Public Policy Of Hydrocarbon Productivity Optimization For Oleo- And Petrochemical Industry: System Dynamics Approach (Case Study : Hydrocarbon Consumption In Riau Province, Indonesia)

Abstract

Nowadays, Riau Province located in Indonesia which is producing approximately fifty percent of Indonesia crude oil production and ten million metric tonnes (MT) of Crude Palm Oil (CPO) from two million hectares of palm oil plantation, has become a potential province to develop a centre of oleo- and petrochemical industry in Sumatra Island. Eventhough it is not a significant natural gas producer, the neighboring provinces such as Jambi and South Sumatra are supplying large amount of natural gas. It is such a challenging moment for Riau local government to have strategic policy of oil and natural gas productivity into petrochemical industry to manufacture its derivative products. It is also happening to CPO in oleochemical industry. If all of these hydrocarbons used as raw materials are high because of the expansion of oleo- and petrochemical industry, the usage of oil and natural gas, as the fossil energy should be substituted by renewable energy, such as wind, water, sunlight, geothermal power. Until now, government and private sectors seem less to care to optimize this productivity. System dynamics is used to simulate the behavior of this hydrocarbons consumption as the energy and product supply to the oleo- and petrochemical industries. Public policy as the intervention is introduced to become the feedback to the government and private sectors to take the growth of oleo- and petrochemical business.