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Jakarta Post

The risk of losing an important asset — natural gas

Indonesia is one of the most prospective regions in the world for oil and gas resources.

Richard A. Fuller (The Jakarta Post)
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Jakarta
Mon, July 24, 2017

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The risk of losing an important asset — natural gas Environmentally friendly – Two gas company workers check pipelines that channel gas to a PT Indonesia Power generator at a gas metering station in Tambak Lorok, Semarang, Central Java. Jakarta-based energy investment company Risco Energy has signed an agreement with Philippines-based Atlantic, Gulf and Pacific Company (AG&P) to establish a joint venture to develop small and medium liquefied natural gas (LNG) terminals across Indonesia. (JP/Suherdjoko)

T

he increasing role for renewable energy throughout the world is irrefutable. Costs are steadily being lowered and new, hybrid methods are being found to compensate for the lack of 24/7 generating profiles for wind and solar in the power generation process.

However, there are two large questions — when and at what cost will renewables replace hydrocarbons in energy supply? In three to five decades renewables will be the primary source of electricity and used in a number of other energy applications. In essence, this means gas resources that are not developed and utilized in the next 30 to 50 years will remain in the ground and lose any value that could have been realized for the people of Indonesia, who by law, own all natural resources.

Natural gas is the most benign of the hydrocarbons, generating far less CO2 and other pollutants than either fuel oil, diesel oil or coal on a British thermal unit (Btu) basis. Thus, a transition role for natural gas is a “natural.”

Our estimate is that Indonesia stands to lose at least — US$1.1 trillion in economic benefits and another $1 trillion in investor capital in the next 50 years by continuing to pursue oil and gas exploration and production under the historic and current procedures.

The process from discovery to production for natural gas often takes a decade. Thus, an aggressive program promoting the exploration and production of natural gas is an immediate need to prevent this loss of value and to recognize capital efficiency in the transition from natural gas to renewables utilization process.

Many independent reviews of the undiscovered Indonesian petroleum resources, including the United States Geological Service, ranks Indonesia as one of the most prospective regions in the world for oil and gas resources.

Since the modern day beginning of the oil and gas industry under the New Order regime in the late 1960s, Indonesian management and content in industry activities has grown exponentially to where the majority of the key positions and vendor support is now provided by Indonesians.

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