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The Nonproliferation Review

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Chris Ajemian

To cite this Article Ajemian, Chris(2007) 'ENERGY FOR SECURITY:', The Nonproliferation Review, 14: 2, 329 — 349 To link to this Article: DOI: 10.1080/10736700701379401 URL:

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ENERGY FOR SECURITY: A Natural Gas Pipeline Solution to the North Korean Security Threat
Chris Ajemian

Downloaded By: [Syracuse University] At: 14:08 31 May 2010

Though North Korea agreed to partial denuclearization in February 2007, achieving that goal is at best a long way off. A natural gas pipeline linking all of Northeast Asia and promising energy and economic help could help convince the isolated nation to step away from its nuclear programs entirely; it could also provide the nonproliferation and energy security benefits that have eluded the region for so long. These economic benefits could motivate the other nations involved in the six-party talks to deal with North Korea more than if only nuclear reactors were offered. KEYWORDS: North Korea; Natural gas; Pipeline; Energy resources; Northeast Asia

North Korea’s nuclear weapon test on October 9, 2006 illustrates the extreme danger and difficulty of dealing with states that are isolated, paranoid, and desperate. Were North Korea to attack one of its neighbors or U.S. forces in South Korea, or supply a nuclear weapon to a terrorist group, the world would face the prospect of nuclear war. North Korea has posed a complex and grave problem for the international community since the end of the Cold War. It blocks reunification with the South, resists significant economic reform within its own borders, and maintains a hostile and unpredictable posture toward the international community. It is an impoverished police state led by Kim Jong Il, who appears willing to sustain any hardship to further the survival of his regime, including famines during the 1990s that took the lives of more than a million in his country. U.S. policy toward North Korea has spanned numerous approaches. The Clinton administration tried resolving North Korea’s security threat with policies that alternated between engagement and confrontation that almost led to war. The efforts culminated in the 1994 Agreed Framework’s Korean Economic Development Organization (KEDO), which proffered nuclear power assistance in exchange for North Korea’s decommissioning of its weapons programs. The Bush administration created the six-party talks (with South Korea, China, Japan, and Russia) to coax North Korea out of isolation. The first several rounds of talks seemed fruitless, but the fourth round produced the September 2005 Joint Statement of Principles, in which North Korea agreed to denuclearize in exchange for light water nuclear reactors and other energy assistance, similar to the 1994 Agreed Framework. North Korea temporarily withdrew from talks, however, after the United States imposed financial sanctions on it. Pyongyang conducted its test nuclear detonation Nonproliferation Review, Vol. 14, No. 2, July 2007
ISSN 1073-6700 print/ISSN 1746-1766 online/07/020329-21 – 2007 The Monterey Institute of International Studies, Center for Nonproliferation Studies DOI: 10.1080/10736700701379401

but nothing on the order of a glasnost or perestroika. much as India and Pakistan are years after their tests. Most significantly. which promises energy assistance in the form of light water nuclear reactors similar to the 1994 Agreed Framework.’’5 Thus. The February 2007 agreement does not address North Korea’s potential arsenal of several nuclear devices or whether it has a uranium enrichment program.330 CHRIS AJEMIAN approximately a year later in October 2006. to keep North Korea on Downloaded By: [Syracuse University] At: 14:08 31 May 2010 . then the question becomes what will motivate him to entirely denuclearize. when mistrust between North Korea and the United States was also extremely high. Finally. despite recent progress. North Korea agreed to shut down its nuclear facilities at Yongbyon within 60 days. the overriding development since the current standoff between the United States and North Korea began in 2002 was North Korea’s test nuclear detonation. it must also be fully supported by the United States and all the states within Northeast Asia. during the last phase of the fifth round of talks. Besides assurances of security from the United States. A successful policy must promise to significantly improve North Korea’s basic well-being.3 Additionally. there is nothing North Korea would like more than a stable supply of energy with which to rebuild its crippled economy. a former director of the Los Alamos National Laboratory. The head of the International Atomic Energy Agency (IAEA) visited North Korea from March 12 Á 15 and concluded that it intends to denuclearize. There are some limited signs of economic reform being reported by recent delegations. some may prefer the subject never to come up. However.2 The United States said it would resolve its financial sanctions against North Korea. returning to the terms of the Joint Statement 18 months earlier. wrote that the test ‘‘will make it much more difficult to convince [North Korea] to give up its nuclear weapons. several positive signs have followed February’s announcement. It is safe to assume that North Korea also seeks the survival of the Kim Jong Il government and revitalization of its economy. February’s agreement promised heavy fuel oil assistance to North Korea in exchange for steps toward denuclearization.4 These positive steps notwithstanding. But discussion of supplying the reactors has been pushed far into the future. It referenced the September 2005 Joint Statement. negotiator at the six-party talks has made statements conveying his belief that North Korea intends to denuclearize. Siegfried Hecker. While only partially successful.1 At the time of this writing. It needs a new source to replace the oil imports that were severely curtailed after the end of the Cold War. While there is much to be accomplished before provision of nuclear reactors can realistically be entertained. If a solution is sought that preserves Kim Jong Il as North Korea’s leader. substantially demilitarize. On February 13.6 The prospect of North Korea retaining any nuclear capability is just too threatening. its occurrence still represents a major failure of the Treaty on the NonProliferation of Nuclear Weapons (NPT) and has likely boosted North Korea’s confidence. an agreement seemed to rescue the process. 2007. and peacefully join the international community? Change from within North Korea is not apparent. After returning from a trip to North Korea a month after the test.S. or its leadership will not risk lowering its defenses. the clock has only been turned back to 1994. the lead U. Moreover. North Korea may believe it will be eventually regarded as a default nuclear weapon state.

8 Japanese Prime Minister Abe Shinzo ¯ has stated it would not be illegal for Japan to develop nuclear weapons. It first examines the region’s energy economies. notes projected growth and rising energy demand for the region.9 While it is no longer taboo to discuss the prohibition on Japanese possession of nuclear weapons that Prime Minister Sato ¯ Eisaku enunciated in 1967. see Mike M. Similarly.ENERGY FOR SECURITY 331 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 track to denuclearization and to ultimately improve the security environment on the Korean Peninsula. The direct economic benefit to the region as a whole from such a pipeline could motivate the other nations in the six-party talks to pursue this solution in a way that reactors would not. Japan’s assertiveness in pressing for sanctions against North Korea demonstrates just how vulnerable it feels in the wake of the North Korean test.S. in South Korea. This article explores how a natural gas pipeline could obtain the nonproliferation and energy security benefits that have eluded Northeast Asia for so long.7 Japan and (to a lesser degree) South Korea and Taiwan may determine they need to develop their own nuclear weapons to deter the North Korean threat. Mochizuki’s article. integral to the February 13 deal. as long as the U. The North Korean Security Threat North Korea presents a unique international security threat. as an offensive military weapon. A natural gas pipeline would deliver a non-nuclear energy source that has little or no potential for military use. there have already been calls for development of enrichment and reprocessing technologies in response to North Korea’s nuclear test. summarizes existing development options.11 .) However. and it has engaged in terrorism in the past. As part of a comprehensive regional agreement. Analysts have studied the feasibility of delivering Russian natural gas to the Korean Peninsula by pipeline for years. and concludes with recommendations for policy and a natural gas pipeline. The resolution of the North Korean nuclear threat is of paramount concern to Japan. or as tool of terrorism (by its own act or through a non-state group). a pipeline seems an obvious answer. Japan is unlikely to exercise the option.10 (For more on Japan’s nuclear debate. The potential for a regional nuclear arms race exists in Northeast Asia. alliance and nuclear umbrella are in place. some major incentive will need to be proposed that will ensure a permanent energy source and that does not raise concerns about nuclear weapons. ‘‘Japan Tests the Nuclear Taboo. If it has functional nuclear weapons * and that status is unclear * it can use them as a deterrent to invasion of its territory. It is a sovereign state that possesses both some minor level of nuclear capability and a significant level of conventional military force.’’ in this issue. it could entice North Korea to negotiate seriously about complete denuclearization and could provide a basis for the region to cooperate in resolving the wider North Korean security threat. The 1994 Agreed Framework and the September 2005 Joint Statement both supported the principle of Western nuclear power assistance in exchange for North Korean disarmament. (Promises of energy assistance were. in fact.) The delivery of pipeline gas is one possible solution. With some of the world’s largest gas reserves geographically proximate to its fastest growing economic region.

