fuels policy - jari.or.jp

MINISTRY OF ENERGY AND MINERAL RESOURCESDIRECTORATE GENERAL OF OIL AND GAS

FUELFUELSS POLICYPOLICYFUELFUELSS POLICYPOLICYPresented at JARI Indonesia Roundtable 2008

www.migas.esdm.go.id

Jakarta, 14th February 2008

13022008MINISTRY OF ENERGY AND MINERAL RESOURCESDIRECTORATE GENERAL OF OIL AND GAS

OutlineOutline

1. Framework of Fuels Supply and Utilization2 N ti l E P li2. National Energy Policy3. Fuel Policy4. Fuel Specification Improvement

© DJ MIGAS 20081


FRAMEWORK OF FUELS SUPPLY AND UTILIZATIONFRAMEWORK OF FUELS SUPPLY AND UTILIZATION

© DJ MIGAS 20082


FRAMEWORK ofFUELS SUPPLY AND UTILIZATION

INCREASING OIL

DOMESTIC FUEL SUPPLY GUARANTEE

• Minimizing petroleum fuelESCALATION IN WORLD

CONSUMPTION

• Minimizing petroleum fuel utilization

• Efficiency in fuels utilization• Rationalization of price of

certain fuels

CRUDE OIL PRICE

INCREASING PETROLEUMUNBALANCED

DOMESTIC FUEL SUPPLY AND DEMAND

certain fuelsFUEL CONSUMPTION

LOW UTILIZATION OF NON-FUEL ENERGY

PRICES OF CERTAIN FUELS ARE STILL BELOW

FUELS DIVERSIFICATION• Improving utilization of alternative

energy

ARE STILL BELOW THEIR ECONOMIC PRICE

LIMITED OIL AND GAS RESERVES

© DJ MIGAS 20083

RESERVES


OIL DOMINATES WORLD PRIMARY ENERGY OIL DOMINATES WORLD PRIMARY ENERGY CONSUMPTIONCONSUMPTION

© DJ MIGAS 20084Source: BP Statistical Review of World Energy 2007


Oil consumption by areaOil consumption by area

© DJ MIGAS 2008

Source : BP Statistical Review of World Energy 2007


Crude oil prices since 1861p

© DJ MIGAS 2008

Source: BP Statistical Review of World Energy 2007


World primary energy consumptionp y gy p

© DJ MIGAS 2008

Source: BP Statistical Review of World Energy 2007


CURRENT FUEL SUPPLY AND DISTRIBUTIONCURRENT FUEL SUPPLY AND DISTRIBUTIONCURRENT FUEL SUPPLY AND DISTRIBUTIONCURRENT FUEL SUPPLY AND DISTRIBUTION

• Supply – Oil reserves (total) is decreasing from 9,82 billion barrels (1999) to 8,68 billion

barrels (2006)– More than 90% of oil fields are mature fields. Twenty-nine existing fields, which

produce 70% of total production depleted in rate of 10% 30% (ave 16%) perproduce 70% of total production, depleted in rate of 10%-30% (ave. 16%) peryear in the last 10 years

– Natural gas potential reserve 334,5 TCF– Natural gas reserve (total) increased of 26% from 134,53 TCF (1999) to 169,35g ( ) , ( ) ,

TCF (2006), 30% is reserve which is difficult to be developed (eg. Natuna)– Natural gas production in the last 10 years is more than 8 BSCFD– Domestic refining capacity cannot fulfill domestic fuel demand, therefore import

is still a necessity to fulfill domestic fuel demandis still a necessity to fulfill domestic fuel demand.– Limited oil and gas infrastructure– Limited fuel operational reserve

• Demand – Certain fuel type are still in subsidized price scheme– Petroleum fuel is still remain a main energy source in many sectors

© DJ MIGAS 20088

Petroleum fuel is still remain a main energy source in many sectors


INDONESIAN ENERGY POTENTIAL 2007INDONESIAN ENERGY POTENTIAL 2007

FOSSIL ENERGY RESOURCES RESERVES PRODUCTIONRATIO OF

RESV/PROD(YEAR)

