NT fracking ban lifted

* Fracking to be allowed with tight regulation -local govt * Ends moratorium imposed in 2016 * "Frack-free" protected areas cover 49 pct of state (Adds comment, detail) SYDNEY, April 17 (Reuters) - The government of Australia's Northern Territory on Tuesday said it would allow gas extraction via fracking, ending a moratorium it imposed almost two years ago amid concerns the drilling method could damage the environment. The Northern Territory (NT), a 1.4 million sq km (540,000 sq miles) expanse extending from the centre of Australia to its northern coastline, had banned hydraulic fracturing, or fracking, in September, 2016 and commissioned a study of the environmental, social and economic risks of the extraction process. The government accepted the inquiry's conclusion, published in March, that risks from environmental damage and groundwater contamination could be managed if the industry was tightly regulated. "The risks from fracking can be reduced to acceptable levels," NT Chief Minister Michael Gunner told reporters in the Territory's capital, Darwin. "The moratorium on fracking in the Northern Territory will be lifted, with strict new laws to be in place before exploration or production can occur," he said, adding that 49 percent of the Territory will remain "frack-free", including national parks and reserves. Drillers will need to make wells compliant with new design codes and present plans for decommissioning and rehabilitation before production begins, the Northern Territory government said in a statement. Gas has become a hot political issue in Australia as soaring domestic prices are hurting households and threatening jobs at manufacturers as well as driving up electricity prices. The national government sees fracking as a way to help ease some of those concerns, but environmentalists and some scientists are opposed to it, urging local and national officials to consider installing more renewable energy capacity. The NT was one of five Australian provinces to restrict fracking, with the state of Victoria having banned it as well as shale and coal-seam gas exploration, while New South Wales, Western Australia and Tasmania have moratoriums. "This decision ... is a betrayal of the science and of the significant community opposition which has been expressed over the last few years," said Lauren Mellor, a spokeswoman for environmental group Frack Free NT Alliance. Matthew Doman, a director at the Australian Petroleum Production and Exploration Association said lifting the moratorium was "welcome" news for the industry. Written By: Reuters