Is Obama talking about the prospect of “Methanol Economy” in Asia Pacific?

In recent speech in front of Australian Parliament, President Obama affirms US commitment to be a productive “Pacific Nation”. His speech is particularly interesting because he pictured Asia Pacific region as a major emerging economy which rival Europe and even North America. However, he also challenged these emerging economies with new paradigm of commerce:

“We recognize that economic partnerships can't just be about one nation extracting another's resources. We understand that no long-term strategy for growth can be imposed from above. Real prosperity-prosperity that fosters innovation, prosperity that endures-comes from unleashing our greatest economic resource: the entrepreneurial spirit of our people.”

He made a call to a more locally engaged Multinationals in the country where they operates. Not only extracting its resources, but also empowering the local communities and nations, so the whole economy rises together:

“We need growth that is fair, where every nation plays by the rules-where workers rights are respected and our businesses can compete on a level playing field; where the intellectual property and new technologies that fuel innovation are protected; and where currencies are market-driven, so no nation has an unfair advantage.”

“We need growth that is broad-not just for the few, but for the many, with reforms that protect consumers from abuse and a global commitment to end the corruption that stifles growth. We need growth that is balanced, because we'll all prosper more when countries with large surpluses take action to boost demand at home.

He also envisioned a sustainable economies in Asia Pacific which rely on the development of clean energy that should be affordable to the people all over Asia Pacific regardless of its economic size:

“And we need growth that is sustainable. This includes the clean energy that creates green jobs and combats climate change, which cannot be denied. We see it in the stronger fires, the devastating floods and the Pacific islands confronting rising seas. And as countries with large carbon footprints, the United States and Australia have a special responsibility to lead.”

Finally, he challenged the country that is still not aware its “place and time” to make a better choice for its future:

“Every nation will contribute to the solution in its own way, and I know this issue is not without controversy, in both our countries. But what we can do-what we are doing-is to work together to make unprecedented investments in clean energy; to increase energy efficiency; and to meet the commitments we made at Copenhagen and Cancun. We can do this. And we will.”

I bet President Obama had his eye on “Methanol Economy” that was envisioned by Prof. George Olah in his book :”Beyond Oil & Gas: the Methanol Economy”. He knows that affordable energy should be available for all people in Asia Pacific, the home of almost half of world's population. He knows if Methanol Economy needs to be started anywhere in the world, it has to be started in Asia Pacific because of its geographical and geopolitical nature. It is so fitting that he chose this region as place where he delivered the speech above.  

Securing the Passage of World's Energy through the Archipelago

The US move to create a naval base in northern Australia close to the South China Sea can actually mean more dollars in the Indonesia's pocket. The first piece of evidence has come by way of Australia's decision to exploit their gas reserves for fueling the Asia Pacific Economy. President Obama made the case that the new defense pact between the U.S. and Australia is vital to protecting commercial traffic in the Pacific. Speaking to nearly 1,700 Australian troops and a few dozen Marines, Obama laid out a reason why "we're deepening our alliance here." “This region," he said, "has some of the busiest sea lanes in the world, which are critical to all our economies."


The US move will provide a sense of protection to East Asian countries including Japan, who have serious conflicts with China but buy vast amounts of Chinese goods. The new found protection will encourage East Asia to reduce its dependence on China for goods and enhance economic ties with Indonesia and other South East Asian countries, one expert in International Trade said.


Japan, Vietnam and Indonesia will feel more secure. Indonesia and its neighbors can get together to control the Malacca Straits, which is the route through which 80% of Chinese imports of oil from Middle East and Africa passes.


There are signs that China is jittery about the US move to station 2,500 US marines in the Northern Territory of Australia within five years. Beijing on Thursday warned Australia it might get "caught in the crossfire" if it allows the US to exercise its naval might in the waters around it. Washington's move has put the US navy within easy sailing reach of Vietnam, which is involved in a serious territorial dispute over oil-rich islands in the South China Sea.


When it comes to exporting of manufactured goods, Indonesia and ASEAN countries cannot replace China yet, which currently has only basic manufacturing Industry to offer, one expert said. Indonesia will need to retool its export basket if it seriously wishes to compete with China as a provider of low-cost goods in the world, he said.


