Malaysian Society for Engineering and Technology 2421-07-WKL APR - JUN 2012 13th ISSUE For Members Only 21 st Century Professionals Inside This Issue: Nuclear Energy: Newsletter Opinion Column 1 Past Events 3-5 Editor’s Note 2 Feature Article 6-7 HIGHLIGHT: Proposed Establishment of MBOT 2 Future Events 8 Contact 8 borne by consumers rather than suppliers. Many countries have now liberalized the electricity market where these risks, and the risk of cheaper competitors emerging before capital costs are recovered, are borne by plant suppliers and opera- tors rather than consumers, which leads to a signifi- cantly different evaluation of the economics of new nuclear power plants. Following the 2011 Fukushima Daiichi nuclear disaster, costs are likely to go up for currently operating and new nuclear power plants, due to increased requirements for on-site spent fuel management and elevated design basis threats. Having said about nuclear energy, according to a 2011 projection by the International Energy Agency, solar power generators may produce most of the world’s electricity within 50 years, with wind power, hydroelectricity and biomass plants supply- ing much of the remaining generation. "Photo- voltaic and concentrated solar power together can become the major source of electricity". Renewable technologies can enhance energy security in electricity generation, heat supply, and transporta- tion. With the above issues raised, it is very clear that there is no obvious answer for ‘a go’ or ‘no go’ policy on nuclear energy. It is ultimately a matter of political decision with the support of a strong public opinion if any government like Malaysia wishes to go for it in our energy mix. including Australia and Canada. However, the countries now responsible for more than 30% of the world’s uranium production are Kazakhstan, Namibia, Niger and Uzbekistan. They are politically unstable. Reserves from existing uranium mines are being rapidly depleted, and one assessment from the IAEA showed that enough high-grade ore exists to supply the needs of the current reactor fleet for only 40-50 years. Expected available fuel threaten future plants and contribute to volatility of uranium prices at existing plants. Uranium fuel costs have escalated in recent years, which negatively impacts on the viability of nuclear projects. On the issue of nuclear war threat, the growth of nuclear power increases the ability of nations to obtain or enrich uranium for nuclear weapons, and a large-scale worldwide increase in nuclear energy facilities would exacerbate this problem, putting the world at greater risk of a nuclear war or terrorism catastrophe. On the issue on nuclear reactors become preferred targets during military conflict, indeed over the past three decades, we have seen repeated attacks during military air strikes. On public opinion, a poll in the European Union for Feb-Mar 2005 showed 37% in favour of nuclear energy and 55% opposed, leaving 8% undecided. This poll showed that the approval of nuclear power rose with the education level of respondents. As of May 15, 2011, a total of 438 nuclear reactors were operating in 30 countries, six fewer than the historical maximum of 444 in 2002.The current world reactor fleet has a total nominal capacity of about 372 gigawatts (or thousand megawatts). The cost of building new reactors is extremely high, as are the risks involved. Most utilities have said that they won't build new plants without government loan guarantees. Analysis of the economics of nuclear power must take into account who bears the risks of future uncertainties. To date all operating nuclear power plants were developed by state-owned or regulated utility monopolies where many of the risks associated with construction costs, operating performance, fuel price, and other factors were Currently nuclear power plants provide 13% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity. In 2007, the IAEA reported there were 439 nuclear power reactors in operation in the world operating in 31 countries. China has 25 nuclear power reactors under construction, with plans to build many more, while in the US the licenses of almost half its reactors have been extended to 60 years, and plans to build another dozen are under serious consideration. However, Japan's 2011 Fukushima Daiichi nuclear disaster prompted a rethink of nuclear energy policy in many countries. Germany decided to close all its reactors by 2022, and Italy has banned nuclear power. There is an ongoing debate about the use of nuclear energy. Proponents, such as the World Nuclear Association and IAEA, contend that nuclear power is a sustainable energy source that reduces carbon emissions. It can increase energy security. Nuclear power's true costs are lower than either fossil fuels or renewable. Nuclear fuel is virtually unlimited and packs a huge energy punch. They emphasize that the risks of storing waste are small and can be further reduced by using the latest technology in newer reactors, and the