The state government has frozen future petroleum exploration licence applications (PELA) until later this year.

“The freeze in processing new PELAs will run for six months until September 26, during which time the government will introduce a more comprehensive application process,” Member for Murrumbidgee Adrian Piccoli said.

The government has also refused five licences from Grainger Energy Pty Ltd which would have allowed it to investigate more than 43,000 square kilometres across the Riverina.

“The NSW Office of Coal Seam Gas has found that Grainger Energy does not have a technical understanding of the existing geological information in the region, has provided scarce work programs that are not sufficient to effectively explore the large areas covered by the application, and has significantly underestimated the costs of the work program they proposed,” Mr Piccoli said.

“We welcome any action which halts exploration which has a detrimental effect on towns, farming areas and water supplies,” NSW Farmers Junee branch president Martin Honner said.

He said closer scrutiny of coal seam gas explorers was something farmers had been pushing for for a long time.

As part of the changes, future exploration licences will cost $50,000 as opposed to $1000.

“It will help sort out those $20 companies,” Mr Honner said.

Illabo farmer David Carter said the changes were good as the government had been bowing too much to business interests.

However, even if larger gas extraction companies were able to afford the higher licence fee it would not reduce the risks. 

“There’s too many ifs or buts in the (CSG) process,” Mr Carter said.

He said a halt to exploration and an increase in licence fees was good, but more needed to be done, including further independent research on the potential effects of CSG.

“Our water comes from underwater sources – drill in the wrong spot and you can ruin water supplies for a lot of towns,” he said.