New Article on Energy Transition in the RUU Migas

Professor of Petroleum Governance at Institut Teknologi Bandung, Tutuka Ariadji, emphasized the need to optimally implement an energy transition article through the optimization of natural gas energy in the Draft Bill (“ RUU ”) amending Law No. 22 of 2001 on Oil and Gas (“ Migas ”), as amended by Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred to as “ Law 22/2001 ”).

“The energy transition must be incorporated into the RUU Migas, as it is a key element. At some point, migas resources will be depleted,” Tutuka stated to Hukumonline.

Tutuka emphasized the need for regulatory arrangements grounded in Indonesia’s substantial natural gas potential, which should be optimized as a transitional bridge from fossil energy to new and renewable energy (Energi Baru Terbarukan- “ EBT ”). Given the condition of Indonesia’s gas fields, which contain relatively high levels of carbon dioxide, this also opens up potential for the utilization of carbon storage technologies.

A member of Commission XII of Indonesia’s House of Representatives (“ DPR ”), Eddy Soeparno, indicated the possibility of establishing a specific energy transition article in RUU Migas. Such regulation is required to refer to considerations of energy security, investment, and climate impacts, whereby EBT would gradually replace fossil energy sources.

Eddy further emphasized the need for regulatory provisions on carbon capture, storage, and utilization, as such measures constitute an investment requirement for international Migas companies. “I believe it is very important to include provisions related to the energy transition, climate change, and net zero emissions,” he stated.