Korea Grappling with Energy
- Korea signs a deal on a Four plus Four meeting among oil importers and exporters
Four Asian oil importing countries, including Korea, and four oil exporters have agreed to form up a consultative body on energy resources, Minister of Commerce, Industry and Energy Lee Hee-beom said on March 16.
MOCIE Minister Lee, participating in the ministerial meeting of energy and environment in London, said four oil importers - Korea, Japan, China and India - reached an agreement on a "Four plus Four" conference in Moscow this summer with for oil exporters, including Russia, Kazakhstan and Azerbaijan.
Minister Lee said he accepted a request from Russia's energy vice minister to participate in the coming meeting. The Russian side asked Korea's participation in the Four plus Four Conference, proposed by India, saying that oil exporters and importers need to hold close consultations to discuss cooperative ties in the energy sector.
Lee and his Brazilian counterpart agreed to hold the first Korean-Brazilian energy cooperation committee in Korea in coming May. MOCIE said Korea and Brazil will discuss such matters as trade expansion of such natural resources as iron ore, copper, oil exploration projects, and electricity supply in remote areas.
In the meantime, MOCIE Minister Lee inked a deal with U.K. Secretary of State for Trade and Industry Patricia Hewite to joint the Renewable Energy & Energy Efficiency Partnership (REEEP) in London on March 16.
In a related development, the government goes into high gear a plan to shift the current petroleum-oriented economy into a hydrogen economic system. MOCIE Minister Lee unveiled the ambitious scheme during a report on his ministry's 2005 business plan to President Roh Moo-hyun on March 3.
MOCIE said it will finalize a master plan on hydrogen economy, calling for, among others, developing hydrogen and other energy sources that could replace crude oil and other fossil fuels, restructuring of relevant industries and infrastructure buildup.
Under the plan, the ministry will push plans to construct pollution-free complexes combining new, renewable energy and fuel cell as well as futuristic high-efficiency units.
The hydrogen economy is considered as a cure-all for solving such headaches as current crude oil price hikes, strife over oil exploration, climate change and air pollution problems, but it still has a long way to go. But experts predict that the market of the hydrogen economy would amount up to $100 billion.
Minister Lee forecast that all fuel and industry systems would be changed to those based on hydrogen economy by 2040. Korea will redouble efforts to raise the technology level of the hydrogen economy, saying that Korea's technology level of hydrogen economy stands at 60 to 70 percent of Japan's. Meanwhile, the government announced on March 18 that it will earmark about $200 million to reduce energy costs of SMEs and relieve the effects of surging oil price hikes on the economy.
Economy-related ministers said in their joint meeting that a third of the government-every-saving loans with lower interest rates than bank loans, amounting to $648 million (649 billion won), will be set aside for SMEs.
Deputy Prime Minister-Minister of Finance and Economy Han Duck-soo, who presided over the joint meeting, apparently tried to play down the effects of oil price hikes and the appreciation of the Korean won to economic growth. Surging oil and raw materials prices are burdensome, but the negative impact brought on by the price hikes would be partly countervailed by the appreciation of the Korean currency, MOFE Minister Han said.
The won has surged some 18 percent since 2004 and set a seven-year high of 989 won against the dollar on March 9. Oil prices set a new high on March 17 with crude futures surging to $57.60 per barrel in New York. Dubai crude, which soared 20 percent last year, has climbed up 35 percent to $47.08 per barrel so far this year. nw