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Aligning Oil and Gas Law revision with Energy Law
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Illustration of oil and gas industry. (Shutterstock/File)
L
aw No. 30/2007, or the Energy Law, is the legal basis of Indonesia’s energy policies both in the main upstream and downstream sectors. The law includes the normative recognition and regulation of energy as the means for economic activities and national resilience.
As for the upstream sector, this law covers both nonrenewable energy such as hydrocarbons (oil, gas, or coal), and renewable energy such as nuclear, geothermal, solar, wind and hydro.
In the downstream sector, the Energy Law regulates the management of energy, including the supply, utilization and operation, in a fair, sustainable, rational, optimized and integrated manner. This law also broadly governs energy regulation, energy buffer reserves and energy prices, and created a new institution called the National Energy Council (DEN). The main task of DEN is to design and formulate national energy policies to be endorsed by the government upon the legislature’s approval.
Government Regulation No. 79/2014 concerning national energy policy transforms the paradigm on energy as the main income to finance development. The messages from the national energy policy are firmly asserted. Firstly, energy independence and resilience shall be achieved by making energy the national development resource. Secondly, energy utilization shall be optimized for national economic development, domestic value adding and manpower absorption.
