Allan govt introduces huge hike on gas exploration permit fees
The Allan government has raised gas exploration permit fees by more than 300 per cent in a move industry members have slammed as a “mixed message” as shortages loom for the state.
Victoria
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The Allan government has quietly hiked gas exploration permit fees up more than 300 per cent, a move the sector has described as a “massive hit”.
Gas industry members say the state’s move to increase costs for gas exploration at a time when it was facing future shortages sends a “mixed message.”
New permit prices were gazetted mid-last year, increasing fees by more than 330 per cent and adding tens of thousands of dollars to the cost of finding new gas resources.
Australian Energy Producers Victorian director Peter Kos said the move was concerning to the industry, which feared the state was already trying to phase out gas stealthily as it transitioned to a renewable energy-reliant network.
“This fee increase is a massive hit to small exploration companies, and it will drive away investment at a time when Victoria urgently needs more gas supply,” he said.
“The Victorian government should remove barriers to gas exploration, not add to them. This only adds to the mixed messages from the Victorian government that only weeks ago promised to fast-track new gas projects in its Growth Economic Statement.”
In December, Premier Jacinta Allan announced an acceleration pathway for renewable energy projects would be expanded to include all new gas projects amid looming shortfalls.
It came after Ms Allan had been accused of lying and misleading the Victorian public over the future of gas in Victoria after new laws were quietly introduced designed to phase out gas in Victorian homes by allowing the regulator to ban gas connections in existing homes in the future.
The Herald Sun understands the fees were increased to better cover regulatory costs for Victoria’s petroleum, quarrying, and mining sectors.
The increased fees will reportedly help fund Resources Victoria to regulate the sector.
However, the opposition spokesman for energy David Davis said the move was a blatant “assault” on the already suffering exploration industry.
“Labor’s bizarre war on gas continues with an assault on the exploration sector and production just when Victorians face gas shortages,” he said.
“The new jacked-up state government fees can only add to the energy costs of the sector at a time when prices have been surging. Families and businesses can only be forced to pay more.
“These massive fee increases for exploration or production send all the wrong signals just when Victoria needs more gas to deal with declining gas production.”
A Victorian government spokesman hit back, saying: “The bumbling David Davis needs a lesson in his own party’s history — it was the Liberal Party that introduced the mortarium on all onshore gas extraction when in government, which we overturned.”
“We’re fast-tracking gas approvals and have approved the only gas application we’ve received in ten years while building the renewable energy projects to drive down energy bills.”
The cost structure has come to light as the United Kingdom this week moved to downgrade some of its gas phasing out policies — changing policies similar to the Allan government’s electrification push, where gas has been banned for new homes.
Previously, the UK had plans to phase out gas heating by prohibiting new gas boiler sales by 2035 and requiring replacements to use heat pumps or eco-friendly alternatives.
The UK government will abolish the 2035 ban on gas boilers in new house building standards.
The Gas Appliance Manufacturers Association of Australia have urged the Allan government to follow suit.
GAMAA president Ross Jamieson said: “This is a victory for common sense, and we call on the Victorian Labor Government to follow the lead of their UK counterparts and abandon its increasingly madcap push to ban the replacement of gas hot water and heating appliances”.
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