18 South Korea is an economic powerhouse. Ukraine. In case of war or governmental collapse.14 Additionally. energy shortages create obstacles to growth and threaten political stability. The IEA predicts world oil demand will reach 116 million barrels a day (mbd) in 2030. Worse. the capital of South Korea. and South Africa either foregoing weapons programs or actual weapons * a new wave of countries contravening international nonproliferation goals could signal the end of the NPT. led by China and India. Even Russia has recovered from the shocks of its conversion from communism and is rebuilding its economy. North Korea in particular suffers from extreme energy shortages. Seoul.19 Within China.332 CHRIS AJEMIAN Downloaded By: [Syracuse University] At: 14:08 31 May 2010 The effect of North Korea’s test may extend outside the region as well. More than 70 percent of this increase comes from developing countries. Within this vibrant region. North Korea constitutes a dead zone. China may also fear having to participate in a North Korean civil war if a coup or other event abruptly removes Kim Jong Il from power. yet could stimulate better performance in all of them if politically rehabilitated. North Korea’s destitution presents a significant refugee threat to both China and South Korea. Other factors complicate the North Korean security situation. Imports of oil and gas in the Organization for Economic Cooperation and Development countries and developing Asian nations are growing even faster.12 Egypt and Saudi Arabia could also change their postures if they see nothing done about North Korea or Iran. is in range of approximately 10. It contributes practically nothing to these economies.800. and Japan remains the world’s second-largest economy. Kazakhstan.000 North Korean rocket and artillery systems that effectively hold it hostage. Belarus.20 Japan and South Korea have mature economies that must constantly seek out new energy supplies. China has lifted a large portion of its population out of poverty since allowing market economics and should enjoy strong 6 Á 7 percent growth for the next two decades. which for South Korea would be a major strain but for China could have a destabilizing effect in the poor and already politically unstable region bordering North Korea. Brazil. Energy Insecurity in Northeast Asia Energy insecurity is a region-wide problem in Northeast Asia. North Korea is a nation of approximately 23 million people with a per capita income of only $1. Led by this region. Most of the increase in oil supply will be met by a small number of major .15 The drag on the regional economy caused by North Korea is an often overlooked factor of North Korea’s security threat. up from 84 mbd in 2005. The International Energy Agency (IEA) recently predicted that global demand would increase by 53 percent by 2030.17 The rest of the region stands in contrast. the number of North Korean refugees could reach the hundreds of thousands.13 After the nonproliferation successes of the last two decades * with Argentina.16 Its economy is estimated at growing at a rate of only 1 Á 2 percent a year. The massive conventional forces that North Korea maintains are in some ways as threatening as its nuclear weapons potential. Iran may be studying the international response and weighing whether to proceed with its own nuclear weapons program. energy demand is rising worldwide. In the Middle East.

The following section explores the energy needs of various countries in the region. and those that are still in use operate at low efficiency and low capacity factors due to maintenance problems and lack of fuel. Non-OPEC conventional crude oil output will peak by the middle of the next decade.ENERGY FOR SECURITY 333 Organization of Petroleum-Exporting Countries (OPEC) producers. North Korea is not expected to be able to grow sufficient amounts of food for its people for years. an international pipeline could be Downloaded By: [Syracuse University] At: 14:08 31 May 2010 . and public transportation. only selected boilers and turbines are operating.24 Thermal power generation capability in North Korea has significantly eroded. These trends also make it important to evaluate which energy sources might meet the diverse needs of Northeast Asia. The fuel with which North Korea rebuilds its economy could be natural gas. much basic infrastructure has either been worn out or is in advanced disrepair.21 These trends indicate growing vulnerability to a severe supply disruption and resulting price shock. Power from these plants could also be used to operate other coalburning power plants in the short term while hydroelectric plants are repaired and modernized. One initial step could be the construction of small demonstration power plants that used liquefied petroleum gas (LPG) imported to small storage facilities for residential fuel within a limited area. in 1995 and 1996 severe floods in many areas of North Korea washed away topsoil from higher elevations and buried many areas of crucial lowlying farmland. While reliable data are hard to find. and serious famines.27 If gas imports are to present a feasible alternative. North Koreans still lack basic food sources and are thin and malnourished. according to the IEA. Little or no gas is used in North Korea at present. generally poor harvests.23 The flooding contributed to deforestation. homes. hydroelectric plants have shouldered the burden of power generation in North Korea. Even 10 years after the famines of the mid-1990s.400 kilowatts (South Korea’s was 2. it may be possible to build a small LNG terminal. If local distribution systems can be established. They also promise to amplify the magnitude of global climate change. its economy is presumed to be stagnating at little more than the subsistence level.200 kilowatts). If an adequate basic number of thermal electric plants could be built along a pipeline delivery system. In virtually all of its large power stations. Compounding these difficulties. despite maintenance problems and the seasonal nature of river flows. North Korea The dire state of North Korea’s economy shows how much it has to gain from a new energy supply.22 The early 1990s saw a series of poor grain harvests in North Korea.26 Natural gas. it will be necessary to begin introducing gas to the population of North Korea several years before in order to generate the necessary demand to justify a major infrastructural investment.25 As a consequence. and is believed to be much lower today. North Korea could provide electricity for factories. If gas consumption increased and a local pipeline network began to form. through either a pipeline originating in Russia or shipments of liquefied natural gas (LNG). Its per capita electricity demand in 1990 was about 1.

