The Sunda Trench runs through the deepest parts of the Indian Ocean, where the rock of the massive Australian Plate meets that of the smaller Sunda Plate. The Sunda Plate is home to most Southeast Asian countries, including Indonesia. While a number of nearby Indonesian islands have recorded earthquakes measuring 6.0 or greater on Richter Scale--to the tune of 30 in the past decade--Bali has been spared for more than 30 years, its last major earthquake taking place in 1979.
Unfortunately, there are a number of scientists who don't think this trend will continue. Researchers at the Bandung Institute of Technology (BIT) calculated that Bali has a Potential Ground Acceleration (PGA) of 25 percent to 40 percent (see References 3). In simple terms, this number is a measure of how severely the ground vibrates during an earthquake.
Using this figure, the researchers were able to determine that Bali can expect to experience liquefaction--where the bedrock turns into a cementlike sludge--and ground collapse in addition to the requisite ground shaking caused by a large earthquake.
Because Bali was spared in the 2004 Indian Ocean earthquake and tsunami, a large number of its residents remain oblivious to the fact that it is still very much at risk. Researchers from both BIT and the group led by Sengara have shown tsunamis as a definite risk for Bali in the event of an earthquake. As an extrapolation, waves as high as 30 meters were measured in nearby Aceh, which wasn't as lucky as Bali in 2004, and lies about the same distance (225 km) away from the Sunda Trench.