Primary energy supply of Malaysia in 2007 was 74.83 million ton COE (crude oil equivalent) in total. In which the share of crude oil was 37.4 %, and that of natural gas was 46.3 %. This means that Malaysia is heavily dependent on crude oil and natural gas. On the other hand, renewable energy’s share was as small as 3.9 %. Malaysian Government, however, intends to lessen the dependence on crude oil imports, and plans to raise the share of renewable energy up to 6 % by 2010, 11% by 2015.

It is true that Malaysia is an energy exporting country. In fact, 54 % of crude oil and natural gas that are exploited in Malaysia is being exported. Malaysia’s domestically produced primary energy was 94.37 million ton (COE), of which 51.38 million ton (COE) is being exported. The government, however, has estimated that reserve of domestic crude oil might be consumed in 19 years, whereas domestic reserve of natural gas might possibly last 33 years. Based on this estimate and due to recent rise of domestic demand for crude oil, the country has started to import some amount of crude oil. As for natural gas, 46 % of domestic production goes to overseas.

Export of natural gas to Japan in 2008 was 14.13 million ton, which occupied 19.6 % in total amount of natural gas consumed in Japan. Today, Japan and Malaysia are strongly tied in energy trade.

Malaysia is known to be one of major palm oil producing countries. In 2008, the country produced 17.76 million ton of palm oil using a palm cultivating acreage of 1.2 million hectare. Malaysia came to the second in the world in palm oil production following after Indonesia that produced 20.25 million ton in 2008. Palm oil is one of Malaysia’s major export materials, and in fact it earned foreign money that shared 4.2 % of total export of Malaysia in 2002. Malaysian Government has been making efforts to promote production and use of biodiesel made from palm oil, so as to lessen the dependence on crude oil imports, and to stabilize palm oil price, as well as to increase export of biofuels. Production of biodiesel in 2007 was 120,000 ton. Officially permitted mixing ratio of biodiesel to regular diesel oil is 5 % at maximum.

Of total production cost of biodiesel, 85 % is the cost of palm oil. Therefore, if palm oil price rises, biodiesel would become less competitive, and its production would be cut down. The government is keenly promoting export of biodiesel. Future export of biodiesel from Malaysia, however, will depend on whether demand for biodiesl in world market would increase or not, and also on whether palm oil cost would be stabilized or not.

Table  Supply of Primary Energy in Malaysia (2007) Unit: million ton COE

	Crude Oil	Natural Gas	Coal	Hydro	Renewable	Total
Domestic Production	36.03	54.29	0.58	0.56	2.91	94.37
Import	17.98	5.43	8.43	0.00	0.00	31.84
Export	26.04	25.07	0.27	0.00	0.00	51.38
Domestic Use	27.97	34.65	8.74	0.56	2.91	74.83

 

Fig.  Supply Structure of Primary Energy (Domestic Production/Import/Export) in Malaysia (2007)

 

Fig.  Supply of Primary Energy in Malaysia (2007)

 

Source:
1) Website of IEA (International Energy Agency): http://www.iea.org
2) Journal: “Research on Agriculture and Fishery Policy of Japan” N0.15 (2009) pp19-40, by Tatsuya Koizumi
3) Malaysia Handbook Ver.8, by Japanese Chamber of Commerce in Malaysia
et al