North Korea reportedly has oil and gas reserves in offshore areas. Since then. The amount reached 50 billion cubic meters in 2005.334 CHRIS AJEMIAN considered as the next step in energy relations between North Korea and its neighbors. China’s import dependency will continue to grow with imports reaching 75 percent of total consumption. China has provided North Korea with 80 Á 90 percent of its imports. but the country lacks the technology to develop these resources and has yet to secure an international partner to aid in such an effort. with real gross domestic product (GDP) expected to have increased 9. consisting mainly of anthracite and brown types.30 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Coal. causing considerable . about one-third less than current demand in the United States.5 billion cubic meters in 2003. By 2010. David von Hippel and Peter Hayes of the Nautilus Institute have argued that this approach would provide significant opportunities to regionally and internationally engage North Korea. In 2030. and it has the added advantage of being strongly in the interests of Russia and South Korea. Within Asia.35 China’s leaders believe constant economic expansion is essential to maintain internal order and stability. something that North Korea so far has been unable to afford. They vary in quality.36 Its growing dependency on Middle Eastern oil imports has made the Chinese economy vulnerable to events outside its control.29 Higher levels of imports could only be attained at world market price. according to the EIA’s assessment. China The growth of China’s economy is being felt around the world through inexpensive imports. China’s natural gas demands are expected to exceed 110 billion cubic meters per year. Currently. China’s natural gas consumption has risen sharply. the EIA expects China to import as much oil as the United States did in 2004. Energy Information Administration’s (EIA) World Energy Outlook 2004 forecast Chinese hydrocarbon demand in 2030 at just under 14 mbd.31 Modern mining techniques may be able to increase these reserves. North Korea’s economy was essentially built on subsidized oil imports from the Soviet Union. whether crude or refined.33 The U.32 Moreover. and major changes in energy markets. up from 30.S. The lack of viable energy alternatives supports natural gas as a primary fuel source. Some are very low in heating efficiency. North Korea possesses substantial domestic reserves of coal. Economic forecasts remain strong for China.5 percent in 2006. it is seen generally as a positive force because it provides a source of cheap labor for Japanese and South Korean manufacturing and a market for low-cost exports.28 Oil. especially those of Southeast Asia. these ceased when the Cold War ended. but a North Korean priority is to decrease its coal share in an attempt to diversify. and the figure is estimated to reach 210 billion in 2020. The EIA also predicted that in 2006 China’s increase in oil demand would represent 38 percent of the world total increase in demand. relocation of jobs. all of the hydrocarbon products used in North Korea are imported. coal is the least clean-burning fossil fuel.9 Á 10.34 In recent years.

41 In May 2006. a narrow thread of water through which roughly 80 percent of China’s Middle Eastern oil travels. When Russian President Vladimir Putin and Hu Jintao met in March 2006. which will be discussed in the next section. it is still reliant upon the Middle East.9 percent in 2006.43 China is also pursuing pipeline options from Russia. Downloaded By: [Syracuse University] At: 14:08 31 May 2010 South Korea After posting 4 percent real growth in GDP for 2005. Two major gas sources are the enormous Siberian Kovykta fields and the Sakhalin Island fields. Despite recovering from the brief 2003 recession. 2003. In general. China is also looking to lay transnational natural gas pipelines with several neighboring countries. South Korea is the ninth largest oil consumer and fifth largest net oil importer in the world.ENERGY FOR SECURITY 335 anxiety among its leadership. China began receiving crude oil imports from its first transnational oil pipeline. Either could support China and Korea by pipeline or LNG shipment. the country’s economic growth in 2004 and 2005 was slight due to weak growth in demand for exports. In February 2005.42 China has undertaken an effort to expand its natural gas delivery system as well. the two leaders reportedly agreed to move ahead with the proposed Kovykta pipeline by 2011. and natural gas is high among its priorities. and the gas must be piped to eastern population centers. including significant investment in nuclear power infrastructure.38 It could also become a chokepoint on China’s economy in time of war because China does not possess the naval forces to guard shipping lanes so far from its mainland. Kazakhstan’s state-owned KazMunaiGas (KMG) was reportedly conducting a feasibility study of a natural gas pipeline to China in partnership with China National Petroleum Company. which was caused mainly by a tightening of requirements for consumer credit. China has constructed or is building several national and international oil pipelines.’’39 While China has attempted to diversify over the last decade. South Korea’s economy was expected to rebound to a healthy 5. for example.40 Pipelines. KMG officials have said that it could be operational as early as 2009 and supply natural gas from Turkmenistan and Uzbekistan. The fears over this vulnerability found a high-level voice during the central economic work conference on November 29. In order to reduce its reliance on the Strait of Malacca. Most of its oil imports come from the Persian . The strait is prone to frequent pirate attacks and vessels in transit are vulnerable to hijacking. and hydrocarbons accounted for 52 percent of its primary energy consumption in 2003. China’s energy insecurity is spurring it to develop all energy resources. although as of March 2007 no formal decision had been made on whether to proceed with the project. when President Hu Jintao reportedly expressed concern over the ‘‘Malacca dilemma. If such a line were built.37 Much of this anxiety is focused on the Strait of Malacca. Many of China’s largest natural gas fields lie in remote basins in the western part of the country.44 South Korea imports all of its crude oil. connecting Atasu in northern Kazakhstan with Alashankou in the Xinjiang Uighur Autonomous Region.

In the short-term. it has both a short-term and a longterm approach to fulfilling its oil needs. most of Japan’s natural gas (97 percent) is imported. 13 percent from Australia. and natural gas Á fueled cars.3 mbd of oil. a joint venture with Russian companies backed by Shell. particularly Persian Gulf countries like the United Arab Emirates. South Korea currently relies on imported LNG for most of its natural gas. South Korea could receive Sakhalin gas either by pipeline. which sits between it and Siberia.3 percent in 2005.48 Japan is important to the world energy sector as one of the major exporters of energy-sector capital equipment. led by exports to China. depending on how far existing lines go and if others are built.47 South Korea still has a market for natural gas that justifies the investment of a pipeline from either Russian source. but could only practically commit to one in the next decade. Domestic consumer spending in Japan also has been strengthening. with 30 percent from Indonesia. though it began producing a small quantity of natural gas from one offshore field in early 2004.50 Like South Korea. utility gas consumption. or a combination of the two.336 CHRIS AJEMIAN Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Gulf region. during the Asian financial crisis of 1997 Á 1998. The EIA estimated that in 2006 Japan would consume 5. but it is the world’s third largest oil consumer (after the United States and China). and project management services. Saudi Arabia. Imports grew by nearly 17 percent in 2004.45 Adding pipelines into the balance of its increasing natural gas imports is its long-term strategy. which is managed by the state-owned Korea National Oil Corporation (KNOC).49 This was a decrease in oil consumption. Most of the oil consumed in Japan (75 Á 80 percent) comes from OPEC. South Korea has sought to diversify its supply. and Iran. Japan Moderate economic growth continued in 2005. KNOC is pursuing equity stakes in oil and gas exploration worldwide. and engineering. Demand for natural gas is rising due to increases in thermal power generation. Japan is the largest importer of LNG in the world. Qatar. Imports of LNG began in 1986 after the founding of the state-owned monopoly Korea Gas Company (Kogas). Japan has almost no oil reserves of its own. with Saudi Arabia supplying about one-third of its import requirements in 2005. Kogas’s most recent supply agreement was signed in July 2005 with Sakhalin Energy. construction. maintaining the recovery that began in 2003 after a decade of economic stagnation. Japan’s real GDP rose by 2. it has developed a strategic petroleum reserve. Japan has worked * with relatively little success * to diversify its oil import sources away from the Middle East. for supplies from the Sakhalin-2 project for 20 years beginning in 2008. attributable to the recovery of Japan’s nuclear power industry after a series of plant shutdowns in 2003 that had caused utilities to maximize the use of oil-based generating capacity. continuing a pattern of rapid growth that has been interrupted only once. Kogas continues to sign contracts for additional supplies to increase the flexibility of its import options.6 percent in 2004 and was projected to rise by 2. LNG. The upturn over the last three years partially reflects a surge in export demand.46 With demand surging. Its access to the shortest routes from Siberia is determined by China. and 11 percent from .51 Most of Japan’s LNG comes from Southeast Asia and Australia. 21 percent from Malaysia. Kuwait.

