[EDITORIALS]Plan ahead for high oil prices

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[EDITORIALS]Plan ahead for high oil prices

International oil prices have been hitting record highs. The price of the benchmark West Texas Intermediate crude oil passed $46 per barrel over the weekend, and the price of Dubai crude, which Korea imports, edged up near $40 per barrel. Such prices are having a negative impact on the world economy; it was recently predicted that they would lower the growth rate of the U.S. economy by half a percentage point.
For Korea, which relies on imports for 100 percent of its oil, these price increases will also slow down the growth of exports. What is more worrisome is the possibility that these high oil prices will not be a temporary phenomenon.
The recent price increases were provoked by the unstable situation in the Middle East, as well as growing concern over the possible bankruptcy of Russia’s largest oil producer, Yukos. Fundamentally, though, they can be attributed to concern that, for a substantial amount of time, it will be hard to resolve the excessive demands on the world oil market. In Korea, it is now time for a policy based on the premise that high oil prices will be a constant, not a variable.
The government would be hard-pressed to answer the criticism that its current energy policy does nothing but appeal to the public to conserve energy. The country cannot afford to foolishly repeat the act of boisterously campaigning for conservation when oil prices go up, then waste energy again once the prices go down.
A long-term policy, involving the conservation of energy in preparation for a long trend of high prices, should be pursued consistently.
Another important long-term project is securing energy resources. China currently meets 15 percent of its domestic needs with oilfields it has secured overseas. Korea meets only 3 percent of its needs this way.
And while China and Japan ferociously develop oil and gas fields in nearby Siberia, we’re approaching the matter of development in a leisurely fashion.
Finally, Korea’s development of alternative energy sources is almost nonexistent.
In order to escape from the trap of constantly reacting to the periodic changes in oil prices, we need a policy that looks 10 years ahead. For this, a plan that would expand the country’s one energy department, at the Ministry of Commerce, Industry and Energy, should be under consideration.
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