Category: English

  • Santos Stuck in Mudflow Controversy

    SIDOARJO, INDONESIA– Santos is facing a blowout in the clean-up bill from the world’s largest mud volcano in East Java, as a new report funded by the Australian government concludes the disaster cannot be contained.

    The study, which was conducted by the United Nations Environment Program and AusAid and is yet to be made public, says transporting the mud 14 kilometres to the ocean and creating a new wetland is the only titigation option available.

    These updated costings of as much as $830 million are nearly 10 times higher than Santos has disclosed to the stockmarket, leading to accusations that the oil and gas major is deliberately playing down the severity of the disaster.

    The UN report also estimates the total economic losses from the mudflow so far at $3,4 billion.

    Santos has yet to admit liability for the disaster, which began after a drilling incident in May 2006, and it had paid almost no compensation to the 75,000 affected.

    “I don’t think there is wide public understanding of the magnitude of this problem,” says Tim Lindsay, director of the Asian Law Centre at Melbourne University.

    “If the projections are correct, it will be catastrophic for any company held responsible.”

    Santos has made provisions of just $88.5 million for the mudflow, which has now affected 1800 hectares of densely populated land in East Java.

    In a statement the company said it would not comment on the UN report, but believed its provisions remained an “appropriate estimate of its potential liability.”

    “The government of Indonesia has taken a major role in responding to the mudflow,” it said in a written statement.

    In its 2007 annual report Santos said its provisions were based on an assumption that “condition at the site will remain stable or improve over the longer term.”

    This is clearly not the case,” says John McLachlan-Karr, an Australian consultant leading the UN team.

    He says retaining walls at the site have failed three times this year and on current projections, the dams will overflow in 2009. This has forced the Indonesian government mitigation team to earmark another 110 hectares for mud lay-down areas, but this is viewed as only a temporary solution.

    The mud pools are growing by 20 olympic size swimming pools every day and the weight could make the area subside by 146 metres in the next decade.

    “It is true to say the volume of mud has declined somewhat but the retaining walls and geology of the area has become less stable,” McLachlan-Karr says.

    “If anything, the impacts are actually increasing.”

    It is this assumption that led the UN team of 12 scientists and engineers to conclude that the mud must be moved. Their 122 page report, commissioned by the Indonesian government, was compiled over the past 12 months. It outlines three possible courses of action. “There is, however, no easy answer,” McLachlan-Karr says.

    One option is to pipe the mud to the sea but there are concerns that the material is too viscous and the pumps would not be able to move the required volume.

    The second option is to pump the mud into a nearby river, which would then be dredged and dumped along the coast. But there is strong local opposition to this method and concern about the increased flood risk.

    Both these options would cost about $1,( billion over the next 25 years, according to the UN report.

    The final option is to build an open canal that would then transport the mud slowly to the ocean. This is the most expensive at $4,6 billion as land, including many shrimp farms, would have to be purchased.

    Santos, despite not admitting any liability for the disaster, is already paying its share of mitigation and clean-up costs, while maintaining the mud flow cause had “yet to be determined.”

    Santos has an 18 percent non operation stake in PT Lapindo Brantas, which experienced drilling problems near the site the day before the mud volcano erupted. Presuming it continued paying 18 percent of mitigation costs, Santos is facing a clean-up bill of between $355 million and $829 million over the next 25 years, according to the UN report.

    The UN team was not asked to determine the mudflow’s cause.

    This is a highly controversial subject in Indonesia, as a company associated with the country’s richest man, Aburizal Bakrie, is Lapindo’s major stakeholder. Bakrie, who is also one of the government’s most powerful ministers and a close allay of President Susilo Bambang Yudhoyono, has maintained the mudflow was triggered by an earthquake.

    This has been universally discredited.

    A team of British, US and Indonesian scientists said in June they were “99 percent certain” that drilling caused the disaster. Their findings were published in the academic journal Earth and Planetary Science Letters.

    Michael Manga of the University of California Berkeley rules out the Yogyakarta earthquake as a potential cause, saying it happened two days before and was 250 kilometres away.

    “In this case the earthquake was simply too small and too far away,” Manga says.

    The report’s lead author, Richard Davies of Durham University, says a “kick” in the well a day before the mudflow erupted resulted in an underground blow-out and a leakage of fluid. He says the chances of controlling this pressure would have increased if the well had contained more protective casing.

    This lack of protective casing raises the issues of negligence and liability.

    So far Santos has spent $US28,5 million ($34,9 million) on mitigation and clean-up efforts. A spokesman for the company said it had paid a small amount of compensation to victims, but would not disclose the figure.

    Bakrie has not admitted any liability for the disaster either, but due to “Indonesian values” has pledged to pay 4 trillion rupiahs ($526 million) in compensation. So far he is estimated to have handed over about 20 percent of this to those affected.

    But this is just a fraction of what the UN estimates the total damages to be. McLachlan-Karr says his team has calculated total economic loss caused by the mudflow, not including mitigation, at RP26 trillion as of April.

    Attempts to recoup these losses have so far been rejected by Indonesia’s notoriously corrupt lower courts. A class action by Friends of the Earth Indonesia has twice been rejected and is at present under appeal with the High Court, which ranks above the High Court in Indonesia.

    But Lindsay from Melbourne University says these early court decisions are irrelevant. He says the merits of the case will be decided when it reaches the Supreme Court, which ranks above the High Court in Indonesia.

    “The Supreme Court knows, understands and has been trained in class actions,” Lindsay says. “It is an increasingly impressive institution that has been making good decisions.” He says there will be serious legal implications for those found responsible.

    And whit each day the mud continues flowing, the potential damage get larger.

    Flooding during the wet season has been raised as yet another problem.

    McLachlan-Karr says the pumping of mud into a nearby river during the dry season has silted up the waterway and raised concerns about flooding.

    “They shouldn’t be pumping in the dry season but they literally ran out of space in the holding dams and so had no other option,” he says. “It’s not good but compared to the alternative, the consequences are relatively minor.”

    But then there’s the issue of subsidence.

    Davies from Durham University says the mudflow area could subside by 146 metres over the next 10 years.

    “That’s the worst case scenario,” he says, but no one can be sure of what impact this may have on the surrounding area.

    “This thing continues to surprise us so who’s to say what will happen next or how long it might last.”

    After more than two years, Davies says, the pressure causing the eruption has not lessened.

    “It will most likely carry on in some form for decades to come. The area will provide an interesting case study for scientists, but apart from that the land is worthless.

    (Angus Grigg)

    (c) The Australian Financial Review – ABIX via COMTEX

  • Mudflow Threatens Renokenongo Residents

    The remaining residents of Renokenongo village, partly devastated by the mudflow two years ago, were knocking down their homes and salvaging their belongings as hot mud and water began inundating the village after a section of the giant encircling dike collapsed recently.

    Around 300 families stayed on in the submerging village because they had yet to receive full compensation either from mining corporation PT Lapindo Brantas or from the government.

    They did receive 20 percent of the compensation due them from Lapindo, but the remaining 80 percent has not been paid despite the expired deadline the government set in a 2007 presidential instruction addressing the disaster.

    Resident Buang Sucipto said they could do nothing to salvage their houses as the mudflow slowly and surely displaced them from their homes.

    “The land and the houses are undocumented but they are ours. We deserve fair compensation. Lapindo should also pay for the hardship. The disaster has robbed the villagers of their social well-being,” he said here Wednesday.

    Minarak Lapindo Jaya, a unit of Lapindo, has offered resettlement instead of cash compensation for families whose assets were undocumented.

    Acting head of Renokenongo village Subakri urged the Sidoarjo Mudflow Handling Agency (BPLS) to immediately repair the failing dike because, apart from the mudflow inundating their homes, its noxiousness is disturbing the locals.

    “We have never given up. We have to receive what is our right although the disaster has caused so much suffering and violated our right to live peacefully and humanely,” Subakri said.

    Separately, BPLS spokesperson Akhmad Zulkarnain said the failing dike near the main hot mud outpouring was due to fragile soil conditions. He said several cranes had been deployed to dredge mud from the Porong river to strengthen the collapsing dike.

    “It may look like we aren’t doing anything, but we actually have done a great deal to repair the collapsing retaining wall. We need more time to tackle the problem,” he said.

    In a separate development, 600 Renokenongo families who have been living in makeshift dwellings at the Porong market building have negotiated an agreement with Minarak Lapindo Jaya regarding their assets damaged by the mudflow.