operational safety record in the Western world is excellent when compared to the other major kinds of power plants. Opponents, such as Greenpeace International believes that nuclear power poses many threats to people and the environment. These threats include health risks and environmental damage from uranium mining, processing and transport, the risk of nuclear weapons proliferation or sabotage, and the problem of radioactive nuclear waste. They also contend that reactors can go wrong, and there have been many serious nuclear accidents. Nuclear power plant accidents include the Chernobyl disaster (1986), Fukushima Daiichi nuclear disaster (2011), and the Three Mile Island accident (1979). It will also increase the risk of nuclear war. On the issue of energy security, nuclear power has been relatively unaffected by embargoes, and uranium is mined in countries willing to export, Ir. Ahmad bin Tamby Kadir MySET Coucil Member an option ahead for the world
Transcript
JAN-MAR 2010
Malaysian Society for Engineering and Technology 2421-07-WKL APR - JUN 201213th ISSUE
For Members Only
21st Century Professionals
Inside This Issue:
Nuclear Energy:
Newslet ter
Opinion Column 1 Past Events 3-5
Editor’s Note 2 Feature Article 6-7
HIGHLIGHT: Proposed Establishment of MBOT 2
Future Events 8
Contact 8
borne by consumers rather than suppliers. Many countries have now liberalized the electricity market where these risks, and the risk of cheaper competitors emerging before capital costs are recovered, are borne by plant suppliers and opera-tors rather than consumers, which leads to a signifi-cantly different evaluation of the economics of new nuclear power plants.
Following the 2011 Fukushima Daiichi nuclear disaster, costs are likely to go up for currently operating and new nuclear power plants, due to increased requirements for on-site spent fuel management and elevated design basis threats.
Having said about nuclear energy, according to a 2011 projection by the International Energy Agency, solar power generators may produce most of the world’s electricity within 50 years, with wind power, hydroelectricity and biomass plants supply-ing much of the remaining generation. "Photo-voltaic and concentrated solar power together can become the major source of electricity". Renewable technologies can enhance energy security in electricity generation, heat supply, and transporta-tion.
With the above issues raised, it is very clear that there is no obvious answer for ‘a go’ or ‘no go’ policy on nuclear energy. It is ultimately a matter of political decision with the support of a strong public opinion if any government like Malaysia wishes to go for it in our energy mix.
including Australia and Canada. However, the countries now responsible for more than 30% of the world’s uranium production are Kazakhstan, Namibia, Niger and Uzbekistan. They are politically unstable. Reserves from existing uranium mines are being rapidly depleted, and one assessment from the IAEA showed that enough high-grade ore exists to supply the needs of the current reactor fleet for only 40-50 years. Expected available fuel threaten future plants and contribute to volatility of uranium prices at existing plants. Uranium fuel costs have escalated in recent years, which negatively impacts on the viability of nuclear projects.
On the issue of nuclear war threat, the growth of nuclear power increases the ability of nations to obtain or enrich uranium for nuclear weapons, and a large-scale worldwide increase in nuclear energy facilities would exacerbate this problem, putting the world at greater risk of a nuclear war or terrorism catastrophe. On the issue on nuclear reactors become preferred targets during military conflict, indeed over the past three decades, we have seen repeated attacks during military air strikes.
On public opinion, a poll in the European Union for Feb-Mar 2005 showed 37% in favour of nuclear energy and 55% opposed, leaving 8% undecided. This poll showed that the approval of nuclear power rose with the education level of respondents.
As of May 15, 2011, a total of 438 nuclear reactors were operating in 30 countries, six fewer than the historical maximum of 444 in 2002.The current world reactor fleet has a total nominal capacity of about 372 gigawatts (or thousand megawatts). The cost of building new reactors is extremely high, as are the risks involved. Most utilities have said that they won't build new plants without government loan guarantees.
Analysis of the economics of nuclear power must take into account who bears the risks of future uncertainties. To date all operating nuclear power plants were developed by state-owned or regulated utility monopolies where many of the risks associated with construction costs, operating performance, fuel price, and other factors were
Currently nuclear power plants provide 13% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity. In 2007, the IAEA reported there were 439 nuclear power reactors in operation in the world operating in 31 countries.
