The Development of South Korea s Nuclear Energy Industry in a Resourceand Capital-Scarce Environment

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1 2014 Pierre Du Bois Conference (September 26-27, 2014) Preliminary Draft Please do not cite or disseminate without permission The Development of South Korea s Nuclear Energy Industry in a Resourceand Capital-Scarce Environment SE YOUNG JANG Ph.D. Candidate in International History The Graduate Institute Geneva & Harvard Kennedy School This paper examines what factors enabled resource- and capital-scarce South Korea to start developing the nuclear energy industry in the late 1960s and early 1970s. South Korea had no sufficient domestic capital to embark upon this highly capital-intensive project and the structure of Korea s economy was still based on labor-intensive industries at that time. Although the South Korean government began to recognize the necessity to develop heavy and chemical industry and to put some resources into planning it as early as the late 1950s or early 1960s, its full-scale endeavor for enhancing heavy and chemical industry started later in the early 1970s. 1 In addition, Seoul s industrial priority during the first stage of capital-intensive industrialization was on advancing labor-intensive segments of capitalintensive industries such as machinery, electronics, and automobiles. Thus, South Korea s interest in the nuclear energy industry in the late 1960s and early 1970s appeared a little bit earlier than what a normal track of economic development would have led to. It is mainly because nuclear power industry requires an enormous scale of investment and a high level of technological achievement. South Korea was also a small-sized country with no abundant natural resources including domestic energy sources. From the early stage of its industrialization, thus, it was 1 Robert Wade, Industrial Policy in East Asia: Does it Lead or Follow the Market? in Gary Gereffi and Donald L. Wyman (eds.), Manufacturing Miracles: Paths of Industrialization in Latin America and East Asia (Princeton, NJ: Princeton University Press, 1990): ,

2 not an option for South Korea to earn huge revenue by exporting primary products. A variety of primary products were rather imported from other countries to feed people and to support Korea s incipient industries. In particular, while electricity was an indispensable resource to enable modern manufacturing industries to work, South Korea was extremely poor in energy resources endowment, and thus, highly dependent on imported primary energy for electric generation. As Yang and Xu pointed out, Korea s electricity was predominantly generated by oil- and coal-fired thermal power generation plants, which all depended on imported resources. This dependency made the electricity industry of South Korea more vulnerable to international energy markets as its economy developed. 2 Conventional wisdom tells us that the first oil crisis in had a major impact on South Korea s decisions to develop its nuclear energy sector. The oil shock dramatically drove up oil prices and shocked oil-dependent South Korea which had been launching a series of projects on heavy and chemical industry. Thus it has been generally said that this oil shock as well as high energy import-dependence led Seoul to diversify energy sources, and as a result, South Korea became interested in nuclear energy. This paper does not deny that the South Korean government s concerns about energy security and costs as well as a structural change of industry in the 1970s would have led Seoul to adopt more active policy on nuclear energy. However, these economic considerations do not fully explain (1) South Korea s earlier interest in nuclear energy before the oil shock and (2) in what circumstances Seoul, a capital-scarce late industrializer, was able to acquire sufficient foreign loans to build nuclear power plants. Thus, this paper attempts to shed light on the role of South Korea s military ambitions to develop nuclear weapons in the 1970s in facilitating its efforts to construct nuclear power plants. In addition, this paper argues that the 1970 s competitions between nuclear suppliers in the world market set up a favorable environment for new customers like South Korea to relatively easily acquire highly advanced technology and facility. 2 Maeng-Ho Yang and Xu Yi-chong, Nulcear Energy Development in South Korea, in Xu Yi-chong (ed.), Nuclear Energy Development in Asia: Problems and Prospects (Hampshire: Palgrave Macmillan, 2011),

