Demand rises, supplies stable for Natural Gas

The California Energy Commission is predicting the obvious: as the State's population grows, demand for Natural Gas is increasing. However, new supplies are not coming on line.

The wholesale price of natural gas in California has doubled in less than four years, and continued price inflation will contribute to future increases in the cost of living and the cost of goods in the Golden State, says a staff report released in Sacramento Monday by the California Energy Commission.

"Californians feel the effects of rising natural gas prices with more expensive home heating and electricity bills, and higher prices paid for food and consumer goods," the CEC Natural Gas Assessment Update states. "Higher natural gas prices add to the cost of California-made products, making in-state businesses less competitive in the global marketplace."

Two realities of the California natural gas market combine to put the state's consumers in that position: the state produces only about 15 percent of the natural gas that it uses, and most of the state's electricity now is generated by natural gas-burning generators.

"It's not that natural gas demand is growing that much in California: we're only growing about 1 or 2 percent per year," said Claudia Chandler, a spokeswoman for the energy commission. "It's that we don't produce much ourselves."