680 trillion cubic feet (tcf) * nearly twice the reserves of the next largest country. Russia Russia’s real GDP grew in 2004 by approximately 7.8 billion. a $1 per barrel increase in Urals oil prices for one year would raise federal budget revenue by 0. Much of Japan’s urban area is not served by a natural gas distribution system.54 Russia holds the world’s largest natural gas reserves.52 Japan uses most of the LNG either for electric power generation or in petrochemical plants. in 2004 Russia was the world’s largest natural gas producer (22. The first attempt was the 1994 Agreed Framework. such as a regional pipeline. other than nuclear reactors. Many analysts cite the absence of an effective natural gas distribution system as a key reason for Japan’s high retail energy prices. anticipates only modest growth (about 1.3 percent) by 2008. The energy portion of energy-for-security concepts with North Korea to which analysts have given perhaps the greatest amount of consideration. the production forecast of Gazprom. and insufficient export pipelines. Japan has strong incentive to seek inexpensive options for natural gas imports.1 percent.53 Russia’s economy is heavily dependent on oil and natural gas exports. However. Thus. making it vulnerable to fluctuations in world oil prices. Moreover. which promised two light water reactors and fuel oil shipments for North Korea’s denuclearization and acceptance of IAEA inspections. but some have attempted to collect this information despite the difficulty of assessing a closed society. as well as the world’s largest exporter (7. Gazprom’s monopolistic control over the industry. How can this supply meet demand? Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Natural Gas Pipeline Dynamics There has been much discussion among policy analysts about a possible energy for security deal with North Korea.55 Accordingly. This section has shown that natural gas demand in Northeast Asia is high and that a large supply is nearby.60 Preliminary work on . The majority of the discussion on this option has focused on economics and investment risk. or $1.59 There has been little consideration of North Korea’s interests in a possible energy for security settlement. The effort was controversial and ultimately failed.ENERGY FOR SECURITY 337 Brunei. nuclear technical assistance is not within the current focus of the talks and will not be for some time.35 percent of GDP. fueled primarily by energy exports.56 Russia’s natural gas sector has been limited primarily due to aging fields. Although the six-party talks rejuvenated the light water nuclear reactor concept this February. Russia’s national natural gas company. involves the delivery of pipeline natural gas. Iran.4 tcf). which the country is considering expanding. Russia’s natural gas industry has not been as successful as its oil industry. with both natural gas production and consumption remaining relatively flat since independence. with 1.58 Other viewpoints marry the economics and security realms but were written before North Korea’s nuclear test. According to an International Monetary Fund study.57 Some have constructed scenarios after a security resolution is achieved but leave the work of resolving the security issues to others.1 tcf). state regulation.

a specialist on Sino-Russian oil and gas issues. In short. The work of Keun-Wook Paik. and Sakhalin Island’s offshore fields to the northeast. This early vision of a circular natural gas pipeline loop serving all of Northeast Asia endures as the basic goal of what a pipeline scheme should resemble in order to achieve North Korean denuclearization as well as FIGURE 1 Northeast Asia Natural Gas Pipeline Concept . emphasizes the private sector’s role in natural gas pipeline development. political.) The map shows the two major Russian natural gas sources that could supply North Korea by pipeline: the Kovykta gas fields near Irkutsk to the northwest of the Korean Peninsula. Transnational pipelines are huge infrastructural projects that face numerous financial.61 Yet none of these development approaches emphasizes the need for regional governmental collaboration and coordination with each other and the private sector. the private sector is free to make decisions based on maximizing profit. not on public interest. the private sector is not motivated * at least not directly * by the future payoff of North Korean denuclearization. it is important to first understand how the private sector is approaching the natural gas supply problem. Profit motives are tempered by the risk of major investments potentially going wrong. Also.62 (See Figure 1.338 CHRIS AJEMIAN Downloaded By: [Syracuse University] At: 14:08 31 May 2010 the financing of North Korean development does exist. In 2000. To understand why government action is crucial. he proposed a circular route using Russian gas to supply the entire region. and environmental risks.

China and Gazprom cannot agree on price.63 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Price. one of the world’s largest. which caused the Roh Moo-Hyun government to reconsider the Kovykta gas option. Paik fears the United States. a breakthrough is possible if approval is given by the Chinese and Korean governments. going through Nakhodka. Now follows an examination of how the private sector has progressed in filling in this map. it also leaves South Korea stranded in the interim. Gazprom is considering an equity purchase the TNK-BP partnership. The Irkutsk Kovykta Fields The Kovykta complex of six gas fields. where a link could then proceed south through the Korean Peninsula. could make pipeline gas pricing competitive. Though South Korea is ready to consume 10 billion cubic meters. viewing Mongolia as too pro-United States. A number of fundamental issues will need to be addressed before any pipeline connecting the Kovykta fields with North Korea can be constructed. Russian action might be hastened if Gazprom sees its potential Asian customers increasing their imports from the Middle East. discussed below. Route. China may not be able to absorb its 20 billion until about 2010. to Nakhodka near Vladivostok. Russia wants LNG rates. which would make it even longer and more expensive. China objects to this route for political reasons. North Korea could receive supply from a branch that connected Dandong (on the China-North Korea border) to Pyongyang and then stretched to the South. if South Korea made a commitment to the Kovykta gas project now * before the remainder of its market is set with additional LNG contracts * it could facilitate a Russia-China-Korea route. This alternate path puts South Korea in a difficult position because the greater length raises the price for consumers. A route concession from either Russia or China through Mongolia. However.67 Gazprom might even prefer to route the pipeline completely around northeastern China. but has not announced any decision. which have remained high due to strong LNG demand from the United States and high oil prices.65 A second route would go through Daqing. The United States has not supported a pipeline to South Korea that involves the North.66 Gazprom dislikes Chinese pricing tactics and prefers a longer route that circumvents China.64 This gives Beijing bargaining room in negotiating price. Gazprom has authority to regulate the export of Russian gas. is located in a remote.ENERGY FOR SECURITY 339 supplying natural gas to all the region’s countries. north of Beijing. wary of any such integration. Pipeline gas then loses its competitive advantage over LNG. Authority. undeveloped part of Siberia to the west of Lake Baikal. The shortest and least expensive route a pipeline could travel from the Kovykta fields to North Korea is southeast through Mongolia. As for the Mongolian route. . but will not allow any export from the Kovykta fields until it decides whether it wants an equity stake in them. this second route could also economically stimulate China’s impoverished and unstable northeastern region. However.

