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Welcome to Grid Brief! The US and UK announce plans to collaborate on international nuclear power development, German vice chancellor warns that German manufacturing could die off without Russian gas flows through Ukraine, the renewable diesel bubble begins to burst, and more.

US and UK to Collaborate on Nuclear

Last week, the White House announced its Atlantic Declaration, a framework for economic collaboration with the United Kingdom. Included in the framework is a partnership on developing nuclear power.

Here are the goals of the partnership in regards to civilian nuclear:

• Develop end-to-end fuel cycles for both countries to move away from Russian uranium fuel dominance.

• Facilitate international deployment of civilian nuclear technologies to meet climate goals.

“These priorities will form the basis of a Joint Standing Committee on Nuclear Energy Cooperation (JSCNEC), which is designed to deliver on shared commitments by the end of the year and serve as an enduring bilateral forum to advance shared policy goals across existing engagement mechanisms, including near-term actions identified through the [U.S.-UK Joint Action Group on Energy Security and Affordability], and facilitate exchanges on new and evolving technical and policy developments regarding nuclear energy,” the White House said in a statement.

This agreement will position the countries to compete with international nuclear development, which China and Russia currently lead. The two countries are responsible for all plants planned or under construction worldwide.

The US and the UK also aim to decouple from Chinese supply chains with regards to clean energy projects.

Germany: Industry Will Die Without Russian Gas

Germany might have to cut or turn off industrial capacity if Ukraine’s gas transit agreement with Russia isn’t re-upped after its expiration next year.

“[Economy Minister Robert] Habeck, who is also the vice chancellor, issued the stark warning Monday at an economic conference in eastern Germany, saying that policymakers should avoid ‘making the same mistake again’ of assuming that the economy will be unaffected without precautions to secure energy supplies,” reports Bloomberg.

Here’s why: current rules demand that countries share the burden of gas shortages, which means Germany would have to export gas to Eastern European countries to help them shore up their losses. Germany’s manufacturers would be left without adequate supplies to keep running.

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Renewable Diesel Bubble Bursts

The renewable diesel bubble has begun to burst as costs soar.

“Agricultural behemoth Cargill Inc. said it has suspended plans to build a giant soybean-processing plant that would have provided feedstock to the renewable diesel industry due to ‘shifting market dynamics,’” reports Bloomberg. “Exxon Mobil Corp. has meanwhile canceled a deal to buy the green fuel from Global Clean Energy Holdings Inc., a company that said it’s facing project delays in part from lack of skilled workers.”

Made from animal fat and crops, renewable diesel has been celebrated as a chemically equivalent replacement for petroleum diesel. The hope is to cut emissions in transportation by blending traditional diesel with renewable diesel.

Labor costs and commodity prices are hammering the sector, which was expected to see a sevenfold increase in production by 2025 as compared to 2020.

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Conversation Starters

• US Energy Secretary Jennifer Granholm may be in hot water. “Energy Secretary Jennifer Granholm revealed Friday that she has held financial stocks as recently as May, contradicting testimony she gave to a Senate committee earlier this year,” reports E&E News. “In a letter shared with E&E News and sent to the committee, she also revealed her spouse held a previously undisclosed investment in Ford Motor Co., an automotive brand that falls squarely in her jurisdiction. Granholm told the Energy and Natural Resources Committee at an April 20 budget hearing that she did not own any individual stocks, saying she was only invested in mutual funds. She also said she would “not object” to congressional legislation that would ban executive department officials from holding stocks.”

• Peruvian protestors have released oil tankers. “Indigenous protesters in the Peruvian Amazon have released two oil tankers and their crew members being held since last week in protest over changes to a development fund, a source at the company operating the vessels, PetroTal,” reports Reuters. “The firm's marine shipments in the area also resumed earlier on Monday, the source added. The two ships were hijacked on Tuesday, one with 40,000 barrels of crude aboard. The release occurred on Saturday after a meeting between the Indigenous group's leaders and local authorities, the source said. The 14 crew members and the ships were unharmed, the source added.”

• The Chinese yuan continues to gain prominence. “Pakistan’s petroleum minister Musadik Malik has revealed that his country paid for its first imports of discounted Russian crude in Chinese currency. According to Malik, the purchase, the first government-to-government (G2G) deal between Pakistan and Russia, consisted of 100,000 tonnes, of which 45,000 tonnes have already docked at Karachi port,” reports Oilprice.com. “The decision to pay in Chinese currency instead of the traditional U.S. dollar comes after Russia last year said it will no longer accept the American currency as payment for its energy commodities but will instead switch to Chinese and Emirati currencies. Further, Russia was cut off from the US dollar-dominated global payments systems following sweeping sanctions off the Ukraine war.”

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