The controversial $3.6bn Narrabri gas project that would drill up to 850 wells in grazing land and forest in northern New South Wales has been given environmental approval by the Morrison government.
Environment minister Sussan Ley said on Tuesday she was satisfied the biodiversity of the Pilliga forest would be safeguarded by conditions set for the project, proposed by Santos.
Santos said the conditions were in line with the 134 imposed by the NSW Independent Planning Commission (IPC), which approved the project in September.
Related: NSW planning commission approves $3.6bn Narrabri gas project in state’s north
The approval is the final major regulatory hurdle for the project, but Santos has still not made a decision to finance the development.
Environmentalists and critics vowed to keep fighting the project which, they said, would threaten groundwater and further fuel the climate crisis.
Santos said Tuesday it would now start a 12 to 18-month appraisal program before making a final investment decision.
Under the plans, Santos would drill up to 850 wells of more than a kilometre deep to extract up to 200 terajoules of gas a day for domestic use for 20 years – equivalent to 50% of NSW demand. The project would impact 1,000 hectares of land across a 95,000-hectare project area.
Ley said in a statement that conditions included an “early-warning system” for any impacts on groundwater, powers to force work to stop and a chemical risk assessment.
Australia’s environment laws do not require the minister to take into account the climate change impacts of burning fossil fuels extracted from developments.
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Santos chief executive Kevin Gallagher said the company was “excited” at the prospect of developing the project, adding: “As the economy recovers from Covid-19, game-changing projects like Narrabri are critical to creating jobs, driving investment, turbo-charging regional development and delivering more competitive energy prices.”
The NSW government also released a statement backing the gas industry, saying it would investigate the Narrabri area as a location for a special precinct that would streamline further approvals.
Deputy premier John Barilaro said: “We want to create a thriving energy hub in Narrabri focused on value-added production and manufacturing to power long-term job opportunities across the region.”
Analysts have said most of the east coast’s lowest priced gas had already been exploited, and that new developments would not deliver low gas prices seen previously.
Related: Narrabri gas project: do we need it and what’s at stake for Australia’s environment?
Greens leader Adam Bandt said gas was as dirty for the climate as coal, and that by “cracking open the Narrabri gas wells, Sussan Ley is opening the floodgates for decades of climate damage, while locking Australia’s industries into a fuel that has passed its use-by date.”
Climate scientist Prof Will Steffen, of the Climate Council, said: “In greenlighting the Narrabri gas project, the federal government shows a lack of care for the families, farmers, and wildlife who need a safe climate to survive.
“Australians have suffered through a horror year of scorching heatwaves, devastating droughts and unprecedented bushfires. This is the cost of continuing to mine and burn gas and other fossil fuels.”
Environment group Lock the Gate Alliance said in a statement the approval would strengthen the resolve of the project’s opponents who would continue to fight against the project, which it said did not have broad community support.
Lock the Gate Alliance spokeswoman Naomi Hogan said the project would face “determined opposition from local people who will do everything they can to protect water and stop this gas field going ahead.”
She said: “Renewable energy is the cheapest, most efficient, and cleanest way for people to power their homes and businesses. Gas, particularly expensive and polluting coal seam gas like that at Narrabri, is not wanted or needed.
“It’s easier to pull the wool over the eyes of politicians than it will be for Santos to convince investors to burn their money on this polluting gas field.”
In a statement, Gomeroi traditional owner Polly Cutmore said: “This is just another example of attempted, devastating colonialism, only now instead of hiding behind the fence, we’re at the table.
“We are coordinating. Gomeroi people are coming together, the whole Gomeroi nation are talking about the destruction of the gas mining, especially to the Great Artesian Basin.”
Richie Merzian, climate and energy director at progressive thinktank the Australia Institute, said the approval “not only endangers water and the environment, but will permanently lock NSW manufacturers into high gas prices”.