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[Viewpoint] LNG pipeline must go through NK

Published: 03 Jul. 2012, 17:49

Anticipation and concerns coexist over the Memorandum of Understanding, signed by Korea and Russia, to construct gas pipelines. Recently, China proposed a plan to build underwater pipelines in the Yellow Sea via China instead of going through North Korea. It is certainly a tempting proposal since North Korea’s series of provocations may be an obstacle for the project.

However, there are seven obvious reasons why the Russian pipelines must go through North Korea. First, the fundamental reason for the deadlock in the six-party talks is the power balance. If Russia becomes a directly interested party, it will put more emphasis on the stability of the Korean Peninsula. If the pipeline is extended to Japan and Japan has a direct interest, it will serve as an insurance guaranteeing peace in the peninsula.

Second, a gas pipeline is like a flowing river. In the conflict over water in the Nile, Euphrates, Mekong and Jordan, the winner has always been the one located upstream. If the pipeline is constructed through China as the upstream user, and Russia’s gas supply does not meet the demand of China, we may not be able to secure sufficient gas supply. That is another reason why it is desirable to extend the gas pipeline to Japan in the downstream.

Third, once the pipeline is constructed, South Korea will be guaranteed a stable supply. LNG transport ships can change the destination, but gas pipelines cannot change the consumer because of the enormous funds invested for the construction. Once the pipeline is constructed, South Korea will become a semi-producer. However, if the gas pipeline goes through China, the priority would be taken by the powerful neighbor located upstream.

Third, Russia possesses enough gas to supply the South for 200 years as well as abundant oil and electric power in Siberia.

However, South Korea has to import all these resources. In contrast, Russia’s major imports are automobiles, ICT communication devices and synthetic resins. The South has a competitive edge in these exports. Therefore, economic cooperation between South Korea and Russia is a win-win relationship, complementing each other’s needs. The gas pipeline would bring a breakthrough for comprehensive economic cooperation in all areas of the economy.

Fifth, North Korea is not that foolish to destroy the Russian pipeline. The freeing of assets in Mount Kumgang, attack on the Cheonan and the bombardment of Yeonpyeong Island would not have taken place if any of these incidents had direct association with the interests of China or Russia. The disputes over the Ukrainian and Russian pipelines happened between the 10 members of the Commonwealth of Independent States (CIS) and NATO nations. Isolated North Korea would not dare to pick a fight against Russia.

Sixth, we would need to provide energy in order to revive the North Korean economy in preparation for reunification, and it would be truly foolish to pay China fees for the pipeline. Natural gas is a fuel that cannot be exploited for war preparation, so it is far safer to provide gas instead of light oil.

Seventh, Beijing and Tokyo have difficulties signing a natural gas deal with Russia because of decades-old border disputes with China and the Southern Kuril Islands dispute with Japan. Although South Korea is the preferred partner of Russia for now, Moscow will not wait forever as it is desperately in need of cash.

Global warming has opened the era of the polar route. Compared to the southern route, the distance between Asia and Europe would be 40 percent closer and up to 25 percent of the cost cut is expected.

Now the Korean Peninsula is about to emerge as the center of global logistics and transport with major hub ports. And the South Korea-Russia gas pipeline would provide the driving force for worldwide logistics. Now is the time we must look out for the grand future.

The Russian gas pipeline project is a serious and significant project that will determine 100 years into the future and it is too crucial for a single public corporation or a group of working-level officials to oversee. I suggest that the government gather all necessary resources and ideas to make sure this project goes in the right direction.

Translation by the Korea JoongAng Daily staff.

*The author is a professor of economics at Seoul National University.
By Kim Tae-you