CARBON PRICING POLICY IMPACT FOR UPSTREAM OIL AND GAS BUSINESS IN INDONESIA

• Main Author: Sapti Putri W, Stephanie
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/65073
• Institution: Institut Teknologi Bandung

Primary energy resources are predicted to have dynamic change with significant growth in renewable energy. However, with the fast growing of the worldwide population and energy growth, the oil and gas production will continue to increase to fulfill this demand. Indonesia is targeting towards the net zero emission country in 2060 or sooner with 29% emission reduction in 2030 and 41% emission reduction in 2050 from the energy sector. The near future implementation of carbon pricing policy is one of the strategies to achieve lower emission, with gradual implementation starting on coal fired power plant. The upstream oil and gas sector as one of the emission source sectors will be impacted with carbon pricing policy in the near future. Author uses the scenario planning method to get an accurate picture regarding the implementation of carbon pricing in Indonesia. The scenarios are developed from qualitative interviews data with stakeholders. The focus on scenario development is to look at the implications of carbon pricing policy implementation on the upstream oil and gas business in general and finding the right strategy to face the energy shift challenge in Indonesia. In this study, the author develops 4 scenarios called Laggard in Transition Scenario, Green and Clean Scenario, Global Warmer Scenario and Delayed Transition Scenario. The Laggard in Transition Scenario described the slow progress on emission reduction In Indonesia because of lower prioritization from the Government and slow transition progress from other countries. The Green and Clean Scenario occurs when there is a good support system from all stakeholders, the policy is directed and well managed thus, the development of technology and innovation is advanced and emission reduction target is achieved faster. The Global Warmer scenario is where the emission reduction target is not achieved and there is no significant progress in technological development. While the last scenario is the Delayed Transition Scenario occurs when the technology development progress is slow due to lack of research integration which result on unreliable technology for an industrial scale. Each scenario will provide different implications and early warning signals for the upstream oil and gas industry sector and the strategic options developed will also be different. Upstream oil and gas business players can get reference from the strategic planning direction on each scenario to support the smooth running of the business in facing the energy shift challenge in the medium and long term.