He’s working in internal confinement fusion, otherwise known as ICF and high energy density physics. And he assures me we are going to bring the discussion down to the common folk. So, welcome Brian.

Brian Appelbe:

Hello. Hi Peter, hi Jackie. It’s a pleasure to be here. Thank you for the invitation.

Jackie Forrest:

Well, hey, let’s start off, tell us a little bit about yourself and how did you become a plasma physicist?

Brian Appelbe:

Yeah, sure. So yeah, so I’m working in Department of Physics at Imperial College London, carrying out research related to nuclear fusion. The specific research is called plasma physics because we’re studying how plasmas behave, which is the sort of material that we use in nuclear fusion experiments. And so, my own background is always since I was a kid, I was interested in, I guess what you’d consider technical problems and mathematics. And it took me quite a while, started off doing an engineering degree and then I realized that the most interesting technical problems that you need to solve using mathematics were actually more in the physics side than engineering.

So, I did a PhD in physics and then I realized as I was doing that, well nuclear fusion is really it’s like the convergence of physics, engineering, lots of technological problems. So, I moved into researching in that area.

Peter Tertzakian:

So, talk about plasma, it’s a state of matter, it’s in the sun. Plasma is not blood plasma, this is a different kind of plasma. This is a state of matter that’s in the sun, it’s a nuclear reaction that happens and it’s at exceedingly high temperatures.

Brian Appelbe:

Yes, that’s correct. So, the easiest way really of introducing what we mean by a plasma is thinking about states of matter. And most people are familiar with three states of matter, solid, liquid, gas. And the difference between those states of matter, obviously we know the difference between ice, liquid water and steam. Physically it’s very obvious but really on a physics level, what the difference is the amount of energy that it contains. And you can think of if you start off with a block of ice, you heat it up, what you are doing is just adding energy to that system.

So therefore, it melts, it becomes liquid water. If you keep adding energy to it, it will evaporate, it’ll turn into steam, it’s transitioned to become a gas. If you keep heating, adding energy to that system, what begins to happen is that the electrons and ions that form the atoms in the substance in the water will separate. And so now, you’ve got something that behaves a bit like a gas, but what’s actually made up of is not neutrally charged atoms, but instead positively charged ions and negatively charged electrons.

So, we’ve got this system that’s somewhat like a gas in the way that it moves around due to individual particles, but these are charged particles and that’s a plasma. Now, it behaves very differently to a gas because these are charged particles. So, it means it can do things like it conduct electricity, it responds to magnetic fields. And so, that’s what a plasma is in general. The reason plasmas are important for nuclear fusion is that essentially, we need to make plasmas very, very hot to try to drive nuclear fusion reactions.

Jackie Forrest:

And you need to condense them so they all get close enough together that we start to get the fusion of the two atoms coming together. Right?

Brian Appelbe:

Yeah. So, that’s exactly it. So, you can make a plasma out of pretty much any material, any elements. This is what we do, a lot of experiments, we study how all sorts of plasmas behave just to gain an understanding. And I guess, I should say with plasmas, we’re not so familiar with them in our homes or everyday life, but like so much of the universe is made of plasmas, pretty much all stars, most of them are made up of plasma. So, this is a very common material throughout the universe, even if we don’t have much day-to-day interaction with it.

But then it’s of interest and importance for nuclear fusion because essentially what we want to do is we want to take, plasma is made up of specific elements or specific isotopes, in particular isotopes of hydrogen, which are deuterium and tritium. So, deuterium is a form of hydrogen that’s made up of one proton and one neutron joined together. Whereas, tritium then is made up of one proton and two neutrons joined together. And because these substances both have only one proton, they’re still forms of hydrogen, but they’re not the common hydrogen that we have day-to-day, they’re instead isotopes of it.

