From Hormuz to Tarragona

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 stocks hit their all-time high this week. Financial markets are telling Trump that they want peace and for him to stop the war. It is a market that Trump can manipulate with tricks for his own benefit, but hardly to encourage him to wage war if they do not want it. They are his friends and they have expressed themselves clearly. Nevertheless, the moment is dangerous. The temptation to flee forward will be there. But I believe that the Persian leaders, fanatical but not stupid, will understand, and that in a relatively short period an understanding will be reached that will allow both sides to claim victory. I think it will include an open Strait of Hormuz.

Now, the implications for the future of hydrocarbons in the world economy will be significant and permanent. It has become even more evident that the decarbonization imperatives of the climate crisis are being joined, particularly in Europe, by those derived from geopolitics and the need for strategic autonomy. Oil must be transported from insecure regions (Middle East) or politically hostile ones (Russia or, alas!, the USA). Decarbonization, unstoppable but slowed by the new global 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 vehicles and fewer combustion engines (and, therefore, fewer biofuels), more acceptance of nuclear power, more interconnections, a more determined 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 darkening. 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 contain its export fervor. Protection by tariffs 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, whose centrality 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 the accessibility of 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, for example, to Aragon– lies in a massive 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 foregone conclusion if, as Mar Reguant explained to us in these pages (¿Qué más tiene que pasar?, April 12), we are obstructing, with the best of intentions, projects for the generation or transport of clean energy.

2. The availability of green hydrogen is indispensable. But promotion policies (Hydrogen Valleys) are stalled. The recent cancellation of Lhyfe's project for a green hydrogen plant in Vallmoll, despite receiving a high 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: by subsidizing the price until economies of scale reduce the cost.

3. Decarbonization programs include the capture of CO₂ at the point where unavoidable chemical processes generate it. If industry responds to the height of the demand, this will involve the adoption of CO₂ capture technologies. It is encouraging that a collaboration between ICIQ, Eurecat, URV, industry, and territorial 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.