Natural Gas

DISTRIK 1 (Sam-Mil)

 Andra Tahzanuu (102318002)

 Dina Septiani (102318005)

 Agnes Priskila Situngkir (102318011)

 Annisah Mardiyyah (102318018)

 Goldie Sanggha Abhimantra (102318033)

 Soraya Ananda Priagi (102318034)

 Oktaviani Nabila Martha Putri (102318041)

 Desnia Amanda (102318049)

 Michael Bryan R. (102318054)

 Firman Teguh Santoso (102318065)

 Raymond Louwi (102318070)

 Widya Dheandra Putri (102318074)

 Lyshet Frilia Taga (102318090)

A, DEFINITION

Natural gas is the most energy-efficient fossil fuel; it offers important energy saving benefits when it is
used instead of oil or coal. although the primary use of natural gas is as a fuel, it is also a source of
hydrocarbons for petrochemical feedstocks and a major source of elemental sulfur, an important industrial
chemical. Its popularity as an energy source is expected to grow ubstantially in the future because natural
gas can help achieve two important energy goals for the twenty-first century: providing the susitanable
energy supplies and services needed for social and economic development and reducing adverse impacts
on global climate and the environment in general.
Natural gas is a mixture of gases which are rich in hydrocarbons. All these gases (methane, nitrogen,
carbon dioxide etc) are naturally found in atmosphere. Natural gas reserves are deep inside the earth near
other solid & liquid hydrocarbons beds like coal and crude oil.Natural gas is not used in its pure form; it
is processed and converted into cleaner fuel for consumption. Many by-products are extracted while
processing of natural gas like propane, ethane, butane, carbon dioxide, nitrogen etc, which can be further
used.
Natural gas origin and sources are different theories to the origins of fossil fuels. the most widely
accepted theory oh the origin of natural gas assumes that natural gas hydrocarbons come from organic
matter (the remains of land and aquatic plants, animals and micro-organisms) that was trapped within
sediments as they were deposited and transfoemed over long periods of time into their present form. two
main mechanisms, namely, biogenic, and thermogenic, are responsible for the degradation of fossil
organic material in sediments (Rojey et al., 1997.

B. Natural Gas Development in Indonesia

The notion that Indonesia could become a net importer of natural gas by 2020 may seem
absurd because it has the eighth largest proven gas reserves in the world; some 108 trillion
cubic feet (Tcf), which are enough to power the country at current rates of production for the
next fifty years, reports the Review of World Energy 2014.

Despite this rich endowment, Indonesia could yet be facing net gas shortages by the end of
the decade. Three factors contribute to this possibility. First of these is the predominance of
natural gas exports under long-term contracts. Indonesia is the world’s fourth largest LNG
exporter after Qatar, Malaysia and Australia, reports the International Gas Union Annual
Report, 2014. Secondly, shortages may arise because of insufficient long-term investment in
exploration and development of gas fields, as Michael Buehler, Lecturer at SOAS, University
of London, points out. “No significant new fields have been discovered and the government
does not seem to make investment in infrastructure in the sector a priority".

Closer to home, the Indonesian Petroleum Association predicted late last year (2014) that the
funds invested for exploration could fall by 20% this year (2015). In addition, development of
new blocks, such as Chevron’s $12 billion USD Indonesia Deepwater Development (IDD),
have been delayed partly due to a bureaucratic failure to extend various permits and partly
because of the government requirement that at least 25% of the output be reserved for
domestic consumption. The third factor is Indonesia’s inadequate distribution infrastructure.
This is due as much to lack of investment as to its geographical make-up which favours
distribution by tanker over pipeline as the most prolific blocks of natural gas reserves are
located far distances from major demand centres.

The IEA forecast a doubling of domestic demand for gas over the next two decades and some
industry commentators estimate demand increasing between 6-7% a year for the rest of the
decade, driven by an expanding power sector and major industrial users switching to gas. In
the absence of considerable investment in E&P, domestic distribution infrastructure
construction and reform of energy subsidies as well as rising domestic demand threaten not
only the ability to export, but also the availability of funds for infrastructure investment.

