Two Essays on energy Security Evaluation of the Republic of Indonesia

Abstract

Energy security is a concept that has become increasingly popular, as most policy makers, entrepreneurs, and academics claimed to have pursued it when proposing or implementing changes in the energy domain. It is an important goal of energy policies in many countries while considering the complex factors, such as high energy prices, increased demand and competition for geographically concentrated resources, resource scarcity and/or depletion, and concerns with the effects of climate change.

In this study, we intend to clarify both the meaning and importance of energy security in Indonesia, as well as discuss the strategies or policy alternatives to support it. The demand for energy in Indonesia has increased due to its strong economic growth. Challenges, such as increasing the availability, accessibility, and affordability of energy resources, need a clear and comprehensive energy policy strategy and framework based on an appropriate energy mix. Therefore, a more comprehensive measure of energy security would help policy makers in creating better policy decisions.

In the first part of the study, we illustrated the importance of energy in Indonesias economy and highlighted how some of the particular characteristics of this area actually explained the increasing interest in this issue. In the second part, we applied the index method on the existing data from 2000 to 2012. In the third part, we evaluated the Gas Supply Security Index of Indonesias gas market regions based on the Indonesia Gas Balance documents. The last part is the general conclusion of the three previous parts.

This dissertation contributes to the literature on the measurement of energy security of Indonesia. Our specific contributions are the following: a. Providing metrics by evaluating a set of parameters and indicators to assess the variation of Indonesias energy security performance over time from 2000 to 2012. b. Providing metrics by evaluating a set of parameters and indicators to assess the overall natural gas supply security of Indonesias domestic gas market. It is important for future policy making to serve as a benchmark against quantified indicators, and assess the gas security of supply weakness.

Keywords: Energy security, Energy security index, Policy analysis, Indonesia

Student Number: 2012-30745 Technology Management, Economics and Policy Program College of Engineering Seoul National University