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Could Indonesia really attain power self-sufficiency?
One of the presidential candidates in the US’ long-running election saga stated that they want to see the US being fully independent with its own power resources, which led me to think, could Indonesia attain power self-sufficiency?
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A worker checks Wind Power Plant at Jawa Bali Power Plant Office in Jakarta. Indonesia is developing renewable energy like wind, especially in regions with high velocity wind like in coastal areas. (Antara/Muhammad Adimaja)
T
he following three headlines caught my eye during the past two weeks: “President disappointed with the progress of 35,000 MW project”, “Geothermal development continues to move at snail’s pace” and “Larger cost recovery pool better for the government”.
Let’s deal with the first two headlines briefly as they are interconnected, the President has threatened to transfer 34 stalled projects to the Corruption Eradication Commission (KPK) to be investigated, where The Jakarta Post reported that the development of geothermal energy remains sluggish while interest from oil and gas companies wanes because of continued low crude prices.
Personally, I do not know what is going on, although when I was talking to some “in the know” people this week on the progress of geothermal exploration, there appeared to be personal group and political aspects that were delaying the progress as well as all the other difficulties that are inherent in such a large project.
It should be noted that the House has called on the government to establish a state-owned company specifically focused on geothermal development. Does this mean that geothermal development will be delayed even more?
The amount of changes that have been made in the top positions of the various government departments over the past few months has led to inconsistency, which has to have affected the progress of the 35,000 MW project.
Why can changes not be made as the project continues according to the time frame of the project, it is all leading up to a 10-year delay? A ship must and does continue to sail, irrespective of changes of the captain or crew.
The third headline, written by Pak Yusak Setiawan, is interesting. He states several points, such as “oil and gas exploration is a risky business, and that from 2002 to 2016 nearly US$4 billion was spent in vain by oil and gas companies in Indonesia without finding suitable reserves for commercial production.
I heard recently that a geothermal company had spent $340 million on exploration, all in vain. Something is wrong!
Pak Yusak also stated that during his 22 years of experience in the oil and gas industry most of the exploration projects have had a “Possibility of Success” of less than 20 percent, which means that more than 80 percent of these projects have failed. I was happy to read this, as I have been advocating for quite some time that the worldwide success rate is about 10 to 20 percent; most people have agreed with me on this.
To see this in writing is nice and it is time that this is widely accepted and something needs to be done differently. After all, would a country go to war if they thought they only had a 20 percent chance of victory?
Exploration is known to be a risk, it is accepted as an industry norm that drilling a dry hole is part of the risk, but, with the cost of drilling holes, it should not be the norm — the chance of success has to be increased.
After all, the only people who are happy are the owners of the drilling companies. Do they care if a hole is dry or not? Of course not. The same applies to geothermal exploration where three pilot holes are drilled to ascertain if the potential is commercial or not.
It is very often that the hole is drilled in the wrong location due to a lack of understanding of the subsurface fracturing.
Does a seismic company care if oil or gas is found? Of course not.
Pak Yusak went on to say that more new oil and gas reserves are required to fulfill the demand — this also applies to geothermal and other natural resources — which means more exploration activities are urgently needed and more new investment is necessary. The government will face difficulties to fulfill this.
This statement supports what I have stated in some of my previous opinion pieces and in this opinion piece. It is still maintained that the government must explore to entice investors. It does not matter if the investment is international, government or private.
What matters are the terms and conditions of the investment, the risk is reduced and the cost recovery for the exploration work is reasonable, today it is not.
Finally, Pak Yusak stated that oil and gas companies are often puzzled and upset as to why they need to spend so much time justifying their planned exploration activities, especially the cost part to, the government. It is fair to say, not just oil and gas companies, but all companies that are involved in exploration, such as geothermal, minerals, water, coalbed methane, one has to justify everything, very often to people who do not understand anything about exploration.
One of the presidential candidates in the US’ long-running election saga stated that they want to see the US being fully independent with its own power resources, which led me to think, could Indonesia attain power self-sufficiency?
Possibly — it has on its own doorstep 40 percent of the world’s geothermal resources, it has a number of basins offshore that have potential for oil and gas, it has an abundance of coal that could provide coalbed methane power (it does not have to be burnt), it has hydro power, it has some potential for wind power, it has potential for solar power and recently I heard that tidal power is being looked at with a Scottish company. Therefore the answer is, it probably can. Will it happen?
Is it all about costs, will the risk still be high and will the time taken be long? The answer is yes, unless new ideas that will help to resolve the three headlines are accepted by the political elite, individuals and groups whose job it is to achieve not only the President’s wishes but also many of the citizens of Indonesia who have no say.
Such ideas that could increase the percentage of success and reduce the time and cost.
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The writer, a hydrographic surveyor by background, worked in the Royal Navy for 24 years and has been involved in various projects in Indonesia for the past 22 years.
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