Rolling blackouts in Indonesia, factories to work weekends to reduce peak demand

Indonesia will force some manufacturers to shift production to weekends in order to reduce peak demand during the week and stave off an electricity crisis, senior government officials said on Friday. Indonesia suffers from power shortages as demand has steadily risen with little new investment in infrastructure. The capital Jakarta began two weeks of rolling blackouts due to maintenance at the offshore West Java gas field. Disruptions in fuel shipments or for repairs, have led to blackouts in recent months. Unpredictable electricity supplies are a deterrent to new investment, and Japanese firms have threatened to shift production to China unless the government fixes electricity supplies, saying that the power cuts have caused production and financial losses.

- Sooner or later, and probably sooner if this is not fixed quickly, people in Indonesia will start pointing to the bright lights that continue to shine in Singapore while their capital Jakarta is undergoing rolling blackouts. If it's the same gas that powers both countries, and if the gas is coming from their own country, why is Singapore able to keep their lights on, and their own capital city isn't?

I have one or two possible answers to this, but neither is particularly pleasant. One, Indonesia does not have the power generation capacity, while Singapore has too much. Their electricity generation is not keeping up with demand while, being a relatively small and wealthy nation, Singapore has half of its power generating capacity lying around idle (Singapore has over 9000MW of power generation capacity and demand of around 4500MW). Two, despite depleting reserves, they are bound by contract to export their gas to Singapore. Shades of NAFTA, where, despite depleting reserves, Canada is bound to supply natural gas to USA and have said they would certainly export it elsewhere, or perhaps consume it themselves for their oil sands operations, if they were not bound by treaty? It looks a bit like that to me.

Political crises have erupted over much lesser issues. Let's hope, for our own sake, that they are able to solve their current power problems soon and not start to point fingers our way, or it would not be particularly pleasant. But, this being a large-scale infrastructural problem, I do not harbour many illusions about the "soon" part. We will have to watch carefully and see how this turns out.

Indonesia to speed up CNG vehicle conversion, using up more of its natural gas

greencarcongress.com -> antara.co.id :

The Indonesian government is to speed up implementation of its program to substitute CNG [Compressed Natural Gas] for fuel in motor vehicles. Vice President Jusuf Kalla said the government would take concrete steps to accelerate the CNG conversion process for automotive transport. He said the converson program would be carried out the same way as the current drive to replace kerosene by liquefied petroleum gas (LPG) for households. All public transport such as buses, taxis and motorized pedicabs will use CNG instead of petrol. The government would also provide incentives to transport companies and carry out the program with a clearly defined timeframe.

- This may well turn out to be the Export Land Model all over again, only this time it involves natural gas instead of crude oil. Rising domestic fossil fuel consumption meets falling domestic production, rapidly leading to less and less available for export to other consumer nations.

For the case of crude oil, we have seen this happen in Mexico, where a combination of rising domestic demand and collapsing oil production in Cantarell (formerly the world's second largest oil field by production and now dropped to third place), has led Mexico to reduce oil exports to the US since early 2008. In Indonesia itself, we have seen rising demand, collapsing production, a 28.7% fuel price hike despite protests, and finally, Indonesia pulling out of OPEC entirely as continued membership no longer made any further sense, being a net crude oil importer. The story is almost always the same. Rising demand, falling production, collapsing exports. The consumer countries have to frantically scramble for alternative sources, if there are any to be found. And meanwhile, the price of fuel keeps rising and rising and setting new records.

The shift to using natural gas and CNG is also alarming in another aspect. Question : what do you get when an oil field's production peaks and then declines? Answer : you tend to get more natural gas and more water and less oil. Once you have sucked out most of the oil, what's left is the gas cap that has been sitting on top of the oil, and once you suck that out too, there's nothing left. Except water. Lots of water, which has been used to flood the well and force the oil out, oil being relatively lighter. An increase in gas output is one of the signs of terminal decline. End game. Checkmate. Hasta la vista.

Don't believe for a moment that switching to using more CNG and using more natural gas is supposed to be a good thing, since natural gas is supposed to be cleaner and all that. The truth is, for many oil fields, it is a sign of TERMINAL DECLINE. Check out any of ASPO's recent global oil and gas depletion charts and note how, after the peak, gas production increases, but OVERALL energy production which includes oil and gas continues to fall rapidly, and keep falling. Eventually to ZERO.

And, one last thing. Indonesia's oil production is falling, its natural gas production is falling, and Indonesia is even going to build its own LNG terminal, becoming a gas importer as well as already being a crude oil importer. What does that mean for Singapore? 80% of Singapore's electricity is generated from natural gas, which arrives via pipeline primarily from Indonesia, and Malaysia. Work on Singapore's own LNG terminal will only start in 2009, and will not be ready until 2012. Singapore's energy security is under threat. What is Singapore going to do about it?