The California Energy Commission is endeavoring to balance the conflicting policy mandates of meeting the state\u2019s growing energy demand while reducing carbon dioxide emissions that contribute to global warming. The CEC discussed this challenge in two days of hearings this week on its 2007 Integrated Energy Policy Report. The commission is mandated to take into consideration AB 32, California\u2019s greenhouse gas reduction law, while crafting the report. The report is to serve as the basis for ongoing California energy policy. The Energy Commission is eliciting public input on the IEPR, which includes its biannual forecast of energy supply, prices, and demand. The CEC plans to adopt the IEPR in November and send it to the California Legislature and Governor Arnold Schwarzenegger in December. \u201cMost of what we are analyzing is in the context of greenhouse gas reductions,\u201d Lorraine White, the commission\u2019s IEPR program manager explained. \u201cAB 32 is a formidable task.\u201d The law, enacted a year ago, has shifted the state\u2019s priorities from securing a low-cost reliable energy supply to fuel economic growth to reducing California\u2019s carbon footprint by meeting its energy needs with zero- or low-carbon fuels as much as possible, the report stresses. Energy efficiency and resource conservation are expected to be the cornerstone of California\u2019s energy strategy in a \u201ccarbon constrained world,\u201d the report adds. California currently spends nearly $100 billion a year on energy to power the world\u2019s eighth largest economy. That demand is expected to grow as the state\u2019s population of 37 million reaches a projected 44 million people by 2020 and 60 million by 2050. California already is the world\u2019s second largest consumer of gasoline and twelfth largest emitter of greenhouse gases, producing 492 million metric tons of CO2 in 2004. California relies on petroleum for 47 percent of its energy resources. It consumed 20 billion gallons of diesel and gasoline in 2006 an amount projected to reach 24 billion gallons in 2020. Natural gas supplies fuel for heating and 41 percent of the state\u2019s electricity generation, with renewables accounting for less than 11 percent. Electricity generation produces 22 percent of California\u2019s total CO2 emissions, while 39 percent come from transportation, including moving goods and services. At the same time California leads the nation in curbing electricity use through energy efficiency programs and green building and appliance standards. California\u2019s building and appliance standards have saved consumers more than $56 billion in electricity and natural gas costs since 1978 and are projected to save another $23 billion by 2013. While the state\u2019s population has surged California\u2019s per capita energy consumption has flattened over the last 25 years. By contrast, average per capita energy consumption nationwide has increased by 60 percent since 1973. However, as Californians continue to move away from congested coastal areas into the hotter Central Valley and Inland Empire peak energy use is increasing with greater demand for air conditioning and longer commutes, according to the IEPR. The IEPR outlines key strategies to reduce greenhouse gas emissions by increasing fuel efficiency, increasing renewables and biofuels, improving efficiency in the electricity and natural gas sectors, reducing consumer demand, and improving forest management. White acknowledged that there is still a gap that will have to be addressed in the future by identifying more energy efficiency measures and in all likelihood adopting a carbon cap-and-trade system. \u201cResources must be reliable, secure, and diverse. But we also must protect the environment, enhance the state\u2019s economy, and protect public health and safety--all within AB 32\u2019s goals of reducing greenhouse gas emissions,\u201d she said. Editors\u2019 note: For a more detailed version of the IEPR story, including details of the proposal, please see our sister publication E=MC2 \u2013 Energy Meets Climate Challenge. You can find it at www.energymeetsclimate.com.