But, one particular opportunity for Indonesia which is still grossly underutilized is not in manufacturing but in energy infrastructure, especially in the downstream sector. The diagram below highlight the looming energy crisis in the world which will lack liquid fuel supply to meet its demand. 

With the high crude prices which has been predicted to reach $200/barrel in 2012 due to the security crisis in Iran, the Oil & Gas industry will be forced to look for other alternatives than conventional petroleum reserves if the world does not want to see the interruption of liquid fuel supply. This is a promising future for Methanol as Energy Carrier of choice in the region, which makes more sense in a high crude price environment. Currently, Methanol is made from natural gas and coal, and in the future can be made in industrial scale from renewable resources such as biomass and geothermal steam.

As the diagram shows above, Gas to liquid and Coal to liquid route to Methanol will become one promising industry to look, especially for Indonesia, a country which still has huge reserves of natural gas and coal all over the archipelago. Indonesia's move to develop its downstream energy sector should make this country an important player in Energy sector in Asia Pacific region and asserts its geopolitical role in the world. 



The political risk in Indonesia has substantially declined in the last few years due to the political. social and economical reformation that swept the country since 1998. If it continues to drop, Indonesia will become an attractive alternative to China at a time when Western companies are looking for alternatives. That would energize Indonesia's economy and further stabilize the regime. A more stable Indonesian regime would remove any attraction for an alignment with China and any opportunities for Chinese or Islamist subversion - even if, in the latter case, prosperity is not enough to eliminate it.

When we look at the map above, we see the importance of Indonesia. When we look at basic economic statistics, we see the strength and weakness of Indonesia. When we consider the role of China in the world economy and its current problems, we see Indonesia's opportunities. But it comes down to this: If Indonesia can provide affordable energy, especially liquid fuel to its people and beyond, Indonesia has a strong future, and that future depends on it becoming the low-cost factory to the world as an alternative to China and India.


Life is more complex than that, of course, but it is the beginning of understanding the possibilities. In the end, few rational people looking at China in 1975 would have anticipated China in 2011. That unexpected leap is what Indonesia needs and what will determine its geopolitical role. Indonesia has joined G20 club and should act as "Mover and Shaker" on the world economy, and not to play a victim's card anymore.

$200 Crude in 2012?

By David Lee Smith 
November 16, 2011  

In May 2008, as crude oil steamed toward a July -- and all-time -- high of $147 per barrel, a Goldman Sachs (NYSE: GS  ) group predicted that black gold's price could move as high as $200 within the following 24 months. Few financial forecasts have ever received more attention. Instead, during the second half of the year its price rolled over and began a free fall to near $30 as December brought the eventful year to a close.

 It now appears, however, that Goldman might just have been early in its prognostication, rather than simply  wrong. Oh, I know, light, sweet crude is currently trading near $100 a barrel, and it would require a host of major events to drive it to double that level, especially during 2012. But almost unnoticed is a price increase by nearly a third in just the past month.  And far more important, it seems that a number of game changers can -- and probably will -- occur as we move into the impending new year. I'm wagering that a host of the potentially catastrophic events could involve Iraq and its neighbor to the east, Iran. The result, almost certainly, would be a steep escalation of crude levies.

Swimming in oil?

For now, energy affairs in war-torn Iraq are progressing swimmingly. The country's production has grown by leaps and bounds since major oil companies from around the world -- beginning with a BP-led (NYSE: BP  ) consortium, and later including ExxonMobil (NYSE: XOM  ) and Royal Dutch Shell (NYSE: RDS-B  ) -- began accepting the government's unusual contractual terms and started reinvigorating its major (albeit waning) fields. Indeed, with help from Schlumberger (NYSE: SLB  ) and its oilfield services compadres, the companies have boosted Iraqi production from a couple of million barrels a day to 2.6 million daily barrels in just over a year.

Even more impressive are the seemingly reasonable notions that the country could reach 9 million barrels a day within a few years. That number assumes, however, that the companies are able to plug away unabated. And therein lies the rub. Indeed, a number of emerging speed bumps will need to be negotiated to prevent production from actually reverting to previous levels and world crude prices from making the Goldman Sachs folks appear amazingly prescient.

