Macfarlane: We need to extract 'every molecule of gas'

THE newly-minted Federal Government is moving swiftly to dispel any hint its push to speed up offshore gas development could be applied to its counterparts on terra firma.

Trade Minister Ian Macfarlane was quoted in national media on Wednesday warning those holding lucrative offshore gas and oil leases could be given an ultimatum to "use it or lose it" - speed up plans for development or risk having to relinquish their leases.

Speaking about offshore projects specifically, the Minister said: "We've got to make sure that every molecule of gas that can come out of the ground does so. Provided we've got the environmental approvals right, we should develop everything we can".

Mr Macfarlane's department on Wednesday confirmed there were no plans to "come in over the head" of states to force action on coal or gas projects.

A spokeswoman for the new minister said that power would remain in the hands of each state or territory.

Earlier this year, Mr Macfarlane indicated that once in government, he would encourage New South Wales to speed up its development of gas reserves.

According to the Minister's office, this would again be through working alongside the state's government.