    Pitanto, coordinator for the Renokenongo disaster victim group, said the victims have received Minarak’s offer for a 20 percent payment up front and resettlement to end the more than two years of displacement.

    “Minarak is still examining the ownership documents for the houses and land the victims owned,” Pitanto said.

    So far, he said, 147 of the 475 families whose assets were damaged have been examined. The review is expected to be completed in a few weeks.

    “All recipients will sign the agreement at the same time,” he said, adding victims accepted Lapindo’s offer after the government had guaranteed the deal.

    The victims have rejected Lapindo’s proposed compensation scheme because the presidential decree did no spell out any sanctions if the mining company were to fail to meet the compensation payment deadline.

    “If the deal is signed, Minarak will pay 20 percent of the compensation for the damaged houses. The remaining 80 percent will be paid within one year,” he said.

    “All the victims will be resettled to a nearby housing compound within a year and they will receive the deeds for their new homes,” he added.

    Ridwan Max Sijabat, The Jakarta Post

    Sumber: http://www.thejakartapost.com/news/2008/09/19/mudflow-threatens-renokenongo-residents.html

  • Santos Denies Poor Attitude Over Mud Mountain

    Australian oil and gas giant Santos has denied playing down the seriousness of a mud mountain, which it allegedly helped to create.

    The company, responding to a report on the unstoppable mudflow that was caused by a gas drilling incident in Indonesia in 2006, said it rejected suggestions that it has understated the severity of that incident.

    According to reliable reports from the UN and Australian governments, the disaster has so far caused economic damage of AUD$3.4 billion dollars to Indonesian land.

    Santos has declared provisions of just AUD$88.5 million dollars to the Australian Stock Exchange to cover the clean-up cost.

    Santos has not admitted any liability for the disaster.

    Foreign scientists in Indonesia have found the mud mountain was caused by drilling by an oil and gas firm linked to the scheme.

    (c) Sri Lanka Source

  • Santos Denies Playing Down Indonesia Mud Volcano Disaster

    SYDNEY (AFP) — Australian oil and gas giant Santos on Monday denied downplaying the seriousness of the disaster caused by the world’s largest “mud volcano” in Indonesia.

    The company was responding to a report that said it faced a ten-fold blowout of the clean-up bill from the unstoppable mudflow that was caused by a gas drilling incident in East Java in 2006.

    “Santos rejects any suggestion that it has understated the severity of that incident,” the company said in a statement.

    The company’s shares fell 3.6 percent following news of the clean-up cost of the area near Java’s second-largest city of Surabaya.

    Fairfax newspapers quoted a leaked report by the UN Environment Program (UNEP) and Australia’s government aid body AusAid as saying the disaster has so far caused economic damage of 3.4 billion dollars and could be contained.

    The study reportedly said the only way to mitigate the disaster would be to transport the mud 14 kilometers (8.75 miles) to the ocean to create a wetland, which would send the cost skyrocketing to 4.6 billion dollars.

    The mudflow could cost Santos 830 million dollars (681,762 US), the report said, while the firm has declared provisions of just 88.5 million dollars to the Australian Stock Exchange to cover the clean-up cost.

    The company, which has an 18 percent stake in a gas operation at the site, refused to comment on the UNEP report but said it believed that its declared provisions would be adequate.

    “Given the conditions at site and current activities being conducted, Santos believes that the provision remains an appropriate estimate of its potential liability associated with the incident.

    “As Santos has indicated previously, the situation remains dynamic, complex and uncertain. Santos will continue to review the adequacy of the provision in light of developments and available information,” the company added.

    Santos has not admitted any liability for the disaster.

    Santos shares were off 0.71 dollars, or 3.6 percent, in late trade at 18.66 dollars following the report.

    A study by foreign scientists in Indonesia has found the mud volcano was caused by drilling by oil and gas firm Lapindo Brantas, which holds a 50 percent stake in the scheme.

    (c) AFP

  • Santos Responds to Sidoarjo Mudflow Incident Report

    Monday, September 15, 2008 – Santos notes the article published in this morning’s Australian Financial Review containing speculation regarding its exposure to Sidoarjo mudflow incident in East Java. Santos rejects any suggestion that it has understated the severity of that incident.

    The Government of Indonesia has taken a major role in responding to the mudflow. Following from the national task force appointed to address the incident in 2006, the President of Indonesia established the Sidoarjo Mud Mitigation Agency in April 2007 with a long-term mandate to manage the issues associated with the incident. It has been doing so actively. Whilst the Agency is responsible for the ongoing response to and management of the incident, the incident remains a matter of significant concern to Santos.

    Santos has a non-operating 18% interest in the Brantas Production Sharing Contract. Lapindo, as Operator, continues to participate in all operations at the site. However, Santos has been supporting the efforts of the Agency and Lapindo and continues to believe that a resolution may ultimately be reached between all relevant parties.

    Santos is not in a position to comment specifically on the UNEP report. However, given the conditions at site and current activities being conducted, Santos believes that the provision remains an appropriate estimate of its potential liability associated with the incident. As Santos has indicated previously, the situation remains dynamic, complex and uncertain. Santos will continue to review the adequacy of the provision in light of developments and available information.

    © Oil Voice

  • Santos Defends $US79M For Indonesian Clean-up

    SANTOS has rejected suggestions that the $US79 million it has set aside to pay for its share of the Indonesian mudflow disaster is inadequate.

    CAMERON ENGLAND, September 15, 2008 11:30pm

    Reports yesterday quoted a United Nations Environment Program report, which said Santos’ share of the clean-up costs for the disaster could run as high as $830 million.

    UNEP spokesman Nick Nuttal yesterday cautioned that the report was “very much in draft form”.

    “Thus any findings released publicly now simply cannot be endorsed by UNEP, neither can any of the assertions, suggestions, observations or recommendations reported in the Australian press,” he said via email from Nairobi.

    Santos was a non-operating 18 per cent partner in drilling for gas at Sidoarjo in Indonesia, which experts say probably triggered a well blow-out and the subsequent mudflow disaster.

    The drilling at the site was conducted by Lapindo Brantas – part of a conglomerate owned by one of Indonesia’s richest families, of which People’s Welfare Minister Aburizal Bakrie is a member.

    The mud has continued to flow since the incident in May, 2006, and was estimated recently to be averaging 100,000 cubic meters a day.

    The mud has so far displaced an estimated 40,000 people and threatens another 60,000.

    The Jakarta Post has reported that a government investigation has not yet decided whether the disaster had natural or human-induced causes.

    A decision in the South Jakarta District Court late last year, which is being appealed, cited natural causes as the most likely cause of the incident.

    In the August edition of Geology, researchers including Australian academic Mark Tingay rejected the hypothesis that an earthquake was responsible, saying an earthquake at the time was too small and too far away to be the cause.

    A report on website Tempo Interactive on Saturday quoted Priyo Budi Santoso, deputy-chief of Indonesia’s House of Representatives, as saying that the Lapindo Mudflow Monitoring Team has “not done its job optimally”, with 98 new sources of mudflow discovered.

    Lapindo Brantas spokesman, Imam Agustino, was quoted as saying the company had disbursed 4.4 trillion rupiah ($582 million) in managing the mudflow.

    The Government has also reportedly allocated 1.194 trillion rupiah ($158 million) to manage the problem in 2009.

    © Adelaide Now

  • Institute Offers to Plug Mud Leaks

    The 10 November Institute of Technology (ITS) in Surabaya is offering a new solution to control the hot mudflows at the Lapindo Brantas Inc. mining site in Porong and a new way to manage the dumping of mudflow waste.

    The new technology was invented and developed by an ITS team of experts in cooperation with the UN Environmental Program (UNEP) and United Stated Agency for International Development (USAID).

    ITS team leader I Nyoman Sutantra said the technology was based on the Bernoulli Theory.

    It would stop the flows by rerouting the hot mudflow through a dam of pipes of 50 centimeters in diameter and 50 meters in height, each erected right on the source of the flow, he said.

    The flow, he added, would go back down the pipes to be diverted, once it reached their top end.

    “We have conducted research and a series of experiments to analyze the validity of the idea. We are confident this could deal with the mudflow,” he told The Jakarta Post on Monday.

    He said his team, in cooperation with the private sector, was ready to finance the implementation of the solution to control the mudflow that has badly affected local residents and the provincial economy.

