Tasmania's gas value not known: Eslake

The value of Tasmania’s gas resource and its ability to affect the state’s economy should be investigated, economist Saul Eslake believes.

Federal Treasurer Scott Morrison has endorsed a plan to withhold GST revenue if states refuse to develop gas reserves.

Mr Morrison gave his support to the idea which is being looked at by the Productivity Commission as part of a review into the distribution of GST revenue.

Tasmania has a ban on fracking until 2020.

Mr Eslake said Tasmania’s gas resource, and how it could benefit the economy was unknown.

“I suspect very few people do know because nobody really has  much idea of how much so-called unconventional gas there might actually be in Tasmania,” he said. 

“If we don’t have any gas then we haven’t really lost anything by banning it.”

Unconventional gas, or horizontal fracturing, involves drilling down and injecting water and chemicals in high pressure to loosen bubbles of gas contained in sandstone and shale rock.

The state is dependent on gas coming from the Tasmanian Gas Pipeline from Victoria across Bass Strait – “at the mercy of mainland gas-pricing conditions”.

Nobody really has much idea of how much so-called unconventional gas there might actually be in Tasmania.

Saul Eslake

“If there is any gas to be had – it would be a good thing to develop it,” Mr Eslake said. “It would provide greater surety of supply and number two; we might get it at a lower price.”

With Mr Morrison threatening to withhold GST revenue for anti-gas states –  Mr Eslake said it was unusual for the federal government to take the “penalise states” approach.

Of Mr Morrison’s threat, Treasurer Peter Gutwein has previously said; “we won't be blackmailed into being silenced on the GST”.

Independent MLC Mike Gaffney has called for the state government to hold an inquiry into fracking and other gas exploration.

He said the government should not “sit back on and wait” for the moratorium decision to roll around before reviewing the issue.