A circular route would comprise a minimum level of redundancy. In 2003.73 However. If such a line is built. which would increase energy security throughout the entire region. Kim Jong Il is reportedly very interested in Sakhalin gas. A Sakhalin pipeline to North Korea has two route choices.76 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Energy Security: A Complete Loop The ideal pipeline network would be a complete loop similar to Figure 1. Alternatively. Sakhalin Island The alternative source of natural gas for North Korea is the offshore fields of Sakhalin Island. ‘‘given China’s burgeoning demand for gas. flows from both Kovykta or Sakhalin Island could travel through the Korean Peninsula to supply Japan. Their development has been discussed since the 1960s.71 The efficacy of both the Russian and Japanese Sakhalin routes is threatened by LNG contracts in Japan and South Korea.74 This preference for a Sakhalin pipeline may be. and questionable returns. as longtime security analyst Selig Harrison argues. but because of uneasy relations between the former Soviet Union and Japan.68 Nevertheless. this line would reach as far as the western tip of Honshu. When the KEDO reactors were under active consideration for electricity supply. One indication of Pyongyang’s interest in Sakhalin pipeline delivery is that it gave rights to three Dutch companies to build the North Korean section of the pipeline from Russia to the South Korean border. South Korea’s long-term Kogas contract for Sakhalin LNG could postpone any route for a Kovykta pipeline until 2010 Á 2015. Ideally. Kim discussed the subject each of the three times he has met with Russian president Vladimir Putin since 2000. because of the feasibility work previously done and the size of the Kovykta fields.69 The Sakhalin-2 project is the largest gas and oil development venture in the world. he views Kovykta gas as the best longterm source for the Korean Peninsula. It is now thought to be able to produce enough gas to be exported throughout Northeast Asia either by pipeline or LNG.340 CHRIS AJEMIAN would not support such an option. Japan’s main island. North Korea was reluctant to consider pipeline gas. did not gain momentum until the early 1990s. The crucial link would connect South Korea and Japan. A western line could track Russia’s mainland coast through Nakhodka to Pyongyang. a Sakhalin-originating . three Japanese utilities representing most of the Japanese gas market placed long-term orders for Sakhalin LNG that could eliminate the need for pipeline delivery from Sakhalin to Japan until 2013 or 2014.70 Both Japan and South Korea have well-developed natural gas markets and are interested in a pipeline from Sakhalin Island to temper their Middle East dependency.72 Likewise. because North Korea is skeptical that Kovykta flow through China will be reliable. Consumer groups in Japan seek a separate Sakhalin pipeline directly south to Japan to compete with the more expensive LNG that Japanese utilities have provided by monopoly for many years.’’75 This is probably because of North Korea’s history with China’s delivery of hydrocarbon exports.

80 David von Hippel and Peter Hayes stress introducing LPG networks before the largescale quantities of energy from projects such as natural gas pipelines or LNG delivery systems. by linking all the customers to the seller. precluding pipeline options for North Korea.78 Thus. Since pipelines can be built to have bidirectional flow. Consequently. LPG is a clean-burning fuel with limited military potential. everyone’s energy security is increased. In short. without expedited action on Russia’s part. . if in a disorganized fashion.ENERGY FOR SECURITY 341 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 flow could be sent westward to the Korean Peninsula. Seoul is also eager to make progress on reunification. which possesses technology and expertise that can aid the North’s energy infrastructure. as South Korean utilities have already concluded one long-term LNG contract from Sakhalin Island and may conclude more. Gazprom is considering building an 850 km natural gas pipeline from Sakhalin Island to northern Japan. If it delays too long. Like other natural gas forms. In fact. Gazprom risks losing the Korean market. the South Korean LPG industry can transfer its services to the North. where it will be liquefied and shipped to Japan. but it is much easier to use where piped-distribution networks do not yet exist. northeast China. and the United States.77 This project lessens the urgency of quick private sector action for a pipeline being built farther into Japan but does not preclude it. Sakhalin2 gas will be transported through an 800 kilometer (km) pipeline to Prigorodnoye.81 This can be accomplished by cooperation with South Korea. and LPG storage and transfer facilities are available in smaller capacities than for LNG. If so. It would be a collectively interdependent and reinforcing system. and two from Sakhalin Island’s offshore fields (west to Russia’s Pacific coast. on the south of Sakhalin Island. South Korea. or around China). Setting up LPG networks can be a first step toward use of natural gas in North Korea. LPG is more expensive than natural gas. only one would conceivably be needed for this link. Infrastructure Very little gas is currently used in North Korea. or south to Japan and the Korean Peninsula). Currently. South Korea will not need to seek pipeline gas for 10 Á 20 years. the threat of shutoff from China or Russia to both North and South Korea and Japan could be reduced.79 As a result. a variety of potential routes exist to bring pipeline gas to North Korea: three of varying lengths from Siberia’s Kovykta fields (through Mongolia. The pipeline could link either to ExxonMobil’s Sakhalin-1 project or to Royal Dutch Shell’s Sakhalin-2 venture. The infrastructure required to import LPG by oceangoing tanker is also cheaper than for either piped or liquefied natural gas. What could become the Japan line has begun. Gazprom has delayed its decision over the development of the Kovykta fields due to indecision over whether to acquire a controlling interest and disagreement with China over price. the Korean Peninsula may not know for several more years whether or how fully it can access this source. Now that a South Korean natural gas pipeline network has been completed where the LPG market has saturated.

Downloaded By: [Syracuse University] At: 14:08 31 May 2010 An Economically Active North Korea Even if it remained predominantly socialist. The test should not preclude nuclear-generated electricity being transmitted from a bordering country. polluting. access to a substantial energy supply would provide North Korea with the means to rebuild its economy. The pipeline itself would also act as a face-saving trophy that it could accept as substitute for the KEDO nuclear reactors. Combined with some guarantee for the security of the Kim Jong Il government. Despite the renewed promise for light water nuclear reactors in the February agreement of the six-party talks. However. an economically productive North Korea would accelerate the economic performance of an already dynamic region. There would also be an immense traditional security and economic payoff for resolving the North Korean crisis * a circular loop pipeline network will increase the entire region’s energy security. Offshore oil drilling may someday be a possibility for North Korea. This step would also be required for distributing energy benefits from in-country reactors or any scaled energy scheme due . or more easily used in military equipment. these incentives would demonstrate to North Korea that the international community is serious about peaceful coexistence and that the time for it to denuclearize has come. the process of connecting Northeast Asian energy demand with Russian supply has progressed far enough to view it from the opposite perspective * that the energy should be used as an incentive to North Korea to gain the political resolution. What are the reasons for which a natural gas pipeline might provide a comprehensive regional security/ energy solution to the North Korean threat? Improved Nuclear/Traditional Regional Security The nonproliferation benefit of a North Korea that gives up all of its nuclear weapons programs would be measured regionally and globally with the mending of the NPT and forestallment of a regional nuclear arms race. Together. if they are never produced. The resulting benefit to the surrounding economies would more than recoup investments for a pipeline. An Optimal Fuel Other hydrocarbon fuels are more expensive. but these reserves are not yet sufficiently explored. The transit fees North Korea would gain as a result of transporting natural gas through its territory would provide a means to finance its section of the pipeline.342 CHRIS AJEMIAN The Benefits of a Comprehensive Regional Solution Most perspectives on natural gas or other energy pacts with North Korea assume they cannot be achieved until a security resolution with North Korea is achieved first. but this form of energy assistance does require the expensive prior infrastructural step of building a modern electrical grid in North Korea. North Korea’s nuclear test cannot have done anything to make nuclear power assistance toward it more politically palatable to the region.

