CPO and Energy Sovereignty

Energy sovereignty can be realized this year with two notes. First, the cessation of oil and gas exports does not affect the trade balance. Second, the purchasing power of the Indonesian people supports the sale of biofuel energy domestically.

But, in fact, oil and gas exports are still needed to maintain macroeconomic stability. Without oil and gas exports, Indonesia’s trade balance deficit is gaping. In 2018, oil and gas exports contributed US $ 17.40 billion or 9.67% of total exports that year which reached US $ 162.65 billion.

This argument can be baseless. Because if oil and gas is not exported, Indonesia’s oil and gas imports will also decrease by the deferred oil and gas export value. But, in fact, oil and gas exports dominated by gas exports cannot be stopped because they are bound by long-term contracts.

Gas is exported based on a contract carried out since the gas well is about to be exploited. Without the certainty of the buyer, the gas will not be exploited considering the nature of the gas that cannot be stored for long as crude oil. Although there are proven reserves, the exploitation of new gas is carried out after there is clarity of the buyer which is proven through the contract.

Gas purchase contracts are generally long-term. More than 20 years. Gas is even sold at cheap prices as happened with Tangguh gas sales to China in 2002, during the reign of Megawati Sukarnoputri.

At present, we are just sorry, why is the price of gas so cheap, even far cheaper than the sale of gas to the country. In the past, domestic gas needs were still small. Domestic gas demand is still weak. Now, when domestic gas needs increase, new gas wells are rarely found. This condition causes the import of crude oil and fuel to continue to grow.

Energy sovereignty is closely related to the purchasing power of the Indonesian people. Energy sovereignty can be achieved by this nation if the people’s purchasing power is not as low as now. Even with the fuel price of around Rp 8,500 per liter, most people still need to be subsidized. How can they reach the energy price above Rp 10,000 per liter?

Energy sovereignty can be achieved this year if people’s purchasing power supports the sale of biofuels at market prices. Indonesian CPO production is able to meet the biodiesel energy needs in the country. If around 30 million CPO is processed domestically to become fatty acid methyl ester (FAME), which is vegetable energy which is capable of being energy biodiesel, Indonesia will no longer need to import. But, the problem is with the expensive selling prices because of the high cost of production.

The results of the ESDM Ministry’s study show that the price of producing 100% B-100 or biodiesel, without mixture, reaches at least IDR 14,000 per liter. If people’s purchasing power is not a problem, the B-100 can be immediately determined. Indonesia needs to have a national energy policy that accommodates various variables that affect the realization of energy sovereignty.

First, the barriers to marketing CPO abroad need to be used as momentum to develop biodiesel (biofuel) energy from CPO. As long as the selling price in the country is not too far below the export price, palm oil producers are not harmed.

Finding solutions that benefit producers while stimulating FAME’s production in the country can be solved by dialogue and mutual understanding. Second, the high cost of producing biodiesel must be reduced by new technology. Universities and various research institutions need to be given incentives to produce biodiesel at lower prices. In this context, fiscal authorities need to be involved in energy policy.

Third, it needs to be targeted and serious about using electric cars and motorbikes. To support the electric car and motorcycle program, steam power plants (PLTU) with coal materials and gas gas power plants (PLTG) need to be optimized.

Fourth, it is necessary to accelerate the development of renewable energy such as hydropower and geothermal energy (PLTB). Indonesia still has natural resources that are suitable for both of these power plants.

Fifth, the development of the energy mix needs to be carried out systematically and coordinated to reduce the overall cost of national energy production. All relevant ministries must support each other. If all this is done, the rejected CPO abroad will not be a problem. This condition can actually become a momentum for Indonesia to realize national sovereignty. (*)

 

Source: https://beritasatu.com/tajuk/cpo-dan-kedaulatan-energi/187396

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