Restart of onshore conventional gas industry in Victoria

New regulations

The Petroleum Regulations 2021 are now in place to help govern the onshore conventional gas sector. The new regulations address the findings of the Victorian Gas Program that found that the previous regulatory framework was sound on environmental and safety grounds but could be improved for project transparency and community engagement.

The development of the regulations was underpinned by strong consultation. Details of the Regulatory Impact Statement, submissions made, how feedback was considered and links to the regulations are available on the Engage Victoria website.

Now that the regulations are in place, Earth Resources Regulation can recommence processing new industry applications for operations on the ground. In line with new requirements, all new operations plans will have to have been developed in consultation with relevant stakeholders and will need to demonstrate how any issues raised in stakeholder submissions have been addressed.

The Government is now finalising a Code of Practice for Well Management and will continue to work with stakeholders to develop further guidance material and to refine the regulatory approach.

The Victorian Gas Program estimated that an onshore conventional gas industry could potentially start production from 2023–24 if industry makes a gas discovery quickly, considers it commercially feasible to develop and secures the necessary regulatory approvals.

The sector is predicted to deliver a jobs boost for south-west Victoria and Gippsland in the coming years.

The restart follows three years of detailed scientific investigations by the Victorian Gas Program. It found an onshore conventional gas industry would not compromise Victoria’s environment or our vital agricultural sector.

The restart of onshore gas exploration and production does not include coal seam gas or fracking, which are permanently banned in Victoria. The fracking ban was added to Victoria’s Constitution in March 2021.

How did we get here?

In 2012, an administrative moratorium was placed 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 Victorian 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.

In June 2020, the Petroleum Legislation Amendment Act 2020 was passed by the Victorian Parliament, which allowed for the restart of onshore conventional gas exploration and production.

In July 2021, the Onshore Conventional Gas sector restarted.

In November 2021, the Petroleum Regulations 2021 were remade after extensive industry and community engagement, enabling operators to progress their regulatory approvals.

Victorian Gas Program

The 2017 extension of the moratorium provided the 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 risks, 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.

Understand more about the Victorian Gas Program and watch an animation showing the variety of work delivered.

Page last updated: 23 Nov 2021