Abstract
Natural gas is a very important non-renewable natural resource that controls the lives of many people. Therefore, the exploitation and utilization of natural gas must be carried out wisely and for the greatest prosperity of the people. This is mandated in Article 33 Paragraph (3) of the 1945 Constitution of the Republic of Indonesia that "Earth, water and the natural resources contained therein are controlled by country and used for the greatest prosperity of the people". With the promulgation of Law Number 22 the Year 2001 concerning Oil and Gas, there has been restructuring in the implementation of natural gas exploitation through pipelines in Indonesia. The law provides more space for private entities to engage in gas exploitation with the purpose to create healthy competition, transparency, improving national development, efficiency in exploiting natural gas and to develop competitive price so that the end consumer can enjoy the benefits. By its implementing regulations, namely, the Regulation of the Minister of Energy and Mineral Resources Number 19 of 2009, natural gas exploitation through pipelines is carried out through an “unbundling” and “open access” mechanism.
Highlights
Natural gas is a very important non-renewable natural resource that controls the lives of many people and is one of the most demanded natural resources in the world society because of its environmental friendly characteristic
Based on the background outlined above, this research seeks to find out the answers of some topic-related questions have arisen as follows: 1. What is the inconsistency of open access and unbundling arrangements in the legislation related to natural gas governance in Indonesia?
Inconsistency in Unbundling If we look at the Oil and Gas Law, Article 23 paragraph (3), which reads: "Every Business Entity can be given more than 1 Business Permit sofar as it does not conflict with the provisions of the applicable legislation”
Summary
Natural gas is a very important non-renewable natural resource that controls the lives of many people and is one of the most demanded natural resources in the world society because of its environmental friendly characteristic. Natural gas is an environmentally friendly, clean-burning fuel, offering important environmental benefits compared to other fossil fuels It is a remarkably safe source of energy when transported, stored, and used. Based on Law Number 44 Prp of 1960 concerning Oil and Gas Mining, oil, and natural gas exploitation in Indonesia was carried out in a monopoly manner by State Enterprises (BUMN).. Guarantee the effectiveness of the implementation and control of exploration and exploitation activities in an efficient, effective and highly competitive and sustainable manner on strategic and non-renewable state-owned oil and gas through an open and transparent mechanism; 2. Open access is proven to have extended the business chain, leading to an increase in the selling price of natural gas, which according to academics, does not reflect the ultimate goal of the constitution, namely "for the greatest prosperity of the people". From the experience of countries that adopt open access, in general, there is a higher price of natural gas than countries that do not implement it
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