Regulation on Geothermal Exploitation in Sensitive Forest Areas Forthcoming

Given the contentious nature of ‘protected’ and ‘conservation’ forest areas, many environmentalists are anxiously anticipating the upcoming Minister of Forestry regulation on the exploitation of geothermal energy in those areas, which are estimated to house up to 70% of Indonesia’s geothermal energy potential. Although forest conservation is the international ‘order of the day,’ so too is the pressure to shift away from fossil fuels and towards renewable energy resources – the situation presents quite a dilemma for the Indonesian government.

Indonesia could potentially exploit up to 33 gigawatts of geothermal energy – heat produced from deep within the earth, and by sunlight on the planet’s surface. Currently, only 1 gigawatt of geothermal energy is being exploited; it is a resource with immense potential for further exploitation. However, not only are the short-term financial costs high, but as asserted by Forestry Minister Zulkifli Hasan, some 70% of the drilling zones are in strictly regulated forest areas (Republika, 18/3).

In addition to the sensitive status of the protected and conservation forest areas, the Minister posited that a separate regulation would be needed due to the relatively different characteristics of geothermal drilling to other mining activities.

“Not much land is required for geothermal mining,” Mr. Hasan assured; “drilling processes will only need to be conducted in limited areas.” (Republika, 18/3)

A regulatory ‘foundation’ for the forthcoming Minister of Energy regulation regarding geothermal exploitation in sensitive forest areas was established by Government Regulation No. 24 of 2010 on Forest Area Utilization, enabling incidental or ‘exceptional’ use of protected and conservation areas on the basis of ‘borrow and use’ permits, which the government is sure to secure for any geothermal commitments.

The effort to delve into geothermal exploitation will likely involve private companies. Like the government, they will be obligated by the aforementioned regulation to be responsible for watershed rehabilitation and reforestation of the utilized areas. Further terms and requirements for exploitation of those lands are sparse, however.

The forthcoming Minister of Forestry regulation relating to geothermal energy is said to be in its final stages, and will likely be issued in the near future.

For a brief ILB on Government Regulation No. 24 of 2010, see ILB No. 1345 9/3/2010.

This ILB is based on research conducted by hukumonline team.