Oil 86.9 billion barrel 9.1 billion barrel*) 365 million barrel 25Oil 86.9 billion barrel 9.1 billion barrel ) 365 million barrel 25

Gas 384.7 TSCF 187 TSCF 2.77 TSCF 68

Coal 90.5 billion ton 18.7 billion ton 170 million ton 110

CBM 453 TSCFCBM 453 TSCF - - -

*) Including Cepu Block

NON FOSSIL ENERGY RESOURCES EQUIVALENT INSTALED CAPACITYNON FOSSIL ENERGY RESOURCES EQUIVALENT INSTALED CAPACITY

Hydro Power 845.00 million BOE 75.67 GW 4.2 GW

Geothermal 219.00 million BOE 27.00 GW 0.8 GWGeothermal 219.00 million BOE 27.00 GW 0.8 GW

Mini/Micro Hydro 0.45 GW 0.45 GW 0.084 GW

Biomass 49.81 GW 49.81 GW 0.3 GW

Solar - 4.80 kWh/m2/day 0.008 GW

Wind Power 9.29 GW 9.29 GW 0.0005 GW

Urani m (N clear) 24.112 ton* e.q. 3 GW for 11

© DJ MIGAS 20089

Uranium (Nuclear) qyears

* Only in Kalan – West Kalimantan


FUELS SUPPLY AND UTILIZATION CONDITIONFUELS SUPPLY AND UTILIZATION CONDITIONU S SU U O CO OU S SU U O CO OVision: Availability of appropriate, high quality fuel for the society

Mission: 1. To supply fuels which meet quality and specification in affordable price2. To reduce fuel subsidy without ignoring less-powered society and remote area3 T i ti d ffi i i t l f l tili ti3. To improve conservation and efficiency in petroleum fuel utilization4. To improve fuel diversification

Goal:1. To reduce certain fuel subsidy2. Shifting of kerosene to LPG completed in 2010 3. To shift usage of RON 88 gasoline to RON 90 gasoline4 T li it RON 88 li l f t l d bli t t4. To limit RON 88 gasoline usage only for motorcycles and public transport

Implementation Phases:1. Usage of kerosene only for less-powered and remote areas by 20102 U f RON 88 li l f bli t t d t l b 20102. Usage of RON 88 gasoline only for public transport and motorcycles by 20103. Utilization of LPG of 4 MTPA by 2010 4. Development of GTL fuels for transportation5. Utilization of natural gas (pipe gas, CNG) for potential consumers

© DJ MIGAS 20081010

g (p p g , ) p6. Increase biofuel utilization for transportation sector


NATIONAL ENERGY POLICYNATIONAL ENERGY POLICY

© DJ MIGAS 200811


NATIONAL ENERGY POLICY FRAMEWORKNATIONAL ENERGY POLICY FRAMEWORK

SUPPLY SIDE SUPPLY

EXPLORATION &PRODUCTION

SUPPLY SIDE POLICY

SUPPLYGUARANTEE

CONSERVATION(PRODUCTIONOPTIMIZATION)OPTIMIZATION)

ENERGY PRICE DIRECT SUBSIDY

DIVERSIFICATION

DEMAND SIDE POLICY

SOCIETYAWARENESS

© DJ MIGAS 200812

CONSERVATION (EFFICIENCY)


NATIONAL ENERGY POLICYNATIONAL ENERGY POLICYNATIONAL ENERGY POLICYNATIONAL ENERGY POLICY(PRESIDENTIAL DECREE NO. 5 YEAR 2006)(PRESIDENTIAL DECREE NO. 5 YEAR 2006)

T t f N ti l E P li i 2025 i th l f h t tTarget of National Energy Policy in 2025 is the role of each energy type to national energy consumption as follows:1. Oil, less than 20%;1. Oil, less than 20%;2. Natural gas, more than 30%;3. Coal, more than 33%4. Biofuel, more than 5%5. Geothermal, more than 5%6. Renewable energy, especially biomass, nuclear, small scale hydropower,

solar energy, wind energy, more than 5%; and7 Coal liquefaction more than 2%7. Coal liquefaction, more than 2%.

