Energy justice within energy and natural gas industry of Malaysia / Lim Zhen Wen

Lim , Zhen Wen (2021) Energy justice within energy and natural gas industry of Malaysia / Lim Zhen Wen. PhD thesis, Universiti Malaya.

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Abstract

Malaysia has always been known as a resource-rich country among its peers in the region, with the energy sector being a key driver of economic growth. Given the competing policy objectives from the various ministries and government agencies, this thesis examines whether the transformation of the energy sector is premised on the growing importance of energy justice in the literature in the formulation of energy law and policy, with a special focus on the natural gas industry. This thesis aims to provide a wholesome understanding of the energy justice concept, which is then applied to the energy policy development in Malaysia to ascertain the importance of this framework. The natural gas sector transformation in Malaysia towards a liberalised market is a crucial milestone for a country with highly regulated gas pricing and a benchmark case for countries globally that are embarking on subsidy reforms. First, the thesis presents and discusses the energy policy and structure of the energy landscape in Malaysia. Secondly, capitalising on the context established, the current energy justice framework is evaluated by comparing multiple scholarships. The ternary plot is utilised to construct a comprehensive energy justice metric that takes into account a holistic view of each tenet. The data utilised for the construct are publicly available from institutions such as World Bank, United Nations, IEA, BNEF and Asia Pacific Energy Portal. The energy justice performance of Malaysia is benchmarked against the other ASEAN countries. Malaysia had performed well for energy economics and energy politics tenet while the environment tenet is of primary concern to achieve energy justice. Thirdly, by deep diving into the natural gas industry, the thesis examines the natural gas industry transformation from the perspective of energy justice using the 8-step economic analysis framework. In realising the true potential of the natural gas industry, four key building blocks are identified as the underlying fundamental for the transformation. The Malaysian journey demonstrated the dynamism of various key stakeholders and the possibility of achieving a well-struck balance between competing policy goals in the country's natural gas pricing reform strategy. The breaking of silos among key stakeholders, understanding the cost of the respective policy goals and structuring recommendations and strategies via cost-benefit analysis have shown the criticality and practicality of balancing the elements of the energy trilemma. Lastly, the 2010 and 2015 input-output tables from DOSM are used as input to the Leontief and Ghosh I-O model to analyse the impact of natural gas consumption and natural gas price on the Malaysian economy, respectively. From the impact analysis on natural gas reforms, it is observable that the overall final demand is expected to increase by RM31.4billion. In contrast, with RM1.50 per MMBtu increase in gas price, the overall final demand is expected to increase by RM36.5billion. This shows that natural gas price and demand will significantly impact the overall final demand and be crucial in driving growth, especially the manufacturing sector. With the aspiration to achieve a just energy transition, natural gas is envisaged to play a critical role in facilitating the transition.

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