Australia's Victoria state bans coal seam gas "fracking"

PERTH (Reuters) - Australia's southeastern state of Victoria on Friday put a hold on hydraulic fracturing, a technique used to produce hard-to-reach gas deposits, and a halt on new coal seam gas exploration licenses.

The moratorium would remain until a national regulatory framework for regulating coal seam gas and hydraulic fracturing was put in place by Australia's federal government, state energy and resources minister Michael O'Brien said in a statement.

The move makes Victoria the latest of several countries and states globally, including Australia's New South Wales state, to ban fracking due to environmental concerns. Britain and China recently opened the door to the mining technique.

Hydraulic fracturing, also known as "fracking," is a process in which pressurized water, chemicals and sand are pumped underground to release gas trapped in rock formations, and has been opposed by landowners and environmentalists who say the process can pollute water supplies.

Australia has a booming coal seam gas industry with around $50 billion worth of projects underway in the country's northeastern Queensland state, but exploration for coal seam gas is in the very early stages in Victoria, and the state currently has no coal seam gas production.

The Australian Petroleum Production & Exploration, which represents the coal seam gas industry, said the policy would send "the wrong message to investors." (Reporting by Rebekah Kebede; Editing by Richard Pullin)