Victoria’s Andrews Labor Government has announced it will lift the moratorium on onshore conventional gas exploration, as well as ban fracking in the state “for good”.
Of the two bills introduced into Parliament today, the first will enshrine a historic ban on fracking and coal seam gas exploration in the Victorian Constitution.
The second will allow for the restarting of onshore conventional gas exploration and development from July 1, 2021.
The difference between the two types of gas exploration is that conventional gas is trapped in naturally porous reservoir formations and when intercepted by a well, is able to move to the surface without the need for a pump.
In unconventional gas exploration, which includes hydraulic fracturing, gas is in reservoirs with low permeability compared to conventional reservoirs. In these cases, horizontal drilling and hydraulic fracturing are often necessary for gas extraction.
The government said in a statement that the decision to allow conventional onshore gas exploration follows three years of detailed investigation by the Victorian Gas Program.
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The Program found that an onshore conventional gas industry “would not compromise the state’s environmental and agricultural credentials”.
Production of Victoria’s estimated resources could generate more than $310 million annually for regional economies and create 6,400 jobs over the lifespan of these projects, according to the Victorian Government.
“The sensible, science-based approach will 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 statement said.
“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.”
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Victorian Premier Daniel Andrews said, “We’re backing the science to create jobs, boost energy supply and support regional communities across the state.
“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.”
EY Power & Utilities Leader Matt Rennie said this is a positive move by the Victorian Government, which should take nothing away from the need for strict environmental regulations and compliance around extraction.
“Extra gas will provide downward pressure on prices and additional energy security for the nation,” Mr Rennie said.
“Natural gas has a critical part to play in the energy transition, providing well priced fuel for fast start engines to maintain reliability.
“It will allow gas to bridge the technological gap between coal and the waves of decentralised energy that will become the mainstream of electricity supply post 2040.”