3 Since the first commercial nuclear reactor of South Korea (Kori-I) began its construction works in 1970 and then its operations in 1978, Seoul has continuously pursued pro-nuclear energy policy by expanding cooperation with other nuclear suppliers and increasing the share of nuclear energy in total electricity generated in 2013 to 24 percent. Todays, South Korea runs 23 nuclear reactors in four nuclear power plant sites, which are the second most number of reactors among Asian countries after Japan and the fifth most in the world. 3 The history of South Korea s nuclear energy industry is not long enough when compared to other early nuclear industrializers such as the United States, Russia, and France. However, South Korea succeeded in upgrading its status from a learner to a teacher of nuclear technology in a relatively short period. 4 In December 2009, the United Arab Emirates (UAE) selected a bid from South Korea s KEPCO-led consortium for four APR-1400 reactors to be built at Barakah. This was a contract which was worth $20.4 billion with expectation to earn another $20 billion by jointly operating the reactors for 60 years. Furthermore, it was a significant achievement in Korean civil nuclear history particularly in terms that South Korea was selected in the face of strong competition from France, United States, and Japan. South Korea s current position as one of the major nuclear energy producers with the 15 th most GDP in the world provides a stark contrast with its own past. The Korean War in the early 1950s destroyed almost two-thirds of the country s productive capacity with almost one million civilians killed. To make things worse, most of industrial bases during the colonial period were located in the northern part of the peninsula, which made South Korea to start its economic endeavors from the bottom. It was estimated that total industrial production in 1953 when the war ended was similar to one-third of the production level of Despite the devastating war, the South Korean economy managed to recover in the 3 Global nuclear power capacity grew rapidly between the 1960s and 1980s. The number of global power plants has surged to around 440 today. The United Sates has the most nuclear reactors with 104, followed by France and Japan. The U.S. generates more than 30 percent of the world s nuclear energy. The U.S. is also planning to build four to six more by European countries show a mixed picture in terms of the number of nuclear power plants. While France came in second with 58 reactors, Germany, with only nine, plans to gradually phase out nuclear energy. 4 See those terms in Alice H. Amsden, Asia s Next Giant: South Korea and Late Industrialization (New York: Oxford University Press, 1989). 5 Charles R. Frank, Kwang S. Kim, and Larry E. Westphal, Foreign Trade Regimes & Economic Development: South Korea, vol.7, National Bureau of Economic Research (New York: Columbia University Press, 1975): 9. 3

4 1950s mostly with the help of foreign aid. 6 However, foreign aid diminished drastically in the early 1960s, and was replaced by foreign loans. Throughout the 1960s and 1970, South Korea showed a remarkable economic performance: the average 9.8 percent of annual growth rate for the periods. 7 Widely regarded as an exemplary case of late industrialization along with Japan and other Asian tigers, South Korea s rapid economic growth based on state intervention and export-oriented strategy received much attention in the recent decades. Electricity plays a central role in a modern way of life. Particularly, its role becomes much more significant when a country embarks on heavy and chemical industry which consumes a huge amount of electricity. For countries like Korea which does not have abundant domestic energy resources to produce electricity, securing external energy resources is a matter of life and death for the survival of their industries unless they develop alternative technology to do it. Nuclear energy has thus come to the forefront in some resource-poor countries that attempted to transform the structure of industry to large-scale manufacture and heavy and chemical industry. However, nuclear energy is not a magic which can suddenly emerge from nothing. The nuclear fuel cycle begins when uranium is mined, enriched, and manufactured into nuclear fuel, which is delivered to a nuclear power plant. After usage in the power plant, the spent fuel is delivered to a reprocessing plant or to a final repository for geological disposition. In reprocessing 95% of spent fuel can potentially be recycled to be returned to usage in a power plant. Proportions of the isotopes, uranium-238 (99.2%) and uranium-235 (0.72%) found naturally. Light water reactors require fuel enriched to 3-4% U 235, while others such as the CANDU reactor (heavy water reactors developed by Canada) uses natural uranium. It is known that there is a significantly large amount of uranium ore deposits in South Korea. In 1976, South Korea s Ministry of Science and Technology announced that 6 During , foreign aid to South Korea reached its peak. See more details in Anne O. Krueger, The Developmental Role of the Foreign Sector and Aid (Cambridge, MA: Harvard University Press, 1979): Il Sakong, Korea in the World Economy (Washington D.C.: Institute for International Economic, 1993): 3. 4

