THE Australian oil and gas industry and the Federal Government have welcomed the Victorian Government’s decision to lift the moratorium on onshore conventional natural gas exploration and development in that State.

APPEA chief executive Andrew McConville said the decision paves the way for the resumption of exploration of possible natural gas resources in Victoria, which over time could lead to more gas supply flowing into the Victorian gas market.

Mr McConville congratulated the Victorian Government’s consideration of evidence compiled through the Victorian Gas Program by the Lead Scientist.

“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,” Mr McConville said.

“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.”

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.

A report released by the Department of Environment, Land, Water and Planning in 2017 highlights that as other sources of baseload power no longer become viable, they are replaced by natural gas generation capacity.

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

The moratorium, which came into effect in early 2017, was followed by an extensive period of scientific investigation and community consultation led by the office of the Victorian Lead Scientist and a stakeholder advisory group.

Federal Minister for Resources, Water and Northern Australia Keith Pitt said it was overdue decision by the Victorian Government.

“This is an important step forward for an industry that has the potential to be a major economic contributor to Victoria and Australia once the ban is lifted from mid-2021,” Mr Pitt said.

“I am pleased the Victorian Government now accepts the true science around the benefits of developing the state’s gas industry and what it will mean for manufacturing.

“Not only will the decision help boost domestic gas supplies, it will generate million on royalties for Victoria the decision on conventional gas is a good win for the state, Minister Pitt said he was disappointed Victoria didn’t take the opportunity to reverse its ban on unconventional gas exploration.

“Victoria has potentially enormous shale and tight gas resources that could generate billions in revenue and create thousands of local jobs,” Minister Pitt said.

The Minister said the Resources sector will play a vitally important role in leading the post-coronavirus economic recovery.

“With the challenge that the Australian and world economy is facing from the COVID-19 pandemic, Australian industry will be well placed to lead the economic bounce back that will come.” Mr Pitt added.