Conventional wisdom holds that the OPEC oil cartel has the world in its grasp. It can manipulate prices by tinkering with supplies. Last month OPEC released a new study on world oil demand that seemed to signal the cartel was readying to tighten the taps because higher prices were slaking the world's thirst for oil. The American Petroleum Institute released fresh data showing that demand for oil products in the United States (the world's largest market) dropped a whopping 3 percent from the year earlier. The news about lower demand has caused oil prices to fall a bit, and all eyes are on OPEC's wizards to tighten supplies.

But the conventional wisdom is mostly wrong. OPEC (which stands for the Organization of the Petroleum Exporting Countries) is no wizard. For the most part, its actions lag behind fundamental changes in oil supply and demand rather than lead them. OPEC looks like a masterful cartel when, in fact, it is mainly just riding the waves.

It is hard to figure out exactly what goes on behind's OPEC's closed doors, but glimpses are possible by probing what the cartel members say about prices and how they set quotas. Over the last five years, OPEC members have announced ever-higher price goals only after the market had already delivered those high prices. As the market has soared, OPEC has followed. Only in the last few months has Saudi Arabia suggested that the cartel would be better off if prices reversed because high prices would encourage the world's big oil consumers to wean themselves from oil. It proffered $125 a barrel. The markets shrugged and kept on rising until real facts about slowing demand revealed that fundamentals were changing.

OPEC also sets quotas so that each member knows its role. Throughout its history, OPEC has faced the difficult task of holding the cartel in the face of strong incentives by each member to cheat. Today's oil market makes that job easy because nearly every member, except Saudi Arabia, is producing at full capacity. OPEC, more or less, has nothing to do.

In fact, the last time OPEC made a major adjustment to its quotas—September 2007—it jiggered them to reflect what its members were already pumping. Algeria got a big boost because it was already supplying nearly 50 percent more than its quota. Kuwait, Libya and Qatar also got boosts that aligned their OPEC quotas with existing reality. OPEC also set, for the first time, a quota on Angola's output. Since then, Angola has attracted a steady stream of new production projects, which makes it inevitable that OPEC will adjust Angola's quota to reflect the new reality. (Iraq has no quota; it has troubles enough without pretending to align its oil output to OPEC strictures.)

Nigeria and Venezuela got haircuts because their political troubles meant they were already producing far less than their quotas. Indonesia also cut its quota and a few months later left OPEC because it realized that as a big oil user it actually had more in common with oil importers than its fellow OPEC members. These changes in quotas were reflections of political realities that OPEC doesn't control.

Today's oil cartel, even more than in the past, is really about Saudi Arabia. But Saudi Arabia also is no wizard at the controls of the world market. The Saudis can adjust their output a bit since they control nearly all of spare capacity in the world market. (Earlier this month they pledged another 200,000 barrels per day to dampen pressure from the United States and other governments that are reeling from high oil prices. But that move was more symbolic than real as the markets were already expecting the new supplies.)

Saudi Arabia is on the front lines of the new reality in world oil supply. It is proving much harder and more costly to bring on more supplies. The Saudis have an ambitious plan to increase output about one third over the coming decade, but they are finding that will be a stretch. Their fellow OPEC members are in a similar situation, and those hard facts also produce high oil prices. In fact, the Middle East members of OPEC are, today, producing at just the same level as they were three decades ago because none of them invested much in finding and producing new supplies. High prices into the future reflect these fundamental facts rather than the assumption that OPEC is a masterful cartel.

Conventional wisdom holds that because OPEC is raking in more cash than ever, it has never been stronger than it is today. In fact, OPEC has rarely been weaker. It is the accidental beneficiary of forces that have caused today's high prices, and it will be nearly as powerless when prices come down.

The real solutions to today's high oil prices require more attention to demand. Blaming OPEC, while good political theater, won't have much impact. Legislation now working its way through the U.S. Congress would actually attempt to break up the oil cartel. Such schemes won't work, and the political effort would be better spent on policies that redouble the nation's efficiency, producing more oil from diverse sources here at home, and in finding ways to move beyond oil altogether.

