After a decade of steady decline, natural gas demand in California is forecast to grow annually, albeit slowly, during the next 10 to 15 years, an updated statewide report to the state legislature says.

After posting an annual decline averaging 0.85% during 2000-2010, the 2012 Integrated Energy Policy Report (IEPR) by the California Energy Commission (CEC) predicts annual growth figures for gas demand ranging from 0.66% to 0.76% for 2011-2022, based on a high-energy demand scenario, and from 0.16% to 0.62% on a low-energy demand scenario.

While the state report said renewables are being added in California “faster than anticipated,” the state is experiencing growing gas demand in the electricity generation and alternative transportation fuel sectors, although not on as robust a pace as the rest of the nation.

“In contrast to the rest of the United States, natural gas demand in California’s electric generation sector has risen only slightly,” said the IEPR. “This is due in part to the success of energy efficiency, conservation, and renewable energy policies.”

In the future, natural gas in the electricity system will become more critical as the state pushes for 33% and possibly as high as 40% renewables by the early 2020s, the CEC said. With more intermittent sources, such as solar and wind, gas is needed more than ever to help maintain grid reliability.

“California is also seeing growing demand for natural gas as a transportation fuel in response to greenhouse gas emission-reduction targets, volatile oil prices, air quality standards, the state low-carbon fuels standard and the federal renewable fuels standard.”

The report said several issues that are national in scope related to natural gas supply/demand need to be tracked closely by California energy officials, including hydraulic fracturing, electric-natural gas transmission grid harmonization, and pipeline safety and reliability efforts.

The report said California continues to rely on natural gas for many energy needs — gas fired power plants account for 42% of the state’s power supplies — and 88% of the state’s gas supplies are imported from the Southwest, Rockies and Western Canada.

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