Victoria must develop a coal seam gas industry to help put downward pressure on the domestic cost of gas, former Howard government minister Peter Reith says.
Mr Reith chaired the state government's taskforce on the eastern gas market and has handed over his report on developing CSG Victoria on Friday.
Premier Denis Napthine says the government will consider the report, but is in no hurry to pursue CSG.
But Mr Reith says the issue is urgent.
"There's a rush because prices are already going up, let's not kid ourselves," he told ABC radio.
"This is going to be a pretty big burden on Victorian manufacturing, it's another load of cost on manufacturing which is already under a hell of a lot of pressure."
"(Prices) are going to go up regardless, the question is are we going to improve supply so as to put some downward pressure on those prices."
Mr Reith said claims that CSG mining - also known as fracking - was dangerous were wrong.
He said the CSG industry had revitalised manufacturing and jobs in the United States.
"People are worried about the issues, of course they are," he said.
"But let's get a few facts on the table ... in the US, with over 1.5 million operations of fracking, there is not one known confirmed case of contamination of water from fracking.
"I just think the whole thing is grossly put out of all whack in terms of the impact likely to be in Victoria."
Opposition leader Daniel Andrews said Mr Reith's inquiry was a "sham" as it did not consult widely enough.
Mr Andrews said there should be a moratorium on CSG until a proper consultation was conducted.
"This has not been a good process, I don't think there's broad community support or consensus for coal seam gas extraction," he told ABC radio.
