East Java Mudflow: Methane Line Explodes

UNCLAS SECTION 01 OF 04 JAKARTA 013358

SIPDIS

DEPT FOR EAP/MTS AND EB/ESC/IEC
DEPT PASS OPIC, EXIM, TDA
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FROM AMCONSUL SURABAYA #2685

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV EPET PGOV CACS ID
SUBJECT: East Java Mudflow: Methane Line Explodes
Causing Flooding and Blackouts

Ref A: Jakarta 7839
Ref B: Jakarta 8250
Ref C: Jakarta 11110
Ref D: Jakarta 12733


1. (SBU) SUMMARY: Pertamina's main East Java methane
gas line ruptured near the PT. Lapindo Brantas
(Lapindo) mud volcano site in Porong, Sidoarjo, East
Java on November 22, causing power outages and
permanently closing the Surabaya-Malang toll road. No
American Citizens were among the 14 dead and 13
injured. East Java's power plants operated on
emergency fuel supplies at reduced capacity and many
local factories were closed until repairs were
completed November 26. The explosion was caused by
erosion of the earth underneath the pipe, resulting
structural failure and gas release. GOI geologists and
expat consultants warned Lapindo and Pertamina of the
impending explosion, but there was insufficient time to
move or decommission the pipe. In a November 29
meeting, National Mudflow Disaster Management Team
(Timnas) scientists noted continually increasing
volumes of mud flowing from the volcano. Timnas
projects massive flooding in the Porong area over the
next few months, destroying as many as 10,000 homes and
the main East Java north-south rail line.
Representatives from Santos, a minority partner in
Lapindo, said that the relief well effort is likely to
fail and all future planning should be based on the mud
flowing permanently. (Note: Controlling interest in
Lapindo is held by Minister of Social Welfare Aburizal
Bakrie and his family.) The GOI is expected to
"nationalize" the mud problem in the next few days,
with the GOI taking over all areas of control from
Lapindo, but it is not yet clear whether the GOI will
continue to hold the Lapindo partners financially
responsible for all of the damages. END SUMMARY.

Gas Line Blows
--------------


2. (SBU) On November 22, the Pertamina's 28 inch East
Java main methane line adjacent to the Lapindo well
blowout and mudflow eruption in Porong, East Java (see
Refs A-D) fractured and exploded, tearing open a dam
wall and releasing large amounts of hot mud to the west
of the well blowout inundating several hundred more
homes and a factory. Twelve people died and two more
are missing and presumed drowned in the scalding hot,
thick mud. Most of the dead were police and army
officers providing security at the site. Thirteen
people were injured. None of the Americans working at
the relief well site were affected. The explosion and
ensuing mud release placed 7 feet of mud on a one
kilometer section of the Surabaya-Malang toll road,
permanently closing a major piece of East Java
transportation infrastructure. The gas line automatic
shut-off valve functioned and damage was limited to the
immediate area of the explosion. The gas line was
repaired and placed back in to service November 26.

Power Disruptions, Factories Close Temporarily
-------------- -


3. (SBU) The gas pipeline supplies 330 million cubic
feet of gas per day to more than 265 of Surabaya's
largest industrial users, including 1,000 Megawatts of
State Power Company (PLN) power plants, Indonesia's
largest fertilizer producer and the State Gas Company.
PLN implemented its emergency plans, operating power
plants on fuel oil at 20 to 40 percent reduced
capacity. Many factories were unable to operate due to
the loss of gas supply. Much of Metro Surabaya
experienced temporary blackouts and water supply
stoppages during the time the gas line was down. The
City of Sidoarjo (population 500,000) experienced

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nearly 24 hours of blackout immediately after the
explosion and intermittent power availability until the
gas line resumed supply. Damage and economic loss
estimates have not yet been released.


4. (SBU) The explosion was caused by subsidence at the
well site due to underground erosion. The high pressure
hot water has been dissolving the shale deposits under
the pipe, undermining its support and causing it to
fracture and release the volatile gas. As early as
June, GOI geologists and expat consultants expressed
concern that the weight of toll road repairs, piling
dirt on top of East Java's main methane line, could
cause a sudden collapse and rupture the line as the
earth underneath subsides (Ref. B and D). The land
around the mud volcano and under the mud lake has sunk
over 15 feet in some locations and is sinking at an
increasing rate. Most recently, the National Mudflow
Disaster Management Team (Timnas) claims it warned
Pertamina of an impending explosion due to structural
failure in the gas line three weeks ago. Pertamina has
a plan to relocate the pipe that will take possibly one
year to execute. Pertamina says that it has no
alternative other than to repair the pipe as needed and
that future service interruptions are likely. Pertamina
released a statement blaming Lapindo for the on-going
problem.

Increasing Mudflow Means Rainy Season Flooding
-------------- -


5. (SBU) In a November 29 meeting with ConGen at the
Surabaya Institute of Technology, four members of
Timnas (scientists and engineers) and three
representatives of Santos (Australia's third largest
oil company and 18 percent owner of Lapindo) shared
alarming projections of increasing mudflow rates and
flooding during the rainy season. (Note: East Java's
rainy season normally starts in October, but was late
this year, starting only a few days ago. End Note.)
The average flow rate has increased to 225,000 cubic
meters per day (enough to fill RFK Stadium every six
days).

Measurement Date Flow (000 cm/day)
-------------- --------------
May 29, 2006 5
June 15 25
July 17 50
September 30 125
November 27 225
January 15 300 (est.)

