1 / 26

Energy Cooperation and Energy Security: Korean Perspective

Energy Cooperation and Energy Security: Korean Perspective. Professor Ki-Ryun Choi, Ajou University, Korea prepared for 4 th MONDER Colloquium: Martigny, January 9, 2006. Contents. Energy Situations of Korea Energy Security: A New Angle Energy Security Measures of Korea

rmegan
Download Presentation

Energy Cooperation and Energy Security: Korean Perspective

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Energy Cooperation and Energy Security: Korean Perspective Professor Ki-Ryun Choi, Ajou University, Korea prepared for 4th MONDER Colloquium: Martigny, January 9, 2006

  2. Contents • Energy Situations of Korea • Energy Security: A New Angle • Energy Security Measures of Korea • Significance of NEA Energy Cooperation • NEA Energy Situations and Cooperation • North-South Korea Energy Cooperation

  3. Energy & Economic Growth of Korea

  4. Energy Consumption Trend by Source

  5. Energy Demand Projection by Sector 2000 2010 2020 60% 50% 40% 56.0 52.9 50.8 30% 20% 24.6 22.6 23.0 22.0 20.6 21.6 10% 2.1 2.1 1.7 0% Industry Transport Residential & Commercial Public & Others

  6. Energy Demand Projection by Source (Unit: Million TOE) • Oil dependency lessens (52% in 2000  44.8% in 2020), but oil will remain the most important fuel 311.8 263.6 192.9 • LNG demand is projected to grow by 5.4% between 2000~2010 • Coal and nuclear are to grow steadily along with the electricity demand growth

  7. Energy and GHG Emission Energy-related CO2 Emission

  8. SecurityAspect of Korea Energy Supply • Energy demand: 220 million TOE • Energy import : US$ 49.6 billion • Korea ranks in the world • No. 10 in energy demand • No. 4 in oil imports • No. 2 in coal and LNG imports • High Import Dependency • 1990 : 87.9% → 2004: 96.7% (unit : %)

  9. Energy Security • Traditional Focus - Quantity Risk • Political or Strategic Energy Supply Disruption • Price Risk + Quantity Risk • Short-term Supply Shortage  Price Shocks • Environmental Risk + Price Risk + Quantity Risk • Economic Vulnerability to Environmental Sanctions “Energy Security” - Stable, Cost-Effective and Sustainable Supply of Energy • Set up an efficient and environment-friendly energy supply system + emergency preparedness + International cooperation

  10. Energy Security: A New Angle • 3 Dimensions of Energy Security • Energy Supply Security • Traditional Concern of Securing Stable Energy Supply: import source and fuel diversification, contract flexibility, reliable delivery routes & system, domestic infrastructure integrity, storage, participation in resource development, ... • Energy Economic Security • Broader Perspective of Fortifying Economic Security from Energy Instability: reduce vulnerability to price volatility, enhance energy efficiency, market liberalization, minimize impacts from environmental issues, ... • Energy for Security • Geopolitical Aspect of Energy: energy as a catalyst for international economic cooperation, easing international tensions

  11. Energy Security Measures of Korea • Solidify the Basis of Energy Supply Stability • Oil Stockpiling • Government stockpiling started in 1980 & private sector in 1992 • Enhance Natural Gas Supply Stability • Long-term import contracts & expand supply infrastructure • Enhance Electricity Supply Stability • Construct power generation facility & prepare measures for electricity supply stability following the electric power industry restructuring • Minimize Exposure to External Shocks • Fuel and import source diversification • Encourage Energy Resource Development • Develop East Sea gas field and encourage participation in foreign resource development

  12. Energy Security Measures of Korea • Streamline Energy Economic Foundation - “Efficientization” of the Energy Sector • Establish Environment-friendly Energy Structure • Promote Energy Efficiency and Savings • Spread New and Renewable Energy • Expand Environment-friendly Energy Supply & Technology • Liberalization of Energy Industries • Deregulation of Domestic Oil Price, Elimination of Entry Barriers to Oil Industry & Rationalization of Coal Industry • Electric Power Industry Restructuring in Progress • Gas Industry Restructuring being Pursued • Eliminate Distortions in Energy Prices • Energy Price Reform being Implemented

