Brunei's energy consumption
Brunei's energy consumption is primarily driven by its abundant reserves of crude oil and natural gas, which have played a significant role in the country's economic development and high standard of living. The nation, which is small in size and population, relies heavily on fossil fuel exports, with oil and gas accounting for the majority of its total exports and over half of its per capita GDP. However, as these resources are depleting, Brunei faces the challenge of diversifying its economy to sustain its First World status.
Recent initiatives focus on energy conservation and the development of renewable energy sources, such as solar and hydropower. For instance, the country has established a 1.2-megawatt solar power plant and is exploring connections to a trans-Borneo electricity grid. Despite these efforts, significant structural changes are required to reduce the nation's reliance on liquid fossil fuels. As Brunei navigates this transition, it aims to expand sectors like Islamic banking, education, and tourism, highlighting the delicate balance between maintaining economic stability and adapting to a sustainable energy future.
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Brunei's energy consumption
Official Name: State of Brunei Darussalam, or Nation of Brunei, the Abode of Peace.
Summary: Revenue from export of crude oil and natural gas has sustained Brunei, but with supplies decreasing, efforts are under way to diversify the economy and resource base.
The location of the sultanate of Brunei Darussalam, a small country of just under 19,685 square miles (6,000 square kilometers) and half a million residents, has its advantages and disadvantages. In 1963, after several decades of British rule, the sultan of Brunei chose not to join the Federated Malay States and to remain a protectorate of Britain until full independence in 1984. This decision stemmed in part from a wish to maintain full control over large reserves of crude oil and natural gas that lay within Brunei’s national jurisdiction. Since then, government revenues from the sale of these fossil fuels have shaped the landscape of Brunei, which has an international airport, a national airline, a university, durable highways and roadways, and the world’s roomiest royal palace. Brunei has earned a seat at the top the United Nations Development Programme’s Human Development Index (a measure of human well-being that takes into account such factors as life expectancy, literacy, education, and standard of living) and was ranked thirteenth among nations in per capita gross domestic product (GDP), equivalent to $77,900 per year in 2023.
However, Brunei shares with Malaysia and Indonesia the large island of Borneo, which is thinly populated, thickly forested, and somewhat isolated in the South China Sea. Across the sea is China’s Pearl River Delta megalopolis; Singapore, the most competitive economy in the world; and Malaysia’s Kuala Lumpur, where revenues from the export of oil and gas have fueled a financial, manufacturing, and tourist dynamo. Brunei’s relative location, small population, and high GDP, which is dependent on oil and gas exports, place the country in a difficult economic position. As oil and gas reserves dwindle, Brunei intends to expand its economic diversification with a focus on services such as Islamic banking, education, and tourism in order to maintain its First World standard of living.
In 1888, oil was discovered on Borneo, then a part of the Dutch East Indies, by a group of British oil pioneers from Shell Transport and Trading Company. To fund further exploration and production, Shell and its fleet of tanker ships turned to the Royal Dutch Petroleum Company, forming one of the world’s largest commercial oil corporations. Brunei’s first oil well opened in 1929, along the Seria River in Padang Berawa. Later technological advances allowed exploration and production to shift offshore. Today there are a number of large oil fields within Brunei’s territorial seas, all managed by Brunei Shell Petroleum (BSP) Company, Ltd., a joint venture headquartered in what is now the town of Seria, close to Kuala Balait, where most expatriates linked to Brunei’s fuel industry reside. Here too is the crude oil terminal, a refinery which daily processes 10,000 barrels of oil into petroleum products for the domestic market, and the One Billionth Barrel Monument, unveiled in 1991 to mark the historical and cultural significance of Brunei’s black-gold rush.
A few miles up the coast from the Seria complex is the western Pacific’s first liquefied natural gas (LNG) plant, which opened in the town of Lumut in 1972. The government of Brunei shares ownership of the plant with Shell Overseas Trading and Mitsubishi Corporation, which annually pump 6.7 million tons of gas into transmarine tankers owned by Brunei/Shell transport companies. Japan imports most of Brunei’s LNG, followed by the Korea Gas Corporation.
In 2021, natural gas was the major fuel source for domestic electricity, accounting for 78 percent of total generation. Oil and gas accounted for the majority of Brunei’s total exports and more than half of the country’s per capita GDP. Local manufacturing and agriculture are slim, so both essential and luxury goods come mostly from Singapore, Japan, and Malaysia. Oil production peaked in 1979 at more than 240,000 barrels per day. To deal with the rising threat of China, which has redrawn the map of the South China Sea, to which it has essentially laid claim, Brunei has reinforced ties with England, the Netherlands, the United States, and its fellow members of the Association of Southeast Asian Nations (ASEAN).
The government of Brunei realized that the culture of nonrenewable energy sparked more than 100 years ago and now so entrenched is unsustainable. The catchwords for national energy policy and planning are conservation and renewable energy. The Energy Efficiency and Conservation Initiative and the proposed National Energy Research Centre are two concrete examples of the country’s efforts to instill the values of conserving energy and diversifying production and consumption. Electricity-generating facilities powered by solar energy and hydropower top the list of objectives. A 1.2-megawatt solar power plant in Seria went online in 2011, and the nation was discussing a way to link to a trans-Borneo electricity grid that was being constructed in the early 2020s. However, breaking Brunei’s dependence on liquid fossil fuels so that economic diversification can take place would require deep structural changes in the country’s political economy, along with some luck from forces of geography.
Bibliography
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Saunders, Graham. A History of Brunei. 2nd ed. London: RoutlegeCurzon, 2002.