Previously Oil Boom Was Fired Economy Indonesia, Now Domestic Oil Well No Longer Can Spew Millions of Barrels per Day

By : Arya Mandala And Aldo Bella Putra | Sunday, April 01 2018 - 14:00 IWST

Ilustrasi Migas (ist)
Ilustrasi Migas (ist)

INDUSTRY.co.id - Jakarta, the reserves of fossil-based energy sources continue to show a decline in reserve levels, amid high energy consumption in the community.

The government also has a strategy to get around by improving new and renewable energy mix (EBT) in the national energy consumption in the future. Business is not easy, but not impossible.

It is an undeniable fact that energy has a very important role in supporting national development, both as raw material for the industrial sector and as fuel for the development propulsion sectors.

For decades, Indonesia is one of the countries with considerable oil fuel production, so it has been a petroleum exporter and has been a member of the Organization of the Petroleum Exporting Countries (OPEC) since 1962.

Petroleum is also a source of raw materials of primary energy in Indonesia is quite abundant.

Foreign exchange derived from crude oil production in the country was briefly inflated.

Following the first Oil Boom in 1973-1974 when world oil prices jumped from US $ 1.67 per barrel in 1970 to US $ 11.70 per barrel in 1973- 1974 period following the oil crisis as a result of action boycott of OPEC countries in the Middle East region in conflict with Israel.

The next five years the second Oil Boom occurred when the price of oil that had reached US $ 15.65 per barrel in 1979 was boosted again to US $ 29.50 per barrel in 1980, and continued to jump to US $ 35.00 per barrel in the year period 1981 - 1982.

Again this Oil Boom was triggered by the war crisis in the Middle East region between Iran and Iraq.

The golden age for the world oil producers had very positive implications for the Indonesian economy in the period 1973 - 1982.

At that time, the overall value of Indonesian exports at the beginning of the first Five Year Development Plan (I) of US $ 1 billion increased to US $ 3.6 billion at the end of the Pelita I period.

Next in Pelita II, export value was recorded at US $ 7.1 billion and increased to US $ 11.3 billion at the end of Pelita II.

The peak value of Indonesia's exports in the Oil Boom period reached US $ 23.6 billion in the fiscal year 1981/1982.

Such was the romanticism of Oil Boom that had tasted the Indonesian economy. Quite different from today's story, when domestic oil wells are no longer able to spew out millions of barrels a day.

With a production range of 700,000 barrels per day, Indonesia is no longer an exporting country, but a crude importing country.

Imports should be done given that petroleum still accounts for 46% of primary energy needs, out of a total energy consumption of Million Tons of Oil Equivalent (MTOE).

Instead of exporting a net importer pushed Indonesia out of OPEC.

In 2015 Indonesia had time to rejoin, but soon decided to suspend its membership because it did not want to follow the policy of cutting production in 2016 ago.

So far the public is still not worried that Indonesia will run out of primary raw materials, because after the oil began to decline in production, Indonesia is still storing gas and coal reserves are quite abundant.

In fact most of the power plants owned by PT Perusahaan Listrik Negara (Persero) depend on coal.

If you look at the total domestic energy demand in 2015 of 116 MTOE, coal becomes the second largest energy contributor with a composition of 26%, followed by gas by 23% while the contribution of renewable energy is still very minimal, ie at 5%.

Yet if we look at the history of using petroleum as primary energy in Indonesia in the past, it has become a necessity that fossil-based energy resources such as coal and gas would be potentially depleted.

Fossil Energy Sources Depletion Continues to Drop

National oil and gas production in fact continues to decline as the number of depleting reserves and lack of exploration activities.

Launched data from the Ministry of Energy and Mineral Resources (ESDM), the proven oil reserves of 3.6 billion barrels with a production rate of 288 million barrels per year is expected to expire in 12 years.

While the gas reserves of 98 trillion cubic feet (tcf) will be exhausted in 33 years ahead if the average annual production of 3 tcf.

Meanwhile, the amount of proven coal reserves in the earth's stomach of the country of 32.4 billion tons is estimated to be exhausted within the next 82 years if it continues to produce 393 million tons per year.

If the dependence of national energy consumption is very high on fossil energy continues to be maintained, it is not impossible Indonesia will fall into the abyss of energy deficit.

The growth of energy consumption, especially oil and gas is not followed by increased production, while the demand for fuel continues to increase, and will force the industry players to import with the number that will continue to grow.

So opening up greater exposure to renewable energy resource management becomes a necessity for the community.

The best solution for future energy needs of course is by boosting the development of renewable energy (ET).

In addition to environmentally friendly, renewable energy can also bring Indonesia to endurance and energy independence considering Indonesia has a source of renewable energy and renewable energy.

Indonesian Vice President Jusuf Kalla said on one occasion that the electricity demand in Indonesia is getting bigger and higher while the fossil and coal resources are limited so that renewable energy sources must be developed.

"How to increase energy with a cleaner more developed and other 'renewable' technologies will be more efficient," said Jusuf Kalla.

Jusuf Kalla said Indonesia has great potential in developing renewable energy.

For the development of geothermal energy for example, Indonesia has many volcanoes that can be utilized for geothermal energy sources.

"Indonesia has a good capacity God is always fair, high risk but many benefits we have many volcanoes means a lot of geothermal potential," he added.

Previously President Joko Widodo has also asserted that the government will encourage the development of power plants that use fuel that comes from renewable energy.

"I also realize that we are not dependent on energy from natural resources, petroleum, or coal, but it will eventually run out because it cannot be renewed," he said.

"Because our country is a tropical country and the sun is shining all year round, this is what we should use," he added.

Still according to the President, the government has begun deploying power plants that utilize the potential of local natural resources, although still on a small scale.

He also mentioned that it has assigned the relevant ministries to build small-scale solar power plant (PLTS) in order to electrify areas in Papua that are difficult to reach electricity transmission.

"I have given the target to the Minister of Energy and Mineral Resources for villages that are difficult to reach by electricity transmission, it will be given by PLTS," he said.

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