COMMON GROUND
 

Air Date: February 22, 2000

Program 0008

Energy for North Korea

(This text has been professionally transcribed, However, for timely
distribution, it has not been edited or proofread against the tape.)

© 2000 by The Stanley Foundation

PETER HAYES: It took the North Koreans and ourselves two years—from 1994 to '96—to, as we say, cryptically to each other, "to move mountains," in each capital city; to actually get the green light to go ahead to actually do a project.

KRISTIN MCHUGH:
This week on Common Ground, a unique North Korean wind energy project.

HAYES:
We ended up agreeing that the cabbage field that they had pointed us to was the right place and we ended up erecting seven towers, very tall towers, with wind turbines. And then we installed the efficient end-use equipment in the clinic, in the kindergarten, and in a number of households in the village.

KEITH PORTER:
Common Ground is a program on world affairs and the people who shape events. It's produced by the Stanley Foundation. I'm Keith Porter.

MCHUGH:
And I'm Kristin McHugh. Electricity remains a luxury for millions of people around the world. This is especially true for the famine-affected, flood-afflicted, rural villages of North Korea. But thanks to the
efforts of the Nautilus Institute for Security and Sustainable Development, one such North Korean village can now turn the wind into useful energy for local schools and medical facilities. Peter Hayes is the Co-Executive Director of the California-based nongovernmental organization and an active environment and energy consultant in developing countries. He says the goal of the project goes far beyond just providing energy to one rural village. It's also one way to help North Korea demonstrate cooperation to the rest of the world.

HAYES:
This project came about because of the North Korean challenge to the international community in its proliferate nuclear weapons. Of course it has a deeper historical origin going all the way back to, really, World War II and the division of Korea in 1945. The issue of nuclear weapons has been part of the division of the Korean peninsula since the war broke out. And remains an important part of it. So, for nearly three or four years, from 1991-2, through 1994, we were on a roller coaster ride between North Korea and the international community led by the United States, including the Security Council, of confrontation leading to a near war in May-June 1994. And then in October of '94, after President Carter's trip to Pyongyang in July, really pulled us out of the free-fall towards war by doing a deal with Kim Il-Sung. In October of '94 Ambassador Robert Galuchi negotiated an agreement called the "Agreed Framework" with the DPRK, with North Korea, which signaled a shift from sole reliance on the tools of militant containment—in other words military tools, including nuclear threats, to a, at least, a supplementation with the tools of cooperative engagement. Now, the United States is not particularly well-versed at this point in nonmilitary cooperative engagement strategies. This was not a very important part of the Cold War arsenal in dealing with the former Soviet Union. And so we felt that our comparative advantage, our ability to contribute to tension reduction and actual ultimate resolution of the issues was to similarly switch to cooperative engagement, but to actually engage in a very realistic way and a cooperative way to demonstrate that it is actually possible to do business with the North Koreans. So that's a very long, big picture background as to how we came to do a very tiny project in the North Korean village on the ground.

MCHUGH:
And what was the ground project?

HAYES:
Well, in 1996, two years after the '94 agreement we had negotiated with our North Korean counterparts, a proposed project, or an approach to a project—you've got to remember that there is this vast distance, both cultural and political, between the United States and North Korea—and so we were trying to find a common ground that would be very functional in nature, in terms of the engagement, not entangled in the high politics of the intergovernmental discussions, but would really push each side to do something new that would advance incrementally towards real cooperation. Now at that point American sanctions were still in place, the "Trading With the Enemy Act" was still in place against North Korea. And there are very deep, not only suspicions, but hatreds, motivating the policy making decisions of each side. So it took the North Koreans and ourselves two years—from 1994 to '96—to, as we say, cryptically to each other, "to move mountains," in each capital city; to actually get the green light to go ahead to actually do a project. So that was the first hurdle. Just get the agreement to do a project of this kind.
Then nearly a year later, in 1997, we took the first step, which was to host a tour—the first, in fact, tour of North Korean scientific and technical experts to come to the United States for training for about a month. We hosted their trip to the United States. And then we reciprocated the following year, in 1998, with two expert missions to North Korea, in May and September/October of that year, to actually construct a wind-powered turbine electric generation system in a flood-affected, famine-afflicted village in North Korea. And the way we did this was very carefully to write a memorandum of understanding with the North Koreans.

MCHUGH:
Hayes says the memorandum of understanding, or MOU, was critical because it provided a clear guideline for both sides to follow.

