Malaysia faces many challenges in the era of globalisation on its quest to achieve developed nation status. Sustainable development of the energy sector is a pivotal factor to maintain economic competitiveness and progress. For more than 20 years, Malaysia has successfully diversified its energy consumption by taking advantage of domestic energy resources such as oil and natural gas.

The world oil crisis in the 1970s powerfully illustrated that concerns over resource scarcity were justified. The situation exposed the vulnerability of the energy supply and the over-dependence on oil as a fuel. These conditions lead to the necessity for the diversification of energy fuel resources. Thus, this era triggered the development of energy-related legislation and policies to address energy requirements.

The National Energy Policy has three principal objectives that guide future energy sector developments based on supply, utilization and the environment. For supply, the main aim is to extend the life of domestic resources and diversify away from oil to promote other energy forms. Utilization depends heavily on the industry and consumers to integrate energy efficiency programmes and develop demand-side initiatives to curb consumption. Energy and the environment are linked at every level, thus the requirement for mandatory assessments to address negative impacts.

The National Energy Balance (NEB) is designed to present basic supply and demand data for all fuels expressed in a common energy unit. It serves as an important reference in formulating new policies for the energy sector. Key energy data and indicators allow policy makers to implement programmes to meet future energy demand and secure supplies.

Energy policies and regulations play an important role in achieving the goals of sustainable development in Malaysia. With strategic planning and sound evaluation, initiated decades ago, of energy resources, the country is able to meet current and future energy needs and supplies.