Friday, April 8, 2016

Sour Anniversary Looms for Indonesian Environmental Disaster

Mud expected to flow for another three decades from Surabaya gas well blowout

On May 28, it will be 10 years since something went disastrously wrong 1800 meters down inside Banjar Panji I, an exploratory gas well being drilled near the Surabaya town of Sidoarjo, about 900 km. southeast of Jakarta in east Java.

When drillers attempted to shake loose a stalled drill bit, or it broke or disappeared, a torrent of stinking, toxic mud and hydrogen sulfide gas boiled to the surface, spraying gas 10 meters into the air. Ten years later, mud and gas have continued to pour of the ground in what has to rank among the world’s biggest manmade environmental disasters.

The story of PT Lapindo Brantas, the company that was drilling the well, is a tale told too often in Indonesia, of professional and managerial incompetence, undue haste to exploit natural resources at any cost, the passivity of the courts and most important the timidity of the Indonesian government to attempt to bring the perpetrators of the disaster to book.

A decade into the disaster, the Indonesian government under President Joko Widodo has agreed to use state funds to help PT Minarak Lapindo Jaya, the unit of a holding group belonging to business tycoon Aburizal Bakrie, to pay Rp781 billion (US$11.72 billion at current exchange rates) in compensation to mudflow victims at the end of 2015.

The deal is sealed under a presidential regulation stipulating that Lapindo will pay compensation to the government within four years with an interest rate of 4.8 percent per year – free of tax.

The scale of the disaster is breathtaking, with 40,000 to 60,000 people displaced from 12 villages and forced to take refuge after their homes and land were buried by the mudflow. Some 30,000 to 60,000 cubic meters of mud bubble to the surface per day, down from 180,000 cu m in 2011 according to disaster management authorities– but still the equivalent of 12-24 Olympic-sized swimming pools. 

Damages at last count have topped US$2.7 billion.  Some 4,000 hectares of fish and shrimp ponds have been destroyed. Mud leaked into surrounding rice fields and water from the basins has already escaped into surrounding  rice fields, destroying the income of many rice farmers. In addition, the impact of off-loading the water extracted from the mudflow into the waters in East Java is a further cause of economic and environmental devastation, according to a scholarly paper on the disaster by authors Nunung Rahayu, Nadia Nareswari and Suprandi Putri Nurina of Gadjah Mada University.

Various efforts to stem the flow have failed – including a network of dams, channeling it into the sea; and an ambitious plan to plug the crater with giant concrete balls.  Geologists expect it to continue for at least 20 to 30 years.  In the meantime, the dikes built to contain the flow have repeatedly been inundated by resultant flooding, resulting in disruptions of local highways and villages. Geologists say further breakouts are still a possibility.

Lapindo Brantas was controlled by Bakrie, who was Coordinating Minister for Public Welfare at the time of the disaster and head of Bakrie Group. The family, through its investments, held a controlling stake in PT. Energi Mega Persada, Lapindo Brantas’s parent company According to Forbes magazine, Bakrie Group then was also Indonesia’s wealthiest man, with an empire worth US$5.4 billion. Bakrie-controlled companies have interests spanning Indonesia’s economy in mining, oil and gas, palm oil, property, telecommunications and finance. Since 2009, he has also been president of Golkar, long one of Indonesia’s dominant political parties.

Although Bakrie officials have sought to blame a 6.2 magnitude earthquake that occurred in Yogyakarta 250 km. away and two days earlier, the mudflow has been a personal disaster for Bakrie, both financially and for his reputation. International geologists from the United States, Britain and Australia, writing in the journal Nature Geosciences, have concluded that an analysis of underground gas levels measured at the time of the outburst points the finger to gas exploration — not an earthquake — as the trigger, a research team from the United States, Britain and Australia wrote in the journal Nature Geosciences. An investigation found that steel encasing linings had not been used, which would have prevented the disaster. Others charged that a safety cap that should have been deployed in the event of such an accident was nowhere to be seen.

Lapindo Brantas has continued to insist on its website that an investigation found no evidence to link its activities to the eruption. A police investigation sought in 2008 to identify the trigger and to determine whether the drillers were liable for compensating 10,000 families, amounting to Rp700 billion (US$10.5 billion at current exchange rates) but the probe was dropped without result.

In January, Lapindo Brantas announced plans to redrill the gas well as hundreds of police officers and security guards guarded a well against angry villagers five kilometers from the center of the mudflow in Porong. A spokesman told reporters the drilling activity at Tanggulangin 1 would be for gas rather than for oil, as had been the case with Banjar Panji-1.

He said the company was currently conducting drill site preparation (DSP), while exploration activities were expected to be conducted by the beginning of March.

The drilling, he said, had initially been scheduled for early December 2015 but had been postponed due to “social problems.”

 “We understand local people’s concerns due to the trauma from the Sidoarjo mudflow,” the spokesman told the Jakarta Post. “We don’t want to repeat the same incident and we are open to all parties wanting to participate in supervising [the drilling].” He insisted the drilling this time won’t cause problems.

Posted on April 8, 2016 By Dewi Kurniawati Economics/Business, Headline, Indonesia


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