Along these rolling hills by the pristine blue Pacific live the remnants of the California dream. Here the mythical American lotus land remains much as it was before millions of people flocked to the state, before California became synonymous with smog, freeways and wall-to-wall subdivisions.

For Ruth Ferry, a 53-year-old retired teacher from Wisconsin, this land - with its sandy beaches, clean air and crystalline sunlight - embodies everything that drew multitudes across a continent to California. But today Ferry fears her personal dream will soon be shattered, the lovely open coastline outside her windown forever obsurced by the smog, noise and devastation of industrialization.

While Ferry and a handful of others have settled here in search of paradise and peace, others look upon this wild and open land as the ideal spot for a proposed $700 million liquefied natural gas (LNG) terminal. Late last month, the California public Utilities Commission endorsed Point Conception as the site for the LNG facility, opening what some conservationists claim may be one of the greatest environmental battles of the next decade.

"It's already making me a nervous wreck," Ferry said as she looked over her sundeck at the ocean. "We thought we had found a paradise, a quiet place, a place to retire. Now they're trying to take it away from us and we're not going to let them."

The LNG terminal is one of several major projects proposed for the more than 100 miles of mostly undeveloped coastline from Santa Barbara north to Monterey. Suburban-style tracts are marching their way up the coast, demolishing groves of avocados, lemons and oranges in their path. And, perhaps more ominously, additional industrial facilities are being planned for the region, including a nuclear power plant and offshore oil and gas field developments.

"It's all very clear if you think about it for a while in terms of everything that's being built and contemplated," said Naomi Schwartz, a leading environmentalist member of the state Coastal Commission. "We all go to the coast to recreate and now the whole standard of living there will suffer immeasurably. I don't know where all the rest of the nation will go when there's no California dream left to go to."

Schwartz and other commission members have expressed concern about the Point Conception LNG facility site but, so far, have been prevented from stopping it. The commission's role in the terminal's site selection was eliminated last year by a special state law signed and supported by Gov. Edmund G. Brown Jr.

Despite their powerlessness, the commission members evaluated all the proposed LNG facility sites and came out opposed to Point Conception. They noted that the facility, which features two 550,000-barrel storage tanks 145 feet high and a pier for large LNG ships, poses a threat to the area's pristine marine environment.

In addition, the commission claimed that several active earthquake faults in the area pose a risk of an LNG leak or explosion.

While utility officials have generally downplayed the seismic dangers local residents were hardly reassured by the recent earthquake that shattered windows and derailed a train near Santa Barbara, some 40 miles away.

But the California Public Utilities Commission and utility officials maintain that putting the plant in remote Point Conception lessens the dangers from an earthquake or any other LNG accident. 'LNG's new here, and there are a lot of old wives' tales that this thing could explode," said John Torrens, public affairs manager of Western LNG Associates, the utility consortium behind the project. "The states asked us to put it somewhere so if something goes wrong it won't be in a crowded area."

Without the facility, Torrens added, California will have no way to attract the Indonesian and Alaskan LNG supplies necessary to forestall a natural gas shortage that in the next decade could cost the state up to 1 million jobs, according to estimates by Western LNG Associates.Local residents - agreeing with the state's energy commission - disagree sharply with Torrens' figures and claim the area is being unfairly victimized to pay for the energy appetites of large cities such as Los Angeles.

"They're trying to turn us into their energy dump" said George Allen, attorney for Point Conception area residents. "I'm concerned about this idea they have that if you have few enough people, you can impose anything on them. If they get the LNG monster, then we'll see more oil facilities around and then, hell, maybe we can get another nuclear facility too and we'll get a real big bang."

Allen is planning a legal defense to block the LNG facility. In the meantime, he said, residents will continue to aid some 50 Indians who have occupied the site for several weeks as a protest against what they call "the desecration" of the Point, one of the holiest sites in western Indian folklore.

A member of the local Chumash tribe who is a leader of the occupation, and who calls himself Kote-Lotan, claimed the Indians' "spiritual encampment" in the area won't end until Western LNG gives up its plans for the site."We've all been coming here since we were kids," Kote-Lotah, whose wife is with him at the site, said. "We used to go clamming, abalone fishing here. This has always been one of our most spiritual sites, the western gate for all souls. They made a real mistake trying to take on the native people here - we're going to stay here if it takes the rest of my life."

It is not the first occupation to take place in the growing battle over the last open stretch of California coast between Los Angeles and San Francisco. Earlier this month on the coast 100 miles to the north, nearly 500 demonstrators were arrested as they tried to occupy the nearly completed Diablo Canyon nuclear power plant.

As is the case here, the Diablo fight is being spearheaded by local residents who fear massive energy facilities will promote more rapid growth and, ultimately, turn their beautiful area into an extension of a developing coastal megalopolis stretching more than 500 miles between the Mexican border and the northern reaches of the Bay Area. Diablo Canyon is in San Luis Obispo County, long one of the sleepiest corners of California and which has recently emerged as one of the state's fastest growing areas. Between 1970 and 1976, the area's population jumped 26 percent, nearly four times the statewide average.

Despite growing opposition to the $1.4 billion Diablo Canyon facility and environmentalist moves to put controls on development, the region continues to grow quickly. The state Department of Finance has estimated that San Luis Obispo County will double in population in the next 20 years, a figure some local business leaders consider too conservative.

"We probably have the most even climate in the state and every day we have loads of people coming in here from L.A." said E.J. Jensen, manager of a branch of the Bank of America. "The potential for development here is absolutely amazing. I'd say 7 to 10 percent per year, whether the environmentalists like it or not."

Advocates of slow growth or no-growth in San Luis Obispo are afraid Jensen may be right. Like their counterparts at Point Conception, they fear their region is being despoiled by urban sprawl, forced to swallow the cities' unwanted excess. Moves to generate more power and get more water from the state aqueduct for the region have some environmentalists fearful of a Los Angeles-style smog and sprawl in what some consider as being close to an earthly paradise.

"For years I've seen this area change," said Ian McMillan, a rancher in the hills east of San Luis Obispo. "I know you look out my window and say there is nothing there. But we've seen devastation all over California, from Mendocino to the Mexican border. This area has everything that places in California, and now it's going and going fast."

Despite these fears, public opinion remains deeply divided on the growth issue. Labor, business and many political leaders generally favor accelerated development, residential and industrial, as a way to expand job opportunities and services for residents.

Among some longtime residents there is resentment of environmentalists, whom they see as nonproductive outsiders interested only in keeping their piece of paradise at the expense of the local economy. "Most of them don't have to work for a living or they are academic people or something. You go to a meeting and you see it's a class thing," said John Holloway, secretary of the San Luis Obispo Building Trades Council. "These people, as far as I'm concerned, are college-educated illiterates. They don't give a damn for the working man."

But for many who have learned to love this coastline, the issue of its preservation goes for beyond considerations of class politics or economics. They see it as a struggle to save a way of life, a piece of the California that was, and now so rarely is.

"This question is, what are the benefits of bringing in all this power, all this water, all these horsemen of destruction," McMillan said as he watched the wind ripple through the soft, golden grass on his ranch. "They're always talking about human rights, but who says I don't have the right to fight for everything I grew up in and what I've worked for all my life to protect."