Natural resources, energy and environment
Indonesia is one of the world’s most favored countries in terms of fishing water, minerals and fertile soil. In addition, almost 60 percent of the country is covered by forest. The significant assets of coal, natural gas and crude oil – although the latter has declined significantly – play an important role in the country’s economy.
The oil industry is one of the oldest in the world; oil was found as early as 1883 on northern Sumatra. However, many of the oil fields are old and their content decreases. In 2006, Indonesia became a net importer of oil (imports exceeded exports) instead of as a former net exporter. As a result, in 2009, the country left the oil-producing countries’ organization Opec, where Indonesia joined in 1962.
- COUNTRYAAH: Major exports by Indonesia with a full list of the top products exported by the country. Includes trade value in U.S. dollars and the percentage for each product category.
The state company Pertamina manages the oil production, but several foreign companies extract oil in Indonesia and have invested in the oil industry.
Commercial extraction of natural gas started in 1977/78. The largest known gas reserves are found on northern Sumatra, eastern Kalimantan and in the South China Sea. The country is one of the world’s largest exporters of liquefied natural gas, mainly to Japan and South Korea.
Indonesia is also one of the world’s largest producers of tin and gold and also has a lot of coal, copper, nickel, bauxite and silver. The country is one of the world’s largest exporters of coal.
In early 2014, Indonesia introduced a controversial ban on the export of unprocessed metals. The government stated that the purpose was to stimulate domestic mining and thus contribute to a greater proportion of the profits from the mining industry staying in the country. However, the critics warned of mass redundancies in the industry. After a lengthy discussion, the two largest mining companies operating in the country, the US Freeport-McMoRan and Newmont, were temporarily exempted from the ban.
- Abbreviationfinder: A popular acronym site in the world covering abbreviation for each country. For example, IN stands for Indonesia. Visit itypeusa for more information about Indonesia.
Coal dominates the energy sector
Nearly half of the energy consumption in the country is covered by coal, while almost one third comes from natural gas and one sixth from oil. The rest of the energy is extracted from hydropower and geothermal energy (geothermal heat). Electricity is also extracted mainly from coal, oil and natural gas.
Indonesia has decided to build two nuclear power plants on the island of Bangka east of Sumatra. Nuclear power plants are estimated to be able to contribute around 40 percent of the electricity demand in Sumatra, Java and Bali.
Many environmental problems
Extraction of natural resources often takes place in a way that seriously damages the environment. The existing environmental legislation is often not followed. There is widespread illegal mining and logging as well as poaching, although the state tried to stop the illegal activities during the 2010s. Indonesia is now trying to environmental certify its forestry in order to compete better on the world market.
Since the 1960s, large areas of rainforest have been harvested. According to nature conservation organizations, a quarter of the country’s forest area has been cut down. Most of the forest is owned by the state, which gives the right to cut down trees to different companies. Illegal tree felling is a major problem. Various estimates suggest that between 840,000 and 3.8 million hectares of forest are lost each year.
Despite Indonesia introducing a moratorium (temporary halt) against harvesting of forest in 2011, a report published in the journal Nature Climate Change three years later showed that deforestation went faster in Indonesia than in the Brazilian Amazon. Harvesting can continue because corrupt politicians allow forestry companies to decompose forest to make room for new crops.
Another environmental threat is the annual fires that are being planted to clear land to be planted with new trees. Farmers, and especially forestry companies, light fires in large areas and trust the fires to extinguish during the rainy season. When the rain fails, it will have disastrous consequences. In Kalimantan and Sumatra, planted fires and traditional burning have led to forest fires spreading uncontrollably. The smoke from the fires has also affected neighboring countries such as Malaysia and Singapore.
In September 2018, President Widodo introduced a halt to the cultivation of new land for palm oil production. The ban is valid for three years. The goal is to develop a sustainable and climate-smart palm oil production. Indonesia is the world’s largest producer of oil, which is part of everything from biscuits to shampoos and cosmetics. Palm oil plantations on Sumatra, Papua and Kalimantan have grown uncontrolled in recent years in line with rapidly growing demand. This has given big profits to companies and good tax revenue to the state. But the price has been high – destroyed tropical forests and huge forest fires with toxic smoke development throughout the region.
