Djoni Hartono

The economic implications of natural gas infrastructure investment

ABSTRACT Since 2001, the Indonesian government has issued natural gas master plans annually holding the planned gas infrastructure developments in order to motivate private parties who are not motivated due to the lack of the gas infrastructure increase. Since 2002, there were only three segments of gas pipelines that have been tendered (IEA, 2008) which are Gresik-Semarang and Bontang-Semarang (Kalimantan to Java Pipeline) in 2005, and Cirebon-Semarang in 2006 that have no supply anymore. The current transmission and distribution lines of 3,762.32 km and 4,554.54 km, respectively, are very small compared to developed countries in a similar gas resource position as Indonesia. The paper views the role of natural gas infrastructure for economic growth and energy security in Indonesia. The economic impacts of natural gas infrastructure are analyzed through the Computable General Equilibrium model. The results show that all financing scenarios have positive impacts on the various macro-economic indicators as well as on sectorial output and employment.

Impact analysis of natural gas policy in Indonesia

ABSTRACT Becoming a net importer of fuel oil has encouraged the Government of Indonesia optimizing the utilization of natural gas energy production. Increasing natural gas domestic usage has raised the potential wide impact on the economy. This paper investigates the impact of natural gas policy regarding the energy balance and national road map of natural gas infrastructure for the year 2014–2030. Applying the dynamic computable general equilibrium model, four scenarios are constructed—business as usual, declining existing supply, increasing potential supply, and energy substitution into four alternative sectors. The economic cost of relying on existing exploration causes natural gas imports to increase and the economy to slow down. Developing natural gas explorations is therefore required. The energy substitution in the electricity sector shows significant results based on both economic and environment indicators. The impacts however are varied depending on the type of energy, the magnitude, and the sector that is intervened.