Govt caves in to coal blackmail
Jero Wacik: Energy and Mineral Resources Minister (JP/Ricky Yudhistira)Governors in Kalimantan have shown their enormous power after the government caved in to their demand to supply more fuel following a massive blockade of a major coal transport route.
Energy and Mineral Resources Minister Jero Wacik told reporters on Monday that the government would add to the supply of non-subsidized fuels as an emergency response to the blockade at the Barito River in South Kalimantan.
However, Jero said, those behind the blockade would be prosecuted for meddling with national energy security.
Jero said he had consulted with four governors in Kalimantan and told them that the blockade could be perceived as a direct result of their previous threat against the central government.
The governors — Awang Faroek Ishak of East Kalimantan, Rudy Arifin of South Kalimantan, Teras Narang of Central Kalimantan and Cornelis MH of West Kalimantan — and other regional representatives previously sent a petition to the ministry threatening to terminate coal supplies from Kalimantan if subsidized-fuel allocations were not raised.
The petition was also sent to upstream oil and gas regulator BPMigas and to the House of Representatives.
According to the Ministry, Indonesia has an estimated 21.13 billion tons of coal reserves nationwide, and 83 percent of its proven reserves are in Kalimantan. The island is also the world’s largest exporter of thermal coal for power plants.
The nation’s coal production topped 371 million tons last year, up 34.4 percent over 2010.
In their petition, the governors demanded that the House increase this year’s quota to 3.46 million kiloliters, up 27.8 percent from 2.71 million kiloliters set in the 2012 revised state budget.
Before the governors could execute their threat, hundreds of activists started the blockade using small boats on Saturday.
The activists claimed to represent the interests of the people of Kalimantan who opposed the systematic exploitation of the central government. One of the nation’s most prominent environment activist groups, the Indonesian Forum for the Environment (Walhi), also took part in the blockade.
“Our motivation is driven by our concern toward the unfair distribution of energy resources — fuel and electricity — in South Kalimantan. We want the locals to have the utmost authority over their region’s natural resources,” Walhi member Berry Furqon said.
Jero said he would continue to discuss with the governors about how to end the blockade.
“With the blockade, the provinces lose a source of revenue. The disruption of coal deliveries will also cause blackouts in Java and other islands nationwide because coal-fired power plants will not get a sufficient supply,” Jero said.
Any decision to raise subsidized-fuel allocations should be approved by the House, which would take time as it would require an amendment to the state budget law. In the meantime, the central government would raise the non-subsidized fuel allocation, Jero said.
Separately, state power utility PT Perusahaan Listrik Negara (PLN) coal division head Helmi Najamudin said that for the time being the blockade would have no impact on PLN’s operations as the company had coal stocks sufficient for around 25 days.
“If the blockade goes on for the longer term, there will be massive blackouts in Java,” he said.
Satya W Yudha, a lawmaker on of House Commission VII overseeing energy, natural mineral resources, research and technology, and the environment, said that the governors had to produce verifiable data to support their argument for a larger fuel allocation.
“What really happened in Kalimantan is not just about subsidized-fuel scarcity but also about the misuse of the commodity. Most of the subsidized-fuel allocations in that region are being smuggled or are consumed by industries that are supposedly using non-subsidized fuels,” Satya said.
University of Indonesia energy expert Kurtubi, however, refused to blame industrial and mining companies for the chaotic situation in Kalimantan and instead pushed the central government to fulfill the demands of regional leaders for more subsidized fuel.
“Our quota policy is basically flawed. We set a quota of 40 million kiloliters for subsidized-fuel consumption this year but at the same time, we forgot that our quota last year exceeded 40 million kiloliters,” Kurtubi said.
Source: Geology Agency