Geothermal Power: The Best Alternative Energy Solution?

As economies develop in Indonesia and the Phillippines, and an energy crisis becomes more evident, the countries are literally digging deep for a solution.Both countries are part of the Pacific “Ring of Fire,” an area with a large amount of volcanic activity. With over 500 volcanoes and approximately 130 known active ones, experts see this area as having great potential for the harnessing and usage of geothermal power.

Some experts claim Indonesia could run its economy entirely on geothermal energy, and that it has not begun to realize the potential for doing so. Unlocking the potential does have its difficulties, but as infrastructure issues reach for solutions and oil prices continue to rise more efforts are being made.

A project in Indonesia, the Bedugul project, is tapping power near volcanoes in Bali. The project is attempting to develop up 175MW of power, which would power somewhere around half of the power needs for the island. The project is however on hold for the time being due to a possibility of damage to a sacred area and potential negative effects on water supply. Ni Made Widiasari of Bali Energy denies the project would have damaging effects. Currently, most of Bali’s power comes from another island nearly through a cable running under the sea. This may not be a sufficient supply in the near future as the tourist area shows a growing demand for power.

Some obstacles are affecting other potential new projects in any location. A fairly extensive amount of drilling is involved to drill deep enough in the earth to reach hot water or steam so that turbines can be powered. This of course takes investment and resources. Furthermore, the legal formalities needed to organize and carry out these projects is also hindering progress. Active volcanoes are associated with high acidity, as thus cause the corrosion of pipes involved in geothermal power projects.

Electrical power is under strain in the Phillipines and Indonesia. Phillipine demand is growing fast, and Indonesia has had blackouts in times of high demand. Indonesia is only tapping 850MW of an estimated 27,000MW potential of geothermal power.

Despite this, the government is pushing for more coal-powered plants to meet energy needs. However, Energy Minister Purnomo Yusgiantoro stated energy from geothermal projects could reach 9,500MW by 2025.

Firms in Indonesia such as Star Energy and Medco Energi Internasional are considering making investments. The largest private producer of geothermal energy in the world, Chevron, has plans to double Indonesian and Phillipine geothermal business by 2020. Chevron makes this estimation despite capital issues and conflicts.

Although drilling and plant construction, not to mention exploration, costs are high in comparison to other alternatives, the maintenance and operation costs of a geothermal plant are significantly lower in comparison. Typically it takes 7 to 8 years for a geothermal project to go from an exploration to production stage. Road costs to remote areas are also a factor. Carbon credit eligibility would make investments in these projects more likely, as well as help with some of the initial project cost.

As member of the Earth Policy Institute says on geothermal power  “…geothermal is going to loom large in the energy economy of the future, and that development could come very quickly once the leadership begins to see the potential.”

Fuel Restrictions in Malaysia

Malaysia is to restrict fuel sales to foreign motorists on its borders in an attempt to curb the spiralling cost of government subsidies.Hundreds of Thai and Singaporean motorists cross the border every day to fill up on cheap petrol and diesel. The ban, due to take effect on Friday, will be lifted as soon as prices can be set at market level, officials said.

Malaysia has some of Asia’s lowest fuel prices due to high government subsidies.

“Taxpayers’ money is being used to subsidise petrol for those who are not entitled to receive the subsidy,” Malaysia’s Deputy Prime Minister Najib Razik said.

“[Foreigners] should not take advantage of our subsidy scheme,” he added.

Subsidies are expected to cost the Malaysian government 45bn ringgit (US$ 14bn; £7bn) this year as oil prices rise worldwide. The government is considering a series of measures to address the problem of rising subsidies, including selling petrol and diesel at market prices.

Malaysia’s trade minister Shahrir Samad said other proposals included cash remunerations for Malaysian motorists and a distribution system involving identity cards.

Until the ban is lifted, those who break the new ruling could be fined or face a jail term.

“It’s a very harsh decision,” Alang Zari Ishak, president of a local petroleum dealers’ association, told the Associated Press News Agency. He added that the ban may affect tourism and relations with Malaysia’s neighbours.

The Indonesian government last week raised fuel prices by nearly 30%, prompting fears of widespread unrest.

East Asia: Natural Resources and the Environment

Most states in East Asia are reliant on energy supplies external to the region, and will become more so. The demand for energy will outstrip domestic reserves even in oil-producing states like Indonesia. East Asian states will grow more dependent on Middle Eastern oil, but will seek to diversify supply through Central Asian and other sources of energy.

This, and the tendency for East Asian states to take equity in resource projects, means that Japan and China will take an even greater interest in developments in important oil-producing regions than they are now. China in particular will be determined to protect its sea lanes to the Middle East. East Asia’s thirst for oil and gas is also likely to allow Russia to exercise resource diplomacy in regional politics.

Population growth in Southeast Asia and environmental damage across the region mean that East Asia will see a rise in tensions over common pool resources, such as water and fish. Some states will be pushed towards open confrontation. Water and fishing disputes are already common and these may intensify, particularly during supply emergencies.

The effect of the damming of the Mekong on fragile ecosystems - and the economic activity they support - downstream could lead to tension between China and its southern neighbours, testing China’s commitment to regionalism. The search for new sources of key resources, like hydrocarbons, could lead to further conflicts over territoriality.

It is likely that irregularities and shifts in rainfall patterns will continue and perhaps increase to 2020. An ongoing northward movement of monsoon activity, or the foreseeable increase in the ‘dwell times’ of El Nino, could see an increase in droughts and water shortages in Southeast Asia and seriously affect crop yields. These patterns will have a significant impact on regions in which there is a dependence on subsistence agriculture, or where there is existing environmental damage such as erosion and deforestation, or where rivers and other water courses have been diverted into large infrastructure projects. Many of the environmental problems in East Asia will be worsened by their cumulative nature, such the effect of land-clearing practices on water supplies and salination in parts of Java.