The Too Slow Flow; Why Indonesia could get all its power from volcanoes--but doesn't.(Cover Story)

Byline: Peter Janssen

American giants like ChevronTexaco and Unocal began exploring the vast energy potential trapped in Indonesian volcanoes two decades ago, when Jakarta opened the sector to foreign investors. An archipelago of 17,000 islands spanning three time zones, Indonesia sits on the Asian-Pacific "ring of fire" and boasts the world's highest density of volcanoes--about 500--of which 128 are still active; 65 of these are listed as "dangerous." The upside: volcanoes make Indonesia the only large nation in the world with the potential to generate 100 percent of its electricity from clean, endless stores of geothermal energy. Yet 20 years on, the country has just a few small geothermal plants, including one run by a subsidiary of ChevronTexaco called Amoseas Indonesia Inc.

That may be about to change. In June Indonesia ratified the Kyoto Protocol on global warming, making it eligible for millions in subsidies for projects that cut emissions of greenhouse gases. Amoseas has applied for approximately $5 million in credits that could make or break a planned $100 million expansion of its operations on the Darajat volcano in West Java, more than doubling output to 330 megawatts, enough to power a medium-size city. That's not much, but it would be a step toward reviving Indonesia's geothermal master plan.

Under President Megawati Sukarnoputri, Indonesia is finally building some reform-minded momentum, seven years after the Asian financial crisis derailed an early-1990s plan to develop 11 geothermal plants producing 3,417 megawatts. Tapping a volcano involves drilling wells to reach the hot steam ...