Moon Jae-in Making Friends By Promising To Buy More Gas
During his successful campaign to become South Korea’s president, Moon Jae-in promised to dramatically increase South Korea’s natural gas consumption.
Within weeks of taking office, he took several concrete steps towards fulfilling that promise. He announced the near-term closure of 10 coal plants, he allowed the operating license to expire as scheduled for South Korea’s oldest nuclear plant, he reopened discussion of a long envisioned project to build a natural gas pipeline from Russia through North Korea and he ordered construction to be halted on Shin Kori 5 & 6, two new APR-1400 nuclear reactors.
Moon Jae-in has stated a goal of increasing South Korea’s natural gas market share in electricity production from the current 19% to 27% by 2030. He has also stated that he would like to increase the market share of renewable energy from 5% to 20%, but cautioned that South Korea is not well-endowed with either wind or solar energy resources.
So far, investors in the ROK stock market, both domestic and international, seem supportive of the natural gas development plans; the KOSPI index has seen a 10% gain (from 2125-2375) during the past four months and is now trading in the range of its all-time high.
Considering what we read in U.S. news reports about the regional instability caused by North Korea’s missile testing program and existing nuclear weapons capability, that performance is a reassuring indicator of the attitude of the people closest to the situation.
As noted by the Financial Times article titled South Korea’s energy shift targets increased LNG supply, analysts that follow the global natural gas market are bullish about the positive and durable effects of Moon’s plans.
“From a country which looked like gas demand would drop because of the focus on coal and nuclear, we’re now preparing for an increase in coming years,” said Trevor Sikorski, gas analyst at consultancy Energy Aspects.
“We are seeing a dramatic change in strategy. There has been a big question over when the market would tighten between 2020 and 2030. The change in policy in Korea brings the date forward.”
Multiple Suppliers Available
In addition to the renewed possibility of pipeline imports of natural gas from Russia’s massive far eastern production sources in Siberia and Sakhalin Island, South Korea has a robust capacity to import liquified natural gas (LNG). Unlike the situation of several years ago, there is a glut of worldwide LNG supplies with large new capacity coming on line in Australia, Qatar, Russia and the United States.
There do not seem to be any major concerns in South Korea about continuing its long tradition of being dependent on imported fuel sources.
There is a well-developed supply of trading companies with experience in arranging deliveries and South Korea’s shipbuilding industry is one of the world’s most productive. It has developed an impressive capability to build the specialized tankers required to move supercooled LNG around the world, so it benefits when that trade increases.
In the past couple of years, South Korea’s shipbuilding industry has experienced a period of low demand because of a reduction in commodity prices and a slowdown in the LNG market. Moon’s energy plan will help inject new vitality in that ailing sector of the industrial economy.
Ties That Bind
Moon Jae-in’s background gives some clues about his strong interest in building up South Korea’s consumption of natural gas. He has a deep desire to gradually remove the barriers – physical, political and economic – that make his ancient country the last remaining nation split by the Cold War.
He was born in a refugee camp in South Korea to parents who had fled from the North. In his mother’s family, she was the only one who left. She is now 90 years old and has a living sister that she has not seen in six decades.
Moon Jae-in knows that his mother is one of tens of thousands of people that have experienced similar family separations. He is clearly motivated by the fact that there is little time remaining before that generation disappears.
During a recent speech to the Korber Foundation in Berlin, Moon Jae-in eloquently described the importance of taking steps that would reduce tensions between the North and the South and enable a gradual transition to a unified country.
He used the example of Germany’s reunification and subsequent economic and political development as a model with many lessons to be learned and adapted.
Along with plans for increased transportation links and a shared belt of economic infrastructure projects, Moon mentioned the gas pipeline project as something that would benefit both the North and the South while binding them closer together with a shared interest.
Presumably, a gas pipeline through North Korea could be readily financed if political risks are reduced by including plenty of connections within the North that could be used to provide fuel to power a dramatically underpowered region.
An overland pipeline network with good connections to South Korea could be of significant interest to Japan, its gas customers and its banks; there is not much water to traverse between the Korean peninsula and the island nation.
A unified Korea would also have a much greater chance of meeting an aspirational goal of providing 20% of its electricity from renewable energy sources. Not only is the North less densely populated, but it has a vast, underused hydroelectric capacity that was severely damaged by bombing campaigns during the Korean War and never fully repaired.