but the prospect of only having to build a single pipeline that carries natural gas today and hydrogen in the future substantially raises the value of investing in a natural gas pipeline. has reached its point of widest opening and is beginning to close. it is at the zenith of pride and confidence and expects the United States to grant it the respect it feels it deserves.83 Hydrogen technology may be two decades or more away. renewable energy. Investment in Hydrogen An added benefit for investing in a natural gas pipeline system is the possibility that it will someday be used as part of a larger hydrogen delivery system. Industry leaders and analysts have proposed a far-reaching regional energy infrastructure network that can distribute natural gas throughout Northeast Asia in the near term and renewable-source gaseous hydrogen in the long term. It produces effectively zero emissions and can be produced from abundant resources including natural gas. It has the highest energy to weight ratio of any known fuel.82 Their goal is to generate clean and renewable energy where hydrogen is produced from hydropower and solar energy in Siberia and China and wind power in areas from Kamchatka through the Kuril Islands to Sakhalin. Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Recommendations for Policy The urgency for maintaining engagement with North Korea could not be higher. A Political Window of Opportunity North Korea needs a reliable source of energy with which to rebuild its economy. countries such as Japan and South Korea have technical capacity and experience. Some believe hydrogen is the key to a clean energy future.ENERGY FOR SECURITY 343 to the eroded nature of the North Korean electrical grid. Further. coal. After its nuclear test.84 As a consequence. fusion and fuel cells. the United States must act quickly. frozen in a Macao bank. North Korea has the attention of the United States and perhaps also its greatest incentive to date for a political solution. The hydrogen produced in these regions could be transmitted by natural gas pipelines built now. it may opt to become a default nuclear weapon state and endure whatever sanctions the United Nations applies in the short term. hydrogen has the potential to create an ubiquitous energy source that is emissions-free. Combined with other technologies such as carbon storage. with its test of a nuclear weapon. which could create bases for regional cooperation. The Bush administration has roughly six months before it . Its walkout from talks in March over the delay in the release of North Korean funds. is evidence of this. biomass. if it does not believe the United States will address more central issues such as its security. or water. however. There are two factors. The political window of opportunity to construct a regional natural gas pipeline within Northeast Asia. To prevent North Korea from becoming a default nuclear weapon state. progressively replacing natural gas as it depletes. First.

Only governments can dissuade their utilities from making long-term LNG arrangements while the potential of pipelines is considered. comprehensive and coordinated governmental action will be required. Downloaded By: [Syracuse University] At: 14:08 31 May 2010 Government Action Ultimately. The prospect of resolving the North Korean nuclear threat should be the impetus for regional governments to act. focusing on a natural gas regional pipeline network and engaging all members of the six-party talks. For Gazprom or ExxonMobil to construct a pipeline serving Japan. including the promised two light water reactors. Specific government action could include the following (some recommendations overlap with actions taken in the February 13 agreement): The United States should begin talks with North Korea immediately. a pipeline will probably not be built in Kim Jong Il’s lifetime. North Korea should accept a non-nuclear energy for security settlement and begin denuclearization and substantial demilitarization along a phased time schedule. Such talks should be done in addition to any other discussions on energy or infrastructure. Only government financial guarantees can create umbrella protection to manage pipeline construction risk and stimulate pipeline development. Japan and South Korea should enact a short-term moratorium on further LNG contracts to increase the demand for political resolution with North Korea. For South Korean utilities to wait any longer. These lines should meet in a loop configuration that provides for continuous flow throughout Northeast Asia. and Russia should do more to guarantee Gazprom’s investment outlays and draw its decisionmaking process over the Kovykta fields to a conclusion. Second. so as not to alienate North Korea. If South Korean or Japanese utilities sign additional long-term LNG contracts in the next six months. The United States should support the Kovykta Mongolian route to accelerate development of those large fields and lower the natural gas price for China and the Koreas. Only the political authority of governments can act on regional energy initiatives within the window of political opportunity to prevent North Korea from becoming a default nuclear weapon state. The pipeline concept should support at least one route from each Russian source. in South Korea and Japan. must negotiate pipeline gas prices with Gazprom as a bloc. They should also guarantee their national energy companies’ investment outlays in regional pipeline projects.344 CHRIS AJEMIAN loses the influence in the region to orchestrate a deal that would resolve the North Korean nuclear threat. These utilities may agree to longterm LNG contracts that would satisfy their customers’ demand for natural gas in their developed natural gas markets. and preferably also Japan. China and Russia should agree to the Mongolian route for pipeline development of the Kovykta fields. they must see a favorable business climate in Japan. To gain competitive pipeline terms. they must receive direct instructions from their government. utilities may tire of waiting for pipeline options either from the Irkutsk Kovykta fields or Sakhalin Island. . which could be enhanced by governmental guarantees. if natural gas pipelines are to be built as part of a security settlement with North Korea. A pipeline is of course not mutually exclusive of nuclear assistance. China and South Korea.

special trust funds administered by the World Bank * often useful in post-conflict situations * should be considered for North Korea. for their assistance with this article. The United States could assist on all of these fronts. NOTES 1. ‘‘North Korea * Denuclearization Action Plan. Conclusion If the six-party talks can freeze North Korean nuclear programs and permit inspections. energy company interest. or a newly constructed international corporation. perhaps an expanded KEDO-type organization. could act as a project authority. Supporting both Siberian and Sakhalin pipelines would balance power in the region. Megan Bowman. negotiate leases. and coordinate operations after gas begins to flow. grant commercial rights. ACKNOWLEDGEMENTS The author is indebted to Keun-Wook Paik and to his wife. Media Note. September 19. Most critically. The dialogue for a natural gas pipeline settlement must happen quickly. According to Bradley Babson. if extensive transparency conditions were met by North Korea. All that remains is for the governments of Northeast Asia and the United States to provide leadership. see DOS. 2005. the project authority could expedite the financial guarantees that would justify the huge private outlays required for transnational pipelines.85 As an interim step. On the Joint Statement.htm. 2007.’’ Beijing. It would oversee the financial processes and pipeline construction. ‘‘Joint Statement of the Fourth Round of the Six-Party Talks. Whether a natural gas pipeline is built alone or in conjunction with light water reactors is unimportant. Bwww. these financial and information-sharing conditions will need to be satisfied at some point because donor governments will most likely want development bank standards met before they give political and development aid. International Atomic Energy Agency (IAEA) head Mohamed ElBaradei said the DPRK ‘‘was very clear they are ready to implement the February 13 agreement once the other parties implement their part of . The project authority would coordinate multinational policy.’’ February 13. 2. diversify energy supply.state. What is important is keeping North Korea on track toward denuclearization. and a project with economic incentive for the entire region holds the best chance for success. and create powerful incentive for engaging North Korea on total denuclearization. and the political impetus from North Korea’s nuclear test. see Department of State (DOS). The ‘‘results transition matrix’’ is a mechanism for coordinating the planning of activities and assistance provided by donors in a phased manner. on the February 2007 deal. then larger. the private sector could participate in a security settlement with North Korea. but all the pieces are in place: sizeable markets. however.ENERGY FOR SECURITY 345 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 The World Bank. more ambitious goals can be initiated. With umbrella coverage. This could only 80479.

