Victoria lifts ban on onshore gas development

AUSTRALIA’s Victoria state Government is lifting a ban on conventional onshore gas development and banning fracking amid warnings that the state could experience energy shortages.

The decision to lift the ban follows an investigation for the state by its Lead Scientist Amanda Caples into the risks, benefits and impacts of conventional onshore gas exploration and development. Following three years of study, Caples’ team identified new areas for gas development in the state’s Otway and Gippsland basins and reported that these onshore developments would not materially impact ground or surface water quality.

It projected that there is as much as 830 petajoules of gas that could be produced but noted this new supply would not meet Victoria’s projected shortfalls. The Australian Energy Market Operator, which manages the country’s power and gas systems, has warned that unless more projects are developed and pipeline capacity increased, the country’s southern states could see gas supplies fall short of winter demand from 2024.

Victoria’s Labor Government has now introduced a bill to lift the ban on conventional onshore development that it brought in 2017, to give its experts time to study the risks. It says new projects could generate more than A$310m (US$186m) annually and create 6,400 jobs over the lifespan of the projects. Any gas produced by future onshore production licences will be prioritised for the domestic market including local industry and consumers, the Government said.

“We’re backing the science to create jobs, boost energy supply and support regional communities across the state,” said Premier Daniel Andrews.

The study found that Victoria’s onshore petroleum regulations are robust for managing environmental and safety risks, though the Government has said it wants to work with industry and communities to bolster so they are best in class. It expects exploration and development activities to start from July 2021.

The research also noted that emissions from industry would need to be accounted for under the state’s targets to be net zero by 2050.

The study did not look into fracking, which the state banned in 2017 following public pressure opposed to the use of the technique. A second bill now introduced will enshrine the ban on fracking and coal seam gas exploration into the state’s constitution.

“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,” Andrews said.

As expected, industry has welcomed the resumption of onshore gas development. Andrew McConville, CEO of Australian Petroleum Production & Exploration Association, 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.”