China has 25 nuclear power reactors under construction, with plans to build many more, while in the US the licenses of almost half its reactors have been extended to 60 years, and plans to build another dozen are under serious consideration. However, Japan's 2011 Fukushima Daiichi nuclear disaster prompted a rethink of nuclear energy policy in many countries. Germany decided to close all its reactors by 2022, and Italy has banned nuclear power.
There is an ongoing debate about the use of nuclear energy. Proponents, such as the World Nuclear Association and IAEA, contend that nuclear power is a sustainable energy source that reduces carbon emissions. It can increase energy security. Nuclear power's true costs are lower than either fossil fuels or renewable. Nuclear fuel is virtually unlimited and packs a huge energy punch. They emphasize that the risks of storing waste are small and can be further reduced by using the latest technology in newer reactors, and the operational safety record in the Western world is excellent when compared to the other major kinds of power plants.
Opponents, such as Greenpeace International believes that nuclear power poses many threats to people and the environment. These threats include health risks and environmental damage from uranium mining, processing and transport, the risk of nuclear weapons proliferation or sabotage, and the problem of radioactive nuclear waste. They also contend that reactors can go wrong, and there have been many serious nuclear accidents. Nuclear power plant accidents include the Chernobyl disaster (1986), Fukushima Daiichi nuclear disaster (2011), and the Three Mile Island accident (1979). It will also increase the risk of nuclear war.
On the issue of energy security, nuclear power has been relatively unaffected by embargoes, and uranium is mined in countries willing to export,
Ir. Ahmad bin Tamby KadirMySET Coucil Member
an option ahead for the world
Editor’s noteNewsletters
EDITORIAL BOARD
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02APR - JUN 2012
Advisor :
Chief Editor :
Co - Editors :
Prof. Dato’ Abang Abdullah Abang Ali
Assoc. Prof. Dr. Suraya Abdul Rashid
Assoc. Prof. Dr. Siti Mazlina Mustapa KamalMr Safuan Ramlan
Assoc. Prof. Dr. Suraya Abdul RashidChief Editor
Dear members,
It is a pleasure to greet you here in the 13th issue of the 21st Century Profes-sionals Newsletter. This issue coincides with the 4th Malaysian Society for Engineering and Technology (MySET) Annual General Meeting (AGM), the �irst AGM for MySET since the of�icial merger between the Malaysian Society for Engineering and Technology (mSET) and the Malaysian Society for Engineering Technologists (MSET) last year.
The theme for this year’s AGM revolves around the formation of the Technolo-gists Board of Malaysia (MBOT), a body that recognizes and empowers technologists and technicians as a professional profession in Malaysia. It will be exciting to see the formation of the MySET council members for the 2012/2013
term to be represented by engineers, technicians and technologists. After all, this is will positively re�lect what MySET stands for, a professional body catering to the entire multi-disciplinary and multi-level engineer-ing fraternity, comprising of engineers, engineering technologists and technicians with all other allied professionals.
This issue features an opinion column by Ir Ahmad Tamby Kadir, one of MySET’s council members. The opinion column entitled, “Nuclear Energy: an Option Ahead for the World” is a timely topic for food for thought considering recent publicity regarding the debate on the future of nuclear energy here in Malaysia. Ir Ahmad raises some interesting issues on the pros and cons of nuclear energy and concludes that there is no de�initive answer for a ‘go’ or ‘no go’ policy on nuclear energy; it is ultimately a matter of a political decision with the support of a strong public opinion if any government including Malaysia, decides to include nuclear energy in their energy mix.
In keeping with the energy theme, we also feature an article entitled, “Energy in Malaysia: Future Trend Overview and Value Chain Analysis”. This article was adapted from an essay originally written by Saw Ting Yik, a MySET student member currently pursuing his Chemical Engineering degree from the Faculty of Engineering, UPM. The original essay won 2nd prize for the 2012 Accenture Asia Paci�ic Oil & Gas Forum Essay Competition. I would like to take this opportunity to encourage all MySET student members to contrib-ute interesting articles for our newsletter.