Peter Tertzakian:

We learned last time on the podcast in 2021 is that the longstanding issue has been, as you’ve stated earlier, to put enough energy in to turn it into plasma. And then as Jackie talked about, condensing it, confining it to the point where you get a self-sustaining nuclear fusion reaction going such that the energy out in heat exceeds the energy that you had to put into the system. And once you get that state and can contain, and we’re going to talk about this because I believe this is your area of expertise in things like a magnetic bottle because it’s so hot, it would melt anything. That that point of reaching the amount of energy out versus how much you had to put in is now being exceeded. Is that correct?

Brian Appelbe:

Yes, that’s correct in specific experiments. But really, so yes. So, for any general plasma that we want to do fusion with, we want to make it sufficiently hot that these ions that are whizzing around of deuterium and tritium can collide and react. And then when you get one of these deuterium and tritium reactions to happen, they release a lot of energy as they do so. So, it’s easy, we just take a plasma of deuterium and tritium, we heat it up, the reactions will happen. What makes it difficult is when you heat it up, it just tends to want to fly apart. Okay? It’s that high pressure, it wants to somehow explode.

So, the real challenge is how do we make this material hot enough that the reactions will happen and we get the energy out, but at the same time that we actually keep the plasma contained such that it’s contained for long enough for enough reactions to happen, to release enough energy.

Peter Tertzakian:

Yeah. And when you say reaction, as the word implies fusion, that the atoms fuse together and release the energy and continue to do so in like a chain reaction effectively, so that the amount of energy coming out once you put the energy in, continues to exceed and then we’re net positive.

Brian Appelbe:

Yes. Yes, exactly and I think that’s the maybe for, we’re talking about fusion reactions as distinct from we have lots of nuclear power plants at the moment, they all operate from the basis of fission reactions. So, with fission reactions, you’re at the very far end of the periodic table, you’re taking heavy elements and you’re splitting them apart to release energy. In our case, we’re way back at the start of the periodic table, we are fusing joining together these isotopes to release energy. So yeah, it’s fusion reactions in particular we’re interested in.

Jackie Forrest:

Okay. And the breakthroughs that have been happening are around this net energy gain. I was just looking, and I have to admit, I looked at chat so it could be wrong, Brian, that’s why you have here. It seems like there’s been a number of experiments all over the world in China and different places, us even where you are in England, which have proven that you can get more energy out that you put in. And if I go back to 2021 when we had this interview, I think there was the one case at that Lawrence lab and that was the first one.

Peter Tertzakian:

Yeah, I think it was like a few microseconds. How long are the reactions sustaining themselves now?

Brian Appelbe:

Well, there are many developments in all different ways, and it depends on which experiment you’re talking about in terms of what their measure for success is. So, one of the things, and actually Jack, you mentioned that I’m in England, I’m not in England, I’m actually sitting in an Airbnb next to Lawrence Livermore National Laboratory because I’m out here on a visit to meet with collaborators. So, this is one of the places that have had big breakthroughs since 2021, but their method of doing this confinement is very different to some of the breakthroughs that we’ve had from say these Chinese experiments or some of the other experiments around the world.

So, in a way before we can decide which has been what the breakthroughs are, you have to consider what different forms of breakthroughs are needed for each experiment. So, I don’t know if we want to pick this apart, but I could start off with the one I guess that I have found most exciting because it’s the one that I’ve been working on most closely.

Peter Tertzakian:

Go for it.

Jackie Forrest:

Yeah, let’s go for that one.

Brian Appelbe:

Let’s go for that one. Yeah, yeah. So, I guess, and this is probably the big thing since, well I think in 2021 it was just happening. So, Lawrence Livermore National Laboratory, which is pursuing a form of fusion called inertial confinement fusion, they have the world’s largest laser built here. It is the National Ignition Facility laser, it is massive. It is, I think the building housing, the laser is about the size of three football fields, and I think football fields are about the same size as soccer fields, so it’s big. So, what that laser does, so we go back and we’re thinking of our plasma made up of deuterium tritium ions.