Nuclear Energy Industry Suffering Collateral Damage
Currently, two thirds of South Korea’s electricity comes from coal and nuclear plants. If the geopolitical and economic goal is to increase natural gas consumption, existing sources must be pushed out of the market to make room for increased use of gas.
There are obviously costs involved and interests that will be harmed by the change, so the pragmatic political decision might logically include efforts to demonize coal and gas as a way to motivate a greater acceptance of the financial costs.
It’s not difficult to convince people in developed countries that they should be reducing their use of coal; that campaign has been running for decades already.
In most countries, there are long running, successful efforts to spread dislike of nuclear energy for reasons of safety worries, actual costs or a combination of both.
The effort to discredit nuclear energy has been a bit more difficult in South Korea because the country has enjoyed a rare success with developing a cost-effective, safe and reliable nuclear industry that can deliver projects near their promised cost and schedules.
With the help of gas-interested media outlets like RT and Al Jazeera [owned by Russia and Qatar respectively], there has been a sustained and apparently successful effort to convince a plurality of South Koreans that the events at Fukushima prove that nuclear energy is too dangerous to rely on for South Korea’s future energy demands.
It remains to be seen whether or not South Korea’s nuclear industry will successfully overcome the negative propaganda and convince Moon Jae-in and his governing coalition that it must remain an important part of the power supply for the Korean peninsula, a source of Korean economic strength, and a source of continued growth in the country’s international stature.
The next three months are an important period; Moon Jae-in has set up a process for determining how the public really feels about his plan to cancel the partially completed Shin Kori 5 & 6 nuclear plants.
Presumably, the affected suppliers and contractors will work to help the public better understand the value of retaining and reinforcing the nuclear industry while recognizing the geopolitical value of increased gas consumption.
Note: A version of the above was first published on Forbes.com. It is republished here with permission.
I had never heard of the Korber Foundation. From it’s entry in Wikipedia, it sounds like a German version of the Bilderberg Group.
Very sad to see South Korea give up on its successful nuclear energy program, which has also resulted in the export of the AP1400 to the UAE.
The potential for renewables in South Korea is not great, because, measured by landmass, it is a small country. Moreover, South Korea also has a lot of energy-intensive and power-hungry heavy industry, which is not a great match with renewable/intermittent energy sources.
You would almost expect ulterior motives on the part of Moon Jae-in for killing nuclear energy and promoting natural gas in South Korea. And what about South Korea’s commitments to the Paris Climate Accord ? More natural gas and less nuclear power will result in higher CO2 emissions.
Paris Climate Accord ?
Ha Ha, that’s a good one!
As Rod’s article shows, Moon is essentially quoted as acknowledging that Korea has little renewables potential. The renewables talk is just a distraction, to curry favor with the (stupid) public. It is completely clear that this is all about increasing the use of imported gas. God, money talks….
Still struggling mightily to understand how increasing dependence on foreign gas could ever, on balance, be a geopolitical benefit, despite the factors Rod mentions.
Then there’s the question as to why they are making room for gas by cutting both coal and nuclear roughly in half, as opposed to leaving nuclear alone and eliminating coal entirely. What are the reasons you “can’t” do that? Look at Ontario, or France. That decision (to keep coal around) completely belies any notion that concerns about the environment and public health are behind any of these decisions.
The very notion of getting rid of nuclear to “protect public health and safety” is insulting. Scientifically illiterate. Orwellian. Actually, as Rod suggests, propaganda is what it is. The public is so easily manipulated. Why can’t we (manipulate them). Oh yeah, that requires money, and no moneyed interests give a damn about nuclear. Why do I (or we) even try?
Over at The Energy Collective, some of us have a bit of a hobby of hammering on Helmut Frik for taking exactly this position. We call him Helmut Coal.
But the public doesn’t know that. The public has been taught for decades that any dose of radiation is dangerous and cumulative. The knowledge that this is false is confined to an elite, of which we are a part.
Has been since the front-page story in the NYT.
Not quite. If you’re clever enough with memes, you can get people to spread your ideas for free. Get catchy enough and they can “go viral”.