As usual we also feature past events recently organized or participated by MySET both locally and interna-tionally. Also check out upcoming future events such as Automex 2012 in Kuala Lumpur this May, The World Congress on Engineering and Technology 2012 in Almaty, Kazakhstan this June and the World Research and Innovation Congress on Engineering and Technology in Kuala Lumpur this December.
We appreciate your feedback on the Newsletter. Please continue to share your thoughts with us via [email protected].
Warm regards,
KUALA LUMPUR (March 21, 2012) - YB Datuk Fadillah Yusof, Deputy Minister of Science, Technology and Innovation (MOSTI) today has of�iciated the Opening Ceremony for the Open Day of the Proposed Establishment of Malaysia Board of Technologists (MBOT) at the Dewan Tun Dr. Ismail, Putra World Trade Centre, Kuala Lumpur. The establishment of MBOT is to recognize and empower technologists and technicians as a professional profession in Malaysia, through the formulation of the Bill of Technologist & Technicians 2012. MBOT will be established as a professional body under the proposed act which will help Malaysia reach the high income nation by recognizing technical manpower, technology and skill and further increase the workforce needed by the country to achieve high-income status.
MBOT will be responsible for the registration of technologist graduates and quali�ied technicians to give them recognition as professionals. MBOT will also regulate the ethic of professionalism of registered members in addition to promoting education and professional training in related �ields.
HIGHLIGHT : Proposed Establishment of MBOT
Visit to Islamic Development Bank (IDB)On 20th December 2011, Prof Megat Johari Megat Mohd Nor, MySET Secretary General and the current Federation of Engineering Institu-tions in Islamic Countries (FEIIC) Vice President, had a meeting with the President of IDB Dr Ahmad Mohamed Ali Al-Madani at the IDB head quarters in Jeddah. The meeting was also attended by Prof Dato Abang Abdullah Abang Ali (MySET President), Mr Rahman Wagiran (MySET member) and Engr Saud Al Mehdi, FEIIC Deputy President and repre-sentative for the Saudi Council of Engineers. The meeting was held to discuss the FEIIC Engineering Qualifications, Accreditation and Profes-sional System (EQAPS) project and its importance towards facilitating the mobility of engineers across OIC Member Countries and achieving greater global recognition of professional engineers from these countries.
A day after the meeting with the IDB President, another follow-up meet-ing was held in Umm Al-Qura University, Makkah, chaired by Prof Faisal attended by about 30 participants from the Saudi Council of Engineers and Umm Al-Qura University. The meeting resolved to support the project for the betterment of the Ummah.
Subsequent to the EQAPS meetings, FEIIC received a letter from the IDB President Dr Ahmad Mohamed Ali Al-Madani, assuring support of the EQAPS project and an offer of initial funding of USD65,000.00 for the project. The first EQAPS project meeting is scheduled in Almaty, Kaza-khstan during WCET2012.
20th December 2011, Jeddah, Kingdom of Saudi Arabia
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03 APR - JUN 2012
Acknowledging the importance of Human Capital Development in Islamic countries and the urgent need for engineers to be educated and trained to the highest standard and benchmarked against their coun-terparts in the more advanced nations, the International Conference on Engineering Education ICEE2011 meeting in Madinah Al Munaw-warah, Kingdom of Saudi Arabia on 30 Muharram – 2 Safar 1433 (25th – 27th December 2011) resolved to;
Establish a Network on Engineering Accreditation in Islamic Coun-tries (NETEAIC) under the auspices of the Federation of Engineering Institutions of Islamic Countries (FEIIC).
Invite six national members from engineering accrediting bodies in the Kingdom of Saudi Arabia, Malaysia, Jordan, Kuwait, Pakistan and Kazakhstan as founding members of the Network with an initial financial contribution of USD5000 per country. Interested societies shall be accepted as associate members and individuals may join as individual members.
Set up a task force to be chaired by Prof Megat Johari Megat Mohd Noor, Vice-President of FEIIC to initiate a study on the Engineering Qualification, Accreditation and Professional System (EQAPS) in Islamic Countries and produce a study report to be presented to the EQAPS Coordination Committee which shall be made up of repre-sentatives of the national members of NETEAIC.
