While key commissions denied approvals for BHP Billiton to build California's first liquefied natural gas import terminal this week largely on the basis of environmental concerns, lurking behind the scenes is growing doubt about whether the state "needs" liquefied natural gas at all. BHP Billiton's proposed terminal off the Ventura County coast plans to open in conjunction with development of Australia's offshore Scarborough gas field, according to Renee Klimczak, the company's California LNG unit president. The field - being developed by ExxonMobil - has an estimated reserve of 8 trillion cubic feet of gas. That amount is expected to be enough to last California three years. However, at the rate the company could import the gas, the field would supply the proposed terminal for 27 years. "That's a lot of gas," observed Klimczak. However, California's demand for gas has been declining. That downward trend could accelerate in the future, according to an analysis submitted to the California Energy Commission April 9 by Ratepayers for Affordable Clean Energy. The analysis by Bill Powers, Border Power Plant Working Group chair, shows that: \u2022 The Energy Commission has overestimated future gas demand in the past. In 2003, for instance, the CEC projected that gas demand in California would grow to 7.5 bcfd by 2012. Instead, according to the analysis, gas demand is falling. In California it was 6.2 bcfd in 2006, or 8 percent less than in 2000. Nationwide demand fell by 6 percent over the same period. The decline is due to the replacement of "older, less efficient boiler plants" for making electricity with "modern, efficient gas-fired combined-cycle plants," the analysis states. \u2022 Higher gas prices not only have driven a move to more efficient gas-fired power plants, but are making renewable energy technologies more affordable. Greater affordability, coupled with policies calling for increased use of renewable power, will further dampen natural gas demand. Meeting California's 33 percent renewables goal in 2020 would result in a decline in conventional power generation from a projected 250,000 GWh this year to 212,000 GWh in 2020, a drop of 15 percent. This will dampen demand for natural gas. \u2022 Finally, the analysis cites forecasts showing that both U.S. and Canadian gas availability is likely to increase. The Energy Information Administration forecasts a 14 percent increase in domestic natural gas production between 2005 and 2015. A new Canadian National Energy Board report, the analysis says, shows that Canada may well export more gas up to 2015 as it moves to enhance energy efficiency. Gas exports could grow from 8 bcfd to 10 bcfd by 2015 and then return to 8 bcfd in 2025. \u2022 Meanwhile, the analysis says, imported LNG may cost more than initially projected (Circuit, April 6, 2007). Accordingly, Powers urged the Energy Commission to update its forecast for natural gas demand on the basis of these trends as it develops its 2007 Natural Gas Assessment Report. The 2005 report, on which the need for the BHP Billiton terminal is based, shows state demand increasing by 0.7 percent a year. State Lands Commission executive director Paul Thayer characterized projections of increased domestic production as "speculative" but agreed that an updated analysis is required to determine whether the state needs liquefied natural gas import capacity.