Government urged to reform energy policy

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)