Continue seeking financial support from the Islamic Development Bank for the EQAPS project.
Organise the next ICEE in December 2013.
ICEE2011: Madinah Declaration27th December 2011, Madinah Al Munawwarah, Kingdom of Saudi Arabia
EQAPS Meeting, Umm Al-Qura University
IDB USD65,000.00 for EQAPS project
MySET Public Lecture : Towards Sustainable Industrialisation in Islamic Countries
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04APR - JUN 2012
13th January 2012, Meeting Room, Tower Block, Engineering Faculty, Universiti Putra Malaysia
A MySET Public Lecture was given by Professor Megat Johari Megat Mohd Noor, MySET Secretary General on 13th January 2012 at the level 2 Meeting Room, Tower Block, Faculty of Engi-neering, UPM. The lecture entitled “Towards Sustainable Indus-trialisation in Islamic Countries”, the lecture was attended by exchange students from Kazakhstan. The lecture took around 2 hours and it was also participated by Professor Thamer Ahmed Mohamed from the faculty of Civil Engineering, UPM.
The programme also allowed students to exchange opinions and discuss current development in each country as well as globally especially in the Islamic countries. The lecture also discussed sustainability in development itself including resource & energy management, pollution & carbon emissions and also human capital which plays a vital role in developing countries.
CIDB Green Card Training15th February 2012, Seminar Room, Administration Block, Engineering Faculty, Universiti Putra Malaysia
The Construction Development Industry Board (CIDB) Green Card Training course was organised by MySET at the Faculty of Engineering, Universiti Putra Malaysia on 15th February 2012. The speaker for the course was Mr. Mohd Rahman Bin Selamat from CIDB Malaysia. The course is an integrated program that involves the registration and accreditation of construction personnel to enhance safety levels at construction work sites.
Green Card is the minimum requirement for personnel to work in construction sites. Through this course, workers are reminded of the importance of a safe and healthy working place, basic knowl-edge on safety and health at the construction work site is provided, legal requirements in relation to safety and health is informed and participants are covered by a special insurance scheme that insures the construction personnel against death and accidents.
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Offshore Asia: Conference & Exhibition21st - 23rd February 2012, Kuala Lumpur Convention Centre, Kuala Lumpur, Malaysia
The course was attended by 42 participants, with most of them being technicians from the Faculty of Engineering, UPM. Upon completion of the course, Green Card forms each participant were collected and submitted to CIDB for processing. Once approved, participants will be appointed a green card for their working purposes.
Offshore Asia: Conference & Exhibition was successfully conducted from 21st - 23rd February 2012 at the Kuala Lumpur Convention Centre, Kuala Lumpur. As one of the programme’s supporter, MySET was given the opportunity to open a booth in the exhibition hall and Ir. Zulkifli Ahmad, a MySET council member and MySET representative was also able to participate in the conference. An event such as this is a good opportunity for MySET to publicize the society to the industries as well as dem-onstrating our potential and expertise as a professional body.
Offshore Asia is a huge annual international event that attracts local and international companies. The exhibition alone attracted participation of almost 4000 professionals related to the oil & gas industry. The conference attracted participation of 150 confer-ence delegates with 30 speakers presenting case studies and technology presentations.
The next Offshore Asia will be at Bangkok, Thailand next year which is anticipated to be a great event as well.
Energy in Malaysia: Future Trend Overview and Value Chain Analysis
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06APR - JUN 2012
1. Introduction
The global energy landscape is changing tremendously, with Figure 1 showing the global energy de-mand increase from 2010 to 2035. World Energy Outlook 2010 has identi�ied 5 main uncertainties in the energy market [1], including:
(U1)
(U2)
(U3)
(U4)
(U5)
The key (U1) – (U5) will be used whenever there is a link to these uncertainties in this article.