    The new technological solution comes following a series of failures of other technologies previously proposed to stop the mudflow, including the insertion of stone balls into the holes and various methods suggested to divert the flow.

    Regarding the method that his team has proposed to deal with the mudflow, Sutantra said it was designed to prevent further destruction of the environment and possible flash flooding during the rainy season.

    The team sees the current handling by the Sidoarjo Mudflow Handling Agency (BPLS) as being not effective enough, since the mudflow is partly dumped into a giant pond and partly diverted into the Porong River.

    This, according to his team, has damaged the environment and could trigger flash flooding in the city during the rainy season.

    Since October, 2006, the volume of mudflow containing oil and gas and dumped into the river has reached 69 million cubic meters.

    This has formed a layer of sediment four meters thick on the riverbed, thus reducing its depth and causing it to overflow, producing odorous gases in the surrounding areas.

    “What we want to introduce is to divert the hot mud to the downstream wetlands, where shrimp ponds belonging to villagers are located,” Sutantra said.

    The mudflow, he said, could be rerouted through 20-kilometer pipelines to the wetlands. “Then we will no longer need to dump the hot mud to the storage pond or the river,” he added.

    The new dump site, he said, could be planted with mangroves that could absorb the salt content and toxic substances in the hot mud and the site could later be developed into farmland.

    “This will be the best alternative win-win solution and the safest way to salvage the environment and help save the Surabaya residents from a possible environmental and social disaster,” he said.

    “But this will be very costly as the development of the dump site requires the acquisition of thousands of hectares of shrimp and fish ponds belonging to local people,” he added.

    Sutantra also said that should the method be applied, the current giant pond could be developed into a residential complex and apartments to help the housing crisis in the capital city.

    Meanwhile, the BPLS deputy chairman overseeing operational affairs, Soffian Hadi, said the current disposal of hot mud into the river was an effective way of dealing with the problem.

    The sediments, he assured, would be washed out to sea by the rains in the coming rainy season.

    Indra Harsaputra, The Jakarta Post

    Sumber: http://www.thejakartapost.com/news/2008/09/17/institute-offers-plug-mud-leaks.html

  • Santos says has provisions for clean-up bill

    Santos Ltd has rejected suggestions that it is facing a ten-fold cost blow-out in its clean-up of the world’s largest mud volcano in East Java.

    The oil and gas giant dismissed media speculation that it has understated the severtity of the incident, saying “given the conditions at site and current activities being conducted…existing provisions remain an appropriate estimate of its potential liability associated with the incident.”

    Santos was responding to a study, leaked to Fairfax newspapers, which said the only way to mitigate the disaster, resulting from a drilling incident in May 2006, was to transport the mud 14 kilometres to the ocean to create a wetland, estimated to cost between $1.9 billion and $4.6 billion over 25 years.

    The local company’s share of the bill would come to between $355 and $829 million, the report said.

    Santos said “the situation remains dynamic, complex and uncertain, and the company will continue to review the adequacy of the provision in light of developments and available information.”

    Santos owns an 18 per cent non-operating stake in PT Lapindo Brantas, which reported drilling problems a day before the eruption.

    Santos has yet to admit liability and has been accused of downplaying the disaster, which has been said is likely to cost the company 10 times more than it has revealed to the stock market.

    Tim Lindsay, director of the Asian Law Centre at Melbourne University, said most of the public does not understand the magnitude of the problem.

    “If the projections are correct, it will be catastrophic for any company held responsible,” Professor Lindsay told Fairfax.

  • Lapindo Mudflow Problem Badly Managed

    TEMPO Interactive, Jakarta –  Priyo Budi Santoso, deputy-chief of the House of Representatives’ (DPR) Lapindo Mud Flow Monitoring Team said 98 new sources of mud flow had been discovered. “The Sidoarjo Mudflow Management Agency has not done its job optimally,” he said during a session with the chairman of the agency’s board of directors and PT Lapindo Brantas at the DPR yesterday.

    The 98 new sources will make the work of controlling the mud flow even more difficult, Priyo said. The worst impacted villages are Jatirejo, Mindi and West Siring. “We have not received information on how the problem is being managed,” he said.

    The DPR team suggested agency includes the three affected villages in their mapping. The villagers should be evacuated to avoid the toxic gas coming out. “The National Budget (APBN) must make provisions to cover the costs for villages that are not in the map,” said Priyo, who led the meeting.

    The agency’s chairman, Djoko Kirmanto, explained that only 50 sources out of the 98 were active. The result of an analysis indicated that the mudflow will be stop by 2009.

    However, Kirmanto is of the opinion that the disaster will continue to happen for a longer period, possibly spearing to even more and larger areas. Hence, with the addition of the three villages, Kirmanto said, the government will have to amend the Presidential Decree No. 14/2007.

    According to Sunarso, chief of the Sidoarjo Mudflow Management Team, the government had allocated Rp 1,194 trillion to manage the problem in 2009. “The Finance Minister has approved it,” he said. Half of the fund – approved in June 10, 2008 — will be used for social welfare activities.

    Meanwhile, PT Lapindo Brantas spokesman, Imam Agustino, claims the company had disbursed Rp 4,4 trillion in managing the mudflow. “This is what we have spent since May 29, 2006 so far,” he said. Around Rp 873 billion was used to cover the mudflow holes, Rp 348 billion to provide for social compensation and the rest for land rehabilitation. “We also spent some amount for buying and selling land,” he added.

    To pay compensation to 20 percent of the victims, he said Lapindo had paid out Rp 650 billion in response to 12,061 applications. Out of the remaining 80 percent, Imam said, the company had compensated 35 percent of the applicants as of August this year. He claimed the company had fulfilled its obligations.

    DWI RIYANTO | RIEKA RAHADIANA | ISMI WAHID

  • NGOs slam govt over mudflow

    Nongovernmental organizations on Thursday threw their support behind mudflow victims from Sidoarjo, East Java, by urging the government to compensate them before the post-Ramadan holiday of Idul Fitri at the latest.

    As many as 24 Jakarta-based NGOs, grouped under the Coalition of Justice for Lapindo Mudflow Victims, criticized the government for “neglecting” the fate of those displaced by the sludge that has devastated the area since May 2006.

    Some 25 representatives of the victims met with the coalition at the Commission for Missing Persons and Victims of Violence (Kontras) headquarters in Jakarta to seek the NGOs’ backing for their demands.

    “We ask President Susilo Bambang Yudhoyono to take stern measures to resolve the fate of Sidoarjo mudflow victims,” coalition coordinator Usman Hamid told the meeting.

    “The President must also be brave and ask all relevant parties, including his minister responsible for this matter, to complete payment of compensation before Idul Fitri.”

    The representatives, from 10 villages in Sidoarjo, arrived in Jakarta on Friday to push for a clear response over compensation payments, which have yet to be completed two years after the disaster struck.

    During their stay in Jakarta, they met with Public Works Minister Djoko Kirmanto and representatives from the Social Services Ministry and the National Land Agency.

    The representatives also met with politicians and legislators from several parties, including the National Awakening Party (PKB), the Indonesian Democratic Party for Struggle (PDI-P) and the Prosperous Justice Party (PKS).

    “The Democratic Party and the Golkar Party rejected our request for separate meetings,” said Sep Muhammad, one of the representatives.

    The mudflow victims will return to Sidoarjo on Friday after the President turned down their appeal for a dialog.

    © Jakarta Post

  • Lapindo mudflow threatens Japanese investment

    The prolonged mudflow disaster has threatened East Java’s chances of attracting foreign investment, particularly from Japan, a local official says.

    The issue has become a major problem, discussed at a meeting of the Japan Club in Surabaya last week, chairman of the East Java Investment Board (BPM) Djoni Irianto told The Jakarta Post here Tuesday.

    A number of Japanese investors had expressed interest in the province, but decided to hold back until they receive a satisfactory explanation to at least three of their four questions regarding the disaster, he added.

    “We were given until Friday to respond to their questions,” Djoni said.

    The three questions concern the relocation of a section of the Surabaya-Gempol toll road, land subsidence on the Porong artery road and the possible overflow of Porong River, into which the mud has flown, he added.

    A forth question concerned the possible threat of avian flu, especially given outbreaks across Indonesia over the past four years. A leak that began on June 29, 2006 at Lapindo Brantas Inc.’s mining site became a mudflow disaster that has thus far buried at least four villages, displacing some 13,000 villagers.

    The mudflow has also damaged Porong highway, a railway line, and the Gempol toll road, causing soil subsidence at the disaster site.

