Indonesia's Resource Policies Will Bring Catastrophe, Walhi Says

Fidelis E. Satriastanti Jakarta Globe 15 Oct 11;

Indonesia could face an energy crisis and environmental disaster unless it makes drastic changes to its current policies on natural resource exploitation, activists said on Friday.

“Indonesia is truly at a tipping point, facing a forestry crisis, an environmental crisis, an energy crisis and even a food crisis,” said Mukri Friatna, head of advocacy at the Indonesian Forum for the Environment (Walhi).

Mukri said the pending energy crisis stemmed from policies that allowed foreign investors to muscle out local ones in extracting fossil fuels.

“Of all the coal mines we have, 75 percent are controlled by foreign groups,” he said.

“In oil and gas, 70 percent of concessions are operated by companies from the United States.”

Mukri said another factor for a future fuel shortage was declining domestic oil production, leading to a growing dependence on increasingly expensive imports. In 2004, total domestic production was 400 million barrels, while in 2010 it was 344 million.

Prianto Rakhmanto, an energy analyst, said rolling blackouts in several regions were a sign the country was already in the throes of an energy crisis.

“We allow our natural resources to be exploited without concern for the environment or consideration for domestic consumption. Our policies have always been toward exporting and earning revenue,” he said.

Prianto said it would be difficult to reverse the situation without first ending subsidies for fuel and electricity. “As long as prices remain artificially low, oil producers will find it more competitive to export oil rather than sell it in the country,” he said.

“And if electricity rates are no longer suppressed, it will finally be commercially viable to start developing geothermal power on a larger scale.”

Walhi executive director Berry Nahdian Furqon said that bringing about the necessary policy changes required serious commitment from the government. “The government bases its decisions on social and political interests, and never on the ecological crisis that we face,” he said.