The urgency of energy security all over the world, particularly in Indonesia is perceived as the main issue that is related with economic development. This issue started in 1970’s where OPEC decided to embargo oil crude production to result in the decrease of oil quantity to be exported to countries that need oil in large amount, such as United Stated. The impact of this policy was stagflation leading to world economic resesion. World crude oil price continued increasing until 2008 and exactly in October 2008 it was $100-150 perbarel. This fact caused negatif effect in world economy (Maria, 2008).
The instability of world crude oil price was caused by several factors. First, the demand and supply of crude oil itself. On supply side, oil price is influenced by the amount of oil stock as well as political situation among members of OPEC. And on demand side, oil price is influenced by the demand from industrial countries, such as, United States, China, India, and Japan. Oil and metal demand from China and India in 2002, increased by 90 percent based on data from IMF (cited by Maria, 2008). Second, oil price in the world is influenced by the fund manager from oil company who takes profit from rising energy stock price, and the next factor is the policy about the development of alternative energy resources (Raghunala, 2006).
There are many reasons to develop alternative energy resources. One of alternative energy resources is biofuel, especially bio-ethanol that is expected to be able to substitute crude oil as the main energy resources. Environment protection is one of the reasons to improve alternative energy resources program, based on agremeent in Climate Change Conference and Kyoto Protocol that give recommendation to decrease the effect of global warming and to minimize the impact of climate change, e.g bio-ethanol that could reduce carbondioxide in atmosphere, rise oxygen and air quality.
Table 1. Final Energy Consumption by Sector
Energy Consumption (included Biomass)
Source: CBS, 2006
The fresh idea about alternative energy resources in Indonesia is influenced by the amount of fuel consumption in this country. Based on the data (table 1) provided by Central Bureau of Statistics (CBS), in 2006, the total final energy consumption in Indonesia was 853.804.354 BOE (Barel Oil Equivalent). Meanwhile, the biggest number of consumption of fuel was dominated by industry sector, household sector, and transportation sector, 801.525.402 BOE (Barel Oil Equivalent).
Developing bio-ethanol as an alternative energy resource is aimed to decrease heavy dependence on fosil oil and this project should be important agenda (planning) to secure the supply of energy as unrenewable resources and to avoid economic problem. Now, Indonesia which was known as a potential oil exporter has changed be a potential oil importer (Modjo, 2008). This paper intends to discuss the agenda to secure energy by reviewing the potency of bio-ethanol in Indonesia toward sustainable energy resources.
Improving bio ethanol intensively will give positive impacts, such as to decrease the dependency on crude fuel, create energy resources that support environment protection program, create jobs and reduce poverty rate.
Great potency in Indonesia to develop new energy resources could be analyzed from the amount of the production of raw material such as Maize (15.860.299 ton), Sugarcane (2.785.000 ton) dan Cassava (20.834.241 ton). Total production of bio-ethanol in Indonesia which is almost 180 milions litres will give positive effect to fulfill the demand of oil to cars 16.418 thousand KL, 16.035 megawatt electricity and industry. The great prospect of developing bio-ethanol is shown by number of producers of bio-ethanol that continue increasing. Eventhough, there are many prospects in Indonesia to develop bio-ethanol, there are challenges that must be faced like the decrease of world oil price, minimum investment to important sectors, both companies and agriculture sectors.
By doing so, intervention from government as policy maker is badly needed by issuing regulation through import tariff of bio-ethanol, renewable fuel standard and incentive to tax. The other steps to develop bio ethanol are to give incentive to agricultural sector through banking role and build infrastructure to distribute bio-ethanol easily.
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