5 approximately eight million tons of uranium ore had been found in South Chungcheong Province and the total amount of uranium ore was estimated to be about 200 million tons. 8 However, the South Korean government has not been successful in finding the areas where the uranium concentrations are adequate to form an economically viable deposit. The concentrations of uranium mined in the Southern part of the Korean peninsula are mostly below 0.03 percent, and thus the South Korean government has imported the total amount of uranium needed for a domestic use from abroad. 9 Nuclear technology was initially developed for military purposes as the U.S. atomic bombing on Hiroshima and Nagasaki clearly demonstrated. However, the U.S.-Soviet strategic balance followed by the first Soviet test of a hydrogen bomb in August 1953 ironically created an impetus for international cooperation and control of fissionable material. President Eisenhower s Atoms for Peace speech at the UN General Assembly on 8 December 1953 opened up nuclear research to civilians and non-nuclear countries for peaceful purposes, and led to the creating of the International Atomic Energy Agency (IAEA) in The Atomic Energy Agency could be made responsible for the impounding, storage, and protection of the contributed fissionable and other materials. The ingenuity of our scientists will provide special safe conditions under which such a bank of fissionable material can be made essentially immune to surprise seizure. The more important responsibility of this Atomic Energy Agency would be to devise methods where by this fissionable material would be allocated to serve the peaceful pursuits of mankind. Experts would be mobilized to apply atomic energy to the needs of agriculture, medicine, and other peaceful activities. A special purpose would be to provide abundant electrical energy in the power-starved areas of the world. Thus the contributing powers would be dedicating some of their strength to serve the needs rather than the fears of mankind. 10 One year after the Eisenhower s speech, the U.S. Atomic Energy Act was passed. This act promoted international dissemination of atomic energy information under bilateral and multilateral arrangements, which affected a number of countries decisions to go nuclear for peaceful purposes. South Korea was not an exception. Seoul and Washington signed the 8 The Dong-A Ilbo, March 23, Korea Hydro and Nuclear Power Co., Ltd., The White Paper of Nuclear Energy Development,

6 U.S.-ROK Nuclear Cooperation Agreement in 1955, which was promulgated in The same year, South Korea s Atomic Energy Law was enacted, and the Korean government accordingly established the Atomic Energy Agency (AEA) in Legal and institutional backgrounds to launch the nuclear energy projects in South Korea started to take shape in the last half of the 1950s under a favorable international environment for acquiring nuclear energy technologies. On 7 July 1956, President Rhee Seung-man met Walter L. Cisler, the CEO of the Detroit Energy Electric Company, who was visiting Seoul as an advisor to the U.S. International Cooperation Agency. In his meeting with Rhee, Cisler strongly recommended that a resource-poor country like South Korea should develop nuclear energy technology and start preparatory works such as establishing administrative bodies and research institutions in charge of nuclear energy in anticipation of its fruitful future in 20 years. He also stressed the significance of educating young scientists. Since then, the South Korean government sent 237 trainees abroad the United States, the United Kingdom, France, and West Germany to study nuclear science and engineering during out of 237 trainees were directly benefited from South Korea s newly established National Scholarship Program for studying abroad, and many of them became principal figures in the South Korean nuclear energy industry later in the 1970s onward. 11 Nuclear energy industry needs highly educated and trained researchers and engineers, but it does not require a large number of employees to be hired in a start-up stage compared to other heavy and chemical industries. In particular, the first ten contracts of nuclear reactors were based on a so-called turnkey approach, which did not allow South Korea s participation in some key technological works including architecture engineering. Thus, South Korea s lack of human capital in the beginning did not pose a huge problem in embarking on nuclear energy projects. The Eisenhower administration encouraged and supported its western allies to construct nuclear research reactors by transferring technology necessary to build and manage those reactors and granting half of the total cost including nuclear fuel. Welcoming 11 The Korean Nuclear Society, 50 Years of Korean Atomic Energy (2010):

