Australian oil and gas explorer Buru Energy breathed a sigh of relief recently after Western Australia’s environmental regulator waved through the company’s controversial plans to frac several shale gas wells in the Canning Basin.

Fracing, short for hydraulic fracturing, is a process in which pressurized water, chemicals and sand are pumped underground to release gas trapped in rock formations.

Buru is the biggest player in the onshore Canning Basin, which has been identified as the most prospective region for unconventional gas in the world outside the United States, with up to 288 trillion cubic feet (Tcf) of gas. Some of its vast exploration footprint overlaps the Kimberley region, which has been described as Australia’s last great wilderness.

Despite this, The Australian newspaper reported that the Environmental Protection Authority will not subject Buru to any formal environmental assessments because the drilling was “unlikely to have a significant effect on the environment.”

It probably helps that Buru has a 25-year state agreement with the Western Australian government to deliver major volumes of gas to the domestic market (which is being sucked dry by five or more LNG projects off the coast). But we won’t go into that.

Traditional landowners and green groups campaigning against fracing in the Kimberley were not happy. Their view is that mixing chemicals with ecosystems is a calamity. But you can be sure Buru cracked a smile, because companies spruiking the practice in eastern parts of the country have been left a little cracked.

Arrow Energy is a case in point. The Shell- and PetroChina-owned company shelved plans to build a LNG plant in Gladstone, Queensland, despite spending AUD$9 billion to date. While rising costs weren’t helpful, Arrow’s plans to source feedstock from the gas-rich coal beds of the Surat Basin were shotgunned to pieces by farmers with fracing firmly in their crosshairs.

The Queensland government believes fracing to be a safe practice, but considered it to be an unsafe practice to get between an angry Australian farmer and an international conglomerate. Arrow petitioned for land access, but the government filled its ears with cotton wool to focus on filling its coffers with royalties from three other major LNG projects nearing completion in the State.

Australia’s oldest oil and gas company, Lakes Oil, discovered that age and experience counted for nothing when the Victorian government banned the company from using fracing to tap into hard-to-access oil and gas in the Otway and Gippsland basins.

Extending a moratorium on fracing until at least July next year, Victorian Premier Dennis Napthine made his position clear. ''We will never, ever allow onshore gas if it jeopardizes our underground water, if it jeopardizes our environment, and if it jeopardizes our food and agriculture production,'' he said late last year. ''There will be no onshore gas industry in Victoria unless it's absolutely safe.''

The continuation of the fracing ban in Victoria was despite the call for it to be lifted by a report into the Victorian gas market, and the inclusion in that report of a statement, by Geoscience Australia, that fracing was unlikely to cause groundwater contamination when done properly.

In New South Wales, coalseam gas explorers including Dart Energy and Metgasco have completely suspended their work programs there since the State government imposed a moratorium on fracing in May 2011. Since then, Dart’s share price has tumbled, from over AUD$1.00 to under $0.10, while Metgasco has slipped from around AUD$0.50 to around AUD$0.10. Major Australian oil and gas player Santos also scrapped plans to commence a 1,100 well coalseam gas development of its Gunnedah Basin acreage in the north of the state.

South Australia’s Limestone Coast is shaping up as the latest battleground in the conflict between resources and farming. The area's shale gas deposits are being targeted by oil and gas explorers, raising fears that fracing will contaminate the world-class wine region's precious underground water reserves.

Recently, green advocacy group Lock the Gate Alliance locked horns with Beach Energy near Penola, 388 km southeast of Adelaide, over the company’s plans to frac gas wells in the area.

But for now, Beach Energy will not be left beached. South Australian Mining Minister Tom Koutsantonis was not backing down over the issue, saying his Labor government would not follow the lead of the New South Wales and Victorian Liberal governments in banning fracing. "We have been hydraulic fracturing and stimulating basins for release of oil and gas since the 1960s and nowhere in Australia has an aquifer been polluted by the process," he said.

"I will not be banning hydraulic fracturing of our basins ... because this state's future prosperity is reliant on oil and gas."

Mr Koutsantonis is a college dropout, but he’s not silly. He knows that South Australia, like Western Australia, is coal-poor and gas-rich, and it's lights out for any government that lets the lights go out.

His comments were relief for Beach shareholders, but a hallelujah moment for Chevron, which recently tipped close to $AUD350 million into Beach’s back pocket to fund shale gas exploration in South Australia.

The American energy giant may have an ear-to-ear grin, but its eyes are now wide open to the fact that not all States in Australia are created equal. Take a drill into coal country, and you risk getting fraced.

--Gareth Quinn, special to Hart Energy