The way the laser experiments work is they essentially all the laser energy is used to compress down deuterium, tritium into a very small amount. And I mean like a really small size. So, you start off with all your deuterium, tritium ions in a little sphere that’s about a millimeter in diameter. So, it’s a pretty small sphere to start with. The laser energy essentially is deposited on the outer surface of that sphere and it just forces it to compress. And this is not too, the everyday comparison would be if you imagine taking something like a water balloon and you use your hands to try and compress a water balloon, okay?

And obviously as you do this, the water will try to squirt out between your fingers. But if you can deliver your laser energy sufficiently smoothly around your sphere, then what you can do is you can actually force this thing to compress down to a sphere that’s about, well it’s a volume of about 100 times smaller, so you make it much, much smaller. So, what that does is it makes it much, much hotter and much, much more dense and that’s the point at which, you know, all the nuclear reactions start to happen. But we talk about confinement times, in these experiments really the confinement time is super short.

We only keep it confined in this really hot dense sphere for less than 1 billionth of a second, about one 1/10th of a billionth of a second, we have this thing that’s sufficiently hot, sufficiently dense, all these nuclear reactions can happen and then that’s your energy coming out. The conditions when we make this thing really hot and really dense, it’s approximately the same temperature as the center of the sun and even more dense than the center of the sun. And so, we get all these reactions happening and then it just falls apart.

The exciting breakthrough that has been that we are now getting more energy out from the fusion reactions than the amount of energy that is in the laser that is actually driving those reactions in the first place. So, this is something that if you look up the stories about the National Ignition Facility, you’ll hear stories about ignition. And this is what we mean by ignition is that we’ve caused a chain reaction of nuclear fusion reactions in this plasma such that we’re getting more energy out than the laser energy that’s been delivered.

So, that’s just one of the fusion breakthroughs that have happened. It’s the one that I work most closely on, therefore is obviously the one that I’m most excited about.

Peter Tertzakian:

So, that’s exciting but let’s bring this to the real world of engineering, as you described at the very beginning of the podcast, which is okay, this thing is the size of a small ball bearing. It effectively fuses and creates more energy, but we need a lot more than a billionth of a second to run our society here. And what do you do keep dropping little ball bearings into the little chamber and zapping them? How does this work?

Brian Appelbe:

Yes. Well, I think first of all, I’ll put some caveats out there. So, NIF has only been built, it was only ever built as a science facility to do the basic research into this and to understand the physical processes. NIF fires the laser approximately once or twice per day. That means you can get this little burst of energy once or twice per day. If you want to make this into a commercial fusion power plant, then we have lots and lots of technical challenges to overcome. None of which NIF is designed or is intending to do, it’s purely a science facility, but others are looking at some of these challenges.

The biggest one really is how do you do this about 10 times per second rather than once or twice a day? So, that’s what we would have to do is we would have to shoot our laser 10 times a second, drop in these tiny little ball bearing pellets of fuel and then the energy would have to be recovered. At the moment, the NIF energy just gets dissipates away in the chamber and we’re not really using it for anything. Whereas, a power plant obviously would have to convert that to electricity. So, there are many technical challenges.

What’s interesting, I guess that’s really happened over the last five to 10 years, partly because of this success of facilities like NIF, is that a lot of commercial fusion companies have been started up to try to address some of these challenges. So, you’ve got a lot of fusion companies that have attracted quite significant investment and they are the ones who are taking on this challenge of how do we actually construct a power plant.

Jackie Forrest:

Yes, and I will put a link to this, there’s a Fusion Industry Association now, and there’s been about $7 billion of investment in private firms according to their 2024 report. Get this, there are 45 different private fusion companies now trying to do this, which is like really a stunning number. And many of these are saying that they could have commercial plants in the mid-2030s, the one I mentioned at the onset, the Commonwealth Fusion. I think they’re the most aggressive saying that they could do this even in the early 2030s, most of them are mid-2030s.

So, tell us a bit about these companies. Now, I was looking, they don’t really publish their results the way the government labs do, so we don’t really have much information that I could tell in terms of the success they’re having.