© DJ MIGAS 200813


INDONESIA’S ENERGY POLICYINDONESIA’S ENERGY POLICY(PRESIDENTIAL DECREE NO 5 YEAR 2006)(PRESIDENTIAL DECREE NO 5 YEAR 2006)

Hydro Power, 3.11%

CURRENT ENERGI MIX (1 million BOE)National (Primary) Energy Mix

(PRESIDENTIAL DECREE NO. 5 YEAR 2006)(PRESIDENTIAL DECREE NO. 5 YEAR 2006)

Natural Gas, 28.57%

Geothermal, 1.32%

Oil51 66%

Coal, 15.34%

51.66%

National (Primary) Energy Mix of 2025(BaU Scenario) (5 million BOE) National Energy Mix 2025 (3 million BOE)

(Presidential Decree No. 5/2006)Power Plant, 1.9%

Oil, 20%

Gas, 20.6%

Geothermal, 1.1%

Mini/micro Hydro Power Plant, 0.1%

Gas, 30% BIOFUELS, 5%

Geothermal, 5%

Biomass, Nuclear, HydroSolar Energy, Wind Power 5%

RE,17%OPTIMIZING ENERGY

MANAGEMENT

Oil, 41.7%

© DJ MIGAS 200814Coal , 33%

Power, 5%Coal Liquefaction

2%Coal 34.6%


GOAL IN FUEL UTILIZATIONGOAL IN FUEL UTILIZATIONGOAL IN FUEL UTILIZATIONGOAL IN FUEL UTILIZATION3,000,000,000

Target PENTarget PEN

2,400,000,000

2,700,000,000 Target PENTarget PEN

1,800,000,000

2,100,000,000

OE 80%

900 000 000

1,200,000,000

1,500,000,000

BO

300 000 000

600,000,000

900,000,000

OILOIL

45,6%

20%300,000,000 OILOIL54,4% 20%

© DJ MIGAS 200815


ENERGY DIVERSIFICATION ENERGY DIVERSIFICATION

Types of fuel Household Transportation Industry Power Plant

• Gas

LPG √ √ √ –

BBG √ √ √ √

• Coal

Coal √ – √ √

Briquette √ – √ –

Coal gasification √ √ √ √

Coal liquefaction √ √ √Coal liquefaction – √ √ √

• Biofuel

Bio-ethanol – √ – –

Bio-diesel √ √ √ √√

Bio-oil √ – √ √

• Geothermal √ – – √

• Other Renewable Energy

Biomass √ – – √

Nuclear – – – √

Water – – – √

Solar cell √ √ – √Solar cell √ √ √

Wind – – – √

CBM √ √ √ √

Hydrogen / Fuel Cell – √ – √

© DJ MIGAS 200816

Oil Shale – √ √ √

Biogenic Gas √ – – √


ROADMAP FOR BIOFUELS DEVELOPMENT

Biodiesel Utilization Biodiesel Utilization

Year 2005-2010 2011-2015 2016-2025

Biodiesel Utilization

BiodieselBiodiesel Utilization

10% of Diesel Fuel Consumption2.41 million kL

Biodiesel Utilization15% of Diesel Fuel Consumption

4.52 million kL

Biodiesel Utilization20% of Diesel Fuel Consumption

10.22 million kL

BioethanolBioethanol Utilization

5% Gasoline Consumption1.48 million kL

Bioethanol Utilization10% Gasoline Consumption

2.78 million kL

Bioethanol Utilization15% Gasoline Consumption

6.28 million kL

Bio-oilBiokerosene Utilization

1 illi kLBiokerosene Utilization

1 8 illi kLBiokerosene Utilization

4 07 illi kL- Biokerosene 1 million kL 1.8 million kL 4.07 million kL

- Pure Plantation Oilfor Power Plant

Biokerosene

PPO Utilization0.4 million kL

PPO Utilization0 74 million kL

PPO Utilization1 69 million kL

BIOFUELS BIOFUELS Utilization BIOFUELS Utilization BIOFUELS Utilization

0.4 million kL 0.74 million kL 1.69 million kL

© DJ MIGAS 200817

BIOFUELS 2% of energy mix5.29 million kL

3% of energy mix9.84 million kL

