The NSW government announced on Wednesday it was giving gas companies the green light to explore two regions in the state's far west with a total area greater than Kuwait.
It's the first such land release in the state in more than a decade, aimed at combating forecast gas shortfalls across the east coast in coming years.
The fee to apply for an exploration licence will also be slashed from $50,000 to $1000 to attract investment.
Bancannia and Pondie Range troughs, north of Broken Hill, were initially earmarked for potential exploration in 2021 by NSW's then-coalition government, but ultimately were not touched.
Releasing them to miners now contradicts the imperative to phase out fossil fuels and will take years to bear fruit for households and businesses, Nature Conservation Council climate campaigner Jacqui Mills said.
"It'll take a decade for these projects to be up and running. In that time, we'll have more renewables in the system including pumped hydro to provide firmed energy to the grid," she said.
"The Net Zero Commission has said NSW is not on track to meet emission reduction targets and we need to reduce our dependence on gas."
But a steady gas supply is necessary to back up renewables which have natural unpredictabilities, NSW Premier Chris Minns told reporters on Wednesday.
"We're doing an enormous amount of heavy lifting when it comes to renewable energy", he said.
"However ... we will need gas in the system when the wind isn't blowing and the sun isn't shining. That's just the reality of it."
Lock the Gate, an anti-fossil fuels group, says the government should instead invest in emerging technology like electrification and heat pumps which would make gas redundant.
High gas prices also mean new extraction projects would be unlikely to put a lid on electrical bills, the group's clean industry coordinator Harriet Kater said.
NSW aims to cut emissions to 70 per cent of 2005 levels by 2035 but this can only be achieved through further decarbonisation of the state's power supply, the independent Net Zero Commission says.
Progress towards emissions targets for the next two decades has also been under scrutiny since coal mine expansions were locked in for another 25 years.
But supporters of the expansion of gas exploration say without boosting onshore production, emissions would simply be generated overseas.
"Energy-intensive manufacturers across NSW depend on reliable and affordable gas. Without it, jobs go offshore and emissions go with them," Australian Workers Union NSW secretary Tony Callinan said.
The new gas fields are set to complement NSW's Narrabri gas project, which survived fierce community opposition and a lengthy sojourn in the Native Title Tribunal to be conditionally approved in May 2025, but is yet to start drilling.
14°C