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The Petroleum Legislation Amendment Bill 2020 has passed the Victorian Legislative Council, allowing for onshore conventional gas exploration to restart.

The Bill will allow the industry to begin on-the-ground exploration and development activity again from 1 July 2021, once the best practice regulatory framework is in place. 

The Victorian Government said production of the estimated resources could generate as much as $310 million annually for regional economies, and create up to 6,400 jobs over the lifespan of these projects. All new gas will be prioritised for local use.

Victorian Minister for Resources, Jaclyn Symes, said, “The work of the Victorian Gas Program gives us the confidence that an orderly restart of the industry can deliver benefits for all Victorians and create jobs, without compromising our clean and green farming reputation.”

“Securing gas sources isn’t needed just for Victorian homes and businesses – it’s a key ingredient for manufacturing. That’s why we’re making sure all new gas projects are prioritised for local use.”

The south-west of Victoria and Gippsland are the main regions being considered, where geoscience studies have located potentially significant onshore conventional gas resources.

The prospective Otway Basin already supports a productive onshore gas industry across the border in South Australia.

APPEA Chief Executive, Andrew McConville, said the legislation passed today was a step in the right direction to help ensure that Victoria has ongoing secure supplies of natural gas.

The Australian Energy Market Operator 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 relies heavily 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,” Mr McConville said.

“Thousands of manufacturing jobs in the state also rely on a stable supply of gas. This legislation should give some comfort that Victoria’s manufacturing base, and the local jobs it generates, should continue to have a source of viable supplies of domestically-produced gas for years to come.

“It’s also good for jobs in regional local communities – from the local butcher to civil contractors and transport operators.”

A Bill to enshrine the historic ban on fraccing and coal seam gas exploration in the Victorian Constitution is also before the Parliament.

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

The investigations were overseen by Victoria’s Lead Scientist, Dr Amanda Caples, who chaired an independent Stakeholder Advisory Panel made up of farmers, environment groups, industry representatives and local councils.

The legislation aims to provide the foundations for improving project transparency and community engagement, as recommended by the Lead Scientist. The Victorian Government said it will now work closely with communities, industry and local government to prepare the supporting regulations.

Victorians will have the opportunity to give feedback on these regulations through the Regulatory Impact Statement process, which includes community consultation.

The Victorian Government said gas will continue to play a role in supporting Victoria’s transition to a cleaner energy future, in line with its commitment to net-zero emissions by 2050.

“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.

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