Indonesia is second only to China, the country in the world that emits the most pollution in the sea. The government has therefore set a target to reduce plastic emissions in Indonesian waters by 70 percent by 2025. The reduction will be through increased recycling, reduced use and increased awareness among Indonesians about the problem of non-degradable plastics.
FACTS – ENERGY AND ENVIRONMENT
Energy use per person
886 kilos of oil equivalent (2014)
Electricity consumption per person
814 kWh, kWh (2014)
Carbon dioxide emissions in total
464 176 thousand tons (2014)
Carbon dioxide emissions per inhabitant
1.8 tonnes (2014)
The share of energy from renewable sources
36.9 percent (2015)
Minister resigns after allegations of corruption
Minister of Youth and Sports Andi Mallarangeng is forced to resign after being accused of financial irregularities in connection with the construction of a sports arena in the city of Bogor in Java. Mallarangeng denies interference but says he is resigning so as not to burden the government. Mallarangeng is the first sitting minister accused of corruption by the KPK since the Commission was formed in 2003.
Eleven Islamists are arrested for suspected terrorist plans
At police raids, 11 people are arrested, suspected of planning terrorist attacks against several Western targets, including the US Embassy in Jakarta, the US Consulate in Surabaya and the mining company Freeport-McMoran. The suspects are believed to belong to a relatively newly formed militant group called the Sunni Movement for the Indonesian Society (Hasmi), whose connection to Jemaah Islamiah is unclear.
Widodo is elected governor of Jakarta
Opposition parties candidate in Jakarta governor election, Joko “Jokowi” Widodo, wins big over government candidate, Fauzi Bowo. Widodo is often referred to as a populist grassroots politician. After the victory, he has approached PDI-P.
Papuan leader is shot to death
Papuan independence leader Mako Tabuni is shot dead by police as he tries to escape an arrest in Jayapura. The police shoot the flying man in the back. The data goes apart as to whether or not Tabuni is armed at the moment. Authorities accuse Tabuni of having been behind the violence and unrest in Papua during the spring. The shooting resulted in violent protest demonstrations in Jayapura and its environs.
Demolition They are sentenced to 20 years in prison
The final trial of Bali deeds in October 2002 is closed. The bomb maker Umar Patek, aka Demolition Man, is sentenced to 20 years in prison for producing the explosive charge used in the largest bombing operation in Kuta Beach. Patek is also convicted of involvement in bomb attacks against six churches in Jakarta in 2000, when 19 people were killed, as well as having helped build training camps for terrorists in Aceh. He was the last of the chiefs in the Bali attack to get his verdict.
DP’s old treasurer is convicted of bribery
DP Party’s dismissed treasurer, Muhammad Nazaruddin, is sentenced to four years and 10 months imprisonment for a bribe for a contract awarded for the Southeast Asian Games in Indonesia in 2011. Nazaruddin fled abroad in May 2011 after being fired as treasurer on grounds of the mutine suspects. However, he was extradited to his home country from Colombia in August of the same year. The case is seen as a disgrace to Yudhoyono’s reputation as a corruption fighter.
Prison for Papuan separatists
Three Papuan separatists are each sentenced to three years’ imprisonment for treason because they advocated an independent Papua speech in the autumn of 2011.
Militant Islamist is sentenced to 18 years in prison
Militant Islamist Pepi Fernando is sentenced to 18 years in prison for sending explosive charges in mail packages to police and moderate Muslim leaders.
Police ward off terror plans in Bali
The Indonesian Police’s Special Counter-Terrorism Elite Force, Densus 88, makes two raids against detention in Sanur and Denpasar, Bali, where suspected militant Islamists with links to Jemaah Islamiah are believed to be planning attacks on multiple targets. Five suspected offenders are shot to death by police. The revealed assault plans have probably been organized by a Jemaah Islamiah outbreak group. It is said to have been about robberies that would have funded terrorist activities.