Krisis Energi (English)

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OVERCOMING THE ENERGY CRISIS IN INDONESIA

By: Prof. Machmud Hasjim

ABSTRACT The Almighty God, Allah, has created man as the Caliph on earth, which has thetask, among others, participated prosperous of the world and all its contents.Therefore, all existing natural resources provided by HIM have to be regulated / managed well and wisely for the welfare. Among these natural resources areenergy resources. The existences of energy resources, both renewable and un-renewable, have to be well planned and managed due to the reserves limitationsnationally as well as worldwide. Due to population growth which requires more

food and clean water, the consequences will also require more energy as well.Therefore, to overcome the possible of energy crises in the future, we need aharmonic national and regional strategy in managing energy in

Indonesia.Presidential Regulation No. 5 Year 2006, can be used as the main basis for preparing concrete steps in consumption of energy in four main sectors, namelyindustry, transport, household and commercial, taking into account existing energyresources and technology to fulfill the Vision of National Energy Policy.

Keywords: Energy Resources, Energy Management, Energy Crisis

A. INTRODUCTION Thanks to the grace of God Almighty, Allah who created men with his

life-necessaries such as land, water and air. In land and water, He has given thenatural resources that are renewable and un-renewable. All of which requirescience and technology, skills and wise attitudes to manage it, to humanwelfare, as a sign of gratitude to Him.

Natural resources which include energy resources have to be exploredin order to know the size, quality and the location of these reserves. Everyhuman activity requires energy; in general there are at least four sectors inenergy usage, namely the industrial, transport, households, and commercialsector. Fossil energy, energy that can not be renewed in three decades (until2030) will still dominate the energy mix in national consumption.

National energy demand is increasing, along with the increasing of population, development, and economic growth. Type of primary energy thatmost dominant used is crude oil (including fuel oil). On the other hand, thenational petroleum production and reserve in recent years tended to decrease.Even the Government has decided to resign from the Organization of Petroleum Exporting Countries (OPEC). In addition, lately the crude oil pricefluctuates, rising and falling sharply.

The energy crisis is not only experienced by Indonesia, but in generalthis crisis has become the attention of the world. At the end of year 2007,

proved reserves to production ratio of crude oil showed that the oil can onlysurvive as long as 41.6 years. This is to be anticipated, considering the world

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oil consumption increased by approximately 1.1% (2006-2007). With thiscondition, future energy resources will relies on natural gas (60.3 years) andcoal (133 years). The lifetime in the future will be shorter because of gasconsumption increased by 3.1% (2006-2007) and coal consumption increased

by 4.5% (2006-2007).In Indonesia, the Government has switched the fuel subsidy to the form

of subsidies that directly perceived by the middle-and-lower people (eg in theform of direct cash assistance, education, health and so on). As one effort tosolve the energy crisis, the Government has decided to reduce the dominationof petroleum in the national energy mix. In Presidential Regulation No. 5 Year 2006 stipulated share of crude oil will be gradually reduced (from 51.66% in2006 to 20% in 2025) by developing non-petroleum energy utilization. In theregulation, it can be seen that the development of new and renewable energyhas become one focus of energy utilization in the future, by setting a targetshare of 4.43% (2006) to 17% (2025).

Efforts to overcome the energy crisis, among others, with theintensification and conservation of energy resources and the development of the utilization of non-petroleum energy resources, whether coal, natural gas andnew and renewable energy. New and renewable energy development should bewell planned, considering that the existence and characteristics of new andrenewable energy is specific in each area. Besides the required level of technology is also highly varied, ranging from the simple technology to thehighly complex. For that, the optimal development strategy is needed so thatdevelopment of new and renewable energy can be carried out in accordance tolocal conditions (availability, technology development, the possibility of itsapplication) so that it can bring benefits at the local, regional and nationallevels.

