by Staff Writers
Melbourne (UPI) Nov 21, 2013
The Australian state of Victoria has extended its moratorium on onshore coal seam gas production and ban on hydraulic fracturing, or fracking, until at least July 2015 while it conducts a community consultation process.
Victorian Premier Denis Napthine announced his decision Thursday, in tandem with the release of the Gas Market Taskforce report, which was submitted to the government three weeks ago.
The premier said earlier this month that he would not be rushed into making a decision. "There is no hurry ... the gas has been in the ground onshore for tens of thousands of years. It'll be there for some time yet," he said.
The report was commissioned by Napthine's predecessor, Ted Baillieu, in January.
The taskforce, chaired by former Federal Minister Peter Reith, in its report recommended that Victoria encourage the development of onshore gas projects and that fracking be allowed. The report also recommends that a gas commissioner be appointed to "engage landholders and communities"
In a statement Thursday, Napthine said the government's priorities "are to protect Victoria's natural advantages and to consult all stakeholders, particularly local communities."
"As a result, we have in place a comprehensive approach which includes: a comprehensive and independent water study, a continuation of the moratorium on hydraulic fracturing ... and a formal community consultation process that will report in July 2015," the premier added.
Victoria introduced the ban earlier this year in response to protests about the environmental effects of gas exploration, particularly from fracking. The state is already a significant gas producer from conventional fields in its offshore Gippsland and Otway basins.
Esso, an affiliate of ExxonMobil, and Ignite Energy Resources hold licenses to explore coal seam gas options in large areas of Gippsland.
In September the Australian Broadcasting Corp. reported an ExxonMobil spokesman as saying the company would begin drilling for coal seam gas in Gippsland over the next 18 months to see whether mining coal seam gas is commercially viable but that it would not use fracking during the exploration phase.
The Australian Petroleum Production and Exploration Association said Victoria's announcement creates "considerable uncertainty" around the entire eastern Australian gas market.
In a statement Thursday, Paul Fennelly, APPEA chief for Eastern Australia said the decision "is an extraordinary rebuff of the gas market review that will further delay diversifying the development of natural gas resources in that state and it will result in higher than necessary energy prices."
The ABC, Australia's public broadcaster, reported earlier this month that aside from former federal minister Reith, all the Gas Market Taskforce members represent energy companies or associated industries and lobby groups.
The Victorian Opposition has described the task force as a "sham," said the ABC report.
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