HAYES:
And so we sent out teams to the village. It was a coastal village that the rice fields of which had been hit by a tidal wave generated by a hurricane the previous year, that had swamped the rice fields. So their rice was not in good shape. Their rice production. And whilst the village itself was definitely at the high end of income in North Korea, it was a working village. This was not a Potemkin Village. There are Potemkin Friendship Villages set up to, for pure propaganda purposes, for visits from Africa and Asia and so on. This was not one of those. This was actually a working farm, a cooperative farm. And we were given pretty much complete access to what we needed in the village. We surveyed the village. We got physical maps. We did a wind resource assessment. We left behind recording equipment. And we ended up selecting actually the site that they had suggested. But we actually selected the site. And they had made a suggestion, it turned out it was a very rational one for lots of reasons. And we ended up agreeing that the cabbage field that they had pointed us to was the right place and we ended up erecting seven towers, very tall towers, with wind turbines. A powerhouse. They built the house, we installed the electric control systems. And then they installed the wiring to our specification. And then we installed the efficient end-use equipment in the clinic, in the kindergarten, and in a number of households in the village.
That equipment, incidentally, was mostly procured in China and there was a strong element in this phase of the project of cooperation with Chinese counterparts; it was really a trilateral project in that sense. Chinese-American-North Korean, partly because you can't buy 220 volt equipment in the United States; 110 volts is what you have here. And partly because we actually wanted to have that Chinese involvement so that there's a sense of bringing the Chinese into the process and the Chinese shouldering some of the responsibilities in the project. So it was really a learning experience for us, as you can imagine.

MCHUGH:
Would you say, then, that the project was successful just from an engineering standpoint?

HAYES:
Well, from an engineering standpoint, I mean the lights went on the day that we left. And in fact the part of the village that we electrified is known now as the "Village of Light," because when the lights are out, which is most of the time in the rest of the village, the lights are on in the households that we electrified. We essentially buffered those village households, and other loads—the kindergarten and the clinic—from the continuous outages or interruptions in electricity service from the main grid, which has pretty much collapsed at this point.
On the other hand, the equipment that we transferred, of course, was American equipment, for political reasons. We wanted this to be American equipment, installed by American engineers, to establish precedent and to create a tangible symbol or an icon of cooperation. On the other hand, it was very expensive, because we were providing high-end equipment, and what would have been much more technically appropriate would be to supply equipment probably made in China. We also wanted to supply them the best equipment possible because we wanted the system to work and we didn't want it to kill someone. It had to be reliable and safe. And that's where we had some of our biggest, I guess you would say collisions, or even cultural clashes, with our North Korean counterparts. Because they're not necessarily, and often for good reason, as concerned about safety or reliability as Americans are. And in one particular instance, where we virtually downed tools over one such issue, this was resolved satisfactorily ultimately by my taking out the senior political party guy in control of their side of the project, drinking a lot of beer and pointing out to him that if a North Korean got killed by the system it wouldn't look good in Washington. Many of their safety practices in the electrical industry are forty to fifty years old and don't, haven't caught up with the changes that have occurred, for practical reasons, in the rest of the world. Things like how towers are grounded against lightning strikes, for example. We had a big fight with them over that. And eventually they agreed that it should be done the American way.

MCHUGH:
Hayes adds the initial success of the wind energy project could pave the way for future sustainable development projects in North Korea.

HAYES:
We plan to go back this year and actually do a house call and then once we have a technical diagnosis we'll ship yet another round of equipment to replace anything that's missing or to upgrade systems that need it. We have discussed with our colleagues in North Korea a next step that would be a quantum leap from doing a single-village level, very local project, to a bigger scale project. So what we suggested is why don't we take a small county, maybe 40-50,000 people, a remote rural area, mountainous area, and we'll essentially do a business plan. And we would thereby identify a small number of very small, discrete, humanitarian projects that we would address ourselves that would be essentially our visiting card, our indication of good faith. And we have discussed specifically introducing ultraviolet light water purification modular technology. It's a very cheap, reliable way of producing very clean water very quickly. So we're suggesting that we should transfer some essentially demonstration units to some large point source consumption sights like hospitals and so on in the county that we might work in. But we haven't made that next step yet, because until we're confident that we have the funds and the resources on the American side to truly implement a strategy like that, we don't want to raise expectations unfairly on the North Korean side and thereby have people put themselves at risk politically until we're ready to commit if they say yes, truly say yes. We've got it in principal, yes, on both sides, from both governments to do this, but you know, the Unhari Village project was on the order of a quarter of a million dollars; this in the order of two million, one and a half to two million dollars. And it's not clear that the American philanthropic community is ready to invest that kind of money in North Korea.

PORTER:
Coming up, more with Peter Hayes on the Nautilus Institute's North Korean Wind Energy Project.

HAYES:
This tiny project really gives us enormous intellectual leverage as well, in terms of framing the policy agenda, because we're now in an authoritative position to raise these kinds of issues with the decision makers.

PORTER:
Printed transcripts and audio cassettes of this program are available. Listen at the end of the broadcast for details. Common Ground is a service of the Stanley Foundation, a nonprofit, nonpartisan organization that conducts a wide range of programs designed to provoke thought and encourage dialogue on world affairs.