B. THE ENERGY RESERVES1. World Fossil Energy

a. Petroleum World's proven oil reserves at the end of 2007 amounted to

1237.9 billion barrels scattered in the 69.3 billion barrels of NorthAmerica, South and Central America 111.2 billion barrels, Europe andEurasia 143.7 billion barrels, the Middle East 755.3 billion barrels,

117.5 billion barrels of Africa, and Asia Pacific 40.8 billion barrels(Figure 1). With the discovery of the location of new oil reserves, theworld's oil reserves continued to increase from 910.2 billion barrels in1987 to 1069.3 billion barrels in 1997 and 1237.9 billion barrels in2007.

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Figure 1Proven World Oil Reserves in 2007 (billion barrels)

b. Natural GasWorld's proven gas reserves at year end 2007 amounted to

177.36 trillion cubic meters, the largest reserves is in the Middle East 41.3% and Europe and Eurasia 33.5% (Figure 2). History hasrecorded an increase in natural gas proven reserves of 106.86 trillion

cubic meters in 1987 to 146.46 trillion cubic meters in 1997 andincreased to 177.36 trillion cubic meters in 2007.

Figure 2Proven World Gas Reserves 2007 (Trillion Cubic Meters)

c. Coal

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World's proven coal reserves at the end of 2007 reached847.49 billion tons consisting of anthracite and bituminous 430.90

billion tons and sub-bituminous and lignite 416.59 billion tons.Location that have the largest reserves are Europe and Eurasia at

272.25 billion tonnes (32.1%) and followed by Asia-Pacific regionwith 257.47 billion tonnes of reserves (30.4%) and North America250.51 billion tonnes (29.6 %), the rest are in Africa, South andCentral America and the Middle East (Figure 3).

Figure 3World Proven Reserves of Coal in 2007 (Billion Tons)

2. Indonesian Fossil Energy Reservesa. Petroleum

Areas that have large petroleum reserves in Indonesia are Java,Sumatra and Kalimantan. Total proven reserves of petroleum inIndonesia in 2007 are 3.99 billion barrels, or about 0.32% of world

proven reserves.In addition to these proven reserves, Indonesia also has

potential reserves of 4.41 billion barrels. By calculating the provenreserves and potential reserves, then the total reserves of Indonesian

petroleum amounted to 8.40 billion barrels (Figure 4).

b. Natural GasAreas having potency for large natural gas in Indonesia are the

Natuna, Sumatra, Papua, Kalimantan and Java. The total provenreserves of natural gas in Indonesia in 2007 was 106.01 trillion cubicfeet or approximately 1.70% of world proven reserves.

In addition to these proven reserves, Indonesia has potentialreserves of 58.98 trillion cubic feet. By calculating the proven

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reserves and potential reserves, then the total reserves of Indonesiannatural gas amounted to 164.99 trillion cubic feet (Figure 5).

Figure 4Indonesian Petroleum Reserves (Million barrels)

Figure 5Indonesian Natural Gas Reserves (Trillion Cubic Feet)

c. CoalIndonesian coal resources of 93.40 billion tons, consisting of

23.63 billion tonnes of hypothetical resources, 35.20 billion tonnes of

indicated resources, 13.66 billion tonnes of inferred resource and

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20.91 billion tonnes of measured resources. Proven coal reserves of Indonesia amounted to 5.46 billion tons and the possible reserve 6.39

billion tons (Table 1). The coal distribution Indonesia is mainly inKalimantan and Sumatra.

