The Victorian government has introduced legislation into parliament to permanently ban hydraulic fracturing for coal seam gas and tight oil and gas resources throughout the state. The government also has moved to extend the moratorium on conventional onshore gas exploration and development until mid-2020 saying it will take time to study the economic and environmental impacts.

Premier Daniel Andrews flagged the legislative move back in August this year following a parliamentary inquiry in 2015 into the unconventional gas industries and what he called one of the most amazing community campaigns Victoria and Australia has ever seen against fracing.

There are about 17 onshore exploration permit holders in Victoria. Resources Minister Wade Noonan says the government will offer compensation for the companies involved.

The Bill will contain a compensation provision where a license holder is prepared to voluntarily relinquish the license.

The minister did not nominate a definite compensation figure, but did say that the New South Wales government had previously offered a capped payment of $200,000 (Aus.) for each permit. He added that this is the sort of sum the Victorian government has in mind.

The company most affected by the bans is Melbourne-based Lakes Oil Ltd., which has seven onshore permits in Victoria.

Lakes Chief Executive Officer Roland Sleeman said this week’s mention of compensation is the first the company has heard of it. Sleeman said the government has never contacted the company. 

Lakes has already sought a judicial view by lodging legal action in the Supreme Court of Victoria over the government’s move to introduce the ban.