NSW Deputy Premier John Barilaro has slammed a proposed gas exploration project off the Hunter coast, saying the project has 'no upside'.
Federal resources minister Keith Pitt is considering the application by Advent Energy to extend Petroleum Exploration Permit 11 for another five years.
The company argues that its plans to drill for gas represent a "potential solution to substantial gas shortage issues".
But an economic analysis of the project, which would allow exploration to occur within 5.5 kilometers of the coast, has indicated it would be likely to employ less than 100 people and jeopardise thousands of jobs in tourism, recreational and commercial fishing.
Concern about the project's potential environmental and social consequences in communities between Sydney and Newcastle has been growing steadily.
Labor, Liberal and Independent MPs whose electorates cover the project's 4500 square kilometre footprint have also publicly expressed their opposition.
While a final determination is yet to be made, Mr Pitt has argued offshore gas could play a key part in the federal government's gas-fired recovery strategy.
PEP 11 was issued under Commonwealth legislation because the exploration area is in Commonwealth waters.
However, the state government is required to make a recommendation on the project as part of the Commonwealth's assessment.
Mr Barilaro, who is also NSW Minister for Industry and Trade, told the Newcastle Herald that the state government's position had not changed since it declared it would not support applications to extend the life of PEP 11 in 2017.
"I recently met with Keith Pitt and made it very clear that the NSW Government does not support this project. There is no upside to it," Mr Barilaro said.
Federal Opposition Leader Anthony Albanese, flanked by Labor MPs at Terrigal, said he was determined to do everything possible to stop the project.
"This is a project that will impact our coast from Sydney to the Central Coast to Newcastle and Port Stephens," he said on Friday.
"The idea that you would have exploration for oil and gas off this coast is a disaster even if things go as well as they possibly could. But if they don't it could be catastrophic.
"That's why a Labor government that I lead will stop this proposal dead in its tracks.
"I want to make it clear Labor is not opposed to oil and gas exploration. We have supported proposals that have met the appropriate environmental standards that are in appropriate areas. But this proposal is just not on."
In response, Mr Pitt accused Labor of sending mixed messages regarding resources exploration.
"Anthony Albanese and Labor will say one thing in the cities and another in the regions. They just can't be trusted when it comes to supporting the resources industry," he said.
Mr Pitt argued the offshore gas industry has been operating quietly off the Victorian coast for more than 50 years providing jobs and economic opportunities to local communities.
"Australians can be assured the National Offshore Petroleum Safety and Environmental Management Authority provides the strictest possible oversight of the industry ensuring the highest standards," he said.
"I will give this project the full and detailed consideration it deserves when it comes before me, making a decision in the national interest unlike the Labor leader who rolls over at the first test of his leadership."
"Be assured - today it will be Labor cancelling the gas industry, tomorrow it will be closing coal industry in the Hunter Valley and Queensland."
More than 76,000 people have signed a Save Our Coast petition calling for the licence to be extinguished. In addition 25,600 people have contacted their local MP about the issue.
MPs lined up in federal parliament late last year to oppose the project.
"Let's be clear, this permit should never have been granted in the first place. We don't need this project, we don't want this project and if anything goes wrong we will more than regret it," Newcastle MP Sharon Claydon said.
"Australia has plentiful energy resources, we don't need drilling rigs set up within spitting distance of major cities and towns."
Shortland MP Pat Conroy said the project did not stack up.
"And while NSW does need to produce more gas in the short to medium term, there are already projects under development that will produce gas more cheaply and in less sensitive environments without endangering existing industries," he said.
North Sydney MP Trent Zimmerman said Advent Energy's plans were inconsistent with community attitudes towards the environment.
"Drilling and exploring for gas is not and never will be acceptable for the wonderful coastal environment that is our legacy and responsibility to protect and preserve," he said.
In a statement on Friday Liberal Robertson MP Lucy Wicks said: "I will not support anything that could harm our waterways and precious marine life."
Environmental group Save Our Coast said it welcomed Labor's decision to reject PEP11's renewal.
"We are opposed to the project because the risk to our precious marine environment, tourism sector and coastal lifestyle far outweighs any benefits, especially in a time when the entire world is moving away from fossil fuels and transitioning toward renewables," spokesman Tim Heffernan said.
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