From Hormuz to Tarragona

The oil tankers that left the Persian Gulf before the war are now arriving at port. That is to say: the worst moment in terms of hydrocarbon availability is yet to come. But the disruption will not be permanent. For a paradoxical reason. US stock markets hit an all-time high this week. Financial markets are telling Trump that they want peace and that he should stop the war. It is a market that Trump can manipulate with tricks for his own benefit, but it is unlikely that they will encourage him to go to war if they do not want to. They are his friends and they have expressed themselves clearly. Nevertheless, the moment is dangerous. The temptation for a forward flight will be there. But I believe that the Persian leaders, fanatics but not stupid, will understand this, and that in a relatively short period an agreement will be reached that will allow both sides to claim victory. I think it will include an open Hormuz.

However, the implications for the future of hydrocarbons in the world economy will be significant and permanent. It has become even more evident that to the decarbonizing imperatives of the climate crisis are added, particularly in Europe, those derived from geopolitics and the need for strategic autonomy. Oil must be transported from insecure regions (the Middle East) or politically hostile ones (Russia or, alas, the US). Decarbonization, unstoppable but slowed by the world's new challenges, is now receiving a boost from these same challenges. The process of gaining independence from oil will be gradual, but it will accelerate and decisive shifts are foreseeable: more renewables, more battery-powered engines and less combustion (and, therefore, fewer biofuels), more acceptance of nuclear power, more interconnections, a more decisive policy to promote green hydrogen, etc.

I will specify what I have just described in the reality of the chemical industrial conglomerate of Tarragona, the largest in Spain. Emilio Palomares, director of the Catalan Institute for Chemical Research (ICIQ), to whom I owe the following ideas, has been warning us for some time that its future is clouding over. On the one hand, like the rest of Europe, we have growing Chinese competition. It is not the subject of this article, but I will say that if China wants to maintain access to European markets, it will have to curb its export fervor. Tariff protection is not desirable. It harms consumers and fosters inefficiency, but Europe cannot give up the possibility of competitive adaptation of its chemical industry.

On the other hand, we have the challenge of decarbonization, the centrality of which has increased with the Gulf War. I point out three aspects:

1. The existence of the conglomerate, and its competitive advantage until now, is due to accessibility to the energy source. Industry has grown around the port through which oil arrives. With decarbonization, this advantage is lost. With renewables, the competitive advantage –compared to, for example, Aragon– lies in a large accumulated investment that is still far from obsolescence. The port for renewable energy may not be maritime and may come from inland. But it will be a declared suicide if, as Mar Reguant explained to us in these pages ("What else needs to happen?, April 12), we obstruct, with the best of intentions, projects for generating or transporting clean energy.

2. The availability of green hydrogen is essential. But promotion policies (Hydrogen Valleys) are stalled. The recent cancellation of Lhyfe's project for a green hydrogen plant in Vallmoll, despite receiving a substantial subsidy for its construction, is indicative: it had no clients. It was not viable if the price had to cover the cost. Europe will have to give more weight to the introduction of green hydrogen, as was done with solar and wind renewables: subsidizing the price until economies of scale reduce its cost.

3. Decarbonization programs include capturing CO₂ at the point where inevitable chemical processes generate it. If industry responds to the demands, this will lead to the adoption of CO₂ capture technologies. It is encouraging that a collaboration between ICIQ, Eurecat, URV, industry, and regional entities is promoting, with public and private support, a project to explore and test different CO₂ capture technologies, with the installation of pilot plants in companies. It is a magnificent technological initiative and an important opportunity, in the European context, for Catalonia to contribute to the development of these key technologies.