7 the U.S. initiatives, a number of countries embarked on the reactor construction projects. For instance, Japan was granted $350,000 by the U.S. government when its second research reactor, JRR-2, was built by a U.S. firm in June South Korea also started constructing TRIGA MARK-II, South Korea s first research reactor. It was provided by U.S. firms General Atomics and General Dynamics under an agreement signed on 3 December The total reactor cost was $730,000 of which $350,000 was provided as grant by the United States. It was not a small amount of money for South Korea of which GDP per Capita was around $155 as of Construction for the reactor began in July 1959 and was completed on 5 November The TRIGA-Mark II reached criticality on 19 March 1962, and began operations on 30 March The original capacity of 100 kw was upgraded to 250 kw in In addition, General Atomics provided the 20 percent enriched uranium fuel for the reactor. 13 Although South Korea started the groundwork for building up a nuclear energy industry in the 1950s, it was in the early 1960 that the Korean government eventually took the ideas of constructing nuclear power plants more seriously. According to a long-term nuclear energy plan prepared by the Committee on Developing Nuclear Energy in 1962, the government was advised to start constructing a nuclear power plant with capacity of 150,000 kw in This plan was further endorsed by the IAEA s feasibility review in The South Korean government dispatched two study teams to a number of countries in 1966 and 1967 in order to better understand how other countries had implemented nuclear energy policy including the issues of financing. Based on these studies, the government concluded in 1968 that a nuclear power plant with capacity of 500,000 kw should be built in Kori, South Kyungsang Province, until 1974, and a nuclear reactor at this plant should be selected out of three candidates: BWR, Pressurized Water Reactor (PWR), and AGR. 14 After being authorized to be in charge of the construction and operation of nuclear plants in 1968, Korea Electric Power Corporation (KEPCO) sent a letter to request a 12 The Korean Nuclear Society, 50 Years of Korean Atomic Energy (2010): Ibid., -55.; Chang Sup Sung and Sa Kyun Hong, Development process of nuclear power industry in a developing country: Korean experience and implication, Technovation 19 (1999): 307; Data of GDP per Capita is from the World Bank ( ), but other sources show different figures. 14 The Korean Nuclear Society,

8 preliminary cost analysis for international bids to General Electric (GE), Westinghouse Electric Company (WEICO), Combustion Engineering (CE), and British Nuclear Export Executive (BNEE). The KEPCO also made it clear that the contractor should agree on its responsibility for securing foreign loans. The four companies submitted their estimated cost in October 1968, and the KEPCO chose Westinghouse as a principle contractor after three months of review. 15 The following negotiations with Westinghouse did not go smooth because of the two parties disagreement on how to set up cost of construction. The South Korean government preferred maintaining fixed cost of construction until the construction of a plant was completed whereas Westinghouse requested a yearly increase of construction cost 5-6 % considering inflation rate. In the end, the two parties compromised on a maximum cap for price increase ($6,750,000) which was virtually a yearly increase of 2 %. Furthermore, the KEPCO secured a loan of $175,000,000 in total from the U.S. Export-Import Bank. South Korea s first commercial nuclear power plant (Kori-I) was finally opened up in July 1978, which made South Korea the 21 st countries having a nuclear power plant in the world. 16 Insufficient energy sources, increasing domestic energy consumption, and rising oil prices played significant roles for South Korea to develop nuclear energy industry in the 1970s. Korean leadership s decision to acquire relevant technology and facilities to produce nuclear energy reflected its strategy to diversify energy supplies and to meet growing domestic demand of electricity to a certain extent. However, the development of a nuclear energy industry cannot be merely explained by economic conditions. As nuclear technology for a peaceful purpose can be relatively easily convertible to military uses, the motivation of a certain government which wants to embark on nuclear energy projects needs to be carefully researched through both economic and geopolitical/security factors. Notably, in the late 1960s and the early-mid 1970s, South Korea pursued a military option of developing its own nuclear weapons. Thus, it is not surprising that Seoul started its civil nuclear programs along with its covert weapons program almost at the same period. 15 Ibid., Ibid.,