The intense pressure of the million year old ocean
water entering the well is eroding the uncased well
walls, thus expanding the well size and the volumes of
water that can escape from the 200 square kilometer
underground reservoir. The scientists project the flow
rate to continue increasing as the well deteriorates,
possibly to 300,000 cubic meters per day by January.
The mud volcano is now growing at approximately 1.5
feet per day and will overflow the dam walls soon after
the rains make the dam walls too soft for the heavy
equipment needed to add to their height.


6. (SBU) The Timnas scientists revealed startling
computer projections forecasting massive flooding over
the next few months to the west and east of the 1,000
acre mud lake. Flooding to the west will be
particularly damaging with as many as 10,000 homes
affected, displacing an estimated 55,000 more people.
The main Surabaya-Malang rail line and the adjacent
Porong Road are also projected to be rendered useless
by the flooding. The flooding to the west would be
caused from blockage of existing rain water runoff
channels coming from the northwest by the 40 kilometers

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of dam walls built to contain the mud. The flooding to
the east would be caused by mud overflowing the dam
walls and dam wall failures. The scientists calculate
a 70% probability that this "worst case" scenario will
be realized, likely in January or February 2007.

Relief Wells Failing - Quick Solution Unlikely
-------------- -


7. (SBU) During the same meeting, the Santos
representatives stated that the relief well effort, the
last hope to stop the mudflow, is very likely to fail
and that future planning should be focused on the mud
flowing permanently. The two reasons they sited for
their pessimism are the noted deterioration of the well
walls at 9,800 feet below ground and the amount of
earth shifting due to the subsidence. The relief well
must hit a target the size of a manhole cover but the
margin of error has increased to three football fields.
They see the relief well program as a long shot at
best. In addition, even if they are able to hit their
target, one relief well is no longer likely to be able
to pump enough material to plug the enlarged hole.
They estimate three relief wells are now needed to
create enough pressure volume. The Timnas members said
that the second relief well, which started drilling one
month ago, is now 1,000 feet down and is failing due to
subsidence under the drilling rig. Basuki Hadimuljono,
head of Timnas, has called a November 30 meeting to
announce closure of the second relief well and its move
to a safer location. There are now two additional
relief well sites identified, but this setback means at
least another four to five months before the relief
wells could be ready. The well hole may be
deteriorating so quickly now that three wells will not
be enough to stop the flow.

Preparations - Too Little Too Late
--------------


8. (SBU) Timnas is responding to this looming disaster.
According to the Timnas engineers, they are frantically
digging new rain water runoff channels to reroute
potential flood waters to the Porong River before they
reach Porong itself. Timnas is also strengthening and
enlarging existing roadways in a circular route through
Mojokerto around the impacted area. They anticipate
the 1.5 hour trip from Surabaya to Malang will average
5-6 hours in good weather along this route. Timnas is
also making improvements to the tiny port in
Banyuwangi, East Java to handle larger container
volumes, anticipating manufacturers in the Pasuruan,
Malang and Probolinggo industrial estates will be
physically or economically (increased transportation
costs negating profit margins) cut off from the Tanjung
Perak port in Surabaya. The Timnas members said they
expect the Lapindo mud problem to be fully nationalized
in the next few days, with the GOI taking over all
areas of control from Lapindo.

GOI Needs to Step In
--------------


9. (SBU) The GOI is finally acknowledging that they
have a major economic and environmental problem in East
Java. Although the Timnas members have not studied the
potential economic impacts of the current and likely
future transportation corridor closures, local East
Java economists tell us that the impact has already
been significant. Timnas members do understand that
the social implications of 55,000 newly displaced
people would be severe, with demonstrations likely
blocking the few remaining transportation routes to
draw the government's attention to their plight,
closing off southern East Java from Surabaya. In a
recent public meeting, the national legislature

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criticized Timnas head Basuki and the government's slow
response to the mud problem. Basuki defended himself
stating that Timnas was formed less than two months
ago, four months after the blowout occurred. The
amount of finger pointing associated with the Lapindo
debacle is increasing as the scope and magnitude of the
problem expands.


10. (SBU) Vice President Kalla, seeking to "reassure"
mud flow victims (and end their protests we assume),
announced publicly that all victims would be
compensated for their losses. Kalla guaranteed that
Lapindo and its partners would live up to their
obligations and not flee the country, noting, "The
Bakrie and Panigoro families are respected and have
true nationalism." Kalla also stated that the two
Indonesian families involved in Lapindo will pay to
build a new turnpike as they are, "very rich and can
easily afford the Rp 1.3 billion (USD 130,000) to
replace the toll road". (Note: We are not sure what
USD 130,000 will buy but we are pretty certain that,
even in Indonesia, it will not buy a new toll road.)
However, Lapindo and its partners have consistently
shown their unwillingness to spend the money necessary
to fix this problem quickly, while it was still
manageable (Ref. D). Avowals of nationalist sentiment
from Kalla aside, local residents are now vocal in
their demands that the GOI "nationalize" the Lapindo
blowout and hold the three partners financially
responsible for all of the damages. To date, less than
USD 30 million has been paid to the mud victims to
compensate for the loss of their homes and businesses.
Short of forcing the three partners to escrow
sufficient funds to cover present and future damages, ,
it is unlikely that the GOI can guarantee compensation
to the growing number of Lapindo disaster victims
(including the local governments) without sticking
Indonesian taxpayers with the bill.

PASCOE