However, a new President, Joko Widodo, with an ambitious reform programme has been
elected which could mark a turning point In Indonesia. President Joko Widodo has taken the
opportunity, afforded by the international collapse in oil prices, to slash and cap fuel
subsidies by some 120 trillion Rupiah in the financial year 2015-2016, thereby releasing
around $18 billion USD for his reform programmes.

In 2013, 52% of Indonesia’s natural gas production was exported overseas. Under short-term
pressure from domestic demand for natural gas, Indonesia has had to buy spot LNG cargoes
to meet its export obligations. To ensure adequate supplies for domestic consumption in the
medium and long term, the government has increased the proportion of gas production
reserved for domestic consumption, which in practical terms, means an increase to 23.4 Tcf
this year from 22.7 Tcf last year, according to data published by the regulator. In December
2014, the state-owned energy firm PT Pertamina (Persero) signed its first import contract
with Cheniere Energy Inc. to receive 1.52 million metric tons of LNG per year for 20 years
starting in 2018, reports World Oil, January 2015.

Whilst gas production must increase to contribute to the expected expansion of generating
power capacity, state-owned oil and gas company, Pertamina, is planning improvements to
support gas deliveries to domestic buyers. The plan is for a nationwide distribution network
beyond Java, to link up with new gas power plants and fields throughout the country,
including a new pipeline linking Kalimantan gas fields with Java. However, given the current
low energy prices, foreign investment in Indonesian gas projects is likely to slow as energy
companies seek to cut their capital spending.

Whether, and how fast, these plans come to fruition will depend upon the resolution of a host
of issues. According to Ismail Akbar, Head, of Media & Market Intelligence - Indo Cognito,
“These include - regulatory uncertainty, complicated bureaucracy and business permit
procedures (involving too many institutions and authorities), not counting the mafia”. He
adds, “In the oil & gas sector, lack of accurate geological data for exploration purposes has
become quite an issue together with a lack of adequate tax incentives.”

For investors, investment in energy is a long game. All are agreed that the new President has
made an audacious start “but the actual ‘reform’ will surely take time” says Akbar. And he
adds, “Given the crash in energy price, some business will see this as an opportunity and
speed up their business development but some others most likely will ‘hold’ any investment
plan – the best they might want to do in this case is probably secure a contract extension”.

Despite a reforming President, the prospects for substantially increasing gas production to
meet demand at home and abroad without imports of gas look poor in the short run. It can
take up to eight years to construct a new gas field from scratch and the preliminary
exploration phase has yet to really start. Against this background one might reasonably
 predict that Indonesia will find itself under pressure to turn to Singapore’s new gas hub by
2020.

C. Advantages & Disadvantages of Natural Gas

 Advantage

Natural gas burns cleaner than other fossil fuels, producing half the carbon dioxide as coal
and about a third less than oil. It also emits fewer amounts of toxic chemicals like nitrogen
oxides and sulfur dioxide. In the U.S. market, it is an abundant resource and currently the
cheapest source of electrical power (an average of 6 cents per kilowatt hour, vs 9 cents for
coal and hydroelectric and 11 cents for solar).

1 It’s environmentally friendly

Natural gas tops other fossil fuels when it comes to clean burning. Since the process of
natural gas combustion is almost up to the mark, the level of byproducts disseminated to the
environmental is little. In addition, advances in technologies have massively reduced nitrogen
oxide, a common pollutant emitted by natural gas. The blue flame witnessed during the
process of burning natural gas is an indication that the gas is burning perfectly.

Also, since combustion from natural gas is clean, it does not leave unsightly ash, soot, and
bad odors behind.

Embracing natural gas alleviates any need for underground storage tank, which wipes out the
risk of soil contamination, oil spills and unplanned and expensive clean-up of the
environment. In case your storage tank is above ground, embracing natural gas alleviates any
risk regarding corrosion of the tank and spills. It’s also non-toxic, which means, low or high
exposure will not have any impacts on humans.

