Submission to the Victorian Inquiry into Unconventional Gas

While it is disappointing that onshore gas in Victoria is again a subject of uncertainty with investment being impeded, the MCA is hopeful that the findings of this inquiry will show the potential for an unconventional gas industry to benefit Victoria.

Natural gas is an important product for households, businesses and manufacturing processes.  Accessible and reliable sources of natural gas, over a long period of time, have supported the development of Victoria’s primary and manufacturing industries.  It is now time to consider how unconventional gas can also contribute to the future prosperity of Victoria. 

There are two issues that remain clouded in confusion; the regulatory regime for gas in Victoria and the rights of the Crown and land owners.

Uniquely in Victoria, coal seam gas and oil shale are classified as minerals and as such are regulated through the Mineral Resources (Sustainable Development) Act 1990 (MR(SD)A).  Conventional and some other sources of gas, including tight and shale are classified as petroleum products and therefore regulated through the Petroleum Act 1998.  These Acts have different approaches to, for example, sustainable development, consultation, community engagement and water.  In most public forums, the Acts are used interchangeably and without understanding of some of the distinct regulatory differences.

The Crown as custodian is vested with the role of understanding the resource potential of the state.  As such a call for moratoriums on specific commodities, such as coal seam gas, leaves Victorians at risk of not knowing what resource wealth is beneath the surface and what potential there is for generation of economic and community wealth.

As the government largely does not undertake resource extraction, it allows others to do so by allocating licences consistent with the principles and objectives of the MR(SD)A.  As such neither a landowner nor a minerals company has power for a veto.

The Victorian regulatory regime is strong and robust.  It is capable of supporting the development of an onshore gas industry.  

Victorians should be able to draw value from the mineral and other assets that are held in trust by the state.  Locking away land and excluding it from exploration, likewise allowing a right of veto by one landowner over the development of an industry ensures that the interests of one or a few impact the interests and benefits of many.

The development of an onshore gas industry has the potential to bring a great deal of wealth to the state and the people of Victoria.  It also has the potential to support regional economies and provide high-paying jobs for people who wish to live in the regions. 

The MCA recommends the following:

  • The inquiry must present a considered and balanced report to government.  It is neither in the interests of industry, the government or the people of Victoria that uncertainty continues   
  • The government must reiterate the state's right to extract wealth from its resource endowment and to make decisions that support the state’s prosperity
  • The government must increase its efforts to educate the community about the demand for gas in Victoria.  This includes providing information on the potential value of Victoria’s unconventional gas industry.  Alternatively, it must provide evidence on whether demand can be met by other means and justify the potential loss of investment and jobs to the people of Victoria 
  • The government must remove the moratorium and recommit to science based decision making.

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