The Dynamics of Policy and Energy Issues in Indonesia

Abstract

The premise of this research is the idea that the dynamic of energy policies and issues relates to its position as a fundamental need to the Indonesian state and society. Energy could not have been separated from state’s economic, social, and political affairs. State maximized capacity to protect energy resources. Indonesia has abundant energy resources that could be traced back from the amount of production and energy reserve on oil, natural gas , and coal . However, with huge population, if the energy reserve remains stagnant and newly proven-energy resources are not found, the energy resource would likely last in the next few decades. There are problems related to energy such as (a) geographical location of the energy sources is relatively far from consumers, (b) oil reserves are lesser if there are no new reserves are found, (c) investment climate is unfavorable to the development of energy industry amid the need for private or foreign investors, and (d) implementation of taxation policies is less supportive for energy investment climate which linked to the changing domestic politics. It was a paradigm shift in the development of energy sources in Indonesia from revenue and export-oriented into sustainable growth-devoted exploitations. The growing importance of energy development has attracted energy to the national interest . Despite complex bureaucratic model, energy management is still sectoral that carried out by the relevant, rather than the whole, ministries, and treated as political and security issue in which the problem of internal coordination between departments is also found.