2 Safer and easier to store, by far

Natural gas is a lot safer and easier to store compared to other fossil fuels. Because of that, it
tops the list of the most efficient sources of energy for generation of electricity and heating.
Natural gas offers numerous modes of storage, for example, it can be stored in tanks above
the ground in liquid form or underground, like a vast majority of homes in the United States.

However, the typical storage module in the larger U.S. is in oil fields or depleted natural gas
located in proximity to consumption centers. It’s relatively easy to convert a gas field from
initial production to direct storage since it can leverage existing wells, pipeline connections
and gathering systems.

3 Natural gas is reliable

Natural gas occurs underneath the surfaces of the earth, which means, when storms come, the
delivery will not be impacted in any way. Other energy sources like electricity can be
interrupted for days in case of severe storms. Extreme cold conditions are even worse for
electricity since power is often knock out time after time.

4 It’s less costly compared to other fossil fuel energy sources

The price of natural gas almost always remains constant even when prices of gasoline spike.
For instance, when the price of gasoline hit more than $4 a gallon, natural gas remained at $2
a gallon. The law of demand and supply doesn’t always significantly affect natural gas prices.
Technological advances have made natural gas even cheaper; case in point: the Shale
Company that supplies gas in the U.S. is far cheaper than any natural gas company. With the
price of its gas so low, it sponsors numerous trucking companies to change up to natural gas
instead of diesel.

5 Natural gas is in bountiful supply

Recent gas studies have learned that there are still more than 100 years of availability of gas
in the U.S. alone, plus a lot more gas reserves have not been touched. This assures
availability for many years to come.

6 Minimizes dependency on foreign oil

Most countries are held to ransom because of over-reliance on foreign oil. Natural gas is a
reliable alternative as it can power vehicle and also be used to generate electricity to
compliment other fossil fuel sources.
 Disadvantage

Methane is a very powerful greenhouse gas, up to 20 times more potent than carbon dioxide.
If improperly extracted, methane can be released into the atmosphere, or burnt off as flaring
at oil fields, releasing many toxic compounds into the atmosphere. There is considerable
debate about the environmental damage caused by fracking. While the evidence of
groundwater contamination by drilling is mixed, there is more of a danger of contamination
from poor transportation, storage and disposal practices of fracking wastewater. Micro-
earthquakes are also a side effect of fracking.

The deficiency of natural gas at environment, efficiency, and business sector

Natural gases known as the most safest and cleanest fossil fuel for industrial and
transportation use. And we know, that natural gas is non-toxic or non-poisonous. But it can
be dangerous for our health and it can cause death too.

A person will experience the following effects as gas concentration increases:

• At 25 to 30% gas increasing in air, the oxygen deficiency can cause ringing ears,
euphoria, and unexplained behavioral changes.

• At 50% gas-air mixture, a person taking in a few breaths will be incapacitated and unable
to self-rescue.

• At 75% gas, a person is immediately incapacitated and death will occur in just a few of
minutes.

Natural gas is always lighter than air, and will rise in a room if allowed to escape from a
burner or leaking fitting. On the contrary, propane is heavier than air and will settle in a
basement or other low level.

Incomplete combustion can occur when the gas mixture is richer than 10%. When this occurs,
there is not enough oxygen to completely oxidize all the carbon to carbon dioxide. If it
happens, it would be become a carbon monoxide gas. Carbon monoxide is toxic or poisonous
and can cause physical illness and the most dangerous is death. It is lighter than air and mixes
very thoroughly.

At another condition, the emission of natural gas in greenhouse, can be harmful too. As we
know this nowadays, the effect of greenhouse very vissible. So, because of this greenhouse
effect can make disadvantages at business sector, and the government would be make it
forbid.
 Reference :

https://www.environmentalscience.org/natural-gas.

-Mokhatab, Saeid dan Poe William. 2012. Handbook of Natural Gas Transmission and Processing. USA :
Gulf Professional Publishing.

https://www.conserve-energy-future.com/advantages-and-disadventages-of-natural-gas.php

https://www.indoenergi.com

https://www.ilmugeografi.com

http://www.gbgindonesia.com/en/main/business_updates/2015/upd_will_indonesia_become_a_net_impor
ter_of_natural_gas_by_2020_11156.php