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Natural gas optimization and energy security
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Illustration of oil and gas industry. (Shutterstock/File)
I
ndonesia has been a net oil importer since 2004. To fulfill national energy needs, the government imports crude oil and subsidizes the fuel to make it affordable.
However, over the years the subsidy has increased, significantly influencing the fiscal situation. Revenue from the oil and gas sector from 2014 to 2016 shows that of the 1.8 percent contribution oil and gas revenues to the gross domestic product, 1.4 percent is allocated to subsidize fossil fuel production and consumption.
Yet, Indonesia has abundant natural gas, which is relatively clean for the environment compared to oil and coal. Unfortunately, gas use is not yet optimal.
Indonesia was once the world’s most significant gas exporter, with exports estimated to be 45 percent of its total production. Nowadays, gas reserves have declined. Indonesia occupied the 14th position out of 15 countries with the largest proven gas reserves.
The share of Indonesia’s gas reserves to total global reserves was 1.5 percent in 2017.
Assuming the production equals the 2017 production of 102.9 trillion cubic feet, without any additional reserves, natural gas is expected to run out in 43 years.
Amid the decline in oil production and along with transition to renewable energy, the role of gas is crucial as a primary energy source. In the national energy policy, the target for using gas is increasing to 22 percent in 2025, 23 percent in 2030 and 24 percent in 2050.
