By Kennedy Maize

Bobby Hefner, the doyen of deep gas, is back on the energy policy scene in a big way. That’s the only way Hefner has ever wanted to be seen: on a big canvas.

Back in the 1980s, Hefner’s Oklahoma-based GHK company was the prophet of natural gas finds way down below where anyone else had ever expected to drill, down to 24,000 feet. He raised a lot of money, had some success at high drilling costs, and landed in a lot of litigation.

Today, according to The Economist magazine, Hefner said he “feels vindicated.” That’s because the U.S. is awash in natural gas. “I used to say we were awash in gas,” Hefner told the magazine. “Now I say we are drowning in it.” The pessimism about U.S. gas reserves of couple of years ago has been replaced with bounding optimism.

For electric generators, the good news as 2009 rolls to an end is that natural gas – the cleanest, by any measure, of fossil fuels – has defied most predictions and has turned into a most plentiful producer of new, practical electricity. The most recent reports from the U.S. Energy Information Administration found natural gas prices at the Henry Hub at $2.76 per million BTU, an futures prices a the New York Mercantile Exchange September contracts were at $2.91 per MMBTU.

Bolstering the low gas price estimates – after a period in which analysts said natural gas would rise to track crude oil prices – the U.S. Potential Gas Committee issued a report that estimated U.S. reserves at 1.8 trillion cubic feet, the highest in the committee’s 44-year history. John Curtis of the Colorado School of Mines and head of the committee, said that the estimate “reaffirms the Committee’s conviction that abundant, recoverable natural gas resources exist within our borders, both onshore and offshore, in all types of reservoirs.”

The Potential Gas Committee is an independent, industry-funded institution that examines natural gas reserves in the U.S. Said Curtis, “Our knowledge of the geological endowment of technically recoverable gas continues to improve with each assessment. Furthermore, new and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources—especially ‘unconventional’ gas—which, not all that long ago, were considered impractical or uneconomical to pursue.”

In a press release, the gas committee noted, “When the PGC’s results are combined with the U.S. Department of Energy’s latest available determination of proved gas reserves, 238 Tcf as of year-end 2007, the United States has a total available future supply of 2,074 Tcf, an increase of 542 Tcf over the previous evaluation.”

So Bobby Hefner is ecstatic, although the future gas play appears to be in Devonian shale formations, not at incredible depths offshore, where Hefner made his mark.

The new gas forecasts have put the brakes on enthusiasm for new liquefied natural gas projects in the U.S. The gas glut means new LNG makes no sense in supplying a domestic market for either heating or power generation.  Cambridge Energy Research Associates, long bullish on LNG, is backing off considerably, although its reports are not available to those unwilling pay large petrodollars to read them.

Meanwhile, in Canada, prospects of moving gas from the Peace River region of British Columbia to Vancouver have resulted in eco-terrorism. The Economist reports that there have been six bomb blasts since last fall attempting to disrupt the pipeline network that collects gas from the Dawson Creek area in the middle of the province along the Alberta border.

Dawson Creek, notes the magazine, is one of the hottest gas plays in North America, a shale area opened up by modern drilling technology, including horizontal drilling and hydrofracturing. “Nobody has been hurt and the damage has been minor, but the risk of a huge explosion is great,” said the magazine.