9 The origin of the South Korean nuclear weapons program designated as Project 890 goes back to the late 1960s. Despite this heavy military dependency on the U.S. and sufficient nuclear deterrence offered by the U.S., South Korea tried to develop its own nuclear weapons against the will of its patron state. What factors drove President Park Chung Hee into the forbidden nuclear path? It does not appear that North Korean aggression in the late 1960s was the main driver of South Korean nuclear ambitions because the South could have built up its conventional military power to deter the North that had the upper hand in conventional warfare at that time. Moreover, Seoul had already retained the U.S. tactical nuclear weapons in its territory since the 1950s, and Pyongyang allegedly started its nuclear weapons program later in the 1980s. Thus, the Project 890 would have been a very costly and unnecessary project if its sole purpose had been deterring stronger conventional forces of North Korea or preventing nuclear endeavor of Kim Il Sung which was not fullfledged in the 1970s. More compelling explanations of South Korea nuclear pursuit in the 1970s come from the troubled U.S.-ROK relationship after Richard Nixon took power. Since the late 1960s, North Korean provocations further escalated along the DMZ, and what was worse, they attempted to assassinate President Park by dispatching a commando unit to Seoul in January Unlike South Korea s resentment and urge for revenge, the U.S. government did not want to escalate the North-South tension in the peninsula. U.S. Ambassador Porter told President Park that the U.S. would not retaliate and any South Korean attempts at retribution would meet with strong U.S. opposition. 17 Moreover, the Nixon Doctrine of July 1969 led the U.S. allies to be more concerned about their own security since the core of President Nixon s announcement was that U.S. allies should assume primary responsibility of their own defense.16 The Nixon administration s new foreign policy was to increasingly disengage the U.S. from the Vietnam War and to normalize its relationship with China. Primary targeted for Asia, the main rationale behind this doctrine was to avoid the entanglement of U.S. ground troops in future wars on the Asian mainland. 18 It was announced without any prior consultation with 17 Victor Cha, Alignment Despite Antagonism: The United States-Korea-Japan Security Triangle ( : Stanford University Press, 2000): Cha, Alignment Despite Antagonism, 61. 9

10 South Korea, which resulted in a deep disappointment and resentment from Seoul as well as other U.S. allies in the region. As a result, the relationships of the U.S. with South Korea entered into a new phase of mutual mistrust. The initial action of the U.S. was caused by its concerns about being entrapped in regional conflicts and bilateral alliance relationships. This U.S. action led to anxious reactions by South Korea, who was worried about the possibility of being abandoned by its patron. This anxiety became a reality before long. In 1971, President Nixon withdrew one combat division of U.S. forces from South Korea, which meant the removal of almost one third of U.S. soldiers deployed in South Korea - 20,000 out of 63,000 soldiers. 19 According to a report written in 1978 by the U.S. Central Intelligence Agency (CIA), the South Korean Cabinet started early discussions concerning a nuclear weapons program in the beginning of It is unclear though when exactly President Park ordered research into the possibility of developing nuclear weapons mainly due to the lack of official documents directly related to his decision. Judging from the U.S. documents and interviews of former officials having worked for Park though, he seemed to have become interested in the nuclear weapons program from the early 1970s at the latest. This was much earlier than December 1974, the time when, according to the CIA report, Park authorized the nuclear weapons design element of Project Park instructed Oh Won-chul the second senior secretary for economic affairs in the presidential office during the Park administration to develop guided missiles, and then Oh consulted with the Ministry of Defense about establishing a research planning team. 22 Oh recently mentioned in an interview with a weekly magazine in South Korea that at the beginning of 1972 Park ordered to acquire necessary technology for nuclear weapons which were inevitable to maintain peace on the 19 U.S. Department of State, Foreign Relations of the United States (FRUS) , Vol. XIX, Part 1, Korea (Washington: U.S. Government Printing Office, 2010): National Foreign Assessment Center, US Central Intelligence Agency (CIA), South Korea: National Developments and Strategic Decisionmaking, DOC , June 1978 (declassified for release, October 2005), 11. Available at 21 CIA, South Korea, Jeong-ryum Kim, Ah, Park Chung-hee: Kim Jeong-ryum Jeongchi hoegorok [Ah, Park Chung-hee: Political Memoires of Jeong-ryum Kim] (Seoul: Joongang M&B, 1997),