Brian Appelbe:

Yeah, yeah. So, I think that’s very true, but it’s been really interesting, like I said I’ve been working in this field for about 15 years and I think in that time, I’m not sure the exact statistics, but if you’re saying there’s 45 now, I suspect there was only about five fusion companies, if not less when I started off in the field. So, there’s been this really exciting development. I think what’s also interesting is like they’re doing very different things. So, so far we’ve just talked about these laser driven fusion experiments, like the ones I work on at Lawrence Livermore.

But there are very different ones where you have people, I’m not sure if people are familiar with fusion, you might have heard of Tokamaks, whereby you use a large magnetic field to try to confine your hot plasma.

Peter Tertzakian:

It’s the ones in the giant donut.

Brian Appelbe:

Giant magnetized doughnuts. Yes, that’s correct, yeah. And so, you’ve got fusion companies that are pursuing all sorts of schemes ranging from the laser driven ones to the giant magnetized doughnuts and everything in between. It’s interesting to see that, I guess ecosystem develop. It’s hard to know exactly which of these is best positioned to actually make significant breakthroughs, but it’s a very interesting time just to see these developments. I guess Jackie you mentioned about not publishing research, there are many reasons for that I guess, and I guess I’m not an economist or such like, so I can’t get into how their funding relates to their publications.

But many of them are having to build large scale labs just to get started, and so it takes several, many years from when you raise money to pursue your fusion scheme to when you actually start doing novel research. So, I think that’s not something that I would find too concerning right now. I think we have to let these companies get started and get off the ground and see where they go.

Peter Tertzakian:

We do hear some of these companies or through these news releases that there’s the possibility, well Jackie even said the mid-2030s, I’ve heard some say by 2030 we’re going to have a commercial scale fusion plant. Is that still nonsensical in your opinion, given the state of play?

Brian Appelbe:

This is where I plead, I’m just a scientist. I think what I would say to that is there’s a couple of things. First of all, there are many different technological challenges to getting a commercial fusion power plant. It’s not just getting lots of energy out of our reactions. We didn’t quite cover this, but you mentioned Peter that well, you have this deuterium and tritium that fuse and they emit two other particles. One of those particles is a helium nucleus, which is okay, that’s useful because it’s a charged particle and we can keep it in our system to heat.

The other is a neutron, which is a high energy neutron, which flies out of the plasma and this is the thing that’s carrying energy out of the experiment. So, what we have to do is we have to go from having a high energy neutron to electricity and neutrons are difficult to deal with because they’re not charged so they tend to just fly through things. And so, there are huge technological challenges in how even if we can produce lots of fusion reactions and get energy out of our plasma, how do we actually convert that from these high energy neutrons back into electricity?

So, that’s a class of problems that people are only starting to tackle right now. And I guess therefore these timelines about when companies say we will have fusion energy are based on how they think they will solve these problems, which they’re only just beginning to solve. Now, perhaps they have perfect solutions, but I might go back to NIF, which I’m familiar with and say, this is an incredibly successful time for NIF. It’s got ignition, it’s got these, we can do these experiments almost routinely now where we’re getting more energy out than we’re putting in.

But at the same time, it took 10 years to do that. So, NIF was switched on in I think 2019 and we as scientists hoped, well, we’ll switch it on and we’ll get these ignition experiments up automatically or immediately, but actually it took 10 years to sort out all the detailed physics to get to the point we’re at now. And so, with these private fusion companies, I think who knows, until you actually start doing things you don’t know what you’ll get.

Jackie Forrest:

Well, and I do want to mention too, we do have a Canadian fusion energy company, one of these ones based in Richmond, BC, General Fusion. On their website, they are also on track to deliver electricity to the grid by the mid-2030s. But I get your point, one thing getting the energy I actually didn’t understand it was neutrons that brought the energy out. I thought it was heat, which would have been easier because then you could just raise steam or something like that, right?

