THE NSW government has clamped down on dodgy gas companies and the lax licensing system, in response to community concern over the industry's rapid expansion.
Resources and Energy Minister Anthony Roberts has frozen all new Petroleum Exploration Licence Applications for a period of six months.
In the interim, the government will conduct an audit of the new and existing applications and the approval system.
Licence holders will be asked to justify why their licence shouldn't be cancelled.
Application fees have also been raised from $1000 to $50,000.
"It is clear that the exploration application process under the former Labor government was not up to scratch," Mr Roberts said.
"This allowed almost anyone to become the owner of a Petroleum Exploration Licence without having to demonstrate their industry experience, financial security or insurance.
"These people could then hold an exploration licence across a large area of land, which placed unnecessary and understandable stress across communities.
"We will examine existing applications and we will not rule out further exploration licence applications being cancelled or asked to show cause as to why an application should not be cancelled."
There are currently 18 Petroleum Exploration Licence Applications under consideration.
Controversial coal seam gas proponent Grainger Energy has been refused the right to explore in the Riverina and Leichhardt Resources exploration licences near Moree, Nowra and between Bylong and Denham are under scrutiny.
The Land understands another exploration hopeful Ceemac is also in the government's crosshairs.
Ceemac has three applications lodged to explore for gas in around the Blue Mountains, Dubbo and Coolah and Binnaway.
Barwon MP Kevin Humphries said the application freeze and licence audit would weed out "the speculative companies, what I would call two dollar companies".
"We need a diverse economy in our rural areas and traditionally mining, and now gas are going to deliver that," he said.
"This is about making sure the proper process is in place."
Greens MP Jeremy Buckingham welcomed the decision, but said the government's announcement "is a clear recognition by the government that coexistence does not work.
"Why is it that viticulture and equine industries in the Hunter have been granted protection from coal seam gas as critical industry clusters, but other valuable industries such as horticulture, rice and other cropping, irrigation areas, dairy, oysters, and tourism have no protection?"
Mike Foley
Senior journalist for The Land.
Senior journalist for The Land.
