What is the level of public expectation regarding the development of oil and gas fields in the East Sea deep sea? According to a recent opinion poll, the number of citizens who view the possibility as low is more than double those who view it as high. Citizens from Daegu and North Gyeongsang are approximately six times more positive compared to those from Gwangju and Jeolla. While supporters of the Democratic Party have little expectation, about 70% of supporters of the People Power Party are hopeful. Of course, the oil that may be buried somewhere in the sea off Pohang does not concern itself with such public opinion.

“Collect data, not just opinions!” This recommendation is a nagging reminder that everyone preparing for startup entrepreneurship or launching new business ventures hears so frequently that their ears bleed. The bible of business idea validation strategies, The Law of Unbeatable Ideas, states this: “90% of new businesses fail. To succeed, you must quickly and affordably validate whether it has the potential before investing significant resources.” This advice is a universal principle that applies to all types of businesses.

If launching a new business for the country could lead to enormous costs in case of failure, this principle is even more critical. Therefore, during President Yoon Suk-yeol's national briefing, where he stated, “There is a high likelihood of oil and gas deposits in the sea off Pohang,” the word we should perk up our ears for is “verification.” The president clearly mentioned that he had “gone through verification with leading research institutions and experts,” and “now it is time to move to the exploration drilling stage to confirm whether there is actually oil and gas present and what the actual deposit size is.”

Science first establishes a hypothesis. Then, it verifies through data whether the hypothesis is correct or incorrect, and how likely it is to be true. Of course, it is preferable for this data to be as unbiased as possible. The first step in reducing bias is to make the verification process a bit more objective. There are many aspects that can be verified, either directly or indirectly, even at a common-sense level. For example, whether Mr. Abreu from Actgeo is an authority in the field, whether other experts generally accept the basis for the “20% success possibility,” or whether Actgeo possesses the expertise, performance, and scale to make such judgments. This is also a point of interest for domestic media.

However, the data for such verification carries different weights. In other words, some data is decisive. And this decisive verification data usually comes from those taking risks. Expecting thorough verification from people who are not at risk is irrational. Let’s consider it from Mr. Abreu's perspective. His positive interpretation regarding the possibility of deposits does not pose any risk to him. He claimed to have “recognized at first glance” that the East Sea deep sea is a good environment for oil. He also stated, “It’s something to celebrate; I don’t understand why it’s controversial.” Would he have any risk for making such a statement?

The problem lies with our government. We should have reasonably questioned Actgeo's positive interpretation. This is because Woodside, an Australian energy company that has been jointly exploring the Yeongil Bay area with the Korea National Oil Corporation for the past 15 years, concluded in 2022 that there was “no prospect” and even returned its 50% stake to withdraw. The company that took the risk, Woodside, withdrew, while Actgeo, providing the narrative the public wants to hear, entered without any challenge. Honestly, how much can we trust the decision-making of those who do not take risks?

This does not mean that consulting is unnecessary. It suggests that we should refer to opinions from consultants who have no risk to their judgments within reasonable limits. The larger issue is that in this current controversy, it appears that the only party bearing the risk is the public. Perhaps the government, which brings hope of becoming an oil-producing nation, may feel secretly pleased. Ultimately, all the burden of risk due to loose verification falls on the public. This echoes the situation with the state-led initiatives of previous governments (such as the Four Major Rivers Project, nuclear phase-out policy, etc.).

One of the fastest ways to turn a sluggish preliminary entrepreneur into a real entrepreneur is to encourage them to start with their own money. Only then will they thoroughly verify and take great risks for success. Isn’t national management the same? A new business that no one is willing to risk on, that might as well succeed but is fine if it doesn’t, cannot give dreams to the public.