18.’’ Nautilus Institute. November 17. when you look at the North Koreans and see that they make a threat and carry through * and on the whole that has not been a losing approach for them?’ ’’ Former Assistant Secretary of State for Nonproliferation Robert Einhorn.’’ p.’’ Nonproliferation Review 13 (November 2006).’’ Financial Times . March 24. 2007.cia. November 10. Broad and David E. 11. 5. February 12. June 23.could undermine the country’s economic growth and thus seriously jeopardize job creation. ‘‘China’s leaders fear that domestic energy shortages.iaea. 2007. Anna 8.’’ March 8. See. is postured within 90 miles of the Demilitarized Zone.’’ Global Security Newswire .org/NewsCenter/News/2007/dg_dprk_concludes.’’ New York Times . ‘‘Taboo Against Nuclear Arms Is Being Challenged in Bwww. ‘‘North Korea’s Nuclear Weapons: Implications for the Nuclear Ambitions of Japan. Bwww. November 15. p. Hecker.html. ‘‘Seoul Should Secure Nuclear Technology. p. Btimes.html. ‘‘U. ‘‘Abe Shinzo and Japan’s Change of Course. November Jung Sung-ki.000 artillery systems. 1.’’ New York Times .html. Japanese Foreign Minister Aso Taro’s calls for debate on the country’s prohibition against nuclear weapons led opposition parties to push for his ‘‘Future Nuclear Proliferation Scenarios in Northeast Asia.nbr. 10.html#sect2. David E. 16. November 9. Bhttps://www. Bwww. 13. 2006. Bwww. June 9. Slide 2. Siegfried S. ‘‘U.’’ Joseph Kahn. Rivals Also Want Nuclear Power. quoted in Dafna Linzer. p. 2003. 2007.000 tanks.000 troops. pp. ‘‘Japanese Opposition Parties Seek Aso’s Ouster. and 2.’’ NBR Analysis 17 (October 2006). see ‘‘North Korea’s Economy Economic cia/publications/factbook/geos/kn. 2006. ‘‘Sensing Shift in Bush Policy. March 20. 4. Steve Weisman. p. 14. ‘‘I wouldn’t be surprised if [Iranian President Mahmoud] Ahmadinejad and other hardliners in the regime say.htm. Bnbr. ‘‘Abe Shinzo and Japan’s Change of Course.346 CHRIS AJEMIAN the deal. Treasury Official to Help Free Up North Korean Funds. see Pyle. Others such as Christopher Hughes acknowledge the potential for a ‘‘nuclear cascade’’ in Northeast Asia but argue it is unlikely for the time being. Kenneth B. 2003. March 2006. 2007.html#7BE4AC70. ‘Why do we back down at the last minute. 3 (January 2007).cn/200311/10/eng20031110_127937. 591 Á 604.’’ New York Times . ‘‘With Eye on Iran. over 8. See James Clay Moltz.’’ IAEA Press Release. ‘‘IAEA Director General Concludes Trip to the DPRK. Provided they were limited in number and for self-defense. World Factbook .html. No.csmonitor. ‘‘North Korea continues to position forces into the area just north of the [Demilitarized Zone] * in a position to threaten Combined Forces Command and all of Seoul with little warning. quoted in Howard LaFranchi.S. ‘‘Report on North Korean Nuclear Program.’’ New York Times.’’ Excerpted from ‘‘Korean People’s Army. March 19.’’ Washington Post . Bwww.nautilus.’’ Staff Report.nti. 2002. 20.S. A5. 17. 7. For a regime that increasingly stakes its political’’ Asia Policy . A5. Ibid.’’ Seattle. Policy Forum Online. Benglish. April 15.ft. Bwww. ‘‘Energy Critical Power Source within N Korea. public statement at the National Bureau of Asian Research conference: ‘‘Pursuing Security in Dynamic Asia. On the nuclear 8. 2007.washingtonpost. 2006. 2006. 20. generally. 6. 2007.’’ GlobalSecurity. pp. A23. Kenneth Lieberthal. ‘‘Optimism Turns to Anxiety On Curbing Nuclear Arms. For the 2 percent figure. ‘‘Is Iran Studying North Korea’s Nuclear Moves?’’ Christian Science Monitor . 19.’’ PowerPoint Presentation. 1. Howard French. p. and Taiwan. 2007. ‘‘Korea.html. Sanger. Assistant Secretary of State Chris Hill said that North Korean officials ‘‘made it very clear that they have begun their tasks for the purpose of denuclearization. people. .’’ Korea Times . . pdf. Pyle. A1.’’ People’s Daily . Downloaded By: [Syracuse University] At: 14:08 31 May 2010 9.’’ New York Times .com/wp-dyn/content/article/ 2006/11/02/AR2006110201581_pf. p. Korea Economic Institute. See also William J. North. Seventy percent of their active force. 75 Á 104. 20. Another Hawk Leaves. 06-97A. ‘‘Economy to Maintain High Growth: Economists. p. 15. 12. June 2006. Sanger. November 3. Ashton Carter. Central Intelligence Agency. including approximately 700. South Korea. . and North Korea Are Said to End Frozen Funds Impasse.

