California's Public Utilities Commission (CPUC) has laid out a definitive roadmap toward potentially closing the Aliso Canyon natural gas storage facility, aligning with the state’s commitment to energy reliability, affordability, and a transition to cleaner energy. In a significant announcement on Thursday, the CPUC established a natural gas peak demand target of 4,121 million cubic feet per day as the benchmark for Southern California to meet its energy needs without relying on Aliso Canyon. This move underscores the state’s strategy to reduce dependence on fossil fuels while maintaining energy security during the transition.

The Aliso Canyon facility, which currently serves over 11 million customers and supplies fuel to 17 natural gas-fired power plants, will face a review for permanent closure when the “forecasted peak day demand for two years out decreases to the target level,” according to the CPUC. This decision is part of California's broader efforts to phase out natural gas usage in favor of renewable energy, in line with its climate goals and policies.

Natural gas demand in Southern California has been declining due to the state’s historic investments in renewable electricity and stringent climate policies. The increased availability of renewable energy resources reduces reliance on gas-fired power plants, making it feasible to consider closing Aliso Canyon permanently. This facility, which has been a critical component of the region’s energy infrastructure, gained national attention in 2015 following a massive methane leak, one of the largest in U.S. history, prompting calls for its closure.

“Aliso Canyon must be closed for good, but without harming working families with skyrocketing utility bills,” said Governor Gavin Newsom, reiterating the importance of balancing environmental objectives with economic considerations. The state remains focused on advancing its renewable energy goals while ensuring energy affordability for its residents.

The CPUC’s decision reflects a critical step in California’s transition to a cleaner energy future. It signals a shift away from fossil fuel dependency, supported by policies that encourage the procurement of renewable energy and the adoption of sustainable technologies. As these efforts progress, California aims to solidify its leadership in combating climate change and achieving energy resilience.

Meanwhile, natural gas futures in the United States surged by about 6% on Thursday, reaching a 23-month high. This spike resulted from several factors, including reduced production in recent days, an increase in gas flows to liquefied natural gas (LNG) export facilities to an 11-month high, and early forecasts predicting colder weather in January. These trends highlight the challenges of balancing energy supply and demand in a market undergoing rapid transformation, as the U.S. and other regions work toward cleaner energy systems.