State Government permanently bans fracking in Victoria

A PERMANENT ban on fracking is set to be introduced in Victoria, amid warnings that households could soon pay more for gas.

A photo handed out by the Greens Party taken in April 2016 shows methane gas on fire along the Condamine River in Queensland.

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A PERMANENT ban on fracking is set to be introduced in Victoria, amid warnings that households could soon pay more for gas.

After years of pressure from farmers and environmental groups, Premier Daniel ­Andrews announced that fracking and controversial coal-seam gas drilling would be banned under legislation to be introduced this year.

The announcement was coupled with an extension of a moratorium on drilling for “conventional” onshore gas until June 30, 2020.

Extracting those gases uses less invasive methods than fracking, which is hydraulic fracturing of underground rocks using water, sand and chemicals to get to “unconventional” gas resources. Coal-seam gas is unconventional, but often it can be drilled out.

The moves have prompted warnings the continued ban on conventional gas extraction will further stifle competition in Victoria’s gas industry, leaving consumers worse off.

Analyst Bruce Robertson, who wrote a recent report on Australia’s gas supply, said the ban on fracking would have “virtually no effect” on prices”.

“(However) the problem is you have very few players and they are basically forcing the price up,’’ he said.

A report released this month found Australian gas is up to 40 per cent cheaper in Japan than it is here, despite the export cost, due to cartel-like behaviour by companies.

Offshore gas exploration and development projects will continue unimpeded.

Shell Australia chairman Andrew Smith said the decision “stifled the development of new gas supply in Victoria’’ and “means every Victorian household and business will now pay higher energy prices moving forward’’.

Resources Minister Wade Noonan said the government had achieved a balanced outcome based on findings from the 2015 inquiry into onshore unconventional gas.

“There has been a great deal of community concern and anxiety about onshore unconventional gas — this decision gets the balance right,’’ he said.

Gippsland beef farmer Bill Bodman, 82, who has worked on the land for 70 years, said he was happy that fracking had been banned.

“Passions ran deep about it,’’ he said.

Greens energy spokeswoman Ellen Sandell said she was disappointed the government had left the door open to conventional gas drilling after the next election.