Brian Appelbe:

Yeah, yeah. So, this is the thing, well, as physicists, we just think about energy as a generic thing usually. And then it’s only when you start engineering that you realize, oh, well if energy is in the form of neutrons versus some other form that can make a big difference. I guess basically what we want to do is we would convert these high energy neutrons, get them to heat up some material, which would then drive, say a steam turbine. So, eventually we convert that energy to heat, but initially we’ll still deal with the high energy neutrons.

And maybe it’s worth mentioning that a few of these private fusion companies are also looking at schemes where you do what we call a neutronic fusion. So, instead of deuterium, tritium reactions, you use other reactions so proton, boron is one of them. And those reactions release energy in the fusion, but that energy comes out in the form of charged particles, which are much easier to deal with. The downside to that is the actual probability of a fusion reaction happening in a plasma is much, much smaller than for deuterium, tritium. But there are many solutions that people are looking at for all these problems.

Peter Tertzakian:

Right.

Jackie Forrest:

Well, and hey, come back to the sun. The sun is using hydrogen, right?

Brian Appelbe:

Yeah.

Jackie Forrest:

That’s how the sun’s doing. Yeah, so we know that that way works. We just have to figure out, they have the advantage of this gravity system that’s keeping it all contained where we don’t have that here on earth.

Peter Tertzakian:

So, it is obviously exceedingly technical, but at the highest level it’s also geopolitical. And we’ve got an arms race that I would say is between realistically the EU, the United States, and China, which have been working on this and now accelerating with a greater amount of dollars, many of those dollars are state-sponsored. Where are the Chinese at in this? Because we hear a lot coming out of there, the Virginia governor, as Jackie mentioned at the beginning, says the US must develop fusion or fall behind China on energy. Well, where are they at? Are they ahead? What’s the state of play?

Brian Appelbe:

That’s an interesting question. And I suppose in my mind when we talk strictly about nuclear fusion, it’s quite difficult to say there is one single race happening because there are so many different challenges. But by that I mean the US is obviously ahead in terms of laser driven inertial confinement fusion because we’ve got NIF, which ignites and has been a great success. So, that in a sense means the US is somehow ahead. But then as I said earlier, well NIF is not a facility that is going to be doing commercial fusion at all there is zero plans for that.

So therefore, you can say, well, does that mean the US is really ahead in some way? Similarly, with the other fusion experiments, things like the Tokamaks, there are many Tokamaks around the world in different countries, and many of them are better at some parts of the problem than others. So, my own instinct is, the easiest way to say who’s ahead might be who’s investing the most money. And in that sense, I think certainly, I don’t know if there in terms of the actual dollar amounts, but there is a big push within China for pushing more money into this area.

Peter Tertzakian:

Yeah, I guess what I think about the arms race, I think about the endpoint and the endpoint being a commercial power plant that is delivering electricity using some fusion process that is effectively this almost unending source of energy, it’s non-emitive. So, if we conjecture that that day is now on the horizon, we can envision it given that groups such as National Ignition Facility, NIF has proven energy out, can exceed energy in which is a major recent milestone. So now, we move into the independent of how we get to that endpoint who would you say, maybe it’s too early to say like what nation is ahead?

Brian Appelbe:

So, I would say, I think it is too early to say, and this comes back to the idea that there are too many different challenges that we just don’t know what the best solution to them is. So, I think the fact that we have this ecosystem of countries and companies that are investigating different approaches and looking at different aspects of the technological challenges, that’s quite healthy. It’s encouraging, but I think t’s really just too difficult to down select for how we can actually do it. And I guess one of them, we didn’t get onto this yet, but one of my key, you asked me earlier was 2030 a realistic prediction or not.

And obviously I did my best to sensibly avoid answering that question. But I think one of the big issues could be all the different like little technological challenges that I’ve mentioned and many other ones, I think in isolation we can overcome them all. We can obviously as NIF has showed, we can get more energy out than in, I think people will be able to build facilities where we can reproduce, do the laser, fire laser 10 times per second. People will be able to find materials and ways of capturing the neutron energy and converting it to steam turbines.