MCHUGH:
Well, you mentioned the difficulty in getting that project established. And it took a couple of years to work with the North Koreans. How was cooperation in Washington?

HAYES:
I think the honest answer is that we found a very tiny window. We're very careful to define the project as conforming to the existing laws. This is a humanitarian project, and there was a humanitarian exemption
which President Bush had implemented, not the Democrat administration. And people could see that we had put very stringent conditions on the North Koreans. Very strong performance specifications that were either met or they weren't. So they knowingly in turn supplied this data knowing that, for example, wind power data, which is militarily highly sensitive for chemical weapons, for ballistics, for high-level special force paratroop insertion, etc., being collected four kilometers from the main MIG airfield that defends Pyongyang, against American fighter aircraft, was being shared with their adversary.
You know, it's another litmus test of the North Korean political will. Are they going to allow these teams to go in or aren't they? Are they going to allow us to come in and do things like measure the wind and measure the voltage on their grid? And find out that the frequency is not, as they announced, at sixty hertz, but fifty hertz, which means they're actually operating two grids, not one? This is a fact of enormous strategic military, political, and economic significance to know about North Korea. And we were the ones who found it out. You know, not DOE or the military or the intelligence, it was a simple matter of putting the voltmeter on the system over time. This tiny project really gives us enormous intellectual leverage as well, in terms of framing the policy agenda, because we're now in an authoritative position to raise these kinds of issues with the decision makers. And whilst they'll never introduce them at the moment into the negotiations with the North Koreans formally, there are already side discussions going on in corridors and so forth about how this issue will be resolved.

MCHUGH:
Well, certainly the project is unique because it deals with a cooperation agreement between the United States and, as you mentioned, some with China and North Korea. But how unique is a wind project
in countries outside the US? I mean, I know of projects in the Midwest and in Iowa specifically. But is this a unique project for developing nations?

HAYES:
No, actually, there are many large wind power projects, either aggregate, the aggregate generating capacity is quite large—in the megawatts or tens of megawatts, and hundreds to thousands of units in developing countries—India, China, and many, many other countries in the Caribbean, in Latin America, and so on. Some in Africa. In Inner Mongolia, for example, in the Inner Mongolia Autonomous Region in China, there are thousands of wind turbines on this kind of scale. Even in North Korea there are domestically produced very crude wind generators; because they're so short of energy they've attempted to make their own. We've actually been given access to one of their manufacturing factories for their wind turbines and looked at them rather closely. And we're fairly certain that they don't work. That in fact if you were to install one on your building it would probably vibrate the building to pieces because the blades on the propellers are not aligned exactly, which means it will wobble slightly and so the whole unit vibrates and the fatigue on the building would be enormous. So we don't believe that their units, for the most part, work. They probably look good and they're politically important because if you're told by the Great Leader to go forth and harvest the wind then you've got to put up windmills so he can see them when he drives past. But practically speaking they don't work in North Korea.
But in surrounding countries, most importantly adjacent in terms of, not physically across the border, but in China, in the Imar Region, there are thousands of buildings. So, there's nothing particularly unusual about putting wind turbines into a developing country. What is unique in North Korea are the difficulties of doing so. This is probably the most difficult place to do it on the planet. Because there's nothing there that you can use. I mean, there's no Ace Hardware down the road; there's no Federal Express to ship it to you. If you're in Somalia you can get FedEx via the Sat phone, to ship you something through Kenya. They'll put it on an airplane and it will be there five days later. Can't do that in North Korea. They'll shoot down a FedEx plane. So, you know, literally, every nut and bolt and every spare part and a whole inventory of materials in case you have to fabricate something on site, all the drills, all the tools, every single item for this rather small project had to be transferred. And so the labor costs on our side, of doing, of essentially taking a whole infrastructure that is taken for granted everywhere else in the world, even in pretty extreme circumstances, of places like Sub-Saharan Africa, doesn't exist in North Korea.

MCHUGH:
Well, certainly wind is a great renewable energy source. But I would also assume probably a fairly cheap energy source. Is that why that was a good idea?