    Many Japanese investors in Pasuruan have had to spend more on production costs, particularly to transport products and raw materials as a result of the damaged road, Japan Club chairman Hajime Matsuda sat at the meeting.

    “That has made it difficult to compete with companies in Sidoarjo and Gresik, two other industrial zones in the province,” Djoni quoted Hajime as saying.

    Around 80 Japanese investors actively involved in the new Pasuruan industrial zone expressed their commitment to retain workers despite the overburdening transportation problem, Djoni added.

    “We are proud of the investors’ commitment because many have repatriated their experts and senior staff instead of dismissing low-income workers, to cope with the additional transportation costs,” he said.

    The congested Porong artery and toll roads are the only links connecting Pasuruan with the port and the provincial capital, he added.

    Japanese investors want the industrial zone to provide an integrated service center, including for tax and excise examinations and for investment permits, Djoni said.

    With such a center, they could begin operations relatively quickly, despite having to pay extra.

    “That is why BPM sought a deadline from the government on the completion of the toll road relocation, the handling of bird flu and other issues that could make foreign investors reluctant to invest in the province,” Djoni said.

    BPM established an investment clinic last month to provide accurate information on whatever foreign investors need to know to invest in the province, he added.

    Djoni was confident more foreign investors will be attracted to the province, which he described as an excellent alternative investment destination, after Jakarta and Riau.

    In actuality, East Java is not trying to compete with those areas, but with Malaysia and Thailand, especially because the province’s infrastructure and regulatory environment are considered business-friendly to foreign investors, with the government working hard to eliminate barriers and costs, he added.

    The province has continued developing its potential in the provision of raw materials for mining, agribusiness and trading, a new sector that has attracted many Chinese investors, Djoni said.

    “Entering their second semester this year, Chinese investors have been taking the lead in the trading sector with 60 percent of their investments, worth US$54.2 million,” he added.

    The US$29.5 million in Japanese investment comes fourth, after Singapore’s $214 million and South Korea’s $40.3 million, he said.

    For the past eight months, the provincial government has issued investment permits for 45 foreign investors, in addition to expanding permits for 19 others in Gresik, Sidoarjo, Pamekasan, Malang and Tuban.

    Wahyoe Boediwardhana, The Jakarta Post, Surabaya

  • Mudflow victims urge govt to complete payment

    Victims of the Sidoarjo mudflow disaster urged the government to speed up compensation payments to them, following a new agreement between them and government representatives last week.

    On Tuesday, the victims’ lawyer, Paring Waluyo Utomo, said they were demanding concrete actions to realize the agreement, despite government assurances that the disbursement would be expedited.

    Some 25 representatives from 10 villages in Sidoarjo, East Java, came to Jakarta on Friday to seek certainty about the compensation, which has yet to be completed two years after the disaster struck.

    The representatives are staying at the National Commission of Human Rights (Komnas HAM) headquarters in Menteng, Central Jakarta.

    On Friday, they met with Public Works Minister Djoko Kirmanto and representatives from the Social Services Ministry, National Land Agency, PT Lapindo Brantas and PT Minarak Lapindo Jaya, in which the parties drew up a new agreement.

    One of the main points in the agreement obliges Lapindo to immediately complete the payment of 20 percent of the required compensation to the victims, whose lands were engulfed by the mudflow.

    It also stipulated the remaining 80 percent should be paid before the end of a two-year house leasing arrangement.

    “The victims are not satisfied with the promises in the agreement. They want it to be truly realized. Many victims have not received the 20 percent installment, let alone the 80 percent,” Paring said after a press conference at Komnas HAM headquarters.

    “We are seeking more support to force the government and Lapindo to finalize this, including from Komnas HAM and the House of Representatives.” He said the victims no longer wanted to deal with PT Lapindo Brantas and PT Minarak Lapindo Jaya and would leave the government to deal with them.

    “We can’t force Lapindo (to pay), so we will leave it to the government, which has the power,” he said. He said the victims would monitor the implementation of the agreement at the site.

    “We will sue if they fail to comply with it,” Paring said.

    The agreement also stipulates the government will provide a clean water facility and build drainage for villagers whose lands were not included in the map of affected zones.

    Paring said the villagers also demanded the government immediately issue a revised 2007 presidential instruction that includes all victims in the map, thus entitling them to compensation.

    Mahmuda, a victim from Renokenongo village, said the representatives would stay in Jakarta until they had secured the government’s promise to undertake its responsibility toward them.

    She also said they wished to meet with President Susilo Bambang Yudhoyono to demand their rights be upheld.

    “We don’t know how long we will stay here, but we really expect to meet the President. He is our only hope because he is the one who issued the policy,” she said.

    “We want to know how much attention he pays in ensuring our rights are upheld.”

    Desy Nurhayati, The Jakarta Post, Jakarta

  • Mudflow submerges Renokenongo

    SIDOARJO: Renokenongo, one of the four villages flooded by Lapindo Brantas’ mudflow in May, 2006, was inundated by a mudflow from the overflowing giant pool in Porong, Sidoarjo, threatening hundreds of victims who were still holding out in the village and have yet to receive compensation either from the mining company or the government.

    The Sidoarjo Mudflow Handling Agency (BPLS) called on Lapindo to pay compensation to the Renokenongo residents so that they can move to safe areas in the regency.

    BPLS spokesman Achmad Zulkarnain said the overflowing pool was caused by the subsidence of soil in the disaster location and the possible solution was to build an outer embankment to prevent the mudflow from destroying the remaining houses in the village.

    Andi Darussalam Tabusalla, vice president of PT Minarak Lapindo Jaya, a unit of Lapindo, called on villagers to remain patient because his company was committed to paying compensation to the victims for their damaged assets.

    “It’s our social responsibility to pay the compensation for the victims,” he said. —JP

  • Living on the Poisonous Stream

    The residents of Permisan village near the Porong river in East Java have been harvesting fish from their ponds for generations, but since an environmental disaster at the Lapindo Brantas gas mining site in May 2006, the area has been suffering from vast eruptions of volcanic mud, which have buried nearby villages and displaced thousands of people.

    Whilst Permisan is not in the immediate vicinity of the mud flow, it does rely on the local river water to replenish its fish ponds, and since the company has been using the river to deposit the excess mud from the disaster zone, the fishermen have noticed that their fish harvests are getting smaller and less frequent.

    In this video, the residents of the community filmed their own story to demonstrate that their rights to livelihood have been violated and to request the acknowledgement of this by those responsible, and their assistance to help the community to manage their resources more effectively to ensure the sustainability of their local economy and way of life.

  • New report says Indonesia mud disaster man-made

    JAKARTA, June 10 AAP – Indonesia’s devastating mud volcano is a man-made disaster caused by exploratory drilling for gas, a new report has found.

    Researchers say the finding disproves the theory, long-argued by the exploration well’s operator, that an earthquake 250km away was to blame.

    The mud volcano burst through the earth two years ago during deep drilling at the exploratory gas well, linked to Indonesia’s richest man and also part-owned by Australian company Santos.

    It has spewed millions of cubic metres of hot, stinking sludge in heavily populated East Java over the past two years.

    “We are more certain than ever that the Lusi mud volcano is an unnatural disaster and was triggered by drilling the Banjar-Panji-1 well,” Professor Richard Davies, of Durham University in the United Kingdom, said in a statement.

    The mud now covers seven square kilometres, and has displaced 30,000 people and swallowed 11 villages, thousands of homes, businesses, paddy fields and mosques. It continues to spurt 100,000 cubic metres of mud each day.

    The study – described as the most detailed scientific analysis to date – was published in the academic journal Earth and Planetary Science Letters this week.

    It follows a study by Durham University last year which found the mud eruption was “almost certainly man-made”, and caused by the exploratory drilling.

    But the well’s operator Lapindo – linked to the powerful family of Indonesia’s Public Welfare Minister Aburizal Bakrie – has long argued it was a natural disaster caused by a 6.3 magnitude earthquake in Yogyakarta two days earlier, a claim backed by a Jakarta court ruling last year.

    In the latest study, University of California researchers tested claims that the eruption was caused by the Yogyakarta tremor and found it did not play a role.

    “We have known for hundreds of years that earthquakes can trigger eruptions – in this case, the earthquake was simply too small and too far away,” said the university’s Professor Michael Manga.

