Non-Geological Constraints to Coal-Bed Methane Production in Indonesia

Transcription

1 Research Collaboration Between ESI/NUS IIEE Non-Geological Constraints to Coal-Bed Methane Production in Indonesia Prepared by: Rachmat Sugandi Hamdani Nataliawati Siahaan Friga Siera Ragina Azis Pusakantara Indonesian Institute for Energy Economics 27 February 2014

2 IIEE [INDONESIAN INSTITUTE FOR ENERGY ECONOMICS] Activities Establishment in 1995 by Indonesian Senior Energy Personnel Research Activities in Policy and Regulation: Energy Economics, Energy Security, Energy Subsidies and Incentives, Energy Efficiency, CTF [Clean Technology Fund], Green Energy, Energy Risks and Opportunities Management, Energy related to Environment and Low Carbon Emission, Energy Certification Standards, Geothermal & Natural Gas, Renewable Energy [Solar, Wind, Biomass, Micro-hydro, Bio-fuel/bio-diesel], Energy Modeling [I2E3M Indonesian Integration Energy Economics Modeling / IESCEM Indonesian Energy Security and Clean Energy Modeling] Non Conventional Gas [Shale gas & CBM Coal Bed Methane] Social Business Activities: Rural Electrification [ Biomass, Micro Hydro, Solar PV, Wind Turbines] Research and SosBis Partners include: BNI, Pertamina Foundation, The Body Shop, Bappenas, ESDM, ICED/USAid, World Bank, ADB, IEEJ, JICA, IISD, DANIDA, SIS, NUS etc 2

3 Upper level game: key supporting factors Sufficient main government institutions: MEMR, DEN, SKK Migas, BPH Migas, MoF, Bappenas. Supporting policies: existing and new draft of KEN, National Energy Blue Print Document , CBM Road Map CBM Regulation: MEMR Regulation No. 36/2008 on CBM Utilization Environment Regulation: MoE Regulation No. 02/2011 on CBM wastewater management Private sector enthusiasm and high interest 3

4 Upper level game: key constraining factors Current Political situations Limited coordination between government institutions CBM regulation is based on conventional oil and gas regulations Land acquisition, procurement, permits Lack of human resources skill and capacities of government agencies. 4

5 Lower level game: key supporting factors No significant local community activities/ngo against CBM operations so far 5

6 Lower level game: key constraining factors Decentralization Law Number 32 Year 2004 on Regional Government Lack of clear roles and responsibility Land access and bureaucratic permits Pipeline issues Pipeline infrastructures are not well developed in some areas Third party access still under discussion 6

7 Critical factors (1) Supports Constraints Geology, geography and information Access to land and CBM resource Official data packages for particular block are available in ministerial and operators offices Earthquake and tsunami free zone in Kalimantan CBM locations are considered as safe from natural disasters. Regulation on working acreage overlapping authorization between different operators is available So far local community accept the operation due to its benefit. Data access authorization Bureaucratic permit consumes +/- 400 days, besides environmental permit Potential for strong local community opposition There is no regulation yet stipulating the operational overlapping. 7

8 Critical factors (2) Rapid drilling Supports The Indonesian Petroleum Association (IPA) promotes intensive discussion with government to issue new procurement regulation specified on CBM Government intention to promote more local rig for CBM Constraints Limited rig provision due to restricted regulation on procurement Short term contract with rig supplier Used conventional gas technology 8

9 Critical factors (3) Economic incentives & other government support Supports GoI provides tax holiday Stable fiscal system Constraints Tax holiday reimbursement without interest rate return Land and Building Tax is applied not just for drilled area. Insufficient tax incentives specified for CBM The CBM pricing has not been regulated 9

10 Critical factors (4) Market and regulatory environment Supports Market absorption is available (power plant, fertilizer, petrochemical, etc) Specific Environmental regulation on wastewater is available Constraints other waste management of CBM environment regulation is not available yet Inappropriate CBM regulation 10

11 Implications for future production The slow policy-making and implementation process is affecting the speed of CBM development in Indonesia However, It is noted that the government is aware of this problem and is taking the following steps to address the current situation. Coordination between government institutions and all CBM Stakeholders CBM regulations and policies break-through to attract domestic and foreign Investors. CBM production is necessary required to contribute 23% NRE energy mix target in

12 Shale Gas Potential resources of Shale Gas 16.3 tcm Still in early stage preliminary development In May 2013 Pertamina was granted PSC of Shale Gas There were 2 blocks offered in December 2013, and there will be 6 other blocks offered in 2014 Lessons from CBM development 12

13 THANK YOU VERY MUCH - ALL THE BEST WISHES Mit freundlichen Grüßen / Sincères salutations / Saludos / Best regards Rachmat Sugandi Hamdani Executive Director IIEE Indonesian Institute for Energy Economics Jl Ciranjang No. 6, Kebayoran Baru; Jakarta 12180, Indonesia Tel: Fax: Mobile: iiee.andi@yahoo.com IIEE Researchers: Nataliawati siahaan : natli_i2n@yahoo.com Azis Pusakantara: apu_g3@yahoo.com Friga Siera Ragina: iiee.friga@yahoo.co.id 13

14 ENERGY GROWTH VS [ECONOMICS AND POPULATION GROWTH] Source: M. Hutapea - EBTKE 14

15 ENERGY MIXED EBT 25% COAL 32% GAS 20% OIL 23% 1237 MBOE 2420 MBOE 3200 MBOE EC 15.6 % 1649 MBOE 3298 MBOE 2785 MBOE NE + R/E= 25 % 15

16 Greenhouse Gasses Emission Target in