Two foreign news reports illustrate the skyrocketing oil prices in international markets will neither fall back much nor end soon. One is about a Goldman Sachs analyst, who has become the talk of the oil markets and foresees a ``super spike,'' a price surge up to $200 a barrel. The other concerns U.S. President George W. Bush's visit to Saudi Arabia to plead for increased oil production but to little avail.
The era of cheap, abundant oil has gone ― for good. What now concerns most oil importers is how to prepare for a post-fossil fuel era, and this starts by weaning themselves from their deep-rooted addiction to oil. The situation facing Korea, the world's fifth-biggest importer and ninth-biggest consumer of oil, is really worrisome in this regard.
Industrial experts say if the oil price stays at $120 a barrel, a level hit Wednesday for Dubai Light, which constitutes the mainstay of Korea's crude imports, the national economy will have to bear an additional burden of $42 billion this year. It is clear even the government's lowered growth target of 6 percent for 2008, based on a crude price of $80, was far off the mark, with major overseas institutions forecasting it between 3.9 percent and 4.8 percent.
The ambitious economic goal can be forgiven, given the volatility of world oil markets, but the policymakers' lingering complacency in dealing with this emergency situation cannot.
Admittedly, the government has not exactly sat idle, as shown by its efforts to secure energy supply sources abroad, including the ``resources diplomacy'' led by Prime Minister Han Seung-soo. The battle over limited global fuel resources, however, can be little more than a temporary solution that can buy time for coming up with a more fundamental cure. This will include enhancing the nation's overall energy efficiency, upgrading the industrial structure to a less energy-intensive one and developing new and renewable energy sources, a project in which Seoul has been active on words but lamentably short on actions.
Consumers are little better than their government, and this is why a sharp change in policy is needed from the demand side.
To be sure, it leaves much room for reflection that Korea is one of the few countries where large, gas-guzzling cars are increasingly popular and consumption of premium gasoline for luxury sedans has soared by 500 percent. Also, most of the high-rise apartments built lately employ mechanical ventilation systems using much energy. The main streets of metropolises are turned into parking lots by driver-only vehicles during rush hours, making one wonder whether this is really a country that depends on imports for 97 percent of its energy demand.
The real problem in this is while the haves lead the over-consumption trend, the have-nots usually end up bearing the brunt of the overall economic strain resulting from it. So the government needs to evenly spread the pains of the scarce-energy era by slapping heavy environmental taxes on large cars and state-of-the-art structures, while slashing rates for transportation use by the self-employed and small businesses.
The person who said we have not inherited the Earth from our ancestors but borrowed it from our descendants is right. And nowhere is this truer than in Korea, which topped the list of the 20 biggest emitters in terms of increasing rate of greenhouse gas production in the 1990-2000 period.
Most Koreans would find it refreshing and instructive if President Lee Myung-bak and his Cabinet show some examples, by switching to no-tie dress in summer and changing vehicles from large to midsize or even mini cars except for official occasions.