3.1 Energy and Natural Resources

 Geography of Korea: III. Production and Consumer Space > 1. Energy and Natural Resources 

1. Resources and Energy: A Country Strapped for Natural Resources and Dependent on Foreign Supply

Resources are vital as the basic component of economic development. Although it has a limited national territory and is not rich in natural resources, Korea has over long geological time been bequeathed a variety of mineral deposits. However, the majority of the peninsula’s natural resources are metallic minerals such as iron ore and copper and are distributed largely in what is now North Korea, so that only a small portion of the key raw materials used in South Korea’s steel industry are produced domestically, most being imported from places like Australia, Brazil, and India. However, non-metallic minerals such as limestone and kaolin are relatively abundant in South Korea, with large deposits of limestone—a key component in cement manufacturing—found in Gangwon-do and Chungcheongbuk-do provinces. Deposits of kaolin, used widely in the manufacture of such things as ceramics, refractory bricks, paper products, and cosmetics, can be found in places like Hadong and Sancheong counties in western Gyeongsangnam-do province.

Figure 3-1. Distribution of mineral resources in South Korea

Energy resources include such things as petroleum, coal, natural gas, and the newly emerging renewable energy, which is playing an increasing role in the country's energy structure. In terms of consumption levels, petroleum is currently the largest energy provider in South Korea, with supplies imported from Southwest Asia, followed by coal. Coal is a long-established energy resource and until the 1970s, when South Korea became a full-fledged petroleum-consuming nation, it was the country’s most important energy resource. One significant development to come out of the oil crisis of the 1980s was the emergence of natural gas as an energy resource and the gradual reduction in petroleum use. Even today, coal, which remains the country’s second most important energy resource, is used for thermal power generation in the form of bituminous coal, which is not produced in South Korea but imported from abroad. The once vigorous production of anthracite coal, which in the form of coal pellets has household uses, fell off as deep mining and wages eroded profitability, and in the late 1980s the government implemented a coal industry readjustment policy aimed at cleaning up the economically failing coal mines through a focus on fostering economically efficient mines.

Figure 3-2. Changes in energy consumption (1975–2010)

Korea has seen a rapid rise in the use of natural gas, a result of advances in liquefaction technology, developments in transportation, the ease and affordability of its use, and the fact that it emits fewer pollutants relative to other fossil fuels. The Donghae-1 gas field in the seas off of Ulsan is a small-scale domestic producer of natural gas, but the majority of Korea’s demand is met by imports and as demand increases efforts are being made toward developing a pipeline to import the gas directly from Russia. Let us now turn to the use of nuclear, new, and renewable energy as sources of electricity production. The majority of Korea’s electrical power needs are met through thermoelectric or nuclear energy production, followed by hydroelectric production. New and renewable energy does provide some electricity production but its contribution to the overall total is still minimal. One of the advantages of thermoelectric energy is that it can be produced in close proximity—in both time and space—to power demand, while the advantage of nuclear energy is its capability of producing power in large quantities and with minimal greenhouse gas emissions, which has resulted in increased demand for nuclear power and its growing production. But due to the greenhouse gas emissions associated with fossil fuels and the risk of radioactive leaks associated with the disposal of nuclear energy by-products, there is a growing interest in new and renewal energy sources.

Figure 3-3. Energy production by type (2012)

Though the percentage of energy supplied by new and renewable energy sources is minimal, it is on the steady rise. The economic efficiency of such energy resources as solar and wind power is still low compared to that of fossil fuels, but investment in these alternative energy resources is increasing due to their negligible environmental footprints and limitless supply. In terms of sources of renewable energy in Korea, the highest percentage (75%) is derived from waste reprocessing, followed by hydroelectricity (10%), and biomass (9.5%). Of the total energy supply, wind and solar energy together account for about 2 percent. As a country, South Korea is resource-strapped and highly dependent on foreign supply for its energy resources. With the country’s economic development and he rise in its standard of living, the consumption of such energy resources is increasing. Looking at power demand by type, industrial demand accounts for more than half, or 50.2 percent, of the nation's total energy demand. This is followed by household and business demand, which together account for 42.8 percent. Therefore, investments continue to be made in order to secure the availability of overseas resources, while diversity in type of resource imports is also being promoted so as to ensure a safe and steady supply.

Figure 3-4. Renewable energy supply and changes in supply (2001-2012)

Figure 3-4. Renewable energy supply and changes in supply (2001-2012)

Though Korea does possess some varied energy resources, its reserves are limited and of inferior quality, and so it is dependent upon imports for the majority of its energy resources. Korea’s industrial development has meant increased production, and this coupled with the rise in the standard of living has resulted in a rapid increase in energy consumption. The country is self-reliant for only about 3 percent of its energy needs, and thus very highly dependent on overseas sources to meet demands.

Figure 3-5. Status of South Korea’s overseas resource development (2013)

With soaring prices due to the irregular supply of energy resources, and the tendency toward “resource nationalism” in countries with particularly valuable resources, efforts by Korean firms towards the development of overseas resources are meant to ensure a stable resource supply. These efforts are focused not solely on energy resources; they are expanding to encompass mineral resources as well, as evidenced by recent efforts to secure development rights in a salt desert in South America for the exploitation of lithium, a key component in rechargeable cell phone batteries.

Figure 3-6. Investment in overseas resource development (2005–2011)

Korean version

3.1 자원과 에너지