Each individual challenge should be surmountable, but it’s really not clear that we would ever be able to do that in a cost-effective, efficient commercial manner. If we have to have these exotic materials for capturing the neutrons and converting their energy into electricity, then maybe it’s a case. Sure, it works, but it’s just very expensive to do it and more expensive than say solar panels or wind turbines. So, I think that’s the greatest unknown for me.

Peter Tertzakian:

But surely also the things like AI, artificial intelligence is able to accelerate, whether it’s development of the materials and new age alloys, whatever, and the processes, it seems like, as you said, these challenges are surmountable. It’s a question of when and whether or not it makes economic sense ultimately.

Brian Appelbe:

Yeah, yeah, exactly. And I guess the challenges are surmountable, but it’s always a case that we will need, say highly engineered materials, very bespoke materials for building these types of experiments or power plants. And maybe, I guess the example with deuterium, tritium, we have lots of deuterium, that’s not a problem, it’s easy to extract from seawater. There is a lot far less tritium available. Now, we can make it in nuclear experiments using lithium, but at the same time, tritium is something that we would need to manufacture for doing fusion and what will be the price of doing that?

How much will our fuel cost effectively? And I think that’s something that’s just, well, for me at least, it’s very hard to predict.

Jackie Forrest:

Well, I think you’re coming to an important point. This has always been plugged as abundant, extremely cheap energy. And when we figure out fusion, we’re just going to have so much electricity, like we can literally capture using direct air capture all the CO2, we can solve all our problems. And yeah, I would say it seems like it could be quite expensive. You described three football field building with lasers and now you’re telling me you need to do that many times a second did you say for this to be continuous, right?

So, maybe you could address that. It sounds like cheap is a question mark. What about abundant? Someone described to me like with a cup of hydrogen, you could create energy that would last a city for a very long time. Is it abundant? Like you just described, there may be some issues on the feedstock too.

Brian Appelbe:

No, no, you’re right. I feel like maybe perhaps I’ve wandered into being too negative about this, so maybe I should recalibrate. Yeah, so historically, why have we spent so much time and money in years pursuing nuclear fusion? There are very good reasons why we have been doing that and trying to do that. And really a couple of the reasons that we’re so keen on it is that effectively the fuel is much more abundant than say for fission power plants. We know we can make the tritium, we can get the deuterium from seawater. So, that means we can have in a sense limitless fuel.

Also, nuclear fusion reactions, like per unit mass are just released far more energy than any other form of energy that we currently use. So, you get a tremendous amount of energy out of just one of these fusion reactions in comparison with the fission reaction. So, it’s a very powerful energy source. Also, one of the nice things about it is sure it is nuclear reactions and we have a lot of complex materials, but in comparison with fission, we should produce a lot less radioactive materials that hang around for much shorter durations.

And that’s effectively because we’re operating with elements that are near the start of the periodic table than near the end. So, the radioactivity issues for fusion are much, much less than they would be for fission. So, that’s also much to its advantage. Also, in terms of nuclear safety, the way in which these reactions work just means there is no physical way whatsoever in which we could have any catastrophic nuclear accidents in these facilities. So, there are a lot of advantages to it that make it worth pursuing.

Jackie Forrest:

One thing that I was also wondering about is it seems like this is only going to really work in these massive large facilities. Would this ever be a fuel source that could power ships or rocket ships or provide electricity to remote locations? Or does it have to be this massive plant? Now, I’m imagining many football fields because of all of the lasers and magnetic fields you’re going to need.

Brian Appelbe:

I think I would love to know the answer to that question too. I think at its heart we could design experiments where we’re releasing quite small amounts of energy from the fusion reactions. It’s all the ancillary devices to drive that. Like how big is your laser? That will be the challenges. So, I know there are some companies that have put out designs where you have a fusion power plant in every neighborhood. And I think that there’s no fundamental reason, technological reason why we could not do that. Whether it’s economic, I have no idea, but I think it would require several generations of technological development to get that far.