    The report found the effect of the earthquake was minimal, with only a “tiny” resulting change to underground pressure. It said scientists were 99 per cent certain drilling operations were to blame.

    The research comes just weeks after another study by Durham University, which found the mud volcano was in danger of collapsing on itself. It warned the bleak, sodden landscape is sinking – and could subside by as much as 146 metres over the coming years.

    Comment was being sought from Lapindo.

    © AAP News Wire

  • A Wound in The Earth

    In Indonesia, an entire district has been buried by an eruption of boiling, noxious mud. Was it a natural disaster-or an industrial accident?

    On the morning of June 2, 2006, Ahmad Mudakir, a 33-year-old factory worker from Porong, a sleepy district in eastern Java, was in his front yard tinkering with his motorbike. A little after 8 a.m. he felt a rumbling in the ground-worrying, but not wholly unexpected in this seismically fitful corner of Indonesia. What happened next was anything but expected. Mudakir watched as a neighbor, who had been inside eating breakfast, came tumbling into the street. “There was an explosion,” Mudakir recalls. “Then the mud started to flow.” He gaped in amazement as a geyser of scalding sludge shot five meters into the air, collapsing the roof of his neighbor’s house. Mudakir froze. Then he gathered his mother and two brothers from inside his own house. “The whole village was panicking. Everyone ran.” Mudakir didn’t stop to collect his family’s belongings. He assumed he’d be able to return home.

    Today, Mudakir’s village, along with much of the rest of Porong, is gone, swallowed by an ash-gray lake of mud. The noxious sludge, incredibly, continues to flow at a rate of up to 5.3 million cu. ft. (150,000 cu m) a day-enough to fill 50 Olympic-sized swimming pools. In total, Porong has been smothered beneath nearly 3.5 billion cu. ft. (100 million cu m) of the stuff. The mud has buried 12 villages, displaced around 16,000 people and caused more than a dozen deaths. Porong hasn’t just been destroyed; it has been erased. Where Mudakir’s house once stood, there is now a vast, gurgling expanse, with only the occasional protruding tree branch or rooftop to suggest the landscape entombed beneath it.

    Locals call it Lusi-a portmanteau of the Indonesian word for mud, lumpur, and the name of the nearest city, Sidoarjo. Lusi is a mud volcano, though that appellation is somewhat misleading. The mud is actually more like brackish water. And, unlike the igneous volcanoes that dot Indonesia’s countryside, the underground plumbing fueling Lusi is largely mysterious. Twenty-two months after it first erupted, Lusi remains the world’s most bewildering environmental disaster. “I’ve never seen anything like it,” says Richard Davies, a geologist at Britain’s Durham University and one of only a handful of experts on mud volcanoes. “It’s a scene, when you see it, you can only say, ‘Oh, my God, it’s a complete bloody mess.’”

    The destruction is total. At the eruption’s epicenter-known to workers at the site as the Big Hole-a 100-ft. (30 m) plume of white smoke billows into the sky, obscuring the sun and spreading the sulfurous odor of rotting eggs. On a narrow causeway leading to the caldera, dozens of trucks idle in a queue, waiting to deliver soil for the massive earthworks meant to contain the mud. Already, they have transported more than 88 million cu. ft. (2.5 million cu m) of dirt to build eight miles (13 km) of levees around the site. Dozens of cranes work late into the evening piling the dirt atop bulwarks nearly 65 ft. (20 m) tall in places.

    As the mud rises, so must the levees, but so far Lusi seems to be outpacing human engineering. Twice the earthworks have been breached-most recently on Jan. 4-flooding more houses. On Nov. 22, 2006, the weight of the soil ruptured a natural-gas pipeline, causing a massive fireball that incinerated 13 workers.

    According to an International Monetary Fund estimate, Lusi has already cost Indonesia $3.7 billion in damage and damage control. And things are likely to get worse. As mud spews up from the ground, the area around the eruption is gradually sinking. Eventually, Porong could become a giant sucking wound in the Earth.

    Ground Forces

    INDONESIA IS BOTH BLESSED AND CURSED by geology. Volcanic ash contributes to the archipelago’s fecund soil. Yet eruptions periodically kill thousands. Indonesia is also rich in minerals and oil, exporting nearly half a million barrels a day. All told, the country’s buried wealth accounts for almost 30% of its total exports. But the same grinding geologic processes that make this wealth possible also bedevil Indonesia with disasters like the 2004 earthquake and tsunami that killed more than 160,000 people in Sumatra. Lusi is unlike any previous disaster, however. Unfolding in implacable slow motion, it has confounded Indonesian engineers and mystics alike. The mostly poor villagers who have lost homes and livelihoods to the mud complain that the response to the unfolding disaster has been equally sluggardly-a symptom, perhaps, of the fault lines in Indonesian society’s own unsettled foundations.

    That’s because mud isn’t the only thing boiling over in Porong. Villagers displaced by the eruption blame the disaster on PT Lapindo Brantas, an Indonesian mining company drilling for natural gas in the area. Lapindo is partly controlled by the family of Aburizal Bakrie, Coordinating Minister for the People’s Welfare, one of Indonesia’s wealthiest men and an ally of President Susilo Bambang Yudhoyono. Victims of the disaster say that a murky web of political influence and corporate fecklessness has blunted the official response to the mud eruption. “Everyone is suspicious,” says Mas Achmad Santosa, one of Indonesia’s most prominent environmental lawyers. “It’s a politically heavy case.”

    Some independent geologists, including Davies, believe that Lapindo may have inadvertently roused the awesome force slumbering beneath Indonesia. “I’m 98% certain this was due to drilling,” he says. Davies, who visited Porong last year and has studied the eruption extensively, thinks he knows how that happened. On May 27, Lapindo’s Banjar Panji-1 well was operating in a field not far from Ahmad Mudakir’s village. The well’s target was a shelf of limestone some 9,800 ft. (3,000 m) below the surface. Lapindo’s drillers were searching for natural-gas deposits, but the well was exploratory. No one knew for certain the subterranean conditions beneath Porong. The drillers had reached about 9,300 ft. (2,800 m) when they noticed a drop in pressure inside the well.

    Such a drop, called a loss of circulation, isn’t uncommon in gas drilling. It usually means that natural fractures inside the borehole are allowing drilling fluid to leak out. Lapindo’s engineers responded by pumping heavy drilling mud into the well to seal the cracks and restore pressure. Then they began to pull out the drill. Davies thinks that while they were removing the drill on the morning of May 28, they set off a massive “kick,” in which high-pressure water and gas from the surrounding rock flowed into, rather than out of, the borehole. To prevent a potentially dangerous blowout, the drillers shut vents at the surface, effectively corking the pressure inside the well. But it was too late. Water from a pressurized aquifer thousands of feet below the surface surged upward, picking up debris from a layer of mudstone as it did. Davies compares the effect to a bicycle pump. When the pump is sealed, the pressure is contained inside. But when it is allowed to escape, air comes rushing out. Lapindo’s drilling primed a natural pump, he believes. Unable to escape through the capped well, the water sought other avenues. At around 5 a.m. the following morning, the first eruption started in a rice paddy about 500 ft. (150 m) from the Banjar Panji-1 rig.

    Banjar Panji-1 never should have gotten so out of control, according to Richard Swarbrick, a British expert on geological pressure and a consultant to oil companies. Usually, when drilling in geologically unstable areas, engineers install steel casing at greater depths, where the low density of the rock might allow fluid to escape from the borehole. In the event of a kick, the casing allows drillers to maintain the integrity of the well. Swarbrick, who has reviewed Lapindo’s drilling plan, says the company originally intended to install casing at depths of 3,500 ft., 4,500 ft. and 8,500 ft. (1,000 m, 1,400 m and 2,600 m). “The conventional well design in that sort of pressure environment would be to install casing,” Swarbrick says. Yet, either through oversight or because of technical problems, Lapindo did not case the hole to the planned depth. “For whatever reason, they weren’t following the plan,” Swarbrick says. “They had 5,000 feet of open hole. That’s taking one heck of a risk.”

    The Nature Argument

    LAPINDO SAYS ITS DRILLING PLAN WAS approved by the government. “The drilling process complied with mandatory regulations,” says company vice president Yuniwati Teryana. “We met the requirements.” Teryana offers another explanation for the eruption. Two days before Lusi started, a 6.3-magnitude earthquake shook the city of Yogyakarta, about 190 miles (300 km) to the west of Porong. Lapindo believes that the quake opened natural fractures that allowed the mud to escape. “The mud eruption is caused by a natural phenomenon,” Teryana says. That’s an opinion shared by Adriano Mazzini, a geologist at the University of Oslo.

