Restart of onshore conventional gas industry in Victoria

In June 2020, the Petroleum Legislation Amendment Act 2020 (the amendment act) was passed by the Victorian Parliament, which allows for the restart of onshore conventional gas exploration and production from 1 July 2021.

This restart of onshore gas exploration and production does not include coal seam gas or fracking, which are permanently banned in Victoria.

New provisions introduced by the amendment act require increased consultation with the Victorian community and greater consideration around social, economic and environmental factors in regards to onshore conventional gas activities.

The Government is currently preparing for the remake of the Petroleum Regulations 2011 to provide further guidance around the legislation, before on-ground exploration and development activities recommence. Public consultation on the draft regulations will occur early in 2021 to ensure that the new requirements are effective.

In parallel to the remake of the regulations, Victoria’s mining regulator, Earth Resources Regulation, is taking steps to ensure existing onshore gas operators are compliant before they can restart any activities. This work includes:

  • conducting compliance inspections of each onshore gas licenced site
  • preparing guidance material for industry to develop new work programs
  • preparing guidance material for industry to develop new operation plans, and
  • reviewing rehabilitation bonds to ensure they are reflective of today’s cost of rehabilitation.

Background

In 2012 the Victorian Government placed an administrative moratorium on all onshore gas exploration and development in Victoria. This was in response to community concerns and meant a temporary hold on onshore gas exploration permits and retention leases, and a suspension on approving any new applications while the moratorium was in place.

In 2017, the Government passed the Resources Legislation Amendment (Fracking Ban) Act 2017.Under this legislation, fracking and coal seam gas extraction were permanently banned, and the existing administrative moratorium on onshore conventional gas was replaced with a legislative moratorium that halted all exploration and development activities in Victoria until 30 June 2020. The recent Petroleum Amendment Act extended the moratorium by another year.

The 2017 extension of the moratorium provided the Government with time to undertake the Victorian Gas Program - a three-year research program to scientifically understand the potential for new onshore conventional gas discoveries and the risk, benefits and impacts of allowing the industry to continue. The Program’s geoscientific investigations concluded in early 2020. The results indicated that there are likely to be commercially feasible onshore conventional gas resources yet to be discovered in the Otway and Gippsland basins. Regional environmental studies undertaken by the program showed that developing these gas resources would not compromise the state’s groundwater supplies or agricultural sector.

Victoria’s onshore Petroleum Regulatory Framework was also reviewed by the Victorian Gas Program and found to be robust for managing environmental and safety risks, however the framework could be improved in its provisions for community engagement and industry transparency. These improvements are being developed as part of the remake of the petroleum regulations.

More information about the Victorian Gas Program’s findings.

Page last updated: 09 Nov 2020