Two Bills have recently been introduced into Victorian Parliament; one to ban fraccing in the state, and one allowing onshore conventional gas exploration to restart

The orderly restart of the onshore conventional gas industry in Victoria, will also introduce measures aimed at ensuring newly sourced gas within Victoria and state waters will be prioritised for domestic use.

In 2017, the Victorian Gas Program set about determining the potential for new onshore conventional gas discoveries and what the risks, benefits and impacts of allowing exploration and development would be.

The Victorian Gas Program has now delivered a large amount of work to answer these questions. The scientific studies have found there are likely to be onshore conventional gas resources in south-west Victoria and Gippsland.

The three-years of studies has concluded that an onshore conventional gas industry would have no significant impact on farming because of the low risks to the environment or groundwater.

The gas program has shared the science with the community via more than 800 separate engagements.

The Australian Energy Council’s Chief Executive, Sarah McNamara, said the decision was a sensible one supported by the science.

“Ensuring reliable gas supplies into the future will help affordability for domestic, commercial and industrial customers.

“Readily available gas will also be an important, flexible back-up fuel that is likely to help ensure the reliability of the state’s grid as older coal-fired power plants retire and more wind and solar generation comes into the system.

“This decision should boost Victoria’s energy security.”

Following the passage of the Bill in Parliament, the department will start working with industry and other stakeholders to amend the Petroleum Industry Regulations 2011. In line with the findings of the Victorian Gas Program, community engagement elements of onshore conventional gas projects will be strengthened.

The exploration for and development of onshore conventional gas will potentially bring hundreds of jobs to south-west Victoria and Gippsland over the coming decades.

In practical terms, the orderly restart will commence immediately with some specific milestones in place as the industry moves into gear from a standing start.

Onshore conventional gas development could potentially start from 2023–24 if industry makes a gas discovery, considers it commercially feasible to develop and secures the necessary regulatory approvals.

APPEA Chief Executive, Andrew McConville, said, “The comprehensive scientific research undertaken by the Victorian Gas Program assessed the risks, benefits and impacts associated with onshore conventional gas. It confirms what other inquiries and industry itself has been demonstrating for decades – natural gas production is safe and sustainable.

“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 (AEMO) 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.

“Victoria is a state that heavily relies on gas. Around 80 per cent 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.”

The amount of additional gas potentially flowing from the mid-2020s and over the coming decades, would bring energy security and many benefits, but it is not likely to bring prices down. It is also not likely to boost consumption, meaning no additional emissions will be created once the gas is out of the ground.

Natural gas-powered energy generation will play a role in supporting and accelerating Victoria’s transition to net zero emissions. 

Greenhouse gas emission modelling found that the total amount of greenhouse gas emissions, should all the gas be found and extracted, would represent 0.1 to 0.3 per cent of Victoria’s net 2017 greenhouse gas emissions.

Mr 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,” Mr McConville said.

“Under every scenario modelled for the Victorian Government, natural gas has an increasing role to play in delivering stable, cleaner energy to Victoria.”

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