This Research Paper provides an introduction and overview of issues relevant to the development of unconventional gas – coal seam, shale and tight gas – in the Australian and specifically Victorian context.

At present, the Victorian unconventional gas industry is at a very early stage. It is not yet known whether there is any coal seam gas or shale gas in Victoria and, if there is, whether it would be economically viable to extract it. A moratorium on fracking has been in place in Victoria since August 2012 while more information is gathered on potential environmental risks posed by the industry. The parts of Victoria with the highest potential for unconventional gas are the Gippsland and Otway basins. Notably, tight gas has been located near Seaspray in Gippsland but is not yet being produced.

There is a high level of community concern in regard to the potential impact an unconventional gas industry could have on agriculture in the Gippsland and Otway regions. Industry proponents, however, assert that conventional gas resources are declining and Victoria's unconventional gas resources need to be ascertained and developed.

This Research Paper is structured as follows:

Chapter 1 provides an introductory explanation of unconventional gas and the characteristics of coal seam, shale and tight gas. It explains the process of gas production and provides information on conventional and unconventional gas resources in Victoria and Australia generally.

Chapter 2 provides an overview of some key reports on the coal seam gas industry in Australia and a summary of the issues identified in these reports regarding the potential environmental and social impacts of the industry. It includes information on the industry's potential impact on water, the process of hydraulic fracturing or 'fracking', fugitive emissions, and issues relating to agriculture and land access.

Chapter 3 provides a brief explanation of the current regulatory framework for unconventional gas in Victoria under the Mineral Resources Sustainable Development Act 1990 and the Petroleum Act 1998. It also provides details of current unconventional gas exploration licences in Victoria.

Chapter 4 provides information on developments in the regulation of unconventional gas in Victoria, and a summary of developments at the Commonwealth and Council of Australian Governments (COAG) level regarding regulatory reform that is relevant to Victoria.

Chapter 5 presents the views of stakeholder groups on the development and regulation of unconventional gas in Victoria, including the Australian Petroleum Production & Exploration Association, the Lock the Gate Alliance, and the Victorian Farmers Federation.

Chapter 6 provides an overview of the development and regulation of unconventional gas in other jurisdictions, including Queensland, New South Wales, the United States and the United Kingdom.