This study first analyzes the energy use of and output from seventeen different industry subsectors in California. Then, decomposition analysis is conducted to assess the influence of different factors on California industry energy use. The logarithmic mean Divisia index method is used for the decomposition analysis. The energy intensity analysis calculated based on economic output of the sectors (value added)shows that "Oil and gas extraction" is the only sector that has higher final energy intensity in 2008 than in 1997. "Electric and electronic equipment manufacturing" and "Apparel manufacturing" show the greatest drop in final energy intensity from 1997 to 2008. Decomposition analysis results show that the activity effects in all time periods studied are positive because the real value added in chained year-2005dollars increased during these periods. The other large effect is the structural effect. The major contributors to the structural effect are the "Electric and electronic equipment manufacturing," "Oil refineries," "Oil and gas extraction," and "Nonmetallic minerals manufacturing." The intensity effect is positive from 1997 to 2000, primarily because the final energy intensity of the "Oil and gas extraction",shows an increasing trend from 1997 to 2000. However, the intensity effect is negative during 2001 to2007.