The East Sea gas hydrate development project, which had drawn more than 200 billion won in funding over the past 20 years amid expectations that it would lift Korea into a resource-rich nation with a future energy source, has been quietly wrapped up without moving on to actual drilling.
In the early 2000s, after it was confirmed that large deposits of gas hydrates were buried in the Ulleung Basin of the East Sea, the government organized and operated a development task force, but it concluded the project was not economical and ultimately disbanded the task force.
According to a compilation of reporting by ChosunBiz on the 15th, the gas hydrate development task force led by the Ministry of Trade, Industry and Resources was officially dissolved at the end of last year. The Korea Institute of Geoscience and Mineral Resources (KIGAM), the Korea National Oil Corporation (KNOC), and the Korea Gas Corporation (KOGAS) participated in the task force as a consortium, and each institution has completed its dissolution report.
Gas hydrates are solid substances in which water molecules and natural gas combine in a low-temperature, high-pressure state, existing in an ice-like form. Because the ice crystals ignite when lit, they are also called "burning ice."
They contain natural gas concentrated to 170 times (170㎥) the volume per 1㎥, drawing attention as an energy resource that could replace oil. If methane gas is extracted from gas hydrates, it can be used for city gas (LNG), power generation fuel, and industrial fuel.
From 2000 to 2004, the Ministry of Trade, Industry and Energy (now the Ministry of Trade, Industry and Resources) conducted basic geophysical surveys at a depth of 2.3 kilometers in the Ulleung Basin of the East Sea through the Korea Institute of Geoscience and Mineral Resources (KIGAM) and confirmed the potential presence of gas hydrates.
In 2005, the government launched the gas hydrate development task force, lending momentum to full-fledged development and drilling. Korea relies on imports for more than 90% of its energy, so boosting energy self-sufficiency is important. Gas hydrates drew attention as a future energy source that could lower the country's dependence on energy imports.
It is understood that more than 200 billion won has been invested in the gas hydrate development project over the past 20 years.
In phase one (2005–2007), the government invested a total of 66.7 billion won to build initial infrastructure and conduct exploration. In 2007, it achieved the world's seventh extraction of gas hydrates at a depth of 1.8 kilometers in the Ulleung Basin.
In phase two (2008–2011), it carried out extensive drilling to confirm reserves. A budget of 80 billion to 90 billion won was injected. Based on the drilling work, the government announced in 2011 that 620 million tons of gas hydrates were buried in the East Sea.
That amount would be enough for 20 years based on Korea's natural gas consumption at the time. The government estimated the economic value at 100 trillion to 150 trillion won.
With trial production targeted for 2015, the phase three (2012–2025) budget was set. However, as analyses concluded it lacked economic feasibility, trial production was postponed indefinitely. After that, rather than large-scale infrastructure investment, the task force focused on maintaining core technologies and on research and development. Last year, the task force's final operating budget was about 800 million won.
Behind the failure to develop gas hydrates, which had raised expectations as a "resource jackpot," were factors such as the U.S. shale gas revolution and technical challenges. As U.S. shale gas flooded the market, natural gas prices plunged, and the relatively high-cost gas hydrates lost economic viability.
Technically, the technology to stably extract only gas hydrates while preventing seabed subsidence did not reach commercialization. At the time, the task force even reported to ministries that "if gas hydrates buried under the Ulleung Basin are extracted, the seabed terrain could collapse, potentially leading to a massive explosion."
An official who participated in the task force said, "The project continued for 20 years based on development achievements, but as external conditions changed, economic feasibility declined and the project was eventually halted," adding, "as far as I know, the Korea Institute of Geoscience and Mineral Resources (KIGAM) is continuing its own research on gas hydrate development."