HAYES:
Well, in principle, yes. Korea does not actually have a superb wind resource, North or South. This was one of our first questions. Because the power you can extract from the wind varies, so we were told at the site that we were at that we had about five meters. Our measurements indicate that in fact we have about three meters, which means we actually have only about forty percent of the wind resource that they thought they had. Now why did they think they had wind resource? 'Cause they have anemometers of their own? And the reason is they go out and they measure wind instantaneously every three hours approximately at these sites, twenty-four hours a day. Very disciplined people, very good record keeping, the meteorologists from the local weather office came over and we looked through his records. Beautifully kept. The only problem is that's like trying to determine your average speed as you go from a freeway and across a town on local roads, and then slow down, and go up to the parking area and stop, by looking once in three hours on a three-hour trip at your speed meter on your car. It's a totally useless number.
So they sort of look at those numbers and they either average them over all the hours that they're measuring them, or they just sort of look at them and try and think what is a good number. And so they don't have, in fact, wind resource numbers. That's why we put up anemometers and so we've suggested in the trainings that we did, and one of the things we're emphasizing, is that to make intelligent economic decisions two things have to happen. First of all you have to actually measure the resource before you try and use it. And secondly, you need to make economically rational decisions. And for that you need price information. You need cost data. Real data. And you actually need markets. And they of course don't have a market system, for the most part.

MCHUGH:
But Hayes says he witnessed first hand the beginnings of a budding marketplace in North Korea.

HAYES:
It turns out, and we discovered this last year, that they're now implementing what they call "local electricity markets." And they're encouraging local farms and work units and so forth to develop many hydro wind power units. And they're allowing them to set their own price and sell electricity in the local grids. But the important thing is that they are actually experimenting with local markets and allowing people to set their own price for this locally produced power. So whilst they'd never admit that they are reforming the rural economy in any way, in reality under the surface there's lots of ferment and lots of change actually happening. We saw the food markets, for example, in the local towns. I mean, local food plots, the private food plots are where a great deal, if not the bulk of the food, is actually grown, efficiently at this point. But you can see the markets. I mean, there are markets. And we also saw a lot of local small goods suppliers spring up in little tents in the local cities, just like you see in, you know, vendors all around Asia. That's a kind of street culture if you like. Small-scale entrepreneurial activity that never existed before in North Korea.

MCHUGH:
That brings me to my final question. And that is, do you see the facade, that Cold War facade, that North Korea has with South Korea and the rest of the world, starting to fade?

HAYES:
No. Because the only leverage they have against South Korea and Japan, their traditional most important adversary, and the United States, is their conventional military. Somewhat supplemented by the threat of nuclear weapons, which most specialists agree is well in the future in terms of a deployable capacity. It's still more of a threat. But the real capacity to wreak havoc is conventional military forces. And even though they're not in great shape at the moment because there's not much food in the country, there's not much fuel, it's still a very well-armed and gigantic force. It's a force that's much bigger and better-armed than it was in 1950 when the war broke out. They still have this core capacity to wreak havoc. They don't have much else on which to exercise leverage, particularly against the United States. At least not that anyone in Washington will take notice of. And so it's not surprising to those of us who sort of stand back and look at the big picture, that as other things crowd them off the agenda they use their cattle prod, whether it's a, you know, firing a rocket that fails, over Japan, or some form of provocation against South Korea, to get themselves back on the front burner.
I also think that there are people in, at the top of the Korean Workers Party who studied very carefully the economic transition from 1958 to '65 in South Korea, and the creation of the Jbaws, or the big integrated multinational South Korean firms who got their startup with Vietnam War contracts, inheriting what factories were in the South left by the Japanese period of colonialism. And I think many of the North Korean top political figures see themselves as, you know, they already have command of the military. They don't need a coup as Park Chung Hee pulled off in South Korea to become a sort of modernizing dictatorship, and they see themselves in probably ten, fifteen years as being billionaire trading empires with probably selling real estate on the DMZ to South Korean conglomerates. I don't think they're shy at all about their intentions. And they have bank accounts already in every major city in the world and warehouses full of stuff that they're trading in Beijing and stuff that is really not—you know, these kinds of activities aren't really consistent with your normal stereotype in Washington of North Korea as a monolithic state. But it's a fact. And those who really study North Korea know these kinds of operations exist and that there is movement under the surface. But they'll maintain this veneer, or this façade, of confrontationalism for as long it serves their purpose. And that's partly to keep South Korea at arms length. And it's partly to force the United States to pay attention.

MCHUGH:
That is Peter Hayes, the Co-Executive Director of the Nautilus Institute for Security and Sustainable Development. For more information on the Nautilus Institute's programming, visit their Web site at www.nautilus.org. For Common Ground, I'm Kristin McHugh.

PORTER:
And I'm Keith Porter. Cassettes and transcripts of this program are available. The transcripts are free, cassettes cost $5.00. To place an order or to share your thoughts about the program, write to us at: The Stanley Foundation, 209 Iowa Avenue, Muscatine, Iowa 52761. Please refer to Program Number 0008. That's Program Number 0008. To order by credit card you can call us at 319.264.1500. That's 319.264.1500.

MCHUGH:
Transcripts are also available on our Web site: commongroundradio.org. Commongroundradio is all one word. Our e-mail address is commonground@stanleyfdn.org.

PORTER:
B.J. Liederman created our theme music. Common Ground is produced and funded by the Stanley Foundation.

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