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Louisiana's petrochemical sector may one day have liquefied natural gas to thank for its survival.

Liquefied natural gas, or LNG, has been around for 40 years but only now is poised to enjoy an unprecedented scaling up in the U.S. economy. It promises to bring a return to the cheap, plentiful supply of natural gas the state's chemical industry so sorely misses.

Natural gas historically has been a "continental commodity." It moves through pipelines to customers located on the same continent where it's pumped out of the ground. LNG is changing that by making it efficient to move massive amounts of gas produced anywhere in the world via ship to markets where it is needed.

A single, specially designed ship can carry enough LNG to generate all of Louisiana's electricity for six months. LNG today accounts for 1 percent of all natural gas. But a spate of announced LNG plants and facilities will boost domestic LNG to 12 percent by 2025, a National Petroleum Council study says.

The news is even better for LNG imports, which is expected account for 21 percent of U.S. natural gas consumption by 2010.

Natural gas prices today are hovering near $6 per thousand cubic feet because demand is too great for supply. The nation's aging fleet of wells produces less each year. Meanwhile, an unprecedented number of power plants and factories now depend on clean-burning natural gas as their fuel of choice.

A number of substantial LNG projects have been announced and are in the planning stages. Once most of them are up and running, the impact will slash prices to as low as $3.25 per mcf, said Stephen A. Brown, the Federal Reserve's chief energy economist for the Dallas region. Brown spoke in early March at a meeting sponsored by the Public Service Commission.

LNG will lower prices by making it possible to ship cheap and plentiful natural gas from other continents to the United States. Several "gasification" plants, or facilities that convert LNG back into gas form so it can be moved through the country's pipeline system, will be in or near Louisiana, potentially making the state a key player in the business.

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Critical, though, will be the process of getting the necessary governmental permits, Brown says. If it takes 20 years for LNG to get a firm foothold, then many chemical plants will simply shut down in the meantime.

"If it takes 5 to 8 years, then a lot of factories will hang on," Brown says. "They might not do well, but they'll hang on."

LNG is not without detractors.

Critics warn that such large concentrations of fuel pose safety threats and make enticing targets for terrorists. ExxonMobil faces stiff opposition in Alabama, where it wants to build a $600 million LNG facility a few miles from a residential area. The governor there has said he won't sign off the deal until an independent study determines it is safe.

On that point Louisiana has an edge. The state and its residents are accustomed to substantial oil and gas infrastructure, and there are plenty of remote places where LNG terminals can locate. For example, earlier this month Freeport McMoran announced plans to retrofit a major platform 37 miles southeast of Venice to make it an LNG terminal.

LNG also promises to bring stability to the petrochemical industry. Instead of relying on short-term contracts that can be volatile, LNG often is sold for much longer terms, such as 20 years. That allows industrial operators to plan more efficiently.

Of course, LNG producing countries could conceivably band together to create an OPEC-style cartel to fix prices, which would leave America exactly where it is today.

LSU's Center for Energy Studies and Greater New Orleans Inc., the city's economic development agency, are set to publish a comprehensive study of LNG, including its potential benefits for Louisiana. LSU energy economist David Dismukes said the state is already in the LNG hunt.

Today there are only four LNG facilities in the United States, most of them built during the last energy crisis. One of the largest existing LNG terminals is Trunkline LNG Co., near Lake Charles. It recently won approval from the Federal Energy Regulatory Commission to undergo a major expansion that will be completed in 2006.

The major LNG players are ConocoPhilips, Chevron-Texaco, El Paso, Freeport McMoRan, ExxonMobil, Shell, Sempra Energy and Chenier Energy. Combined, they have announced about $6 billion in U.S. LNG investments, and $1.3 billion of that will be onshore along the Louisiana and Texas Gulf Coast, Dismukes said.

Those projects will create 1,400 temporary construction jobs in Louisiana and another 1,300 offshore jobs.

"These are big projects and big dollars," Dismukes said. "Along the order of $600 million to $800 million per project."

TOM GUARISCO covers telecommunications and utilities, retail, oil and gas, and insurance. Reach him at tguarisco@businessreport.com.