Table 1Indonesian Coal Resources and Reserves

HYPOTHETIC INFERRED INDICATED MEASURED TOTAL PROBABLE PROVENSumatra 20,148.46 13949,28 10,734.67 7,699.17 52,531.58 3,781.44 904.80 Java 5.47 6.65 - 2.09 14.21 - - Kalimantan 3,389.28 21,028.92 2,893.82 13,156.04 40,468.07 2,605.99 4,556.99 Sulawesi - 146.91 33.09 53.10 233.10 - 0.06 Maluku - 2.13 - - 2.13 - - Papua 89.40 64.02 - - 153.42 - -

TOTAL 23,632.61 35,197.91 13,661.59 20,910.39 93,402.51 6,387.43 5,461.79

RESOURCES (million tons) RESERVES (million tons)LOCATION

3. Indonesian New and Renewable Energy ResourcesInstead of fossil energy resources, Indonesia also has new and

renewable energy resources such as water, geothermal, mini / micro hydro, biomass, solar energy, wind energy, uranium and Coal Bed Methane(CBM) in large amounts (Table 2).

Table 2Indonesian New and Renewable Energy Resource

Types Resources Equivalent Value Existing UtilizationHydro 845.00 million BOE 75.67 GW 4.2 GW

Geothermal 219.00 million BOE 27.00 GW 0.8 GWMini/Micro Hydro 0.45 GW 0.45 GW 0.084 GWBiomass 49.81 GW 49.81 GW 0.3 GWSolar - 4.80 kWh/m 2 /day 0.008 GWWind 9.29 GW 9.29 GW 0.0005 GWUranium 24. 112 tonnes

eq 3 GW for 11 years- - - -

C. ENERGY PRODUCTION1. World Energy Production

a. Petroleum World oil production in 2007 amounted to 81.53 million barrels per day, which means a decrease of 0.2% of production in2006 (81.67 million barrels per day). Largest oil producer in theMiddle East region with an average production of 30.8% of world

production, and Europe and Eurasia contributed 22% of the world production (Figure 6).

b. Natural GasWorld's natural gas production in 2007 amounted to 2.94

trillion cubic meters, which means an increase of 2.4% of production

in 2006 (trililun 28.72 cubic meters). Largest gas producer are in

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Europe and Eurasia region with an average production of 36.5% of world production, and North America with a contribution of 26.6% of world production (Figure 7).

Figure 6World Crude Oil Production (Million barrels per day)

Figure 7World Gas Production (Billion Cubic Meters)

c. CoalWorld coal production in 2007 amounted to 3.14 billion tons

of oil equivalent ( 6.40 billion tons of coal), which means an increaseof 3.3% of production in 2006 (3.03 tons of oil equivalent or 6.19

billion tons coal).

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Coal production from 2002 until 2007 showed a rapid increasein a row is 4.85 billion tons, 5.19 billion tons, 5.58 billion tons, 5.90

billion tons, 6.19 billion tons and 6.40 billion tonnes.

Figure 8World Coal Production (Million Tons Oil Equivalent)

d. EthanolIn late of 2007, world ethanol production reached 25.97

million tons of oil equivalents. It is quite encouraging, given that inthe year of 2001 the world ethanol production is only 9.12 milliontons of oil equivalents.

World ethanol production is dominated by the United Stateswith production amounting to 47.7% of world production and the

production of Brazil with 44% of world production.e. Photovoltaik

Until the end of 2006, solar energy which utilized using photovoltaic technology is about 5.70 GW. Most of these solar power plants are located in Germany (50.2%), Japan (30%), and UnitedStates (10.9%).

f. Wind PowerUntil late 2007, the capacity of Wind Power Plant in the world

amounted to 94.0 GW. Most of these wind power plants located in

Germany (23.7%), United States (18%) and Spain (15.7%).

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2. Indonesian Energy Production

National oil production has declined from 549.18 million barrels in1996 to 348.36 million barrels in 2006. In the same period, natural gas

production fluctuated slightly, but in general showed a decline trend from568.28 million to 529.29 million BOE (barrel of oil equifalent). On thecontrary, on the period coal production showed a sharp increase from215.32 million barrels of oil equivalent (BOE) to 743.48 million BOE.