Questionable pullout and the lurking dangers

• Last month, President Obama announced a complete pullout of all U.S. forces from Iraq, thereby making room for as many Iranians as that country's President Ahmadinejad wishes to deploy to his neighbor's territory. The Wall Street Journal called the announcement "a disappointment for U.S. defense officials." There's likely a stronger -- and more appropriate -- term than "disappointment" for those officials, who likely were discharging volumes of smoke from their ears, as were the members of Congress who'd demanded that Iraq "tap its oil resources to pay some of the U.S. war costs," a demand that the White House not surprisingly refused to support.
  Nevertheless, watch for dangerous developments from a combination of the two primarily Shiite-populated "I" countries. It seems that the potential for a progressively closer relationship between the pair -- they're already tending to be mutually supportive on regional issues -- is enhanced by Prime Minister Nouri al-Maliki's having resided in Tehran while Hussein was in power. As a result, he retains a number of contacts in the dangerous land of Ahmadinejad.
• Further, ExxonMobil has ruffled feathers in Iraq by becoming the first member of Big Oil to reach an agreement to search for oil and gas in the country's semi-autonomous Kurdistan region. The Kurdish area is thought to hold as much as 45 billion barrels of oil and 200,000 billion cubic feet of gas, amounts approximately comparable to those in Libya.
  But while the new deal obviously will provide a substantial opportunity for Exxon, it has sufficiently raised the dander of Iraq's central government -- which reportedly sent three letters admonishing the big company before its Kurdistan agreement was signed -- that it could ultimately endanger Exxon's license to perpetuate its current work on southern Iraq's giant West Qurna field. Beyond that, the Kurdistan Regional Government may have held discussions with Chevron (NYSE: CVX  ) , which is not currently involved elsewhere in Iraq, and Italy's Eni (NYSE: E  ) , which is.
  Obviously, the primary concern involves the potential for widespread conflicts between the companies working in Iraq and those that wish to spread their efforts to the Kurdistan region. According to the Iraq Oil Ministry's Abdul Mahdi al-Ameedi, "Exxon should choose between either continuing with its deal with the Kurdistan Regional Government or lose its contract in southern Iraq."
• Clearly more danger lies in Iran's development of nuclear weaponry, which -- if it weren't already widely known -- was documented last week in a United Nations report. As part of an effort to provide a regional counter to the rogue nation, the U.S. is in the process of formulating a deal to provide the United Arab Emirates (U.A.E.) with thousands of "bunker buster" bombs, among other munitions.
  At the same time, the Obama administration is reportedly preparing to fortify the six members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Oman, Qatar, U.A.E., and Kuwait). Beyond that, concerns are mounting almost daily regarding the potential of Israeli airstrikes (with or without U.S. support) against Iran's nuclear facilities.
• And finally, within Iraq, minimally publicized Shiite-Sunni factionalism appears to run the risk of spilling over into a renewed civil war with the attendant danger of possibly drawing in Shiite Iran and Sunni Saudi Arabia -- neither of whom are especially fond of each other to begin with. The normal factionalism has been intensified by the Shiite Maliki's determination to purge the nation's security and intelligence forces of those who served in Saddam Hussein's Sunni-dominated regime.
  At the same time, with the U.S. about to complete its role as a peacekeeper in the country, Maliki has yet to fill a number of ministry posts, given his concern about a coup emanating from potentially disloyal security units. As such, he remains personally in charge of the ministries of defense, interior, and national security.

I could continue to discuss potential difficulties in the oil-rich Persian Gulf area, along with other exporting countries, such as Libya and Nigeria. But you get the point: The Middle East and North Africa -- and especially the all-important Iraq-Iran-Saudi Arabia region -- remain very much a tinderbox, with the potential to drive crude prices to stratospheric levels.

Renewable Methanol

Renewable methanol (or biomethanol) is perhaps the oldest form of methanol production.  Sometimes refered to as wood alcohol, methanol was originally created by the Egyptians for the embalming process through the destructive pyrolysis of timber and has since evolved to provide a number of essential materials and chemicals to society. 