The United States needs natural gas. Developing countries many thousands of miles away are willing to supply it. This sleepy beachfront town and other communities along the Gulf of Mexico are likely to become the links between producers and consumers.

Altogether, energy companies are planning to spend more than $100 billion in the next decade to bring gas from developing countries to rich nations, according to PFC Energy, a Washington consulting firm. The only way to do it is to supercool the gas so that it condenses into a liquid, which is then compact enough to load onto tankers and send across oceans.

For years, this process was too costly to compete with relatively cheap domestic supplies of natural gas and with imports from Canada. But those supplies are tightening just as the demand for clean-burning gas is soaring. That has led to the most severe gas shortage in the last 25 years and caused domestic gas prices to double this year.

The gap between domestic supply and total demand is forecast to grow significantly over the next 20 years. That has made liquefied natural gas competitive, if only companies can find places that are willing to accept having L.N.G. terminals built nearby. "We've entered the gas age, and there's no turning back if we want a firm supply of a strategically crucial fuel," said Michael S. Smith, an investor who controls Freeport LNG, a Houston company that plans to build a receiving terminal on Quintana Island.

Mr. Smith and his partners, Cheniere Energy and Contango Oil and Gas, both of Houston, expect to begin construction of the terminal early next year on this tiny island about 70 miles south of Houston. The $400 million operation will be able to receive ships full of liquefied natural gas, warming the gas and piping it to a nearby plant owned by the Dow Chemical Company.

Quintana Island's attraction lies not only in its proximity to a plant that uses natural gas as a raw material but also in its location near the center of the nation's energy industry. That, it is hoped, will make political resistance to such projects tepid compared with the safety, aesthetic and environmental concerns in places like Northern California and Massachusetts.

Despite such concerns and worries that large, potentially explosive gas terminals could become terrorist targets, energy companies are eager to import liquefied natural gas. It is a shift that could avoid gas shortages forecast for the future, but could also increase the nation's dependence on foreign energy supplies.

"Just as we're debating the need to diversify our oil supplies, we're faced with an array of challenges to secure reliable and politically stable sources of gas," said David G. Victor, director of the Program on Energy and Sustainable Development at Stanford University.

More than a dozen projects like the one here are seeking approval from regulators in North America, including several on the Gulf Coast and in the northern Mexican state of Baja California.

The United States is already the world's largest natural gas producer, and domestic production is expected to increase to 28.5 trillion cubic feet in 2020 from 19.1 trillion cubic feet in 2000, according to the Energy Information Administration. Still, demand is expected to far outstrip production, growing to 33.8 trillion cubic feet by 2020 from 22.8 trillion cubic feet in 2000.

The gas to close that gap - more than five trillion cubic feet, a 40 percent increase in 20 years - will have to come largely from outside the United States.

Almost all of America's imported natural gas currently comes by pipeline from Canada. But a growing market for gas within Canada and rapidly depleting Canadian wells are expected to weaken that country's ability to increase exports. Mexico, though believed to have large untapped gas reserves, is mired in nationalist debate over making it easier for foreign financiers and companies to explore for gas.

As a result, Mexico, a power in crude oil, is a growing importer of natural gas - and an attractive base for liquefied natural gas receiving terminals, which cost as much as $700 million to build. The Organization for Economic Cooperation and Development recently forecast that the percentage of North America's gas from imports would climb to 26 percent by 2030 from just 1 percent today.

Those imports will come mostly from developing nations like Equatorial Guinea, a former Spanish colony in West Africa where Marathon Oil of Houston plans to build an L.N.G. plant able to serve gas fields throughout the Gulf of Guinea.

Ambitious ventures are also under way in other West African countries, including Angola and Nigeria, where energy companies were recently burning gas escaping from oil drilling operations because there was no ready market for it. In the Middle East, small countries like Oman, a sultanate on the Strait of Hormuz, and Qatar, are emerging as important gas powers.

In South America, Trinidad and Tobago has become an early leader in exporting liquefied natural gas, although companies in Bolivia and Peru have had difficulties advancing efforts to export L.N.G. to California. Producers in Indonesia, Malaysia and Russia could step in to supply the West Coast, pushing the Andean countries to the margins of the business.