Figure 1: Global energy demand increases by one-third from 2010 to 2035, with China & India ac-counting for 50% of the growth in the New Policies
Scenario [2]
A value chain is a chain of activities for an operatio in a speci�ic industry. Products pass through all activities of the chain in order and at each activity the product gains some value. Popular visualisation of the value chain is shown in Figure 2, which the primary activities include:
i. Logistics – delivery of supply and productsii. Operations – technology development and decisions makingiii. Marketing and Sales – �inding buyers and comparing prices
Figure 2: Visualisation of the value chain [3]
For the �irms and companies in the energy market who want to be able to stay ahead of the others, such uncertainties prove to be a dif�icult challenge over the value chain. Although the ‘oil and gas’ industry is what naturally comes into mind when ‘energy’ topic is discussed, recent emphasis by the Malaysian government on renewable energy resources, especially on biofuel
and solar energy, has opened up various economic opportunities.
2. Current and Future Landscape Overview
2.1 Oil and Gas Industry
Basically, Malaysia is well endowed with conventional energy sources such as oil, gas and coal and is thus a net energy exporter. The role as an energy exporter therefore puts Malaysia in link with the global energy network, which is highly volatile in response towards global oil and gas prices. (U2, U3).
The oil supply of Malaysia is estimated to peak by 2018 [4]. Following such trend, the oil and gas industry would need to expand towards deepwater oil reservoir and also unconventional oil. Oil industries and governments across the globe are investing in unconventional oil sources due to the increas-ing scarcity of conventional oil reserves [5].
2.2 Government Policy
Since Malaysia is a developing nation, we are not legally bound by either the Kyoto Protocol or the Copenhagen for CO2 reduction. However, the govern-ment is actively dedicated towards a shift in greener energy and industry. Just recently, Prime Minister, Datuk Seri Najib Abdul Razak, announced plans for a Low Carbon Cities Framework and Assessment System to propel Malaysia towards a low carbon economy and reduce carbon dioxide emissions by 40% by 2020 [6].
Such decision puts the Ministry of Energy, Green Technology and Water (KeTTHA) into an important position. Following the National Green Technol-ogy Policy, within the energy sector, applica-tion of green technology in power generation and in the energy supply side management will be given focus; and within the energy utilization sector, the application of green technology in all energy utiliza-tion sectors and in demand side management programmes will be carried out [7].
These policies will certainly affect the oil and gas industry in the process. In fact, KeTTHA has outlined the future renewable energy resources of Malaysia over the next two decades. Notice that solar PV and biomass are given more emphasis. (U4)
2.3 Renewable Energy Industry (RE)
The need for cleaner alternative energy resources opens the door to various economic opportunities, primarily solar energy and biomass industry. Following the footsteps of several developed countries, Malaysia will become the next country to introduce solar PV grid system (illustration shown in Figure 3) and Feed-in Tariff (FiT) [8]. The Sustainable Energy Development Authority (SEDA) has been estab-lished to manage and oversee the implemen-tation of FiT. (U4)
Figure 3: Solar PV grid system. In this system, solar panels are attached to the roof of the buildings. Additional energy generated is sent to the power grid
system and sold to the corresponding company.[9].
Current tariff rate is suggested to be at RM 1.23/kWh for installed capacity up to 4kWp [10].The high FiT value seems to be attractive; however the solar panels involve a high start-up cost. The participation of residential and industrial area is therefore an uncertainty, even with banking loan scheme
By Saw Ting Yik, Chemical and Environmental Engineering Department, Engineering FacultyUniversity Putra Malaysia. Edited from the Second Prize winner, 2012 Accenture Asia Paci�ic Oil & Gas Forum Essay Competition
Economy – slow economy is recovering, but pressure is still on supply and demandOil market – age of ‘cheap oil’ is over with oil demand and supply becom-ing less sensitive to priceNatural gas market – is in the midst of revolution which will probably open up a new era for gas due to predicted long term gas glutClimate changes (government policy) – Copenhagen Accord & G-20 subsidy reforms are key advances, however the extent of implementa-tion is uncertainChina and other emerging economies – will shape the global energy due to growing GDP and populations which certainly have very high impact on energy supply and demand
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07 APR - JUN 2012
provided by SEDA. Also, in case of any damages to the solar panels, the party responsible to incur the cost has yet to be addressed. These are several of the uncertainties that lie in the RE industry. (U1)
Another concern is that FiT is bound to change due to the economy. For example, the UK government just slashed FiT to half of the original, doubling payback period. This not only upset the solar PV industry, but also discouraged the residents to switch for renewable energy source [11]. (U1, U4)
It is worth mentioning that the government is giving emphasis on biodie-sel as alternatives to conventional petrol as well. The Biofuel Policy was launched by the federal government of Malaysia in 2005, primarily aimed at reducing the country’s dependence on depleting fossil fuels; promoting the demand for palm oil as well as stabilising its prices at a remunerative level [12]. Currently, efforts have been made to increase the palm oil industry’s contribution to gross national income by 240% from 2010–2020 [13]. (U4)
The government has started to implement the B5 mandate (a blend of 5% of palm methyl es-ters in diesel) in stages. B5 biodiesel, charging the same price as subsidized petroleum diesel, is available at only some of the Petronas stations. However, domestic consumption is not expected to increase sharply in the near term [14].