11 peninsula. 23 Additionally, the WEC reportedly adopted the decision to pursue a nuclear weapons capability unanimously in the early 1970s. 24 Following this decision, the Park administration embarked on a series of processes aimed at acquiring nuclear-related technology and facilities. These endeavors were covered by South Korea s interests in fuel cycle research and a civil nuclear cooperation with nuclear suppliers. However, the South Korean government s focus on acquiring reprocessing technology demonstrates that its real interest did not remain only in the field of nuclear energy. South Korea had already made contracts with the United States which would provide light-water reactors with enriched uranium, so it would not have been necessary to acquire reprocessing facilities if Seoul s only purpose had been to generate electricity. In 1972, South Korea s Minister of Science and Technology was dispatched to France and Britain for consultation on the issue of future technical cooperation in the field of reprocessing. Then in 1973, South Korea signed a contract with a French nuclear engineering company, Saint Gobain Technique Nouvelle (SGN), for the theoretical design of the reprocessing facility. 25 In September 1974, South Korea also signed another contract with Belgonucleaire (BN) of Belgium to purchase a mixed oxide fuel reprocessing laboratory. However, the South Korean government did not limit its technical consultations to France and Belgium. In addition to a visit by Weapons Exploitation Committee members to Israel, France, Norway and Switzerland in 1972, Korean scientists also visited India and Taiwan to consult on technical issues related to the operation of the NRX (National Research experimental) reactor which the South Korean government considered importing from Canada. Alongside this, a certain number of ethnic Korean scientists who had been educated and worked abroad were invited to South Korea for the purpose of improving its reprocessing capability. 26 With the inflow of new scientists, Project 890 took shape basing its structure on strict compartmentation of three divided teams; the design team, the 23 The Interview with Oh Won-chul, Weekly Chosun, Vol. 2089, January 12, 2010, available at 24 U.S. House, Subcommittee on International Organization, Investigation of Korean-American Relations (Washington, D.C.: US Government Printing Office, October 1978), Leonard S. Spector, Nuclear Proliferation Today (New York: Vintage Books, 1984), 341, cited in Kim, The South Korean Case, Seung-Young Kim, Security, Nationalism and the Pursuit of Nuclear Weapons and Missiles: The South Korean Case, , Diplomacy & Statecraft, Vol.12, No.4 (December 2001),

12 chemical warhead team and the missile team. 27 Not much information, however, has been declassified concerning the progress of the research itself so the full extent of the project today remains a mystery. The 1950s and 1960s were remarkable periods in history of nuclear energy industry. In 1951, the Soviet Union built the world-first 5,000 kw nuclear reactor which supplied electricity to ordinary people in Obninsk. Five years later, the United Kingdom succeeded in operating Calderhall nuclear power plant (50,000 kw, Gas Cooled Reactor) followed by the U.S. construction of the 60,000 kw Shippingport nuclear power plant (PWR) in West Germany started operating the first nuclear power plant (200,000 kw, BWR) in 1959, and Canada also joined this group of nuclear energy producers by managing to operate a 250,000 kw PHWR-type CANDU nuclear power plant in The competition in developing new types of nuclear reactor led to nuclear suppliers pursuit to expand overseas market for nuclear energy by looking for new customers in the late 1960s and early 1970s. 29 This competition enabled nuclear customers like South Korea to become less rely on one dominant supplier (the U.S.) and to rather seek alternative ways to pursue nuclear technology for both civil and military purposes. South Korea s interests in Canadian CANDU and NRX reactors from the early 1970s were also partly influenced by its military ambitions. These heavy-water reactor designs were desirable for South Korea because it could run on natural uranium fuel which was comparatively easy to obtain. However, CANDU reactors can be also refueled while in operation as well so that they could be more easily used to clandestinely produce weapons usable plutonium. The Indian detonation of a nuclear device in May 1974 using a Canadian NRX with heavy water offered by the United States reveals this proliferation-friendly characteristic of Canadian heavy-water reactors. When the Korean government selected a contractor for its first commercial nuclear power plant in 1968, a heavy-water reactor like CANDU was not an option to have been considered from the beginning. South Korea s priority was on other reactor types such as BWR, PWR, or AGR as mentioned earlier. Thus, it 27 CIA, South Korea, The Korean Nuclear Society,