I’d love to join in discussions at the Energy Collective, but for some reason I don’t understand, they haven’t been publishing my posts. It happened not once, but several times. None get posted. So, I eventually gave up. No reason going to the trouble if I know my post will not get published. I have no idea why this is happening. Is there a length requirement they’re not telling me about? Does someone at EC feel the need to silence me?
It has been my hope for some time that some of my memes would catch on an influence/frame the debate. I like to think that I’ve had a least a few original ideas, ones that I’d hoped would gain some traction. But there is little evidence of that, as far as I can tell. If they’re having any influence, it’s too subtle to detect. I’d be happy if I were making at least some difference, even if I never got any credit for it. What’s hard to take is not lack of credit, but lack of knowing if you’re making any difference at all (and a growing sense that you are not).
If you can do visual memes, the places to spread them are Gab, Facebook, Twitter and 4chan/8chan.
For what it’s worth, I’m always happy to read one of your comments when I happen across them and I find them clear, well written, and I imagine that they are persuasive to the people who have room for convincing. However, I am already “converted”. You always have a very reasonable tone in your comments. I’m prone to vitriol….
Please do not get discouraged. It is a discouraging situation, but I think that we should keep trying. We can only do so much.
“Get catchy enough and they can “go viral”.”
Penn and Teller made the video game, ‘Desert Bus’ to satirize what it would be like to play a video game that simulated real life. The game was intentional created to be so boring that no one would play, yet the game has a large following. Engineers should create the game ‘Next Gen Nuke’ to satirize the ‘dangers’ of operating a passively cooled reactor. Create a small buzz and have PewDiePie review the game, making jokes about it for his 55 million youtube subscribers.
I think one problem in the popular culture is all the folks who grew up playing the original Sim City or Civilization. In both of which, if you power your city (ies) with a nuclear reactor, it eventually explodes polluting the surrounding area. In Sim City, this is invariable. In Civilization, it “only” happens if the host city is in civil disorder. But it creates the unexamined idea that nukes eventually come to a disastrous end.
These days, you can’t afford PewDiePie lol.
If I was good with images, I’d do something like a side-by-side of the Porter Ranch gas leak and a spent pool. Left side, supra: 91,000 tons of toxic climate-changing gas spewed in just weeks, dozens sickened. Right side, supra: 75,000 tons nationwide, never hurt anything or anyone. Caption below: So which is the dangerous one again?
Actually, as Rod suggests, propaganda is what it is. The public is so easily manipulated. Why can’t we (manipulate them). Oh yeah, that requires money, and no moneyed interests give a damn about nuclear. Why do I (or we) even try?
It’s not just a lack of money that inhibits us from successfully manipulating the public. Good engineers and technologists are also fundamentally honest people that try not to overstate what we know and try to use facts to convince our audiences.
Ben Heard just published a sad, but useful “know your enemy” piece at Bright New World that identifies some of the devious, manipulative and successful tactics used by some of our not terribly well funded adversaries. I’ll add it to my “recommended reading list” if I ever get around to producing such a list.
Well, if you plan relies on a pipeline of Russian gas through North Korea for success you may just be bat sh$t crazy.
I’m guessing the reason to shut down nukes is safety?
Well once gain if your plan involves a partnership with Russia/North Korea you are not safe.
Hard to believe this guy got elected.
You lost me with a pipeline through North Korea supplying Russian as gas as your safe reliable source of energy.
I mean what could go wrong?
Are you aware of the Gazprom project, known as Nord Stream 2? Seems to me the distance from China to S Korea is shorter than the Nord Stream 2 project, and probably a prefered route for China.
Let me summarize what I hear: South Korea’s leaders want to needle part of the sphere of influence of Russia and leave the US behind. Also, they have never heard of Ukraine. For a preview of countries dependent on Russian gas, look at Ukraine.
Also, it’s totally cool to give a country (NK) that has historically been constantly threatening you and making unprovoked military attacks against your ships and kidnapping people from under your nose, the ability to price gouge you or turn off a large portion of your energy supply at any time it wants.
That sounds reasonable.
It sounds like Moon Jae-in is basically Rick Perry with a Korean visage. He doesn’t care what happens to his country as long as he can sell it off to interests in other countries. It would be interesting to monitor his personal finances over the next several years, especially the year or two after he leaves office.
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