State government lifts moratorium on onshore gas exploration

The state government has lifted the moratorium on conventional onshore gas exploration, but enshrined the ban on fracking into the Victorian Constitution.
The state government has lifted the moratorium on conventional onshore gas exploration, but enshrined the ban on fracking into the Victorian Constitution.

IN the midst of the COVID-19 panic, the state government has quietly lifted a controversial gas moratorium on conventional onshore gas exploration.

Despite being banned in 2014, conventional gas exploration will now be permitted in Victoria from July, 2021.

The state government introduced two bills last week - the first solidifying the historic ban on fracking and coal seam gas exploration in the Victorian Constitution, and the second allowing for an orderly restart of onshore conventional gas exploration and development from July 1.

Fracking was banned in 2017 and the state government is fulfilling a 2018 election promise by putting the ban in the constitution.

Local opponents of gas drilling have called it a "low, dirty act" to release the news in the middle of a media frenzy on coronavirus and after major events such as the drought and bushfires for Gippsland.

Gippsland resident Tracey Anton said she was "furious", and called for the government to be called out.

"I have spoken to a few farmers and we are all confused as to when the so-called survey was in Gippsland ... and attitudes to it," she said.

"When did it happen, who did the survey, how many and where?

Environmentalists pushing for less reliance on the fossil fuel industry and regional communities concerned about drilling in rural areas campaigned hard between 2011 and 2017 to stop fracking and cease onshore conventional gas drilling.

The government's turn-around on onshore conventional gas drilling comes after a report overseen by the state's lead scientist found there were gas reserves which could be extracted without causing environmental harm.

The studies 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 $310 million annually for regional economies and create 6400 jobs during the life span of these projects.

Premier Daniel Andrews said the new gas supplies would be reserved for Victorian households and businesses first and companies that wanted to drill for gas on private land would have to strike agreements with landholders.

However, Friends of the Earth says Victoria produces more gas than it uses, but gas companies and politicians "are manufacturing anxiety around gas shortages to justify opening up yet more gas".

The group also rejected the government's assertion onshore gas drilling would bring down gas prices for domestic and commercial consumers, arguing that Victoria would be better off with a domestic reservation policy for gas to ensure supply for local consumption.

The group claims gas companies are "gaming the market", and distorting the supply and demand landscape.

In contrast, Premier Andrews said new gas exploration and production was essential to help businesses who were struggling with "record high gas and electricity costs".

"We're backing the science to create jobs, boost energy supply and support regional communities across the state," he said,

"We promised to enshrine our historic ban on fracking in the constitution and we're delivering - to protect farming communities, and our huge food and fibre sector."

The Victorian Chamber of Commerce and Industry supported the state government's move, and is calling for a regulatory regime to manage the risks of individual gas supply projects on a case-by-case basis, a domestic gas reservation scheme to secure low cost and reliable gas supply for local industry and gas-fired generators, and an integrated national climate and energy policy.

VCCI chief executive Paul Guerra said the decision would put Victorian businesses in a better position to emerge stronger from the coronavirus crisis.

"The decision to lift the moratorium is the right one," he said.

"Not only for business owners, but for all Victorians who in such uncertain times cannot afford to be hit with more unnecessary costs."

Currently, most of the state's gas is produced from the offshore Gippsland Basin, with some coming from the offshore Otway Basin, and a minor amount from the offshore Bass Basin.

The government will 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 in negotiating access rights and compensation with exploration companies.

The moratorium on onshore conventional gas exploration and development was set to expire on June 30.

A new wave of offshore gas exploration is expected to begin this year off the south-west coast.

Companies will soon be awarded the rights over blocks in waters next to existing sites.

According to the government, gas will continue to play an important role in supporting Victoria's transition to a cleaner energy future, in line with its commitment to net zero emissions by 2050.

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