As an oil-producing country, the world's biggest exporter of coal and (formerly) the biggest exporter of LNG, Indonesia does not have to worry about its energy security.
Unlike many other Asian countries that largely depend on energy imports, we have in this archipelago significant energy reserves: hydrocarbons (oil, gas, coal, etc.) and renewables, including the world's most abundant geothermal potential. Why bother with energy security issues?
To say that our energy situation is secure is surely not correct!
Using the common A4S indicators (availability, affordability, accessibility, acceptability, sustainability) we can assess just how secure our country's energy is.
Our access to electricity and fuel is still among the lowest in Asia. The percentage of households connected to the power grid is a mere 60 to 70 percent, while the rural electrification ratio is about 85 percent, meaning 10,000 rural villages are still in darkness, waiting for electricity.
Power blackouts are common phenomena in many cities, including provincial capitals.
Oil-based fuels (gasoline, diesel and kerosene) are widely available, but not in thousands of scattered small islands, mountainous and isolated areas; whereas many others experience seasonal supply disruptions. Two or three years ago, people had to wait in long lines for kerosene.
Energy services are made available unfairly, with Java (which actually lacks indigenous energy resources) getting far better services than other islands that are really rich in energy resources.
Average Indonesians can afford to pay their (highly subsidized) energy bills, but the affordability of the government to make energy available for a long-term period is questionable, since the government's budget is already loaded with energy subsidies paid to the state-owned energy companies doing oil and electricity delivery jobs.
Regarding acceptability, we still have to accept low quality of fuels, unreliable electricity services and high pollution related to energy production, transmission and consumption.
All those indicators suggest we are far from achieving a good energy security standard.
Other indicators usually applied in detecting energy security are ratio of energy imports, ratio of oil imports (how much comes solely from the Middle East?), and the share of low-carbon or renewable energy in the country's energy mix.
On energy security and resilience, Energy Law No. 30/2007 only mentions (in Articles 5 and 6) that the government is obliged to provide energy buffer reserves and to take any necessary measures in case of an energy crisis (shortage/lack of supply) or energy emergency (supply disruption due to damage to the energy infrastructure/means).
We may pay heed to wider energy security by analyzing along the energy supply chain: from efforts to make primary energy available, to transformation of primary energy into the final form, and the ways we consume energy.
We are lucky that most of our primary energy - except crude oil - can be provided from domestic sources, and that our energy import ratio is among the lowest in East Asia. But this does not mean we do not have any serious problem regarding primary energy supplies, especially in terms of sustainability.
So far, energy resources (coal, as an extreme instance) are exploited uncontrollably with a strong paradigm to serve exports first rather than "my country first", meaning that we prefer to secure other countries' energy security rather than ours. Oil dominates our energy consumption portfolio, while domestic production is less than consumption, meaning our energy cost is vulnerable to oil price hikes.
The Minerals and Coal Mining Law No. 4/2009 states "the Government shall have the authority to set the annual production quantity of any commodity for any province" (Article 5). This is a worthy progress in policy, since for a long time we did not pay significant interest to mineral and energy resources depletion policies, meaning we did not care to use our energy resources for future generation.
While the government (especially at local levels) easily awards mining licenses without paying heed to sustainability, our energy resources are exploited uncontrollably for the sake of making short-term money from exports, rather than worrying about long-term energy security.
In the transformation sector (from primary energy to the final form), we face an energy infrastructure that is insufficient, inefficient and deteriorating.
Our oil refineries' capacity (about 1 million barrels per bay, or bpd) is much less than our consumption of 1.3 to 1.4 million bpd; most of the refineries are also aging. Oil storage and distribution networks are not extensive enough to cover all parts of our archipelago.
Domestic gas infrastructure (transmission, distribution) are far from sufficient; even in Java we have not built an interconnected gas transmission network, not to mention an LNG receiving terminal or natural gas storage plant. Coal infrastructure (terminal, transport system, etc.) are also not adequate.
As for electricity, we face shortages in power generation (aging, need re-powering), deteriorating condition of the JAMALI (Java-Madura-Bali) interconnection, transmission bottlenecks, saturated distribution networks and high losses.
The end point of the energy supply chain is the consumption system; here, our ways of consuming energy (in transportation, industries, etc.) are not efficient enough, making the energy no longer usable nor available for a wider range of consumers.
Our ways of consuming energy - indicated by high energy consumption per GDP - are making our energy security worse, so they need to be changed.
A lot of work needs to be done to improve our energy security.
The writer is an energy planner and economist with the National Development Planning Agency (Bappenas). The opinions expressed are his own.