3. Value Chain Analysis
3.1 Logistics
Logistics will become more and more important for the energy industry in the next 20 years. The up-stream oil and gas industry of Malaysia will shift towards deepwater and unconventional oil. Such changes would mean a further distance for pipes or ships to cover when transferring materials such as Frac sand to the drilling site and shipping the crude oil to re�ineries. Carefully planned shipping schedule and method will reduce cost of transfer signi�i-cantly and to stay competitive above the other �irms, who compete in interna-tional export market. (U2)
On the other hand, renewable energy industry such as solar PV will be highly dependent on the availability of local resources. Robert Bosch GmbH recent investment of RM 2.2 billion in a solar panel manufacturing plant in Penang [15] and Panasonic announcing to spend RM 1.8 billion on the new cells factory in Malaysia [16] will require the industry to plan even better logistics to compete with other nations over lower cost and sustainable investment.
As for biomass and biofuels, transport logistics is also a shaping factor for designing new process network architecture. This is because contrary to fossil resources which are “point” resources i.e. extracted in a small geographi-cal area far from areas of consumption and then transported to re-�ineries and �inally the consumers, biogenic resources are “dispersed” resources that are provided by large swathes of land with a relatively low productivity per area unit. They have to be collected, possi-bly re�ined and then transported to production sites [17].
The development and use of 2nd generation biofuels, such as those produced from cellulosic material, due to their current high costs and present inability to be produced at scale, are not expected to play a signi�icant role in the overall transport energy mix by 2020.
3.2 Operations
In this article, operations will be de�ined as technological advancement and decision making process for the industry.
3.2.1 Industrial Ecology – Full Utilization of Raw Material
Reducing industrial wastage reduces impact towards the environment and helps the industry to save cost and stay competitive, especially when materials are getting more costly by the day. As mentioned, the age of ‘cheap oil’ is over and the winner will be the one who can make treasure out of the wastes of others.
Wastage can be reduced by using materials and energy as many times as possible. This is called “Industrial Ecology”. One form of industrial ecology is “industrial symbiosis” – a form of collaboration between neighbouring plants so that wastes from one are used as inputs to others [19].
The current challenge is how to incorporate such process within established plants to enhance more output than they already have. Over the next 20 years, such ‘cradle to grave’ analysis will be-come crucial to have higher integration of the overall value chain from upstream to downstream.
3.2.2 Real Time Update - Process Optimization
As the global oil and gas prices become more and more volatile, the answer around supply is harder to predict. It increases the need to effectively plan and manage energy businesses, which have tradi-tionally adopted a longer-term perspective, through an uncertain environment [20]. (U2, U3)
Real time economy and market updates become crucial for the oil and gas industry in deter-mining the production strategy. Current PID control system of Malaysia industry should slowly shift towards the more advance Model Predictive Control (MPC) [21]. MPC has been in use in the process industries since the 1980s, though not yet implemented in the local oil and gas industry. MPC offers real time updates with changes in market and integrate them into the process control of operation. This ensures a complete control and quick response towards the volatility of the market, minimizing cost and optimizing process.