In some ways, the scramble for natural gas projects resembles the heady early days of the oil industry a century ago. Then, British, Dutch and American investors raced around the world to stake out interests in remote oil fields in the Middle East, Central Asia and the archipelagoes of the Java Sea.

Some regions are considered more promising than others. Industry executives point out that just three countries  Iran, Qatar and Russia  hold more than half of the world's natural gas reserves, inevitably focusing attention on the delicate interplay between politics and commerce in these places.

Russia, with the largest proven reserves, plans to start exporting liquefied natural gas in 2007 with deliveries to Japan. Iran, while off limits to American companies because of trade restrictions by the United States, has attracted Japanese, French, British, Indian and South Korean concerns interested in mounting gas ventures.

There are important differences, however, between past oil booms and the current interest in natural gas. For one thing, studies show the world will be swimming in natural gas supplies while oil reserves are expected to dwindle in the decades ahead. Just one area in Qatar, a monarchy near Saudi Arabia with fewer than a million people, is thought to have enough gas to supply the United States for 40 years, according to a study by Deutsche Bank.

The natural gas industry has to overcome several obstacles before evolving into a vibrant global market. Even with ample supplies there is no market for trading liquefied natural gas, as there is for crude oil. Instead, producers and customers sign long-term contracts, sometimes resulting in significant price differences from one year to the next or from one country to another.

One reason the natural gas market has remained fragmented is because the fuel is difficult and expensive to extract and transport. But these costs are declining, adding to the appeal of gas projects. Lord Browne, the chief executive of BP, said the cost of developing gas liquefaction plants had halved since the 1980's, while shipping costs had also fallen.

Shipbuilders are seeking to meet demand for tankers, with the global gas fleet expected to grow to 193 ships by 2006 from 136 in 2002, according to LNG One World, a gas- shipping information service operated by Drewry International of Britain and Nissho Iwai of Japan.

Natural gas is still not considered as crucial as oil for overall energy security since oil's main use is for transportation and there is no short-term alternative. Natural gas has a variety of important industrial uses, like serving as a raw material for fertilizer and generating electricity.

Still, the growth in demand for liquefied natural gas in the United States is expected to outstrip other parts of the world. It is likely to grow 35 percent in the next five years, compared with 20 percent in other North Atlantic countries and 12 percent worldwide, according to Deutsche Bank. Hence the rush to proceed with projects that supply liquefied natural gas to the United States.

"The world could be consuming more gas than oil by 2025," Philip Watts, the chairman of the Royal Dutch/Shell Group, the large British-Dutch energy company, said in a recent address to industry executives in Tokyo. "We must be prepared for growing geopolitical turbulence and volatility in an increasingly interdependent world."

The United States has only five terminals capable of receiving L.N.G., including one in Puerto Rico. Almost 20 are on the drawing board, but opposition to the terminals has already prevented the start of work on several of them. Earlier this year, for instance, Shell and Bechtel Enterprises shelved a plan to build a terminal about 30 miles north of San Francisco because of stiff public opposition.

California remains perhaps the most difficult place in the country to gain approval for gas-receiving terminals. This has encouraged imaginative proposals like one last month from BHP Billiton, Australia's largest energy company, for a $600 million floating terminal 20 miles off the coast of Oxnard in the southern part of the state. It remains to be seen whether any of the California projects will be built.

An air of resignation hangs over even the critics of the plan to build the terminal on Quintana, which is scheduled to start operating by 2007. Officials from Freeport LNG have told residents that they expect to make more than $1 million a year in tax payments to the city, a substantial sum for a community of 40 homes that is the smallest municipality in Texas.

At the Jetties, a restaurant on the island's edge overlooking the brown water of the Gulf of Mexico, the walls are plastered with warnings of the perceived dangers of receiving tankers full of potentially combustible gas from far-flung parts of the world. But the restaurant's employees seem to believe that the terminal will be built, inevitably changing the island's easygoing atmosphere.

"People come out here to drink beer on the beach and look at the birds and the gulf," said Dana Difatta, a cook at the restaurant. "Imagine what they'll think when they're staring at some huge vats holding natural gas. Will they be horrified or relieved?"