    After studying data provided by Lapindo, Mazzini concluded that Lusi was probably caused by the May 27 earthquake. “There is strong evidence for a naturally triggered event,” he says. Davies believes that if the eruption had been caused by the quake, it would have occurred sooner afterward; he cites research suggesting Porong was too far from the earthquake’s epicenter to be affected.

    Given that no one fully understands the powerful subterranean engine powering Lusi, efforts to stop it have proven predictably ineffectual. Two relief wells intended to reduce pressure inside the original well have failed. Early last year, scientists from Indonesia’s Bandung Institute of Technology came up with a more novel idea: dropping thousands of concrete balls, linked with chains like a string of pearls, into the Big Hole. The idea was to bleed off pressure inside the volcano slowly enough so that Lusi wouldn’t simply erupt elsewhere-or shoot the concrete balls back out like a cannon. Satria Bijaksana, one of the Bandung scientists who came up with the idea, says that the balls reduced the mud’s flow temporarily. But the project was abandoned last March when a new government team took over management of the site. More recently, a Japanese team proposed building a 130-ft.-high (40 m high) dam to contain the mud. Scientists familiar with Lusi have dismissed that idea. Because the ground beneath the caldera is still sinking, a heavy concrete dam would likely rupture.

    Going with the Flow

    LUSI MAY, IN FACT, BE UNSTOPPABLE. IN 1979, the oil company Shell set off a similar eruption while drilling off the shore of Brunei. That mudflow took 20 years and 20 relief wells to halt, according to Mark Tingay, a geologist at the University of Adelaide in Australia. Lusi may eventually choke itself as mud clogs its interior plumbing. But if left to die on its own, Davies estimates that it could continue to erupt for years, and perhaps even decades. Hardi Prasetyo, deputy head of the new government team in charge of Lusi, says that his workers are now focusing on containing, rather than stopping, the mud. The current strategy includes channeling the sludge into the nearby Porong River in the hope that it will be flushed to the sea. Mud flows through a massive spillway to a pumping station, from which it gushes into the river. Two dredges work to keep the waterway open. But already, the river is filling with mud. At a shrimp farm downstream, where men stripped to their underpants wade through paddies, workers complain that the mud is clogging their water supply. “This is a war,” says Prasetyo, gesturing at a line of trucks rumbling along a levee. “We are not promising to stop it. We must also pray to God.”

    Locals have turned to less orthodox methods. According to one popular story, the Lapindo drilling may have angered a spirit living in a tree near the eruption site. Such beliefs have an enduring appeal in this part of Indonesia, where religion is a syncretic mix of Islam and animism, and Lusi has drawn mystics from Bali and Borneo, who have sacrificed chickens, monkeys and even a cow to mollify the upset spirit. The government’s engineering team has tried similar tactics; a spokesman says the group has hired diviners to pray for rain to wash the mud away.

    Along with the mystics have come opportunists. To attract curious visitors, one enterprising local hotel changed its name to Kuala Lumpur: “Lake of Mud.” In the roads near Lusi, shirtless men dart in and out of traffic selling bags of roasted nuts and dried fruit. They have also installed themselves at certain busy intersections, and demand a small levy to let cars pass. At the top of a levee, the men eagerly tout CDs compiled from video footage of the disaster. “Professional best,” promises one CD featuring a photo of a charred, mud-crusted corpse on its front cover. Some of the CD sellers are displaced villagers; others are merely hoping to make a little money. One man cheerfully says he is a pickpocket. For 10,000 rupiah, or about one dollar, the touts offer visitors motorbike tours of the site.

    One, a laconic, mostly toothless man named Purwanto, says he was a farmer before the mud smothered his rice fields. He now makes extra cash taking tourists to the wreckage of his house, located in the shadow of the levees. Purwanto’s village flooded last year when the dikes broke, and, although it hasn’t been fully inundated yet, most of the people have demolished their homes for scrap and moved on. At present, the village looks like it has been carpet-bombed, with piles of rubble rising out of the greasy water. Purwanto points out an especially large mound: the remains of the town’s grandest house. His own more modest home is gone except for the broken stubble of the walls. “I was born at this house,” Purwanto says, sucking contemplatively on a clove-scented cigarette. From a nearby mosque, still being used despite the rising mud, the call of the muezzin echoes through the abandoned village. “Where my parents are buried is covered by the mud,” Purwanto adds.

    There’s no question about whom the villagers blame for their distress. At a refugee camp in a local outdoor market, where more than 2,000 people live in converted, tarp-covered stalls amid goats grazing contentedly on piles of garbage, graffiti makes their target clear: “Lapindo terrorist,” one reads. The company provides food for everyone in the camp, along with services such as a medical clinic and a makeshift mosque. But the villagers are quick to recite a litany of complaints, from the quality of the rations to the health effects of the mud (though the government team says the gas coming from Lusi has no ill effect, locals complain of difficulty breathing and strange rashes).

    Mostly, though, they complain about money. On the orders of the Indonesian government, Lapindo has agreed to compensate the villagers with a total of $412 million-the company is offering 20% of the money up front, with the balance paid within two years. “It will not be enough,” says Riati, a 45-year-old woman sitting outside the 16-ft.-wide (5 m wide) cubicle where she lives with her husband and sister. Riati says she turned down Lapindo’s offer of 40 million rupiah, or about $4,500-with an initial payment of 8 million rupiah-because she says even the full amount is not enough for her to buy a new home. Teryana, the Lapindo vice president, says the company hopes the holdout villagers can be persuaded to accept the compensation scheme.

    Anger Management

    AS NEGOTIATIONS HAVE DRAGGED ON, THE refugees are growing increasingly militant. In one corner of the market camp, villagers have stockpiled sharpened bamboo stakes-a defense against possible forced eviction. The villagers have also directed their anger at local officials regarded as allies of the company. At one recent protest, a crowd of about 200 people occupied a government compound to demand the resignation of a village chief. The demonstration began almost casually, with families picnicking or resting beneath the shade of a banyan tree. But tempers rose with the broiling midday heat. A squad of policemen armed with machine guns arrived and took up a position opposite the protesters.

    “Please respect our suffering,” a man shouted through a loudspeaker. A scuffle broke out between police and protesters, and the policemen surged forward, kicking and pushing the scattering demonstrators. One of the protest’s leaders explained that the police had previously exercised restraint when dealing with them. “We carry out our protests in a peaceful manner,” he said. “We never have anarchy.” Then he added, for portentous effect: “Not yet.” The demonstrations are indeed growing more aggressive: on Feb. 19, villagers blockaded a main road in the Sidoarjo area to protest a new parliamentary report that concludes Lusi was a natural disaster.

    Fueling the refugees’ anger is the fear that Lapindo will walk away from its promises. Last September, PT Energi Mega Persada, a company controlling 50% of the Lapindo drilling project and connected to Bakrie, the Indonesian Cabinet minister, attempted to unload Lapindo for $2 to a company based on the island of Jersey but owned by Bakrie’s family conglomerate.

    When Indonesian financial regulators blocked that sale, Energi Mega tried to sell half the beleaguered Lapindo to the Freehold Group, registered in the British Virgin Islands. That deal also collapsed amid controversy. The attempted corporate reshuffling raised fears among many that Lapindo was preparing to declare bankruptcy, thus potentially allowing parent company Energi Mega Persada to evade any liability for Lusi. Lapindo says it is committed to compensating Lusi’s victims.

    Critics say the government’s own response to the disaster has been muddy at best. “The government is not serious in its handling of the disposal of the mud or settling the social problems caused by the disaster,” says Sonny Keraf, Indonesia’s former Environment Minister and head of a parliamentary investigation into Lusi. “They are leaving the people to face the company when it should be acting as a bridge between them.” Keraf says that, while he believes Lapindo is acting in good faith, the government’s indecisiveness is blunting any sense of urgency. A yearlong police investigation into the eruption has resulted in no indictments or clear conclusions. “It’s all about politics,” says Ivan Valentina Ageung, head of legal affairs for the environmental group Walhi, referring to the disaster in general. Walhi sued Lapindo, alleging it was responsible for Lusi; that, as well as another lawsuit, were decided in favor of Lapindo. A spokesman for Yudhoyono denies that Bakrie’s connection to the administration has influenced the government’s response. Indeed, it was Yudhoyono who ordered Lapindo to compensate the displaced villagers.