3.2.3 Metric Analysis – Justifying Process Sustainability
Unless the socioeconomic values and environmental impact of the process are justi�ied, it is rather dif�icult for the industry to convince policy makers, especially in the renewable energy industry. For example, the usage of microalgae as feedstock for biodiesel synthesis is claimed to be renewable and has high productivity, but is not implemented as it is not currently economi-cally prudent [22]. (U1)
3.2.4 Pioneering Technology – Reducing Cost and Maximizing Pro�it
As Malaysia’s oil and gas industry proceeds towards deepwater and unconventional oil, technology advancement is essential to compete with the rest of the world. Closer cooperation with local research universities and research institute is expected in the future as the industry struggles to move forward. Investment in research shall be prioritized to prepare the industry for further transformation.
For example, the application of green chemistry is expected to be a major trend of the future industry. To illustrate, the development of a catalyst has reduced multi-step processes into a single-step process [22]. As the total process chain is consolidated, the energy input and unit processes has been reduced signi�icantly, saving cost and ensures the industry to be a leader in the chemistry related �ield.
3.3 Market and Sales
In the next 20 years, China and India will rise as the main importers of oil and gas. Securing the mar-ket at these two countries now will be of utmost important. Malaysia has the advantage as we are very close to them. However, as mentioned, competing with global market will require the advance of logistics and operations. Identifying the markets needs as early as possible will give Malaysia the upper hand over the next two decades. (U5)
As for renewable energy industry, it requires a lot of subsidies from the government due to the immaturity of the technology and market. Without it, the market will collapse easily, since the cost of energy produced by this sector is still much higher compared to oil and gas. Expected cheap natural gas price in the near future will be the major competitor to renewable energy markets. (U1, U3, U4)
4. Conclusion
Overall, Malaysia oil and gas market will experience volatile market and must be able to respond swiftly towards all changes to be competitive in the future. Application of latest technology; well-planned logistics and operations; early identi�ication of market needs and changes will help the oil and gas industry of Malaysia to stay ahead of the rest. As for the renewable energy industry, the struggle continues as it is heavily dependent on the government policy. However, current insight is that a bright future awaits the industry with Malaysian government giving great emphasis on sustainable development.
References:[1] IEA, "World Energy Outlook," 2010. [Online]. Available: http:// www.iea.org/weo/docs/weo2010/weo2010_london_nov9.pdf. [Accessed 10 December 2011][2] IEA, "World Energy Outlook," 9 November 2011. [Online]. Available: http://www.iea.org/weo/docs/weo2011/homepage/WEO2011_Press_Launch_London.pdf. [Accessed 8 December 2011].[3] Wikipedia, "Value Chain," [Online]. Available: http:// en.wikipedia.org/wiki/Value_chain. [Accessed 5 December 2011].[4] Energy Files, "Energy Files," 2011. [Online]. Available: http://www.energy�iles.com/asiapac/malaysia.html. [Accessed 10 December 2011].[5] Wikipedia, "Unconventional oil," 2011. [Online]. Available: http://en.wikipedia.org/wiki/Unconventional_oil. [Accessed 13 December 2011].[6] A. Annuar, "The Sun Daily," 8 September 2011. [Online]. Available: http://www.thesundaily.my/news/137440. [Accessed 11 December 2011].[7] KeTTHA, "National Green Technology Policy Main Areas," 20 October 2011. [Online]. Available: http://www.kettha.gov.my/en/content/national-green-
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FUTURE EVENTS
Editor21st Century Professionals NewsletterMalaysian Society for Engineering & TechnologyLevel 2, Block A, Faculty of EngineeringUniversiti Putra Malaysia43400 UPM SerdangSelangor, MALAYSIA.
The World Congress on Engineering & Technology 2012 (WCET2012) Almaty, Kazakhstan
1-3 June 2012
IRIS 2012 Kuching, Sarawak
4-6 September 2012
1-Day Seminar on Affordable Quality Housing 2011 : The First-Time Home Buyers Kuala Lumpur
16 October 2012
World Research & Innovation on Engineering & Technology (WRICET2012) Kuala Lumpur
3-5 December 2012
5th World Engineering Congress Islamabad, Pakistan
March'13
FEIIC General Assembly & IntEC2013 Sudan / Mesir
1-3 October 2013
World Housing Congress (WHC2013) Kuching, Sarawak
2-4 December 2013
ICEE2013 Madinah, Saudi Arabia 16-18 December 2013
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