Lift ban on Vic gas fracking, report says

THE Victorian government should lift its moratorium on coal seam gas, appoint a gas commissioner and offer incentives to businesses to develop the industry, a report on the state's gas market says.

Communities should also be offered a share of the benefits of a CSG industry through a Royalties for Regions program, and the compensation limit for loss of amenity be doubled to $20,000, the report says.

Premier Denis Napthine released the final report and recommendations of the Gas Market Taskforce on Thursday, three weeks after it was handed to government.

The report makes 19 recommendations, including lifting the moratorium on fracking and the approval of new CSG exploration licences.

Taskforce chair Peter Reith says it is sensible for the government and other eastern states to promote production of additional gas supply to help keep prices down.

The report recommends the government introduce legislation and licence conditions to allay environmental concerns.

The opposition and Greens have described Mr Reith's inquiry as a sham as it did not consult widely enough and its eight members were all representatives of energy and industry groups.

However, on Thursday the premier announced an 18-month consultation process with farmers, environment groups and community bodies before any decision is made about the introduction of fracking in Victoria.

Dr Napthine also said the moratorium on CSG would remain in place until the consultation process was complete.

"We will never, ever allow onshore gas if it jeopardises our underground water, if it jeopardises our environment and if it jeopardises our food and agricultural production," he said.

Opposition Leader Daniel Andrews said CSG was a divisive issue, the science was at best unclear and it was appropriate to have an open consultation process.

"This has got to be based on science and there's got to be a community consensus - we're a long way away from that now," he said.

Victorian Greens environment spokesman Greg Barber said the report was a propaganda exercise, with the proposed gas commissioner the salesperson and the consultation process a roadshow.

He said the government should be looking at energy alternatives.

The Australian Pipeline Industry Association said the recommendation to appoint a gas commissioner should be given high priority.

Chief executive Cheryl Cartwright said the gas industry had to earn the social licence to operate in Victoria and not brush aside community concerns.

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