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[Op-Ed] Gas OPEC

Posted December. 26, 2008 03:57,   


Another resource cartel has emerged. Representatives from 16 natural gas exporting countries gathered in Moscow Tuesday to get the Gas Exporting Countries Forum moving toward becoming a formal organization. The forum’s power is expected to be formidable. The five major members -- Russia, Iran, Qatar, Venezuela and Algeria -- control two thirds of the world’s natural gas reserves and 42 percent of production. Global media are calling the new cartel a “gas OPEC.” The Qatari capital of Doha beat St. Petersburg and Teheran in becoming the headquarters of the organization.

Russian Prime Minister Vladimir Putin has drawn attention by saying the era of cheap natural gas is ending. This is worrisome because Russia, the world’s largest gas producer, seems to be encouraging the world’s top gas producers to join forces in raising natural gas prices. Russia has led the way in turning the loosely run forum, founded in 2001, into an official organization. The cartel will likely cooperate with OPEC since eight countries are also OPEC members. Venezuela’s energy minister underscored this possibility, saying OPEC and the forum have the same principles.

Russia is notorious for using its abundant natural resources as political pawns against oil and gas importing countries. Russian state-run energy giant Gazprom is threatening to cut off gas to Ukraine from Jan. 1 if the former Soviet republic fails to pay its gas debt. Two years ago, Russia cut gas supply to Europe for two days after a political conflict between Moscow and Kiev erupted.

Korea is heavily dependent on imports for its energy consumption, so any movement by resource-rich nations draws keen attention. Qatar, Malaysia and Indonesia, three countries from which Korea imports most of its liquefied natural gas, are member states of the forum. Leaders of Korea and Russia agreed in September to build gas pipelines linking the two countries. A slew of obstacles will arise in constructing the pipelines, however, which is to secure natural gas at low cost. Getting North Korea’s permission to allow gas pipelines to cross is one of them. Seoul, however, must not let these obstacles stand in the way. Friendly relations with Moscow, the major player in the gas cartel, will be a big help in keeping favorable relations with other member countries.

Editorial Writer Bhang Hyeong-nam (hnbhang@donga.com)