Jakarta—Observers believe that the development of massive gas projects could hamper Indonesia’s commitment to the Paris Agreement, especially regarding reducing greenhouse gas emissions. Indonesia has abundant gas reserves, and infrastructure investment needs reach USD 32.42 billion.
According to a report from debtWATCH and Trend Asia, in a written statement on Sunday, 16 March, methane emissions resulting from gas use have a major impact on climate change. This can potentially hinder the transition to cleaner, renewable energy and reinforce dependence on fossil fuels.
“LNG financing is part of a global strategy that delays a true energy transition and maintains corporate control over Indonesia’s natural resources. With LNG expansion, Indonesia remains an exporter of gas to developed countries, not to fulfil domestic needs,” said debtWATCH Indonesia Researcher Diana Gultom.
The Indonesian government has integrated gas as part of the energy transition in the National Energy Policy (KEN), which is planned to continue increasing until 2060. However, this contradicts its emission reduction commitments.
“In international forums, the government promises to reduce dependence on fossil energy, but domestically, it includes gas as a ‘transition bridge’. This will only move us further away from our emission reduction targets,” said Novita Indri Pratiwi, Fossil Energy Campaigner of Trend Asia.
Based on the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) data, Indonesia has a proven gas reserve of 54.76 trillion in standard cubic feet (TSCF). However, 18 major gas projects spread across various regions, such as Sumatra, Java, Kalimantan, Sulawesi, and Papua, have the potential to significantly increase methane emissions.
Some of the major gas projects:
Tangguh LNG, Bintuni Bay, Papua Barat Operator: British Petroleum (BP) Indonesia Investment: USD 8 billion (ADB, JBIC, IFC) |
Bontang LNG, East Kalimantan Operator: Pertamina Investment: USD 4 billion (ADB, HSBC) |
Abadi LNG Project (Masela Block), Arafura Sea, Maluku Operator: Inpex Corporation Investment: USD 19.8 billion (JBIC, KEXIM) |
Power plants Arun, Aceh and Bangkanai, Central Kalimantan Operator: PLN Investment: EUR 160 million (Standard Chartered Bank) Capacity: 184 MW and 155 MW |
Source: SKK Migas
The global financial system, including institutions such as the Asian Development Bank (ADB), Asia Infrastructure International Bank (AIIB), and the World Bank Group, which have committed to align with the Paris Agreement, are funding these projects.
“If the government continues to exploit gas, emissions releases will soar, leaving little room for renewable energy to thrive,” Novita emphasised.
The high-cost requirement also opens the door for corruption and governance inefficiencies, such as the corruption case of LNG procurement in the 2011-2021 period involving former President Director of PT Pertamina, Karen Agustiawan.
“Indonesia is rich in clean energy potentials such as water, sun, wind and sea. We must have the courage to move away from business and mega-project-orientated fossil energy schemes and prioritise the needs of the people and environmental sustainability,” Diana added.
With the challenges at hand, activists are urging the government to halt environmentally damaging gas projects and switch fully to renewable energy to achieve the Paris Agreement targets. (Hartatik)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
