The Northern Territory government has accused the federal environment minister of putting the "handbrake" on gas extraction in the Beetaloo Basin.
Tanya Plibersek on Saturday announced an inquiry into the impact of gas exploration on water resources in the basin.
The contentious project, 500km south of Darwin, has been subjected to several NT environmental assessments, but has now been swept up in a raft of federal nature and water reforms.
The previous NT government approved the fracking in the Beetaloo Basin last year and signed a deal with Tamboran Resources in May to buy gas from the basin.
The NT Lands Planning and Environment Minster Josh Burgoyne said the industry was already "well regulated" in the territory.
"The federal Labor government has no reason to put a handbrake on developing the Beetaloo Basin," he said on Monday.
"Developing our onshore gas industry in the Beetaloo Basin is an important part of rebuilding the Northern Territory economy."
It follows comments by NT Treasurer Bill Yan, who said the Beetaloo was essential in dealing with the $11 billion debt left by the Labor government.
Mr Burgoyne said hydraulic fracking in the region could be done safely.
"Our regulatory systems and processes are informed by the best available science, and the Beetaloo has been subject to extensive environmental and scientific studies," he said.
"It's now time to move forward with these nationally important projects."
But Greens senator Sarah Hanson-Young said the inquiry did not go far enough.
"Tamboran (Resources Corporation) has been clear they plan to start fracking any day now - without any environmental or water assessment," Senator Hanson-Young said.
"These gas cowboys need to be reined in."
She said Ms Plibersek had the power to halt fracking by using the water trigger legislation, a reform proposed by Labor that ensures coal seam gas extraction is subjected to more rigorous assessment of surface and groundwater impacts.
In April 2023 NT Labor released the Strategic Regional Environmental and Baseline Assessment, a multi-million dollar report into the potential impacts of fracking in the Beetaloo Basin.
The widely criticised report was then used to green-light onshore coal seam gas extraction following a five year moratorium on the industry.