In terms of renewable energy, production development of nationalhydroelectric power in general is relatively constant at around 22 millionBOE, whereas biomass production increased from 209 million BOE in1996 to 322.90 million BOE in the year 2007. Production of GeothermalPower Plant was also increased from 4.58 BOE in 1996 to 7.18 millionBOE in 2006, and had even reached 12.31 million BOE in 2003 (Figure 9).

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1993 1996 1998 2000 2001 2002 2003 2004 2005 2006

JutaSBM

Batubara Mi nyak Bum i Gas Bum i Tenaga Air Geothermal Bi om asa

Figure 9 National Energy Production (Million Barrel of Oil Equivalent)

D. ENERGY CONSUMPTION1. World Energy Consumption

World Energy Consumption in 2007 reached 11.10 billion tons of oil equivalents. Type of energy consumed is still dominated by fossilenergy is 35.61% of crude oil, coal 28.62%, and gas 23.76%. The otherstypes of energy that are nuclear and water energy each less than 10%(Figure 10).

World oil consumption in 2007 reached 85.22 million barrels per day in which 30% are consumed in Asia Pacific and 23.9% are consumed

in the United States. World gas consumption in 2007 reached 2.92 trillion

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cubic meters, mostly consumed in Europe and Eurasia 39.4% UnitedStates 22.6%, and 15.3% Asia Pacific. In the same year, coal consumptionreached 3.18 billion tons of oil equivalents, mostly consumed in AsiaPacific (59.7%) and the United States (18.1%).

Figure 10World Energy Consumption (Million Tons Oil Equivalent)

2. National Energy Consumption National energy consumption in 2005 reached 850 million

barrels of oil equivalent. Kind of energy consumed is still dominated byfossil energy, namely crude oil, natural gas and coal (Fig. 11).

Based on energy user sector, sector of largest energy user arehouseholds and commercial sector, followed by the industrial sector andtransportation sector (Figure 12).

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Figure 11

National Energy Consumption (By Type of Energy)

Figure 12 National Energy Consumption (By Sector)

E. NATIONAL ENERGY POLICY

The Government of Republic of Indonesia has established the General

Policy of Energy Sector in 1981 with four main policies that are intensification,diversification, conservation and indexation. With the passage of time andchanges over time, the policy is kept up to date in 1987, 1991, and 1998.Moreover, in the year 2003 the General Policy of Energy Sector is updatedagain and changed its name to National Energy Policy.

Last in the year 2006 Presidential Regulation No. 5 of 2006 on NationalEnergy Policy was stipulated. In the Presidential Regulation, goals andobjectives of the National Energy Policy are as follows:

The National Energy Policy goal is to direct efforts in realizing the domesticenergy supply security.

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The objectives of the Policy are:a. Achievement of energy elasticity less than 1 (one) in the year 2025

b. Achieving the optimum energy (primary) mix in 2025, namely the share of each type of energy to the national energy consumption:

1. Petroleum to less than 20% (twenty percent).2. Natural gas to more than 30% (thirty percent).3. Coal to more than 33% (thirty three percent).4. Biofuel to more than 5% (five percent).5. Geothermal to more than 5% (five percent).6. Other new and renewable energy, particularly biomass, nuclear,

hydropower, solar, and wind power to more than 5% (five percent).7. Liquefied coal to more than 2% (two percent).

To achieve these objectives of the National Energy Policy, accomplishedthrough two (2) policies: Main Policy and Supporting Policy.

The main policy includes:a. Energy supply through:

1. Guarantee the availability of domestic energy supply;2. Optimization of energy production;3. Implementation of energy conservation;

b. Energy utilization through:1. Efficiency of energy utilization;2. Diversification of energy.

c. Stipulation of the energy pricing policy towards the economical price,taking into account the ability of small businesses, and assistance for impoverished people within a certain timeframe.

d. Preservation of the environment by applying sustainable development principles.

Supporting policy includes:a. Development of energy infrastructure including increasing consumer access

to energy; b. Government and business partnerships;c. Community Development;d. Development of research and development and education and training.

