Energy Resource Development and Management in Malaysia

Abstract

Within the last decade, Malaysia has become a major exporter of petroleum and natural gas. The exploitation of new energy resources has provided an important stimulus for economic growth and has helped to provide the government with major new resources for eco nomic development and its ethnic redistribution programmes. As a consequence, public policy has recently become more oriented towards longer-range planning, development and management of energy resources as part of integrated economic and socio-political strategies. In this process, the government has assumed a central role in the control, investment and operation of energy resource develop ment projects. A brief review of energy development and energy policies in Malaysia will reveal how important energy has become for the economy and politics of the country. During the colonial era, the government gave almost no attention to energy on the assumption that Malaya, the Straits Settlements and the Borneo territories had almost no commercially exploitable energy resources. The development of steam shipping and rail transport in the late nineteenth century required substantial quantities of coal which had to be imported from abroad, especially to the large ship ping centres such as Singapore and Penang. After the turn of the cen tury, coal was also used for steam generation of electricity. Some local coal was mined at Batu Arang for use by the Malayan Railways, but it was low quality soft coal with a high moisture content and many impurities. As motor transport and diesel power became more impor tant, imported oil gradually replaced coal as the primary energy source, both for transport and electric power generation. This trans formation to heavy dependence on oil was nearly complete by the mid-1970s when Malayan Railway's last steam locomotives were retired and the coal mines at Batu Arang were closed.1