Letter: After quitting OPEC, what's next?

Wed, 06/04/2008 10:14 AM | Reader's Forum

Indonesia, starting in 2009, is set to quit the Organization of Petroleum Exporting Countries (OPEC). The decision was made during a Cabinet meeting in early March. Such a decision is, to a great extent, not strange as this country has been a net importer of oil since 2004, as a result of the steady decline in its oil production.

The strange thing is, why such a decision was made now, while being a member, Indonesia has to pay Rp 29 billion (US$3.1 million) per year, plus billions of rupiah more for financing government officials who attend OPEC's regular meetings. If such a decision was made four years ago, it could have saved millions of dollars.

As to whether Indonesia will come back to OPEC once the country's oil production reaches a secure level, it has to rethink of its costs and benefits. Many have said that, so far, there has been no benefit gained from being a member. There was no special treatment given to Indonesia once it needed to import oil from other members.

What should the government do now to cope with energy problems? The government has to seriously turn to alternative energy, at least two among the available options.

First, turn to the jathropa plant (jathropa curcus linnaeus). According to Robert Manurung, head of the Biotechnology Research Center at the Bandung Institute of Technology, Indonesia could fulfill its need for diesel oil by growing 10 million hectares of jathropa plant.

He says Indonesia currently has 20 million hectares of unused land that could be used to grow jathropa. Every 1,000 hectares of jathropa plant could produce 10 tons of diesel fuel per day at the cost of only Rp 2,250 (US 40 cents) per liter. If the unused land were grown with jathropa, the national needs would certainly be fulfilled, with extra diesel for export.

Second, solar energy, which is available the whole year across the country. An example can be taken from an advanced country, Germany, which I visited last month.

Apart from having nuclear power plants, Germany also uses solar energy effectively for its own needs. Many offices use solar energy in Germany.

Indonesia can learn from Germany's experience. For sure, by utilizing solar energy effectively in every office, this country would never suffer from fuel and power shortages.

M. RUSDI
Jakarta

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