  13. Energy Security Measures of Korea • Geopolitical Potentials of Energy • Seed for Broader International Economic Cooperation • Northeast Asian Regional Energy Cooperation: easier to implement because of coinciding practical interests • Reduce Political Tensions and Promote Harmony • Inter-Korean Dialogue of Energy and Economic Cooperation • Development of European Coal and Steel Community after WWII to today’s European Union • Consolidated Approach to International Energy Trade • East-West Asia Dialogue: Recognition of Economic Interdependency • Strengthen Bargaining Power through Unified Voices

  14. NEA( North-East Asian Region)Energy Cooperation: It’s Implication • Korean Perspectives • Strengthen Energy Supply Security • Import source & fuel diversification • From isolated to continent-integrated energy system • Address Energy-Environment Issue • Wider access to environment-friendly energy • Alleviate siting problems • Cost-Effective Energy Supply • Transport cost reduction due to adjacency • Avoided costs on infrastructure investment • Catalyst for North-South Korea Cooperation

  15. NEA Energy Security Threatening Factors • Rapid Growth of Energy Demand • EIA forecast of annual growth rate for 1999~2020: China 4.7%, South Korea 2.8%, World Average 2.2% • Growing Dependency on Oil • Oil becoming the leading primary energy in NE Asia • Japan (2nd largest consumer), China (3rd), South Korea (6th) • Increasing Import from Outside the Region • 76% of NE Asia oil imports from the Middle East in 1999: Japan (86%), S.Korea (72%), China (46%  79% in 2020) • Vulnerability to Environmental Issues • High dependency on coal (64% in China) and oil (S. Korea 51%, Japan 50%, China 30%)

  16. Why NEA Energy Cooperation? • Economic Benefits • Resource development • Improvement in facility use • Spillover Effects: market liberalization, etc. • Environmental Benefits • Utilization of abundant environment-friendly energy • Emergency Preparedness • Less vulnerable to factors outside the region • Enable emergency swap of energy supply

  17. Overview of Northeast Asia • A Diverse Mixture of Countries with • Different stages of economic development • Disparate political and social situations • Divergence in energy reserves

  18. Primary Energy Production/Consumption in NEA (2000)

  19. Long-term Outlooks of NEA • Total Energy Consumption Forecast (EIA) • Carbon Dioxide Emission Forecast (EIA)

  20. Natural Gas Development & Trans-NEA Pipeline Construction: Irkutsk, Sakhalin, Yakustk... Electricity Power Grid Interconnection & Power Swap Oil Joint Utilization of Storage Facility, Joint Transportation, & Joint Efforts to Correct the “Asian Premium” Energy Cooperation Schemes

  21. Prospective PNG Projects

  22. Power Grid Interconnection Prospect Amur Iruktsk Sakhalin Russia Mongol Shenyang China N. Korea Beijing Peace Network Japan S. Korea E.Siberia-NEA Line Tokyo Hydro Power Nuclear Power

  23. Obstacles to NEA Energy Cooperation • Political and Institutional Obstacles • Relations among the countries within NEA & Inter-Korean tension • Uncertainty in investment and market conditions, esp. in transitional economies • Economic Obstacles • Financing of huge investment costs • Competition with other energy projects outside of NEA • Geographical/Technological Obstacles • Technological difficulties in the tundra area

  24. Implementation Requisites • Dialogue for NEA Cooperation • Address political & institutional concerns • Investment protection treaties, Assurance of fiscal stability (tax, tariff), Dispute settlement mechanism for resolving trans-boundary jurisdiction, Harmonization of technical standards, etc. • Governmental, commercial & research Sector interchange • Senior Officials Meeting, Expert Forum, Business Forum • An Institutional Vehicle for Infrastructure Financing • NEA Development Fund (Bank) • Finance infrastructure investment/economic development in NEA • Mobilize international capital market for NEA infrastructure needs • Reduce investment risks with governments as its shareholders

  25. North-South Korea Energy Cooperation • Stable North Korean Economy Solidifies NEA Security • Resolving energy shortage is a prerequisite for economic boost • Mutually Beneficial Energy Cooperation • Utilize comparative advantages • South(capital, technology) vs. North(labor, land) • Implications of North-South Korea Energy Cooperation • Open up crossing gate of energy trade and system interconnection • Induce foreign investment and stable political circumstances • Foster a market-oriented institutional transition in N. Korea

  26. Energy... could be either the source of conflict, or a cooperative catalyst for strong regional ties and peaceful coexistent prosperity! Thank You Very Much! Gam-Sa-Ham-Ni-Da!

More Related