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Qld govt to life shale oil mining ban

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February 13 2013, 07:49AM

The Queensland government will open up a major new revenue stream by lifting a ban on shale oil mining in the state.

About 90 per cent of Australia's known shale oil reserves are in Queensland.

But the industry has been in limbo since 2008 after a 20-year moratorium was placed over a major deposit in north Queensland.

Natural Resources Minister Andrew Cripps on Wednesday is expected to announce plans to lift the ban, a move likely to anger environmentalists, The Courier-Mail reports.

The newspaper says the change will allow one operator, Queensland Energy Resources, to progress its trial plant at Gladstone and seek approval for a full commercial operation.

But the government will maintain, until 2028, the moratorium on the controversial deposit near Proserpine in north Queensland, which critics claim is too close to the coastline and sensitive wetlands.

Mr Cripps said the industry could provide huge economic benefits to Queensland, with the current resource considered capable of producing 22 billion barrels of oil.

"As the world supply of conventional crude oil diminishes, there are strong prospects for oil shale to become the next major source of liquid fuel supplies in Australia," he told the newspaper.

Environment Minister Andrew Powell said approvals would be made on a case-by-case basis, and proponents will have to show they can meet high environmental standards.

Shale oil is a sedimentary rock that can be mined, crushed, heated and processed, or heated in place to produce petroleum and other fuels.