From the New York Times:
North Korea is desperately short of energy, and agreed in 1994 to halt its nuclear weapons program in exchange for help from its capitalist neighbors and the United States in building nuclear power plants. But work at the site was halted on Dec. 1 because the United States said North Korea had violated the 1994 agreement by pursuing nuclear weapons anyway. On Friday, the State Department said the civilian nuclear power program had “no future.” In retaliation, North Korea is holding hostage the construction equipment at the site belonging to contractors from South Korea, which has sunk almost $1 billion into the project.
With the civilian nuclear power program off the table, North Korea needs another plan for expanding its energy supply, and its neighbors need a way to break the diplomatic stalemate. On Monday, at a regional energy forum here, energy executives from Russia and the United States outlined two proposals. Both ideas – a 235-mile electric power line from Vladivostok and a 1,500-mile natural gas pipeline from Sakhalin – highlight Russia’s future as an energy exporter to Northeast Asia. Just as Canadian power fuels much of the United States, so the hydroelectric resources of the Russian Far East seem destined to flow south to China, Japan and the Koreas.
“Everyone wants a nonnuclear solution” to North Korea’s energy proablem, said John B. Fetter, an American consultant who traveled here from Philadelphia to present the $3 billion natural gas pipeline project proposed by the KoRus Gas Company, a consortium of American, Russian and South Korean owners.
The project calls for a pipe to be laid from the vast gas deposits off Sakhalin Island, southwest through Russian territory to North Korea and, probably, on to Seoul, South Korea’s capital, as well. Mr. Fetter said gas could flow through it as soon as 2008.
By then, it is hoped, at least one reliable customer for the gas will have emerged in North Korea, a nation notorious for rewriting rules after the fact and for failing to pay its bills. If the pipeline is built all the way through to South Korea, it would reach a nation of 47 million whose appetite for energy is growing rapidly. Oil consumption has quadrupled since 1980, and South Korea is now the world’s fourth- largest oil importer, after the United States, Japan and China. Analysts expect demand for gas to increase by 50 percent in the next 10 years.
For North Korea, though, an electric transmission line promises faster, cheaper relief.
For just $180 million or so, a 500-kilovolt line could be built in four years, according to Victor N. Minakov, general director of Vostokenergo, a subsidiary of Russia’s state electric utility, United Energy Systems.
The timetables for both projects are ambitious, and financing them could pose problems, industry experts said. But both projects reflect the future importance of the Russian Far East as an energy supplier to Asia, according to Alexei M. Mastepanov, deputy director of Gazprom, the Russian gas monopoly.
North Korea’s energy needs are critical. It depended for decades on tankers full of oil delivered at subsidized “friendship prices” by China and Russia, but both its patrons began charging market prices in the early 1990’s, and North Korea has yet to recover from the blow.
Shortages of energy crippled North Korea’s industry, and much of the country regressed to a 19th-century existence of candlelight and wood stoves. In rural areas, many trucks are run with gas generators fueled by wood or charcoal, as in Europe during World War II when gasoline was scarce.
North Korean officials support both the gas-pipeline proposal and the power line proposal, but have no money to pay for them, according to people attending the conference who had recently been to Pyongyang, the North Korean capital.
