California law accelerates gas demand without more supply: IECA

Knoxville, Tennessee (Platts)--28Sep2006

California's new greenhouse gas control law amounts to "another mandate
that will accelerate consumption of natural gas without any consideration to
our nation's failing natural gas supply," the head of the Industrial Energy
Consumers of America said Thursday.

The new measure, AB 32, was signed Wednesday by California Governor
Arnold Schwarzenegger. It is designed to cut greenhouse gas emissions 25% by
the year 2020. Mandatory caps would begin in 2012 and ratchet down to meet the
2020 goals.

"A cap on greenhouse gas emissions will result in fuel switching from
coal and oil to natural gas, further [exacerbating] the five-year natural gas
supply crisis that has seen natural gas prices spiking to over $15/MMBtu,"
said Paul Cicio, IECA's president.

"Today is not a happy day for the US manufacturing sector," Cicio added.
"Congress is leaving town without acting upon the Outer Continental Shelf
legislation that would address our country's dwindling natural gas supply, and
California enacts legislation that will spur additional demand. We are truly
disappointed and concerned."

The IECA called on California's senators to become proactive leaders to
increase gas supply in California and across the nation. "Individual states
that continue to demand more natural gas must play an active role in
increasing supply," the group added.

--Stephanie Seay, stephanie_seay@platts.com

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