On the Presidential Regulation No.5 / 2006, the energy prices are also provided, as follows:1. Energy prices gradually adjusted until a certain time limit to the economical

price.2. Phasing and adjustment of energy prices should provide optimum impact on

energy diversification.3. Further provisions on energy prices and assistance for impoverished people

to be conducted in accordance with the provisions of legislation.

F. OVERCOMING THE ENERGY CRISIS

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1. National and Regional Energy PolicyTo solve the energy crisis that occurred, local government needs to

follow up the National Energy Policy by establishing Regional EnergyPolicy refers to the policy at the national level. Local governments were

given discretion to set the Regional Energy Policy based on their ownedenergy resources and local conditions. Therefore we need Regional EnergyBoard to construct the Regional Energy Planning.

2. Energy Conservation

In addition to energy policy which is a legal basis for developmentin energy sectors, efforts to overcome the crisis must be conducted by the

performing energy conservation nationally.Conservation is carried out both in the upstream sectors (energy

producers) and downstream (users of energy). In the upstream sector, inmining of energy resources (eg coal) a limits of profit margins should besetted that must be adhered by coal mining practitioners. This is so that thecoal mining perpetrators are not just mine coal near the surface but alsohave to mine to a depth in accordance with the economic limit (stipulated

profit margin) so that more coal could be mined. On the downstream side(users of energy) socializing energy-saving should also be conducted,started from the little things in daily life, for example in the use of household appliances such as televisions, air conditioners, lighting, and soforth.

Habituating to turn off lights, televisions and air conditioning whenrooms are not used is an initial step that must be done, and this requires theactive participation of all parties. The use of sensors will also be helpful inconservation of electricity such as solar light sensor for the lights outsidethe house, infrared sensors for escalator and so forth. In the transportationsector, for example by heating the vehicle engine sufficiently, maintenance

periodically so that no improvident use of fuel and so forth.

3. IntensificationExploration activities need to be continued intensively with the

latest technology in an effort to find new energy resources to ensure theavailability of national energy. Exploration activities, research andtechnological development carried out both for the development of fossil

energy use and non-fossil energy.

4. Development of Various Energy Resourcesa. Petroleum and Gas Sector

Intensification in the oil and gas sector should be done bymean of exploration activities to find out new oil and gas fields aswell as to improve the status of existing reserves to the higher level of geological confidence.

In addition to the discovery of new reserves, effords should beconduct to use the old wells that are no longer in use and abandoned

by applying technology Enhanced Oil Recovery (EOR).

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The implementation of EOR technology will be able to produce oil from oil field that was previously considered to beexhausted and can not be produced anymore.

b. Coal SectorCurrent utilization of coal is mainly as fuel at the Steam Power

Plant and some others industry. Another development of coalutilization is as coal briquette to fulfill energy needs in the householdand small to medium industries sector.

Considering the number of available technologies in coalutilization, it is necessary to develop the application of coalderivatives technology such as Upgrading Brown Coal (UBC) whichwill increase the calorific value of coal which initially categorized aslow rank coal.

By applying this UBC technology, low rank coal which wasnot able to be utilized will be able to be mined and exploitedeconomically. Thus it will increase the availability of national energy.UBC product can be used to supply coal demand for inter-island andexport.

Coal gasification technology has been introduced and carriedout pilot coal gasification for the household sector. With the currentenergy crisis conditions, the results of the pilot should be followed upand developed in order to meet the energy needs in the householdsector and small to medium industries.

Current coal liquefaction technology was not yet entered thecommercial stage, although its technology has been available. It isnecessary to carry out research and development acceleration so it can

be utilized. Coal liquefaction would be useful in providing syntheticoil which is increasingly rare due to the energy crisis.

c. Biofuel SectorBiofuels can be used to meet energy needs in the

transportation sector and industrial sector. Biofuel technology has been proven and has even entered the commercial stage.

