PERTH (miningweekly.com) – The Victorian government has introduced legislation to lift the moratorium on onshore gas exploration and production, while moving to permanently ban hydraulic fracturing (fracking).

The government will be introducing two Bills to Parliament on Tuesday, the first of which would enshrine the ban on fracking and coal seam gas exploration into the Victorian Constitution.

Fracking was initially banned in 2017.

The second piece of legislation will allow for an orderly restart of onshore conventional gas exploration and development from July 1, 2021.

The decision follows three years of detailed investigation by the Victorian Gas Program, which found an onshore conventional gas industry would not compromise the state’s environmental and agricultural credentials.

“Three years of research shows securing local gas supply for Victorians will not come at the cost of the state’s groundwater supplies, agricultural industries or our farming’s clean and green reputation,” said Victorian Resources Minister Jaclyn Symes.

These studies have identified potentially significant onshore conventional gas resources particularly in the Otway basin, which stretches across the border to South Australia where a productive industry has been established.

Production of Victoria’s estimated resources could generate more than A$310-million annually for regional economies and create 6 400 jobs over the lifespan of these projects.

Symes said on Tuesday that the sensible, science-based approach would also bolster Victoria’s energy security, with any gas produced from future onshore production licences to be prioritised for the domestic market – supporting local industry and consumers.

“The government will now work with industry and communities to develop rigorous engagement and transparency obligations, and improve the regulatory framework – to guarantee a world’s best practice approach. Landholders will also be supported to better negotiate access rights and compensation with exploration companies,” she said.

A new wave of offshore gas exploration is expected to start this year off the south-west coast, from where gas has flowed for decades, and companies will soon be awarded the rights over blocks in waters next to existing sites, the Minister said.

The Australian Petroleum Production and Exploration Association has welcomed the lift on the moratorium, with CEO Andrew McConville saying the decision paved the way for the resumption of exploration for possible natural gas resources, which over time could lead to more gas supply for the local market.

“The government’s decision to lift the moratorium is a step in the right direction to help ensure that Victoria continues to have ongoing supplies of natural gas into the future. The Australian Energy Market Operator has forecast shortfalls in Victorian gas supply as soon as 2024 if more supply is not developed. Shortages could happen earlier if winter demand is high,” McConville said.

“Victoria is a state that heavily relies on gas. Around 80% of Victorian homes are connected to natural gas, and an average household in Victoria uses nearly twice the amount of natural gas as a household in any other state in Australia.

“Thousands of manufacturing jobs in the state also rely on a stable supply of gas.”

McConville said the lifting of the moratorium aligned with Victoria’s Renewable Energy Target and its position on reducing emissions.

“As a low emissions fuel, natural gas has an important role to play in helping Victoria reach its emissions reduction targets,” McConville said.