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U.S.-Indonesia energy trade deals?

March 18, 2010 at 12:41 PM   |   Comments

JAKARTA, March 18 (UPI) -- U.S. President Barack Obama's upcoming trip to Indonesia could be a boost for energy trade.

Analysts predict that U.S. energy interests would take priority over sensitive issues when the president visits his childhood homeland as part of a scheduled tour Tuesday-Thursday, which is to include stops in Guam and Australia.

Noting that the United States has a "comparative advantage" in a number of renewable energy areas, Indonesian Trade Minister Mari Pangestu, in advance of Obama's visit, said, "we hope there can be investments," Bloomberg News reports.

"Energy investment will become the main highlight because that is the main U.S. interest in Indonesia," Ikrar Nusa Bhakti, a researcher with the Indonesian Institute of Sciences, told The Jakarta Post.

U.S. Commerce Secretary Gary Locke will follow up on Obama's trip by leading a trade mission of American renewable energy companies to Indonesia in May.

But before Locke's visit, Chinese Prime Minister Wen Jiabao is scheduled to visit Indonesia in April, which appears to confirm the urgency of the race to make deals.

"The (United States) will be under greater pressure now to secure potential energy investment in Indonesia, which China has also been vying for," Bhakti said.

In a Washington speech Wednesday, Locke said Indonesia, the world's third-largest emitter of carbon, "is going to be a vast, steady market for green technologies."

Locke noted that the Indonesian government expects a 56 percent increase in overall energy investment in the next four years. In 15 years, 15 percent of the country's energy must come from renewable energy.

"Indonesia is taking bold steps, ones that can -- and really must -- be met with equally bold initiatives from U.S. companies," Locke said.

"Ensuring that American companies play a lead role in this energy transformation is a priority for the Obama administration."

Pointing out that Indonesia's population is predicted to increase by 50 million in the next 40 years, Locke said, "Indonesia's energy needs are going to skyrocket.

"And American companies can help Indonesia meet this energy demand and energy challenge."

Locke acknowledged the competition for a piece of Indonesia's energy market, saying, "There are regional neighbors, for instance, like China and India that are racing with us to meet Indonesia and the world's demand for renewable energy, a demand expected to increase by 50 percent by 2030."

While Indonesia contains 40 percent of the world's known geothermal resources, there is also "great potential" for biomass and photovoltaic renewable energies, Locke said.

Topics: Gary Locke
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