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NATURAL GAS USE, TRANSPORTATION ISSUES AND FUEL SUPPLY VULNERABILITY FOCUS OF CALIFORNIA 1991 FUELS REPORT

 NATURAL GAS USE, TRANSPORTATION ISSUES AND FUEL SUPPLY
 VULNERABILITY FOCUS OF CALIFORNIA 1991 FUELS REPORT
 SACRAMENTO, Calif., Dec. 26, /PRNewswire/ -- As a result of new interstate pipelines now being constructed, natural gas customers in California will save an estimated $5.8 billion over the next 25 years, according to a report recently released by the California Energy Commission.
 "The Energy Commission has long supported policies to expand access to lower cost natural gas supplies," noted California Energy Commission Chairman Charles Imbrecht.
 Natural gas prices and supplies are several of the major issues addressed in the California Energy Commission's 1991 Fuels Report, formally adopted by the five-member state commission. The report assesses fuel-use trends and examines issues that affect the ability of fuel suppliers to meet projected energy demands. It also examines how to satisfy California's future transportation needs, while reducing fuel use, traffic congestion and air pollution.
 According to the report, low-priced, relatively clean-burning natural gas has become the principal fuel for electricity generation. Natural gas may also play a role as a vehicle fuel as part of a state strategy to reduce petroleum use in transportation and to reduce automobile emissions.
 "Natural gas prices are expected to remain low and supplies ample over the long term," said Energy Commissioner Art Kevorkian, presiding member of the committee that produced the Fuels Report. "Using the North American Regional Gas Model (NARG) to analyze the likely sources and costs of future gas supplies, the Energy Commission foresees relatively stable gas prices. Long-term gas price trends, in real terms, range from a 2.0 percent annual increase, in the low price case, to a 4.6 percent annual increase in the high price case. The latest Energy Commission forecast of natural gas prices for electricity generation is 15 percent lower than the last Commission Fuels Report released in 1989."
 In the transportation sector, California continues to rely on petroleum fuels to supply nearly all of its energy. Even though new vehicles continue to be more efficient and even with new energy efficient public transit additions, transportation energy use continues to climb. With transportation fuel use increasing from 43 percent of the total energy use in 1980 to 48 percent today, the Energy Commission is encouraging the use of economic incentives as a means to dampen increasing transportation fuel demand and to reduce transportation-related air pollution.
 "Economic incentives provide consumers the choice to find the least-cost options available to them to reduce fuel use," said Commissioner Richard Bilas, the second member of the Fuels Report Committee.
 In the 1991 Fuels Report, the commission continues its strong endorsement of the use of a variety of alternative transportation fuels to help meet California's new air quality regulations and to diversify fuel options. Since air quality concerns are a major driving force behind development of clean, alternative fuels, the commission recommends that the state continue to compile data and analyze the air quality benefits and costs of alternative fuels such as compressed natural gas, electricity, methanol and propane, as well as reformulated gasoline. California currently has the nation's largest clean, alternative fuels demonstration programs underway.
 In an unregulated market, the report concludes, California's greatest vulnerability in supply disruptions is due to gasoline price increases rather than actual physical shortages. From a supply standpoint, California continues to be heavily dependent on oil in the transportation sector, despite advances in energy conservation and the development of alternative energy resources. A disruption of oil supplies anywhere in the world could affect the price of oil everywhere, including California.
 Copies of the 1991 Fuels Report are available to the general public from the Energy Commission's Publications Office, 1516 Ninth St., MS-13, Sacramento, Calif., 95814, 916-654-5200.
 Members of the news media interested in obtaining a copy of the report, or who have questions about the report should contract Claudia Barker, assistant executive director, at 916-654-4989.
 -0- 12/26/91 R
 /CONTACT: Claudia Barker of California Energy Commission, 916-654-4989/ CO: California Energy Commission ST: California IN: OIL; AUT SU:


DG -- SF002 -- 5307 12/26/91 13:05 EST
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Date:Dec 26, 1991
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