Though much of today's methanol comes from the methane in natural gas, one of the most remarkable aspects of methanol is the diversity of feedstocks that can be used in its production. Though often methanol comes largely as a byproduct of the methane in natural gas, a great and growing amount of methanol is being made from renewable and sustainable resources.

As the most basic alcohol, methanol has the distinct advantage of 'polygeneration' - whereby methanol can be made from any resource that can be converted first into synthesis gas. Through gasification, synthesis gas can be produced from anything that is or ever was a plant.  This includes biomass, agricultural and timber waste, solid municipal waste, landfill gas, industrial waste and pollution and a number of other feedstocks.

Below you will find factsheets on two of the Methanol Producers in the world that are actively engaged in producing renewable methanol. In Iceland, Carbon Recycling International utilizes CO2 flue gas and electricity from a geothermal power plant to make renewable methanol for vehicles and trucks on the island nation. In the Netherlands, BioMCN converts crude glycerin—a residue from processing vegetables and animal fats—into advanced second generation bio-methanol.  

Carbon Recycling International

BioMCN and Bio-Methanol

How Methanol is going to change the way we use mobile devices

Direct Methanol Fuel Cell (DMFC) could be used 

to replace rechargeable battery and 

therefore it does not require access to electricity.

Cadangan Gas Di Tangguh Untuk Domestik

Oleh Vega Aulia Pradipta

Selasa, 08 November 2011 | 18:42 WIB

JAKARTA: Pemerintah menegaskan cadangan gas yang ditemukan di Tangguh, Papua akan diprioritaskan untuk keperluan domestik, mengingat akan ada sentra industri petrokimia di sana.


Kepala Divisi Humas, Sekuriti dan Formalitas BP Migas Gde Pradnyana mengatakan meski belum diputuskan secara resmi oleh Kementerian ESDM terkait berapa besar porsi domestik dan ekspor, namun gasnya pasti akan diprioritaskan untuk domestik.


“Memang itu akan diprioritaskan untuk domestik, tetapi apakah akan 100% atau tidak, itu belum diputuskan oleh pemerintah,” ujarnya hari ini.


Menurut Gde, kepastian porsi untuk domestik baru bisa diketahui setelah ada data terkait kebutuhan gas untuk industri di sana. Selain untuk kebutuhan industri, gas juga masih dibutuhkan untuk pembangkit listrik PLN di Papua.


“Porsi untuk domestik tergantung berapa besar kebutuhan PLN, berapa besar kebutuhan petrokimia? Memang sudah ada beberapa permintaan gas ke Menteri ESDM, tapi belum ada perjanjian jual-beli gas yang resmi sampai saat ini,” ujarnya.


Saat ini sudah ada dua train kilang LNG yang beroperasi di Tangguh dengan kapasitas masing-masing 3,8 juta ton per tahun (mtpa) yang dioperatori oleh BP Indonesia.

Sementara itu, sertifikasi cadangan train tiga juga sudah selesai dilakukan oleh Lemigas dan ditemukan cadangan gas tambahan kira-kira sekitar 3-4 TCF. Gde mengatakan selain itu, Genting Oil juga telah menemukan cadangan gas di Papua sebesar 2 TCF.


Sebelumnya, Direktur Perencanaan Industri Manufaktur BKPM Lily Herawati berharap gas dari Tangguh bisa dialokasikan untuk domestik daripada gas itu diekspor dengan harga yang murah ke China, yakni sebesar US$3,35 per MMBTU. Lily mengatakan apalagi di Papua akan dikembangkan Merauke Integrated Food and Energy Estate (MIFEE) yang akan membutuhkan pasokan gas cukup besar.


“Ini tergantung kebijakan Kementerian ESDM. Selama ini di Papua yang train 1 dan 2 itu diekspor gasnya. Kami dengar ada pengembangan baru di sana, kami harap jangan di-LNG-kan dulu gasnya, tapi lepas saja gasnya untuk bahan baku pupuk, metanol di sana,” ujar Lily belum lama ini.


Lily mengatakan saat ini sudah ada investor yang berminat membangun pabrik metanol di Papua. Oleh karena itu, BKPM sudah mengirimkan surat secara resmi kepada Kementerian ESDM agar pasokan gas bisa dialokasikan untuk domestik.(api)