Last shot for Vic CSG

AUSTRALIA'S upstream industry will make a last-ditch plea to Victoria's new resources minister in the small window of opportunity provided by the Andrews government's decision yesterday to defer its call on whether it should give its stalled CSG industry the go-ahead.

The Australian Petroleum Production and Exploration Association said the Victorian government's decision to delay its response to the parliamentary inquiry into unconventional gas was a chance to make the "right long-term decision for the families and businesses relying on natural gas".

APPEA and its members plan to meet with Victorian Resources Minister Wade Noonan before a final decision on the future of onshore gas operations in Victoria is made in August.

Noonan said yesterday he appreciated that there were "significant concerns" within the Victorian community about unconventional gas exploration and the extraction methods used, and assured stakeholders that he takes them seriously.

He cited this as the reason why he will take more time to meet with industry, farmers and other community representatives.

Victorian Premier Daniel Andrews said delaying the government's findings was a "common sense" one, particularly given Noonan was only sworn in a couple of weeks ago.

"I think it's a reasonable thing for him to take the time to be respectful of all the different stakeholders," Andrews said.

"There's a lot of concern about this and the Government holds those concerns.

"That's why we supported [the moratorium] well before the previous government implemented the ban. That moratorium stays in place and the minister's just given an opportunity, a few more weeks, to have a respectful and appropriate discussion with all the stakeholders."

The deadline for the government was today after it had six months to respond to the Environment and Planning Committee of Parliament's final report tabled in parliament on December 8, following an inquiry into unconventional gas in Victoria.

The inquiry received more than 1800 submissions and heard from more than 100 individuals at public hearings across Victoria to develop an understanding of the broad range of economic, environmental and social issues that are of concern to many Victorians.

The problem is, the Victorian report was a muddled response, as Energy News described it at the time, as it offered few answers and little clarity on the future of the industry.

The outcome was even been slammed by the committee's chairman, Liberal MP David Davis, who said the government was not serious about the review in the first place.

The committee was unable to reach a majority decision on extending it the moratorium for another five years or banning the unconventional gas industry altogether.

While the committee found it was unrealistic to stop exploration because no activity is 100% safe, and that the risks are manageable with the right regulatory framework, the committee also complained it had been unable to travel to examine best practice in other jurisdictions.

The review found that both oil and gas explorers and gas buyers were convinced shale and tight gas existed in the Otway and Gippsland basins, but there was little prospect of CSG from the state's brown coals, the reason for the drilling moratorium being imposed in the first place.

It also identified gaps in the scientific knowledge around water resources.

The Australian Competition and Consumer Commission's contentious recent East Coast Gas Inquiry Report recommended: "Governments should consider adopting regulatory regimes to manage the risks of individual gas supply projects on a case by case basis rather than using blanket moratoria."

The report added that "… allowing new sources of gas supply to be developed is likely to put downward pressure on domestic gas prices".

Citing the ACCC's report APPEA yesterday encouraged the government and the community to make "informed judgements based on facts, not misleading scare campaigns".

"Industry has long argued Victoria needs to lift its onshore gas exploration ban to secure future supply for households, businesses and manufacturing sector," APPEA said yesterday in a statement.

"Victoria is the only mainland state in Australia with a ban on new investment to develop its onshore gas resources, which leaves more than 1.8 million customers exposed to unnecessarily higher gas prices.

"We are disappointed the government has not already removed the uncertainty. With output from existing gas fields expected to decline from 2017, time is running out to bring new supply into the market.

"This should not be a difficult decision to make.

A long list of independent scientific inquiries have confirmed that onshore gas production is safe when properly regulated. The benefits to regional Queensland are well documented."