    But cleaning up Lusi’s mess won’t be easy. In a worrying sign, heavy rains in early January caused a breach in the levees, forcing more than a hundred families to evacuate. With the government’s attempts to stop or channel the mud faltering, and the tide rising by the day, the sludge that swallowed Porong could eventually threaten another quarter-million homes. Indonesia’s Big Hole only gets deeper.

    Petter Ritter | © Time

  • Indonesian Firms Denied Drilling Caused Mud Volcano

    JAKARTA (Reuters) – A volcano that started spewing hot mud in Indonesia two years ago displacing more than 50,000 people was triggered by tectonic activity, experts working for the energy firm blamed by some for the disaster said on Thursday.

    The comments contrast with the view of an international team of experts who said on Monday that drilling for a gas exploration well, and not an earthquake, set off the volcano in East Java.

    A geologist and drilling expert working for oil and gas firm Lapindo Brantas said that the international team, led by Richard Davies of Britain’s Durham University, had based their findings on the wrong data and assumptions.

    “Experts opinion, Davies and others, that concluded that the burst came from the drilling well is based on a study that used the wrong data and assumption,” Edy Sutriono, drilling expert at Lapindo, told a news conference.

    The international team had said records kept by Lapindo during the drilling of the gas exploration well called Banjar-Panji-1 showed an underground blowout that could have triggered the disaster.

    But Bambang Istadi, a geologist at Lapindo, said tectonic activity had caused an old escarpment to crack and become the channel for the mud to flow.

    The company and some experts have argued that the mud flow was caused by a 6.3 magnitude earthquake in Yogyakarta and its aftershocks that happened two days before the eruption. That quake, centred 160 miles from the mud volcano, killed 6,000 people and left 1.5 million homeless.

    Richard Davies told Reuters on Thursday that the well was being drilled next to a mud volcano at the same time it erupted.

    The hot noxious mud began spewing near the gas exploration site in Sidoarjo, in East Java, on May 29. “I mean, it’s just I’m sorry, there’s just too much evidence now to propose that this isn’t due to the well,” he added, noting there would be a public debate with Lapindo experts on the issue in late October this year in Cape Town, South Africa.

    The mud, which is flo wing at a rate of more than 100,000 cubic metres a day, has displaced more than 50,000 people and covered more than 2.5 square miles.

    A mud volcano is usually a naturally occurring phenomenon created when a mix of mud, water and gas forms underground and is forced to the surface. There are a few thousand on earth.

    PT Energi Mega Persada indirectly controls Lapindo, which holds a 50 percent stake in the Brantas block where the mud originated. PT Medco Energi International Tbk holds a 32 percent stake and Australia-based Santos Ltd the rest.

    The situation has also become a major embarrassment for the government since Energi is owned by the Bakrie Group, controlled by the family of chief social welfare minister, Aburizal Bakrie.

    Indonesia’s government has ordered Lapindo to pay 3.8 trillion rupiah ($408.1 million) in compensation to the victims and to cover the damage ($1=9311 Rupiah).

    Olivia Rondonuwu | © Reuters

  • Jakarta puts own interests first in tale of two disasters

    On May 27 last year, 6,650 people died and 450,000 homes were damaged or destroyed when an earthquake struck near the Indonesian city of Yogyakarta.

    Two days later, mud started gushing from the ground 280km to the east after a mishap near the town of Sidoharjo at an exploratory drilling well. More than 11,000 homes and two dozen businesses have since been buried under 20m-deep mud flows that are still spewing at a rate of 130,000 cubic m a day. Rail, road and gas links to a large section of east Java have been severely disrupted, sending reconstruction costs and estimated economic losses soaring to billions of dollars, more than that of the earthquake.

    A year on, the Indonesian government’s contrasting responses to these two separate disasters demonstrate the significance of decisive political leadership and the continuing power of well- connected businesspeople.

    Only 1 per cent of people who lost their homes in Yogyakarta lack temporary shelter or a permanent new home. More than 90 per cent of markets, schools and health centres have been rebuilt and more than 80 per cent of damaged irrigation networks are functioning properly.

    “In the 10 years that I’ve been doing this, this (recovery) has gone the most smoothly,” says Peter Manfield, of the United Nations’ co-ordination office.

    Bill Marsden, recovery co-ordinator for the International Federation of the Red Cross in Yogyakarta, says the reconstruction process could be finished next year, a year earlier than expected.

    “The crucial thing was the speed with which the government mobilised the money and the system that was used,” he says. “It wrong-footed everyone. No one thought it would be possible to disburse so much money so quickly. It has shown what can be done with the right political will.”

    The local government in Bantul, the worst-affected district, received its 2007 reconstruction funds in April; regular central government budget allocations are unlikely to be disbursed for another month.

    President Susilo Bambang Yudhoyono had good reason to act so efficiently. “Yogyakarta is the heartland of the nation,” says a diplomat. “The president could not afford to neglect millions of people on his doorstep.”

    The situation in Sidoharjo could not be more different. Lapindo Brantas, the company doing the drilling that police say triggered the mudflow, is owned by the family of Aburizal Bakrie. Mr Bakrie is the senior welfare minister and a prominent member of Golkar, which as the largest party in parliament provides key support to Mr Yudhoyono. This has cast a dark shadow across the whole relief operation.

    “If Bakrie hadn’t been involved, the situation would not have been like it is now,” says Anton Soedjarwo, director of Dian Desa, a relief organisation. “The response would have been more pragmatic.” Mr Bakrie has denied that Lapindo employees’ negligence caused the disaster but he has agreed to buy all the victims’ destroyed property and pay some of the clean-up cost.

    Lapindo has been ordered to pay for much of the clean-up but no one in the government is willing to say that the company was responsible for causing the mudflow. Political analysts and government officials say the dilemma facing Mr Yudhoyono is that he does not want to alienate a crucial supporter but he cannot afford to let Mr Bakrie off the hook.

    “The result is that he has been indecisive and the people on the ground are suffering the consequences,” says an official involved in disaster management. “When elite interests are involved, they always seem to take priority over tackling the core of the problem.”

    Virtually all affected residents have received money for rent and monthly allowances from Lapindo. But only a few dozen have begun to receive compensation promised by Lapindo.

    Khairul Huda, a university lecturer who has helped co-ordinate the response in one village, says the frustration over the slow disbursement of money has grown to a point where demonstrations have become regular.

    “The problem is the political will of the government and Lapindo. It’s just not there,” he says. “We don’t know whether there’s an elite conspiracy or not. We just know we’re not getting our money.”

    Despite the scale of the destruction, Mr Yudhoyono has yet officially to declare the mudflow a disaster. Central government aid has been limited and non-governmental organisations have established only token presences. There has also been little progress in the prosecution of those responsible for the drilling mishap. It took the police nine months to complete their investigation but the case has yet to go to trial. Conspicuously, only individual employees and contractors, not the company, are being probed as suspects.

     John Aglionby 

    © Financial Times

  • Slimy business; Java’s unstoppable mudflow

    FARMERS tilling the fields of Java, the world’s most populous island, have long known that the gods give and they take away. Java’s volcanic soil is astonishingly fertile but, like the rest of Indonesia, alarmingly prone to seismic activity. An earthquake that struck the eastern island of Sumbawa on November 25th killed at least three people.

    But the calamity that has befouled a swathe of semi-industrial farmland in east Java was, by most accounts, a man-made mess. In May last year Lapindo Brantas, an energy company, was drilling for natural gas when it accidentally opened a fissure in the ground. Torrents of hot, toxic mud began to flow. It has been flowing ever since, inundating 11 villages and swamping schools, factories, farms and roads in a 2.5 square mile (6.5 square km) zone. A network of earthen dams and levees holds back a lake of oily grey muck. Some is being pumped into a river and out to sea, despite the risk of contamination from heavy metals and chemicals in the mud.

    Efforts to staunch the flow have ranged from the ambitious to the ludicrous. Hundreds of concrete balls linked by steel cables were air-dropped into the hole, to no good effect. A group of Javanese mystics, offered a cash reward by local authorities to plug the abyss using supernatural powers, fared no better. Various experts have offered advice on how to divert or disrupt the volcano, which has spewed out an estimated 1 billion cubic feet (28m cubic metres) of mud. Japanese scientists have proposed building a 130-foot (40-metre) dam, reasoning that the weight of the exposed mud, which hardens as it dries, would eventually stem the flow. Nobody knows if or when it would stop of its own accord.

