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Developing Marine Natural Resources: Present and Future

Developing Marine Natural Resources: Present and Future

BAE Young-Il

Dec. 19, 2011

Transcript

Welcome to our video program. I'm Young-Il Bae from the Industry and Strategy Department II.

The world is facing a severe shortage of natural resources. The prices of resources are skyrocketing and “weaponization” of resources by some resource-rich nations has often been witnessed. This phenomenon has continued since 2000. Unlike previous oil shocks, the recent shortage of resources has been caused by a surge in demand, not a temporary drop in supply. Over the next two decades, the three billion strong middle class in emerging economies will form a new-consumer juggernaut in the global economy. Accordingly, demand for primary energy resources like oil, coal, and natural gas will increase by 40% by 2035.

The problem is that the more resource shortages occur, the more resource-poor nations like Korea will suffer. There will be fluctuations in the short term, but the shortage of resources will deteriorate in the long-term if the current output levels are maintained. Prices of resources are sure to go up even higher.

How can this challenge be overcome? There is the only one solution to increase supply since this shortage has been triggered by a failure of supply to catch up with demand. This is a simple equation. But terrestrial natural resources are being depleted. Then, what should be done to address this shortage?

Marine resources development is only alternative to increase supply. The ocean, covering 71% of the earth's surface, still remains an unknown world; less than 10 % has been explored. Mankind has traveled more than 300,000km to land on the moon but has never gone deeper than 11km in the ocean, which contains an estimated one-third of the world's oil reserves or 1.6 trillion barrels, and 15% of the world's natural gas reserves.

In addition, there is much more copper, manganese, nickel, and cobalt buried in hydrothermal deposits or manganese nodules in the ocean than on land. The amounts are estimated to be enough for 200 to 10,000 years of use.

Of all minerals, methane hydrate, so-called "fire ice," is attracting particular attention. Methane hydrate is methane gas trapped or dissolved in ice embedded in deep-sea sediment. Global methane hydrate reserves are estimated at 10 trillion tons, 100 times more than those of natural gas and enough for 5,000 years of use.

At the same time, global competition to secure ocean resources continues to intensify. From the early 1970s, immediately after the first global oil shock, countries began to announce exclusive economic zones (EEZ) and claimed special rights over the exploration and use of marine resources, including production of energy from water and wind, within 200 nautical miles from their coasts.

EEZs are the source of many territorial disputes. Japan, for example, turned its eyes to the ocean to secure marine resources and has often had maritime boundary disputes with Korea, China and Taiwan. The Japanese claim over Dokdo is mainly due to vast marine resources reserves adjacent to Dokdo. Japan also has had disputes with the Diao Yu Tai Islands with China due to oil and mineral resources in the adjacent sea. Okinotorishima, which is only a few rocks protruding 16 cms above sea level, is also at the center of one of Japan's maritime disputes. Japan, which spent billions of yen to reinforce the rocks with concrete, claims territorial rights over these rocks.

Along with this, Japan is stepping up efforts to take leadership in marine natural resources development. Led by Japan Oil, Gas and Metals National Corporation, a Japanese government independent administrative institution, the country will start to extract methane hydrates from the ocean in 2012. Not only Japan but also other countries, including the US and China, will begin the development of marine natural resources in earnest. The global competition over marine resources development will only get more heated.

Marine resources development activities, currently limited to oil and gas development, will likely evolve into two directions.

First, thanks to the advancement of exploration and drilling technologies, countries will turn their eyes to deep sea oil and gas reserves. In the early days of marine oil reserve development, divers installed necessary facilities at the ocean floor, so it was impossible to reach oil fields more than 300 meters below the sea surface. In the 2000s, resources buried at depths of more than 3,000 meters started to be developed. Since average sea depth is known to be more than 4,000 meters, marine resources development is expected to go deeper.

Second, marine resources development, which was previously confined to energy resources, will expand into mineral resources. Global competition for marine resources development will become more heated. Korea has also joined the global marine resources development trend. In 2008, and 2011, it acquired exploration rights to develop seafloor hydrothermal ore deposits in exclusive economic zones in Tonga and Fiji in the Southern West Pacific. If these explorations succeed, Korea can produce marine mineral resources starting from 2017.

The mostly untapped ocean can serve as a treasure house that ensures a sustainable supply of major mineral resources into the future. Accordingly, before rival nations enhance their competitiveness, Korea should nurture capabilities specialized for the development of marine natural resources and make a strategic approach towards the development of them.

Government and academia should develop experts in marine resources development and explore ways to secure relevant technologies. Furthermore, marine resources development needs different technological capabilities because they must deal with typhoon-force winds, waves more than 10 meters high and deepwater pressure. Marine experts should be well versed in not only basic marine science (e.g., ocean physics, chemistry, biology, and geology) but also applied science (e.g., machinery, electronics, civil engineering, shipbuilding, and submarine medical care). To this end, the government should provide support for pilot projects.

The ocean, covering 71% of the earth's surface, still remains a mysterious and unknown world; less than 10 % of it has been explored. The global pecking order can be rearranged by the ability to explore the oceans.

Thank you for watching. I'm Young-Il Bae.

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