Government urged to reform energy policy

JAKARTA (JP): Noted energy analyst Subroto has called on the government to reform its energy policy to optimize the development of the country's energy resources.

Subroto said Thursday Indonesia could become a net oil importer in 15 to 20 years if the government did not change its energy policy to attract more investment in oil and gas exploration and to boost the use of alternative energy sources, like coal, geothermal and hydropower.

By maximizing the development of these energy sources, Indonesia could delay becoming a net oil importer for several years.

Indonesia has 60 oil and gas basins, including 21 basins in the western part of the nation and 39 basins in the eastern part. The basins contain 48.4 billion barrels of oil resources and 216.8 trillion cubic feet (TCF) of natural gas resources, Subroto said.

Only 35 percent of the oil and gas resources are categorized as proven reserves, including 10.41 billion barrels of oil and 19.03 TCF of natural gas.

He said the country's oil reserves would be depleted in 17 years while the gas reserves would last 33 years, if the government did not attract investors to carry out more exploration especially in the eastern part of Indonesia where most of the oil and gas resources remain unexplored.

Only 14 basins, including 11 basins in the western part of Indonesia and 3 basins in the eastern part have been exploited, Subroto added.

The current production sharing contracts should be reviewed to make it more attractive to investors than those offered by countries like Malaysia, Vietnam, Papua New Guinea, China and others.

Subroto said the review should include a gradual revocation of the state oil and gas company Pertamina's monopoly over oil refineries and fuel distribution in the country.

Indonesia has potential coal resources of 36.6 billion tons, but only 4.6 billion tons are proven, he said.

Bituminous, or high quality, coal accounts for 14.4 percent of the reserve, the sub-bituminous medium quality coal for 26.6 percent and lignite, or low-quality, coal for 58.6 percent.

Lignite coal, which has a high sulfur content, does not sell on the international market but it can be used for power plants.

Subroto said most of the lignite coal was useless due to a Ministry of Environment regulation which forbids the use of coal with a sulfur content higher than 0.3 percent to 0.4 percent.

Subroto called on the government to change the rule saying even the U.S. and Japan allow the use of coal with a sulfur content of up to 0.67 percent.

Indonesia also has a huge hydropower potential to generate 75,000 megawatt, but only 4.3 percent of the potential has been developed, he said.

The country has a 16,000 MW geothermal potential resource, but only about 350 MW has been developed. (jsk)