Yoon’s much-ballyhooed oil, gas project falters as it lacks economic feasibility
In past decades, South Korea launched deep-sea exploration projects to discover oil and gas reserves, only to get poor results. Last Thursday, the government put out a similarly disappointing result: The first exploratory drilling under the “Blue Whale” project showed that one of the prospective oil and gas sites in the East Sea lacks economic feasibility.
The Ministry of Trade, Industry and Energy announced that while traces of natural gas were detected, the quantities were insufficient to justify commercial extraction. The government said it would conduct further analysis of the collected samples before implementing additional exploratory drilling at six other promising sites, in partnership with foreign energy firms.
The news about the failure of the first drilling itself is hardly surprising, given that resource exploration projects around the world have confronted numerous setbacks and failures before any success. Even an official from the Trade Ministry conceded that “the probability of success on the first attempt was lower than winning the lottery.”
But the latest announcement by the government about the Blue Whale project has generated starkly different reactions. Already, political parties are wrangling over whether the project can be considered a “fraud.”
From the outset, critics have accused the Blue Whale project of being politically motivated. When now-impeached President Yoon Suk Yeol first unveiled the initiative in June last year, suspicions arose that it was his attempt to regain political momentum following the ruling People Power Party’s crushing defeat in the April 10 general election.
The underwhelmingly poor results of the first exploratory drill are now fueling the controversy. Critics claim that Yoon’s much-hyped oil and gas exploration project was little more than a dubious political maneuver that raised false hopes of turning South Korea into an energy-rich nation, while costing a huge amount to fund a project filled with uncertainties.
The main opposition Democratic Party of Korea strongly criticized the results of the first drilling, calling it a “nationwide scam.” The Democratic Party demanded an apology from Yoon's ruling People Power Party, which had fought to restore the budget for the drilling project.
The People Power Party, however, defied the criticism and announced plans to push ahead with drilling the six remaining possible oil and gas reserves and to secure the related budget for doing so.
What is playing out in the political sphere is creating more turmoil, especially now that Yoon is in detention and under investigation on charges of leading an insurrection and committing abuse of power over his short-lived imposition of martial law in early December.
In retrospect, much of the blame lies with Yoon himself. The Blue Whale initiative could have been implemented as another national resource discovery project. Instead, Yoon announced in June last year that the recent findings suggest a “very high probability of 14 billion barrels of oil and gas deposits,” citing assessments by “leading research institutions and experts.” Yoon also claimed that the reserve of gas would be big enough for the entire country to use for up to 29 years, and the oil for up to four years.
Trade Minister Ahn Duk-geun went a step further, claiming at a briefing that reserves of 14 billion barrels are equivalent to “five times the market capitalization of Samsung Electronics,” which translates into 2,200 trillion won ($1.5 trillion).
The debate over the project’s future now centers on two competing views. Some argue that, given the setbacks, the entire initiative should be reassessed from the ground up. Others maintain that resource exploration, by nature, requires persistence through repeated failures before yielding results.
Either way, the rival political parties should stop their wasteful fight and instead focus on the scientific facts and economic rationale to prevent the Blue Whale project from running aground.
