Canavan takes aim at ‘ridiculous’ gas exploration moratoriums

PERTH (miningweekly.com) – Federal Resources Minister Matt Canavan has committed to work with state and territory governments in an effort to lift “ridiculous” moratoriums on gas exploration.

Speaking at the Australian Petroleum Production and Exploration Association (Appea) conference in Perth on Monday, Canavan said the federal government’s plans for gas supply in the constrained east coast not only relied on a regulatory instrument like the Australian Domestic Gas Supply Mechanism, but also recognised the need for new supplies.

“The first step is to encourage state and territory governments to remove the blanket moratorium that exists across the Northern Territory, Victoria, and perhaps later across a large area of Western Australia,” Canavan said on the sidelines of the conference.

The Minister noted that the federal government would be working directly with state and territory governments, as well as through the Coalition of Australian Governments to encourage states to remove moratoriums that impede further investment into the sector.

Pointing to the recent Budget, the Minister noted that the commonwealth government had set aside A$90-million to unlock new opportunities in the oil and gas sector, of which some A$28.7-milion would be spent on an East Coast gas development programme to target the faster development of onshore gas fields to meet local demand.

Funds have also been set aside to conduct scientific studies to open up new areas of gas supplies, and to undertake feasibility studies into pipelines and other barriers that might exist to gas transportation across Australia, Canavan said.

“It is a comprehensive approach from the government to try and encourage more gas supplies,” the Minister added.

“I have had requests from the Victorian Minister to invest in things like more scientific studies and more exploration, but I’ve told him, and I will say to other states and territory governments, that the Australian government is looking to partner with people and governments that can show a pathway to production.

“We are not looking to do research for research’s sake, but research that leads to production.”

Canavan noted that states where a blanket moratorium was in place would be at the back of the queue as far as federal investment of this nature was concerned, while states where responsible and attractive production regulations were already in place would be prioritised.

Furthermore, states with policies in place that share wealth with land owners, such as South Australia, would be further prioritised, as the federal government believed that land owners not only deserved a fair return on production from their land, but that it was also an essential ingredient to encourage greater political support, and more widespread acceptance of onshore gas development in Australia.

The need to lift the moratorium on oil and gas exploration has been echoed by industry, with producer Woodside’s CEO and MD, Peter Coleman, saying the exploration and drilling bans were symptomatic of a trust deficit that has emerged between industry and the broader community.

“The imbalance between exports and domestic gas has made this situation worse,” Coleman said at the conference.

He told industry participants that it was clear that there was a need to consider how players in the oil and gas sector could regain the trust of the public.

“If we are to get onshore development back on track, we should think about whether a first step might be for Appea to consult and agree on a code of conduct for land access and use that recognises and assuages landowners’ concerns. We need to commit to a clear set of principles and processes to enable us to work with the land owners and affected communities.

“To put it bluntly, we need to ensure some of the resources we develop are available for Australian consumers, and available at a price that is sustainable for both the customer and the producer.”