Plans for seismic testing to find gas reserves in Bass Strait across an area half the size of Tasmania have been withdrawn after community and environmentalist campaigns.
But the federal government has earned the ire of the Greens for approving new gas production licences in the same area a day later.
International firm TGS proposed testing over 31,500 sq km in the Otway Basin, waters between Victoria and the island state's northwest coast.
The exploration plan sparked protests, while some scientists raised concerns the impact of seismic testing on wildlife, including whales, was not fully understood.
The fishing industry flagged concerns about the impact of seismic testing on rock lobsters. (James Ross/AAP PHOTOS)
Tasmania's peak fishing industry body also voiced opposition, claiming blast zones were adjacent to rock lobster and giant crab fisheries off King Island.
TGS cited competing global priorities for not pursuing the project, which had been scaled back from an initial 77,000sq km.
The company said it had told the national regulator for offshore petroleum and greenhouse gas storage it was withdrawing its environmental plan.
Australian Energy Producers chief executive Samantha McCulloch said TGS's decision was a major blow to Victoria's energy security and would compound looming gas shortfalls in eastern Australia.
However, Australian Marine Conservation Society's Louise Morris said it was a win for grassroots campaigns.
"Thousands of people have turned out to protest in coastal communities," she said.
"More than 30,000 people made submissions to (the regulator) about this controversial project, with the vast majority opposing it.
"Seismic blasting is deadly for marine life and can impact all levels of the food chain, from ... killing zooplankton ... to deafening whales and driving them away from feeding and breeding grounds."
The federal government on Friday granted two production licenses to Beach Energy for the Artisan and La Bella fields off the coast of Victoria.
🚨BREAKING: TGS & SLB-Schlumberger have scrapped plans for seismic blasting in Australian waters after massive community action! � Pygmy blue whale habitats are safe for now, but SPA permits still allow blasting in whale zones. Call on the Australian gov to end these permits. 🌊 — Australian Marine Conservation Society (@AustMarConsSoc) pic.twitter.com/LCtfrZz0lUSeptember 26, 2024
The goal was to boost domestic gas supply and keep downward pressure on energy prices, Resources Minister Madeleine King said.
Greens Senator Peter Whish-Wilson said the announcement was "grossly insensitive to all the local legends who've battled to end new fossil fuels off their coast".
A representative from global energy industry association EnerGeo Alliance previously told AAP there was "no evidence" seismic testing damaged wildlife to the extent conservationists claimed.
Federal Energy Minister Chris Bowen told ABC Radio the Otway Basin was a very sensitive part of the country and a decision had been made on that basis.
Ms Morris said another Otway Basin seismic testing proposal, by data company CGG, was along endangered right whale migration routes.