    A hand-painted banner across an abandoned strip of toll-road offers its own succinct formula: “Lapindo + Government = Madness”. Many are angry at the government’s sluggish response to the disaster, which has displaced some 16,000 people. Hundreds are still living in a makeshift camp. The local economy has collapsed. Factories and farms have been inundated, and the vital toll-road to the port of Surabaya closed. To ease the appalling traffic a military airport in Malang, a town to the south, has opened to civilian flights.

    Apportioning blame for the disaster has been tricky. Lapindo argued the mudflow was caused by an earthquake that struck central Java two days earlier, a theory pooh-poohed by most geologists. After much dithering, Susilo Bambang Yudhoyono, Indonesia’s president, ordered the company to pay $412m to the afflicted. But inundated villagers get just 20% now, and the rest within two years.

    Mr Yudhoyono may be influenced by Lapindo’s majority shareholder, the diversified family-owned Bakrie Group. At the time of the disaster, its patriarch, Aburizal Bakrie, was the economics supremo in Mr Yudhoyono’s cabinet, having backed his presidential campaign in 2004. Mr Bakrie described the mudflow as a natural disaster that “nothing can prevent”. Perhaps to escape liability, his group tried to sell Lapindo to obscure offshore buyers. But Indonesian regulators blocked the sale. Mr Bakrie has since moved, with no intended irony, to the post of co-ordinating minister for public welfare.

    © The Economist

  • Two Years On, a Mud Volcano Still Rages and Bewilders

    As a disastrous mud eruption on Indonesia’s Java Island marks its second anniversary, the unprecedented event continues to stir debate about whether it resulted from an exploratory gas well drilling accident or a distant earthquake and how long it will last. The mud volcano, nicknamed Lusi, has been disgorging mud at a rate of up to 150,000 cubic meters per day. Officials are struggling to contain the effluent within dikes that are regularly breached and built anew farther out.

    In November 2006, ground deformation near the volcano ruptured a natural gas pipeline, killing 13 people. Lusi’s mud has engulfed 750 hectares, destroying the homes of more than 30,000 people as well as factories and farms. “Sadly, it’s not about simple technical problems anymore. It’s more [about] economic and social and political problems,” says Satria Bijaksana, a geophysicist at Institut Teknologi Bandung.

    Lapindo Brantas, the oil and gas exploration company that operated the ill-starred gas well, and the government have promised compensation to landowners, but it has been slow in coming. Hundreds of families are still living in temporary shelters. In two separate cases, Indonesian courts have ruled the eruption a natural disaster, absolving Lapindo Brantas of liability.

    Ivan Valentina Agung, a lawyer for Walhi, an Indonesian environmental group that filed one of the suits, says the group is appealing to a higher court in hopes of getting Lapindo Brantas to take responsibility for environmental rehabilitation.

    For scientists, Lusi is an intriguing specimen. A flurry of papers refines previous work on the eruption’s dynamics and offers insights into the evolution of mud volcanoes. “This is a great opportunity. Nobody knows how other mud volcanoes looked when they were first appearing,” says Adriano Mazzini, a geologist at the University of Oslo.

    There is general agreement on the sequence of events. On 27 May 2006 at 5:54 a.m. local time, a magnitude-6.3 earthquake struck near Yogyakarta, in central Java. Between 5 and 8 a.m. the following day, Lapindo Brantas’s gas well, which was being drilled 250 kilometers to the east near the town of Sidoarjo, began to flood. Workers shut the well’s blowout preventer to keep the fluid from gushing out the top. They noted that pressure inside the well rose rapidly before gradually subsiding. Early in the morning of 29 May, mud began burbling out of the ground about 150 meters away.

    In a February 2007 article in GSA Today, Richard Davies, a geologist at the University of Durham, U.K., and colleagues claimed that the drillers penetrated a porous limestone formation about 2800 meters below the surface, inadvertently tapping into a highly pressurized aquifer. The borehole’s casing didn’t extend deep enough to protect rock from cracking under the pressure when the blowout preventer was shut, he concluded. Water then channeled its way to the surface, bringing mud with it (Science, 2 February 2007, p. 586).

    That’s not how Mazzini and his colleagues see it. In the 30 September 2007 issue of Earth and Planetary Science Letters, they argued that the region’s geological structures, pressurized hydrocarbon deposits, common in the region, and a seismic fault created conditions “perfect for a mud volcano.” The only thing missing was a trigger, Mazzini says. The drilling might have contributed, he says, but he believes a more important factor was that the Yogyakarta earthquake reactivated the fault. At roughly the same time Lusi broke, mud also erupted from eight fissures along a 100-kilometer stretch of the fault line. “I don’t think this is a coincidence,” he says.

    Global Positioning System (GPS) data and an obvious kink in a rail line show that ground along the fault has shifted up to half a meter since the Yogyakarta earthquake. But Michael Manga, a geologist at the University of California, Berkeley, who has studied how earthquakes trigger distant volcanic eruptions, contends that the quake was too small and too far away from the fault to influence it. In recent decades, he says, “there were many earthquakes that were both closer and bigger and by any measure more likely to have triggered an eruption.”

    In a paper published online on 5 June in Earth and Planetary Science Letters, Manga, Davies, and colleagues suggest that the fault is likely to be shifting in response to the movement of vast amounts of material to the surface. The mechanism is not clear. Co-author Rudi Rubiandini, a petroleum engineer at the Institut Teknologi Bandung, says the analysis “makes every other reason [for the eruption] impossible.” Most earth scientists agree that the well must have had some effect, says James Mori, a seismologist at Kyoto University in Japan. But he says researchers can’t determine whether the volcano would have formed without the drilling.

    While sympathizing with Lusi’s victims, geologists say they relish the rare opportunity to study a mud volcano’s birth and evolution. GPS and satellite-based interferometric synthetic aperture radar data indicate that the surface near the volcano’s vent is collapsing into a funnel shape, characteristic of sand draining from the top bulb of an hourglass. Davies and colleagues concluded in a paper published online on 21 May in Environmental Geology that between June 2006 and September 2007, the funnel’s center sank at about 4 centimeters per day, which in 3 years would produce a sag of 44 meters. They also report that areas outside the funnel are rising, probably due to movement of the fault.

    Scientists are puzzling over other phenomena as well. Since March 2007, the flow has periodically stopped for hours or days only to resume with its previous vigor. The likely explanation, Davies says, is that the weight of mud at the surface is collapsing the vent deep underground. Pressure backs up until it breaks through the blockage. In addition, there have been 88 minieruptions of water and methane where the ground is subsiding. Rubiandini believes the subsidence is cracking open pressurized gas pockets. And along the fault, geysers of water have suddenly shot up in the middle of yards, rice paddies, and even within factories, probably due to the rearrangement of subsurface plumbing.

    “The volcano is taking on a life of its own,” Davies says. How long this will go on, he says, is anybody’s guess.

    Unstoppable

    The mud volcano Lusi is unique in its longevity and the volume of material ejected. It may also be setting records for the number or failed attempts to plug it. Immediately after the 29 May 2006 eruption, Lapindo Brantas., the company whose exploratory drilling, some claim, triggered the eruption, pumped concrete into the well to try to stop the gush of hot, salty water from a subsurface aquifer. When that failed, the company brought in a consultant from Houston, Texas, who directed the drilling of two relief wells intended to intercept the original borehole and pump in high density drilling mud to plug the leak. This effort was abandoned when the wells were short of their target, also, reportedly, because Lapindo ran out of money.

    In February 2007, following a proposal from geophysicist Satria Bijaksana and two colleagues from Institut Teknologi Bandung, Lapindo Brantas started dropping into the vent clusters of concrete balls, 20 centimeters and 40 centimeters in diameter, roped together with steel cables. The objective, Bijaksana says, was “to reduce the sheer volume of mud coming out of the vent to a manageable level.” This effort was abandoned after 398 of a planned 1000 clusters had been dropped; a government agency that took over management of the disaster concluded that the balls were having little effect.

    The only hope of plugging Lusi is to drill another relief well to plug the original well at a point below where it was breached, says Rudi Rubiandini, a petroleum engineer at Institut Teknologi Bandung. He estimates that the well would cost $70 t0 $100 million. But that is unlikely to happen, he says: “Our government now thinks this is a natural disaster and impossible to kill.”

    Dennis Normile