THREE south-west mayors have tentatively supported a push for partial lifting of a moratorium on gas drilling to allow potential huge reserves in the region to be tapped.
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However, they have maintained their opposition to controversial fracking and coal-seam gas extraction.
Lakes Oil boss Robert Annells toured the region last week to meet mayors of Glenelg and Moyne shires and Warrnambool City, as well as local MPs Denis Napthine and James Purcell.
Mr Annells outlined hopes of sinking two proof-of-concept exploration wells to test what the company believes could be Victoria’s largest-ever onshore gas field which could provide cheap gas to households and industry.
He has predicted the new supply would lead to lower prices and stem the alarming increase in households being unable to afford gas bills.
The Greens and environmental groups, including the grassroots Lock The Gate, want a permanent ban, citing risks of damage to water tables.
Several south-west communities have participated in surveys aimed at lobbying local councils to allow farmland to be used for oil, gas extraction and mining.
Moyne mayor Colin Ryan, Warrnambool mayor Michael Neoh and Glenelg mayor Robert Halliday said they personally saw no reason why conventional drilling should not be allowed, particularly to sink test bores.
“If large reserves were tapped there would be long-term benefits — it could be enormous for our region’s economy,” Cr Ryan said.
“I don’t have a problem with test bores using conventional drilling where shafts are sunk straight down like they’ve been done hundreds of times all over the place.
“But I certainly support the ban on coal-seam gas and fracking — that shouldn’t happen anywhere.”
Cr Neoh said the state government should consider separating conventional gas drilling from the moratorium.
“This is a huge opportunity for the south-west,” he said.
“It’s important we have a very economical supply of gas.
“But we have to have certainty from the government.”
Cr Halliday said his personal view was the proposed project sounded like a “castle in the sky”.
“If it came to fruition the whole of western Victoria and south-east South Australia would benefit,” he said.
“Mr Annells accepted my invitation to address all councillors at a future date.
“We have a policy opposing fracking, but conventional vertical drilling hasn’t come before council.”
Mr Purcell, a Port Fairy-based upper house MP, is more cautious and wants to see more scientific research before changing his stance on a total ban on all forms of exploration and extraction.
“Lakes said the reserves could be up to two kilometres deep, which would mean they wouldn’t have to frack,” he said.
“However, we need to make sure all the research is done. I don’t want to give up our water resources’ quality for future generations.”
Dr Napthine was not available for comment.
Mr Annells predicted gas could be marketed at $3 a cubic metre as opposed to $14, which was the current rate for Queensland gas going to export markets.
“If supply is increased prices will come down,” he said.
“It costs between $50 milliion and $100 million to tap a well offshore, but we believe we can tape the south-west reserves for under $2 million a well.
“Things will only get worse for consumers if new supply cannot be reached.”
Lakes Oil has tenements north of Warrnambool and Port Fairy and east of Port Campbell. Beach Energy has onshore permit areas north of Portland and east of Warrnambool and is also keen to persuade the government to relax the blanket ban.
Managing director of Beach Energy, Reg Nelson, has said potential large reserves in the onshore Otway Basin were locked away “for no good reason”.
The company said last week it was looking forward to working with the newly-formed government.
Mr Annells has already touched base with the state government.
Premier Daniel Andrews announced in January the moratorium imposed under the previous Napthine government would be extended until the results of a new parliamentary inquiry into the industry were known.
