The summer is a season with low demand, and so the reason the price of oil is so high is because the market situation is so uncertain. They say world oil production is at its capacity and not much more can be produced. The world has the ability to produce 85 million barrels of crude a day and consumption has pretty much caught up with that since it currently stands at 84 million, while demand in "BRIC" nations such as China and India continues to rise. The experts say the high prices are here to stay. One prediction is that should there be something like a major terror incident in the Middle East the price could shoot over US$100 a barrel.
There is nothing a non-oil producing nation like Korea can do about the cost of oil. That being the case we should at least be working to be ready for the crisis, but everyone is watching on from a distance like someone watching a fire on the other side of a river. Oil consumption in Korea fell 1.3 percent in 2004, but this year it has been increasing again. It is hard to find a sense of urgency even within the government. It is pursuing 88 energy-related policy initiatives, and says that it just looks like nothing is being done because none of the measures being taken involve shock treatment. The Ministry of Commerce, Industry and Energy's Resources Policy Office is the only department working on the issue. It is embarrassing to see officials talking as if something is being done while everyone is behaving like a spectator.
Korea is the world's largest importer of crude. Per capita energy consumption is one of the highest of OECD member states, behind only Scandinavian countries with their freezing winters and the United States. After the oil crises of the 70's and 80's people repeatedly talked about expanding oil development projects overseas and developing alternative forms of energy, but nothing has changed about the percentage of oil developed by Korea and the production of alternative energy. Is the country again going to scurry around in confusion when the next crisis arrives?
The Hankyoreh, 17 June 2005.
[Translations by Seoul Selection (PMS)]
