Monday, October 04, 2004

Sempra demand predictions questioned

Sempra Utilities--owners of San Diego Gas and Electric and the Southern California Gas Company--have been crying "crisis" over the future of natural gas supplies. Now, opponents have begun to question the need for more natural gas supplies--specifically LNG--based on a California Energy Commission projection:

"All experts agree that the current infrastructure and natural supply will be insufficient," PUC Commissioner Susan Kennedy said, before voting to approve LNG shipments. She also urged action to stem rising prices.

However, the California Energy Commission forecast late last year that supplies of natural gas will be adequate for the foreseeable future. The state imports 85 percent of its natural gas via conventional pipelines.

Although some outside sources are declining, the energy commission said, growing imports from the Rocky Mountains will offset production declines in California and elsewhere.

That forecast was issued before the PUC voted to require California to derive 20 percent of its electricity from renewable sources by 2010. Dave Maul, who oversees monitoring of natural gas supply and demand at the energy commission, said he expects that commitment to cut the growth in California's demand for natural gas from 1 percent annually to 0.5 percent.

While conservation on the retail level might reduce demand for Natural Gas, there is no denying that Natural Gas will play an increasingly important role in firing the State's electricity plants--and therein lies the basis for a true crisis.