[EDITORIALS]Energy planning a mustWe are deeply concerned about energy supplies in Korea. The price of Dubai crude, which makes up most of the oil that Korea imports, has almost reached $30 per barrel. That will certainly trigger another oil price hike in Korea, as international oil prices shoot up with the looming war between the U.S. and Iraq.
Korea was forced to import liquefied natural gas from Japan recently, a move spurred by a drop in gas reserves for heating and electricity to several-days' supply.
The government plans an emergency task force to address possible disruptions in oil supplies and will implement the second stage of its energy contingency plan if import oil prices breach $29 per barrel.
If the situation grows worse, the government will contain oil prices by cutting fuel taxes and putting in place a ban on driving every 10th day, according to license plate number, and restrict commercial outdoor lighting. Cooperation from the general public is the key to overcoming the energy problem.
As the war drums become louder, anxiety grows in Korea, the fourth largest importer of oil in the world, accounting for 97 percent of its energy needs. The government's energy contingency plans, however, have been makeshift at best. Only when there are oil price hikes does the government react to oil price hikes, forgoing any planning to deal with an energy crisis until one occurs.
Countering an energy crisis requires stability of supply, rather than price adjustments. But the government has no plan to increase petroleum stores, and Korea at this moment has just 101 days of oil reserves, compared with the average of 114 days for members of the International Energy Agency.
Oil prices will play a key role in stabilizing the economy this year. If oil prices jump to $50 per barrel, which is likely if war breaks out between the United States and Iraq, the government will have to spend an additional $1.2 billion per month to import crude oil. In such a case, consumer prices will leap, and growth plummet. We must pool our wisdom to minimize the effect of high oil prices on the economy and to conserve energy.