Peter Tertzakian:

Well, I mean nuclear fission, which the first commercial facility was I think in 1959 in the UK, it’s Sellafield, it took quite a while before it became economic. That to me is not the issue, getting a commercial-sized facility is step one, and then costs come down over time as you get economies of scale and technology improves and processes improve. I think the promise of having this incredibly dense, which is really important, source of energy, energy density, as you said, like a cup of hydrogen can fuel a city. Well, I don’t know what the stats are.

Jackie Forrest:

Yeah, maybe you can tell us, Brian, what is the stats?

Peter Tertzakian:

Yeah, come on. How many Airbnbs can that thing?

Brian Appelbe:

Yeah, no, that’s, I’ll have to look up how much a cup of hydrogen would power, but I think you’re right that just fundamentally it’s per unit mass. It’s releasing orders of magnitude more energy than any other form of energy source that we’ve got. So, that’s the reason why in principle, you could use it to power spacecraft traveling very long distances or ships or whatever is because the energy density within the fuel is huge. We just have to figure out how we release that in an effective manner and what technology we need associated with it. But just, yeah, in terms of the fuel itself, then it is game changing compared to other energy sources,

Jackie Forrest:

Right, yeah. We’re not going to make it much past Mars if we have to rely on fossil fuels energy to get and to see the rest of the planets, right? If we had a system like this, you could actually get very far. I’m sure that’s what they’re using on Star Trek.

Peter Tertzakian:

Of course, they are, dilithium. Is that in there? Yeah. I want to get back to the geopolitics for a second. You’re at Lawrence Livermore, you’re obviously collaborating. What is the state of international collaboration? Is it now becoming increasingly secretive as the promise of fusion starts to materialize? So, it’s gone beyond collegial scientific community to something that is now of national security in the important sense of the collaborative spirit is starting to break down or what is going on?

Brian Appelbe:

Yeah, I think that’s interesting. I would not say that I would have noticed a breakdown in collaborative spirit, apart from the fact there are many fusion companies, which obviously for various reasons aren’t saying precisely what they’re doing. But right now, I think all these private fusion companies are very keen to engage with the publicly funded experiments because they are still the big beasts in this. Okay? All the biggest experiments are still the ones that are publicly funded. So therefore, private companies, they need to interact with that community.

I talked a lot about NIF showing my bias. We still haven’t mentioned Ether, which is the large Tokamak being built in the south of France, which it’s an internationally funded organization. China’s involved with it, the US, Europe, you have all the players in fusion are all collaborating and funding Ether, which has had some setbacks, but it’s due to be switched on and demonstrating energy release, energy gain by I think the mid-2030s. And that right now, despite all the excitement with private fusion companies and NIF, that’s the one that has had the most money invested in it.

But in the last couple of years, I think the private fusion companies have made the ones making more noise and are releasing aggressive timelines for when they’ll have success. NIF is the one that has had the biggest scientific breakthrough, but the fact remains, the biggest fusion experiment is still a fully publicly funded international collaborative experiment.

Peter Tertzakian:

Well, I’ve studied nuclear fusion, I’m not going to say how long ago and when I did my original physics degree. And the joke back then was that nuclear fusion is always 25 years out. But finally, as I followed the story over the years, the ignition and the energy released versus the energy and I think was a huge, huge breakthrough. And so, it seems to me like the amount of money, the amount of effort is really starting to materialize, we’re entering a new chapter in this story. Brian Appelbe, research fellow in the Centre for Inertial Fusion Studies at Imperial College.

Thank you very much for bringing us up to date, technically, and a little bit of sprinkling of geopolitics in there as to where we’re at. Delighted to have you and hope to have you back as you make more breakthroughs.

Brian Appelbe:

Thank you. It was a pleasure talking with you.

Jackie Forrest:

Thank you, Brian. And thanks to our audience. If you enjoyed this podcast, please rate us on the app that you listened to and tell someone else about us.

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