13 is notable that South Korea s new interests in heavy-water reactors happened to be overlapping with President Park s launch of Project 890 in terms of timing. Furthermore, If South Korea had adhered to U.S.-supplied light-water reactors, the safeguards applied to enriched uranium fuel provided by the United States would have made it more difficult for South Korea to clandestinely use it for non-peaceful purposes. South Korea was negotiating with Canada to purchase Canadian heavy-water reactors from 1973, and the ROK-Canada Nuclear Cooperation Agreement (NCA) was a precondition for the Korean government to receive Canadian loans for its nuclear reactor sales. After India tested its first nuclear device in May 1974, using plutonium generated by a Canadian-built reactor, Canada sought to insert stricter terms in its ongoing NCA negotiations with South Korea. Despite significant opposition to these new stipulations, South Korea acquiesced in large measure because they were eager to import an NRX (National Research Experimental Research Reactor) as well as a CANDU reactor from Canada as promptly as possible. One of the most significant concessions by Seoul was that they decided to ratify the NPT under Canadian pressure which linked its nuclear reactor sales to South Korea s full membership in the multilateral nuclear non-proliferation regime. 30 Canadian loans [will be added] The U.S. Ford Administration strengthened its pressure to stop the South Korean nuclear program from Even though it is not clear whether the Indian nuclear test in 1974 had an effect on the firm decision of the US to curb the nuclear ambition of the South Korean government, the application of outright pressure by the US undeniably emerged after India successfully detonated its nuclear devices. Since then, the Ford administration utilized every possible security and economic means to prevent South Korea from retaining any useful technology and facility related to nuclear weapons. They succeeded in dissuading Canada, France, Belgium from delivering reprocessing-related technologies and equipment to Korea, and also threatened to withhold Export-Import Bank financing of 30 13

14 $292 million for the Kori 2 nuclear power plant. More notably, in late 1975, Kissinger sent Assistant Secretary of State, Phillip Habib, to President Park in order to threaten that the U.S. would withdraw its security commitment to South Korea. 31 According to the CIA, Park eventually ordered his officials to suspend Project 890 in late December This decision in 1976 was not the end of the South Korean nuclear program as indicated by Park s message to acquire the capability, but in a manner not inviting foreign pressure. 33 In December 1976, the South Korean government started a new plan to learn nuclear reprocessing technologies. It established the Korea Nuclear Fuel Development Institute and sent elite researchers to European countries. 34 As a measure to create a substitute for the Canadian NRX reactor, South Korea pursued development of an indigenous reactor and finished a detailed design in Furthermore, the Korea Institute of Science and Technology allegedly made yellowcake by refining local uranium. Park s nuclear program in the late 1970s was, therefore, a nuclear policy with a dual purpose. One purpose was to acquire sufficient civilian nuclear energy and the other was to acquire the capability of producing nuclear weapons in case of emergency. 36 In Levite s term, this dual-purpose policy could also be called nuclear hedging which means a national strategy lying between nuclear pursuit and nuclear rollback. 37 After Park was assassinated in 1979, General Chun Doo-hwan seized power by a military coup in Eventually, this dualpurpose nuclear program was suspended by General Chun because he was desperate to win recognition and support from the Reagan administration. In 1981, he consequently downsized and put an end to research institutes related to nuclear weapons and missile development programs inherited from the Park era Kim, The South Korean Case, 63 & CIA, South Korea, Cited from Won-chul Oh, Park Chug-heewa Kateoui Hyultu [Bloody Fight Between Park and Carter], ShinDongA (November 1994), Byung-won Min, 1970 nyundae hooban hankukui anboweekeewha haekgaebal [Security Crisis of South Korea and Nuclear Weapons Development in the Late 1970s], Hankuk-jeongch-ioekyosa-nonchong, Vol.26, No.1 (2004), Kim, The South Korean Case, Min, Security Crisis, Ariel E. Levite, Never Say Never Again: Nuclear Reversal Revisited. International Security, Vol.27, No.3 (Winter, ), Peter Hayes and Chung-in Moon, Park Chung Hee, the CIA, and the Bomb, Global Asia, Vol.3, No.3 (Fall 2011), accessed December 11, 2012, Moon.html. 14

