Victoria to allow conventional onshore gas exploration, but bans fracking.

The Andrews Government will enable conventional drilling for gas reserves from July 2021.

Premier Daniel Andrews said the new gas supplies would be reserved for Victorian households and businesses first and companies that wanted to drill for gas on private land would have to strike agreements with landholders.

The announcement came after a three-year investigation by the Victorian Gas Program, overseen by Victoria’s lead scientist Amanda Caples, found there were gas reserves in Victoria that could be extracted without harming the environment.

But a temporary ban on fracking and coal seam gas will be made permanent.

Environment Victoria chief executive Jono La Nauze said the Government’s decision would expose everyone to a greater risk of climate change.

Mr Andrews said natural gas would be extracted under the highest standards and production of the resource could generate more than $310 million annually for regional economies and create 6,400 jobs.

“We are backing the science to create jobs, boost energy supply and support regional communities,” Mr Andrews said.

“In the middle of next year we are ready for a new chapter against the highest of standards, we will get more gas into the overall supply chain and that puts a downward pressure on prices.”

Resources Minister Jaclyn Symes said a royalty system was already in place and estimated it could generate $43 million a year for landowners, which could flow back to regional communities.