5% of energy mix22.26 million kL


FUEL POLICYFUEL POLICY1. Categorization (subsidized fuels, industrial fuels, general fuels)2. Supply :

- Domestic feedstocks is allocated for domestic refinery feed- Opening opportunities for all business entities (SOE, private, cooperative) in fuel p )

supply business- Improving infrastructure facilities

3 Pricing3. Pricing4. Allocation for National Reserves5. Environment friendly through improvement of fuel specification

Implementation strategy

6. Distribution system

-- Improving fuel utilization efficiencyImproving fuel utilization efficiency

-- Shifting kerosene utilization to LPG Shifting kerosene utilization to LPG Improving utilization ofImproving utilization of biofuelsbiofuels

© DJ MIGAS 200819

-- Improving utilization of Improving utilization of biofuelsbiofuels-- Limiting gasoline 88 consumptionLimiting gasoline 88 consumption



Fuel specification is formulated by considering :

Engine technology developmentEngine technology developmentEnvironmental aspectsDomestic fuel supplier’s capabilityDomestic fuel supplier s capabilityConsumer’s purchasing power

© DJ MIGAS 2008



Improving the quality of gasoline, by:Improving the quality of gasoline, by:

Limitation of aromatic, benzene, and olefin content

Decreasing sulfur content

Usage of additives which are safe for engine performance and for environment

Provide gasoline in several grades and quality to meet consumer’s needs

Improving the quality of ADO, by:

Limitation of aromatic content

Improving cetane number

D i lfDecreasing sulfur content

Usage of additives which are safe for engine performance and for environment

P id ADO i l d d lit t t ’ d

© DJ MIGAS 2008

Provide ADO in several grades and quality to meet consumer’s needs


GASOLINE SPECIFICATION DEVELOPMENT

YEAR GASOLINE TYPE RONMin

LEAD CONTENTMa g Pb/L (cc/USG)

SULFUR CONTENTMa % t (ppm)

GASOLINE SPECIFICATION DEVELOPMENT

Min. Max gr Pb/L (cc/USG) Max % wt (ppm)

1979 Premium 87 0,75 (2,5) 0,20 (2000)

1990 Premium 88 0,45 (1,5) 0,20 (2000)

1997 Premium 88 0,30 (1,0) 0,20 (2000)

2001 Premium TT 88 0,013 0,10 (1000)

1991 Premix 94 0,30 (1,0) 0, 20 (2000)

2001 Premix TT 94 0,013 0,10 (1000)

1995 Super TT 95 0,005 0,20 (2000)

2002 Pertamax 92 0,013 0,10 (1000)

2002 Pertamax Plus 95 0,013 0,10 (1000)

2006 Gasoline 88 88 0,013 (unleaded)0,3 (leaded)

0,05 (500)0,05 (500)

2006 Gasoline 91 91 0,013 0,05 (500)

2006 Gasoline 95 95 0,013 0,05 (500)

© DJ MIGAS 2008


AUTOMOTIVE DIESEL OIL (ADO)AUTOMOTIVE DIESEL OIL (ADO) SPECIFICATION DEVELOPMENT

YEAR ADO TYPE CETANE NUMBERMin.

SULFUR CONTENT Max % wt (ppm)

1999 MINYAK SOLAR 48 0 50 (5000)1999 MINYAK SOLAR 48 0,50 (5000)

2006 MINYAK SOLAR 48 48 0,35 (3500)

2006 MINYAK SOLAR 51 51 0,05 (500)

© DJ MIGAS 2008

fuels policy - jari.or.jp

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