Currently, biosolar has already been available in the marketwith a ratio of 10% biofuel and 90% petroleum diesel. By research

and development and cooperation with automotive manufacturers, the percentage of biofuel can be increased (eg up to 50% - 80%) so thatthe portion of oil can be minimized.

With the growth of biodiesel production and consumption, it isimportant to provide the raw material of biodiesel. Therefore we needa policy that ensures the supply of raw material of biodiesel. One waythat can be done is by attempting the cultivation of biofuel rawmaterials in the islands that are uninhabited. This will provide acontinuity of supply of biofuel raw materials.

As the fuel is still new, the use of biofuels should to besocialized continuously to the general public both at national and

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regional levels. This is intended to increase the interest of thecommunity to use the new energy.

d. Other New and Renewable Energy Sector

Developments of other new and renewable energy also need to be implemented in order to guarantee the availability of nationalenergy.

Coal Bed Methane has to be more intensive explored(acceleration) in order to be utilized. Utilization of nuclear energytechnology has been proven in many countries, therefore the use of nuclear energy in Indonesia should continue to be socialized. One waythat can be conducted at an early stage is to build a Nuclear Power Plant (NPP) on an uninhabited island which lies far from the electricuser centers. This is intended to reduce the possibility of civil unrestas well as a test case. After the nuclear power plant operates withoutany feared impact, and then the community will be able to accept anuclear power plant.

Increased use of water energy, solar energy, wind energy, biomass, and biogas is focused to meet local energy needs.

G. CLOSINGIndonesia has large numbers of fossil and non-fossil energy resources. To

overcome the occurring energy crisis, it requires the use of non-fossil energywhich has not been used optimally. To accelerate energy crisis solving,conducive policies at the national level is required to trigger regional performutilization of local energy resource.

Energy development priorities:1. Short-term

Utilization of natural gas to meet the needs of households and industrythrough the development of city gas for natural gas producer region,whereas for non-oil-producer regions use LPG.

Development of coal briquettes, upgraded brown coal (UBC) to meetthe needs of household and industrial sectors.

Development of synthetic coal gas to meet the needs of urban andindustrial gases. The pilot results ever undertaken need to followed up.

Developing the use of biofuel to meet energy needs in the transportationsector and industrial sector. To guarantee continuous of supply of biofuels, raw materials for biofuels should be planted in the islands thathave not been inhabited. This is also a form of utilization of landresources optimally.

Development of biogas utilization focused in farm area. Thus willincrease the local energy availability and reduce environmental impactsimultaneously .

Utilization of geothermal energy needs to be done by means of builtGeothermal Power Plant to meet the electricity demand in industry andhouseholds.

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2. Long Term Intensification needs to be done in oil and gas activities, including

exploration and implementation of Enhanced Oil Recovery technologyon old oil locations that have been abandoned.

Development of synthetic crude oil from coal to meet energy needs inthe transportation and households sector.

Utilization of Coal Bed Methane (CBM) as fuel of small scale gas power plants.

Utilization of nuclear energy to generate electricity to meet energyneeds in the industrial, households and transportation sector.

3. Revitalization of Energy PolicyEnergy policy that has been established has to be periodically

reviewed and adjusted to both at the national and global energy conditions.Consistently implement the national energy mix adjustment on PresidentialRegulation No. 5/2006 for the utilization of coal, gas, and others new andrenewable energy optimally.

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REFERENCES 1. BP Statistical Review of World Energy, June 20082. Data and Information Center, Ministry of Energy and Mineral Resources of

Republic of Indonesia, 20083. Indonesian Coal Book 2008/2009, Indonesian Coal Mining Association, 20084. Directory of Supporting Industry of New and Renewable Energy and Energy

Conservation, Directorate General of Electricity and Energy Development,Ministry of Energy and Mineral Resources of Republic of Indonesia, 2005

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