26. 2006 (University of Alberta.. Bwww. Bwww. 5. South Korea Country Analysis Brief. p. China Country Analysis Brief. 2006. et al. 47. ‘‘Hu Jintao Urges Breakthrough in ‘Malacca Dilemma. 33. 31. 48. p.eia. EIA. 44.9 percent figure.’’ Kenneth Lieberthal and Mikkal Herberg. 26. Ibid.S. 35. 49. ‘‘China’s Search for Energy Security.eia.doe. updated August 2006.pdf..’’ NBR Analysis 17 (April 2006).ENERGY FOR SECURITY right to rule on economic performance and rising standards of living. Bwww. Ibid. 46.’’ p. EIA.iea. Energy Information Administration (EIA). revised.. ‘‘China Likely to Slow Down Progress in LNG Project. 27. Report Prepared for the Korea Energy Economics Institute.nti.. Ibid.’’ p.’’ p. 38. ‘‘China’s Search for Energy Security. 2003). Energy_Aid. Bo Kong. see ‘‘Pipelines and Shipping. 25. p. Ibid.html. 40. 45. 39. Downloaded By: [Syracuse University] At: 14:08 31 May 2010 23. Von Hippel and Savage. October 2006.nautilus.. Nautilus Institute (revised March 6. footnote 61. Bhttps://cia. David von Hippel and Timothy Savage. Nautilus Institute Report (see sections 6. Ibid. EIA. Bwww. Bwww. 9. ‘‘China’s Search for Energy Security: Implications for U. Ibid. 22. 34. 30. Bwww. p. updated May 2006. Lieberthal and Herberg. September 26.uofaweb. ‘‘Sectoral Redevelopment. ‘‘An Anatomy of China’s Energy Insecurity and Its Strategies.pdf. Ibid. EIA. Pacific Northwest Center for Global Security. 2007. for the 10. the threat of economic stagnation raises real risks of social’’ Global Security Newswire . which could in turn threaten the continued political monopoly of the Chinese Communist Party. html. ‘‘The DPRK Energy Sector: Estimated Year 2000 Energy Balance And Suggested Approaches To Sectoral Redevelopment’’ (hereafter ‘‘Sectoral Redevelopment’’). Policy. ‘‘South Korea’s Power Play at the Six-Party Talks’’ (hereafter ‘‘South Korea’s Power Play’’). p. 11. updated March 15.S. Ibid. December 2005. see U. 2..’’ SinoCast China Business Daily News . p. China profile. 43. et al. 24. World Factbook . Lieberthal and Herberg. see CIA. 41. Ibid.doe. 2005. Ibid. China Country Analysis Brief.3.5 percent figure.’ ’’ James publications/factbook/geos/ch. Cleverer. Ibid. ‘‘North Korean Energy Needs?’’. October 20.. Bwww. et al.html#15E6CBE5. China Institute Web Site). and More Competitive Energy Future.. Ibid. 9. 118. ‘‘With the Grain or Against the Grain? Energy Security And Chinese Foreign Policy in the Hu Jintao Era. Ibid. For the 9.pnl. 97.’’ Pacific Northwest National Laboratory (PNNL).ca/chinainstitute/ nav03. On small demonstration power plants and local distribution. 42. July 21. 37.pdf . 36. China Country Analysis Brief. pp. Ibid.pdf. 347 21..cfm?nav03 50936&nav02 43590&nav01 43092.’’ Brookings Institution. Korea/pdf. see ibid. p.’’ November 6. David von Hippel.’’ p.pdf. 29.. International Energy Agency. updated November 2005. ‘‘The World Energy Outlook 2006 Maps Out a Cleaner. 37. 50. 32. 3. p. 36.eia. 28.nautilus.asp?PRE SS_REL_ID 187. and 6. ‘‘Redevelopment Priority’’).2. 6. 27. ‘‘Kim Reportedly Promises Not to Conduct Another Nuclear Weapon Test. Peter Hayes. . 11.ualberta. Japan Country Analysis.

Ibid. p.html. Gazprom is expected to respond positively this year to TNK-BP’s offer.’’ p. August 2005. See Paik. Full. p.harriman institute. 66. 52. Bwww. 76.pdf. No. Paik. 2006. 82.’’ Paper Prepared for the Second Colloquium on ‘‘Eurasian Pipelines and East Asia: A Path to Integration or a Marriage of Convenience?’’ Columbia University.sptimes. ‘‘South Korea’s Power Play.’’ p. ‘‘Russian Energy Roulette Spooks Japanese. see Keun-Wook Paik.eia. 64. updated January 2006. p.. 27. ‘‘Pipeline Gas.’’ in Eberstadt and Ellings. 60. 53. 67.’’ World Policy Journal. Bwww. 77.’’ Leighty Foundation. ‘‘Pipeline Gas. Ibid. Ibid. See the Introduction by Nicholas Eberstadt and Richard J. EIA. 68. Regional Stability. March 15.html.. 12. et al.’’ Asia Policy . On China’s 25. Ibid. For a discussion of pipeline and private sector dynamics.php?action_id 2&story_id 17953. 81. Hayes and von Hippel. June 20. ‘‘Trends in Natural Gas: Outlook.. Paik. On perception of Mongolia. Ibid. 16..’’ p.html.pdf. ‘‘Pipeline Gas Introduction to the Korean Peninsula’’ (hereafter ‘‘Pipeline Gas’’). ‘‘Gazprom in Japan’s Pipeline. Bwww. 2 (July 2006). 12. Ibid. 17. p. January 2005. Bwww. 73. ‘‘Visualizing a North Korean ‘Bold Switchover’: International Financial Institutions and Economic Development in the DPRK.’’ Press Release. 79. Petersburg Times (Russia). ‘‘TNK-BP Offers Gazprom 51% of Shares in Kovykta Project.’’ Ibid. Bwww. Global Strategy Institute. footnote 73. ‘‘Pipeline Gas. Harrison. p. and William Leighty. index. 78..’’ St. p. ‘‘Gas and Geopolitics.’’ p. 72. 8.’’ Asia Times Online.pdf. ‘‘South Korea’s Power Play.’’ p.enecho. articles/wpj02-4/harrison. Bwww.. 70. See Harrison. ‘‘Gas and Geopolitics. 83.pdf. Bradley O. Department of Energy. Bwww. Ibid. 74. 71. see Paik. ‘‘Energy Sources: Hydrogen. November 30 Á December 1. 18. 26. Ellings. 41.pdf.leightyfoundation.atimes. ‘‘Pipeline Gas. 2 Á 8. ‘‘Gas and 54. 63. October 24. Paik. meti. htm.’’ pp. ‘‘Hydrogen: The Fuel of the Future?’’ Center for Strategic and Downloaded By: [Syracuse University] At: 14:08 31 May 2010 80.’’ p. Bwww.. pp. No Answer Received. ‘‘Pipeline Gas. 27. 26. Babson. p.tnk-bp. ‘‘Sino-Russian Oil and Gas Pipelines: The Reality and See Selig Harrison.go. 34. ‘‘Gas and Geopolitics.’’ p.’’ Japan Agency for Natural Resources and Energy.nbr. and the Korean Nuclear Crisis. ‘‘What If?’’ Keun-Wook Paik and Kengo Asakura envisioned a circular natural gas pipeline system for Northeast Asia around the same time in 1999 Á 2000.’’ p. Hisane Masaki. 57. see Harrison. 61. 62.’’ p. 2006. Russia Country Analysis Brief. . Bwww. Hayes and von 10 Á 12. p. 23-36. Ibid. 55. ‘‘Proposal for a Northeast Asian Hydrogen Highway: From a Natural Gas-Based to a Hydrogen-Based Keun-Wook Paik. 75. Ibid. 2006.doe. Chatham House Report.. 30.348 CHRIS AJEMIAN Kazuhiko Ohashi. but there had been no official decision at the time of writing. Bwww. 27. Masaru Hirata. 56. pp. 59. 69.worldpolicy. Winter 2002 Á 2003. ‘‘Gas and Geopolitics in Northeast Asia Pipelines. 15. ‘‘What If? Economic Implications of a Fundamental Shift in North Korean Security Policy.’’ Bwww.

’ ’’ p. 2007.com_csis_pubs/task.’’ New York Times . ‘‘China Ends North Korea Talks Amid Delay in Return of Funds. 349 Downloaded By: [Syracuse University] At: 14:08 31 May 2010 . 7A. 2005.view/ id. p.csis.ENERGY FOR SECURITY International Studies. David Lague. March Bwww. 85. 18. Babson. October 12. 84. ‘‘Visualizing a North Korean ‘Bold Switchover.