During its heyday, in the 1980s and 1990s, much of the main northern Aceh city of Lhokseumawe would be illuminated at night by the light radiating from the five ever-burning gas flares belonging to PT Arun’s refinery.

Then, life was easier thanks to the booming gas-powered industries. Exxon Mobil, Arun, Pupuk Iskandar Muda, Asean Aceh Fertilizer (AAF), Kertas Kraft Aceh and Humpus Aromatic were the big players then.

Today, nights in the coastal town are quieter and dimmer. Of the five flare stacks, only two still burn.

“That means PT Arun is no longer operating at its full capacity. The facility is refining a small amount of crude from the offshore gas field,” Iskandar, a local living near the vast refinery complex, said.

Lhokseumawe has lost the “petro-dollar city” status it earned in the 1980s when the American Exxon Mobil exploited its gas reserves, contributing millions of dollars to its coffers. Almost all of the commodity was exported to Japan and only a small portion was used to fuel industry in Aceh and the neighboring North Sumatra.

Nevertheless, the abundant gas led to booming industry. But today, when the fast depleting natural resource is becoming scarce and costly, business is languishing and the few surviving companies have shrunk for the sake of efficiency. Some plants have been left in ruins.

“Our economy has been getting more difficult since the businesses collapsed,” said Nuraini, a food vendor at Krueng Geukeuh traditional market. In the past, she made a living as a vendor outside the AAF complex, until it went bankrupt and eventually ceased operations in 2003.

AAF was founded in 1979 as part of an ASEAN economic cooperation. Indonesia’s state-owned fertilizer maker PT Pupuk Sriwijaya owned 60 percent of the joint venture, Thailand 13 percent, Malaysia’s oil and gas giant Petronas 13 percent, the Philippines’ National Fertilizer Corporation 13 percent and Singapore Temasek Holding Pte Ltd 1 percent.

Nuraini described the decades between 1980 and 2000 as the heyday of Lhokseumawe in local economic terms thanks to the fertilizer venture’s multiplier effect. “Then, making money was easy. Anything would sell like hot cakes because there were many people working in the company.”

The company’s hundreds of employees from all over Indonesia enjoyed high salaries and generous fringe benefits, making their socioeconomic status higher than that of any other companies’ workers.

“When the monetary crisis hit Indonesia [in 1997], we prospered,” said Rochandiono, a former AAF employee. “Then our income soared because our product was exported for US dollars, which strengthened against the rupiah.”

JP/Hotli Simanjuntak

Ironically, the company has perished now when separatism no longer poses a major security issue in Aceh. The inadequate and costly gas is all to blame. The management did their best to keep it alive but to no avail. It eased operations after ExxonMobil terminated its gas supply after protracted negotiations, which had started in 2003, failed.

Then, AAF asked for US$1 for each million matrix British thermal units (mmbtu), but Exxon Mobil stuck to its guns at $1.85. To break the impasse, AAF requested a subsidized prize, which was flatly declined by the government because the fertilizer product was wholly for export.

Finally, AAF was closed down and 1,400 employees lost their jobs. Now, all of the company’s assets, including the plants and employees’ housing complexes, have been abandoned.

All the machinery and tools are broken beyond repair. The 20-meter tall loader at the port that once was able to serve 25,000 deadweight tonnage (DWT) vessels now lays idle and is every angler’s platform from which they cast a line.

“The plant will have to be completely rebuilt if it is going to be used again. Most probably, the underground pipelines have perished as well,” Rochandiono said.

The same sorry state has also happened to other major companies in Lhokseumawe, like paper company Kertas Kraft Aceh, fertilizer venture Pupuk Iskandar Muda and aromatics maker Humpus Aromatik. Today, only Pupuk Iskandar Muda remains afloat, although it operates only one of its two factories.

Plants have their parts stolen, apparently being sold as scrap iron. Herds of cattle and goats are seen grazing in every corner of the abandoned factories, where tall grass is testament to the dead economy.

Kertas Kraft Aceh has ceased operations, but some of its machinery has been used as power generators. The rest of the complex lies idle and untended. Built in 1983, the company had gone on and off due to the lack of raw materials and irregular gas supply.

“Between 2003 and 2005, the company often stopped operations because of armed conflicts between GAM [Free Aceh Movement] and the Indonesian Military led to disruption of the wood used as raw material,” said Muhammad Darmi, a former Kertas Kraft Aceh employee.

He recalled skirmishes between the two forces often happened near the plant. “We were too scared to venture out and collect wood for fear of getting caught in the crossfire or being kidnapped.”

Pupuk Iskandar Muda is nestled among six villages with a combined population of 2,700 people, who shared the economic windfalls.

A Jamuan village resident and one of the 10 shop owners catering to the company’s employees, Hasbi Kaoy, recounted how the presence of 1,200 company employees and their families fueled the local economy. But now they are all gone, poverty has returned to the villages.

“The economy is bleak,” he said. “Of the 10 shops, only two are still in business. Many people are unemployed and we have to rely on farming to survive.”

But Hasbi has not lost hope for the return of the economic boom to Lhokseumawe. “May be it’s still a long way off and for the welfare of our offspring.”

In the hinterland, residents play cat and mouse with security guards, scavenging crude oil from the mine pits that PT Exxon left behind.

Now the Aceh administration is trying to boost the economy by, among other things, reviving Lhokseumawe’s economic glory, probably by rebuilding the weathered infrastructure for brand new, post-gas businesses. However, the effort won’t be easy. Most of the vast multi-million dollar projects have been completely lost. Pipelines have been irreparably corroded; machinery is nothing but scrap metal and buildings have collapsed. To rebuild the industries would cost Aceh trillions of rupiah that it may not be able to afford without the central government’s help.

“Now that the armed conflict is over, the central government should be more enthusiastic about developing Aceh,” said legislator Zulfan Lidan. “We [the House of Representatives] are pushing for reconstruction of the collapsed industries to revitalize the local economy.”

Impoverished residents and the cash-strapped local administration are longing for the bright gas flares to shine on Lhokseumawe again.