15 South Korea s aspirations for a nuclear energy power never ceased in spite of its decision to reverse the nuclear paths for weapons. From the beginning of its nuclear industrialization, South Korea was not content with turnkey nuclear reactors offered by the U.S. Westinghouse and Atomic Energy Canada Limited (AECL). Thus, the Korean government made an effort to participate in any architecture engineering work by adopting a nonturnkey approach, and successfully joined the whole process of architecture engineering works in the 10 th and 11 th nuclear projects. 39 Based on the joint projects with Combustion Engineering, South Korea constructed several KSNPs (Korean Standardized Nuclear Plant which later changed into OPR-1000) since the 1990s. Recently, it developed APR-1400 (Advanced Power Reactor) independently, and four nuclear reactors of APR-1400 type will be exported to UAE the contract concluded in Conclusion [will be added] APPENDIX Comparison: Japan and South Korea when their first commercial nuclear power plant began operating Japan 1970 South Korea 1978 GDP 75,265,398,416,422 24,944,700,000,000 Gross Capital Formation 29,236,494,600,441 8,227,300,000,000 Source : UN Data, United Nations Statistics Division, 39 Sung and Hong,

16 Nuclear Power Reactors Operating in South Korea Name Type of Reactor Capacity (MWe) Reactor Supplier Commercial Operation Kori 1 PWR 576 Westinghouse (US) Wolsong 1 CANDU 645 AECL (CAN) Kori 2 PWR 639 Westinghouse (US) Kori 3 PWR 1003 Westinghouse (US) Kori 4 PWR 1001 Westinghouse (US) Hanbit 1 PWR 958 Westinghouse (US) Hanbit 2 PWR 953 Westinghouse (US) Hanul 1 PWR 960 Framatome (FR) Hanul 2 PWR 962 Framatome (FR) Hanbit 3 System Hanjung/C-E (ROK/US) Hanbit 4 System Hanjung/C-E (ROK/US) Wolsong 2 CANDU 653 AECL/Hanjung (CAN/ROK) Wolsong 3 CANDU 675 AECL/Hanjung (CAN/ROK) Hanul 3 KSNP 994 Hanjung/C-E (ROK/US) Wolsong 4 CANDU 679 AECL/Hanjung (CAN/ROK) Hanul 4 KSNP 998 Hanjung/C-E (ROK/US) Hanbit 5 KSNP 988 Doosan (ROK) Hanbit 6 KSNP 995 Doosan (ROK) Hanul 5 KSNP 996 Doosan (ROK) Hanul 6 KSNP 996 Doosan (ROK) Shin Kori 1 OPR KHNP/Doosan (ROK) Shin Kori 2 OPR KHNP/Doosan (ROK) Shin Wolsong 1 OPR Doosan (ROK) Total: 23 20,656 PWR: Pressurized Water Reactor (light water reactor) System 80: PWR designed by Combustion Engineering CANDU: Canada Deuterium Uranium reactor (pressurized heavy water reactor) KSNP: (Generation I) Korean Standardized Nuclear Plant OPR-1000: (Generation II) Optimized Power Reactor (a new name of KSNP) APR1400: (Generation III) Advanced Pressurized Reactor 16

17 Nuclear Power Reactors under Construction or Planned in South Korea Name Type of Reactor Capacity (MWe) Reactor Supplier Start Construction Commercial Operation (Expected) Shin Wolsong 2 OPR Doosan (ROK) Shin Kori 3 APR Doosan (ROK) * Shin Kori 4 APR Doosan (ROK) * Shin Hanul 1 APR Doosan (ROK) Shin Hanul 2 APR Doosan (ROK) Shin Kori 5 APR undecided Shin Kori 6 APR undecided Shin Hanul 3 APR undecided Shin Hanul 4 APR undecided Shin Kori 7 APR undecided Shin Kori 8 APR undecided Total under construction: Total planned: *delayed 17