But the extraction of other types of onshore "unconventional gas" in Gippsland, and all forms in the Otway region, would have only low impacts on water users, the same studies suggest.

The reports were released by the state government on Wednesday alongside its own submission to an inquiry into unconventional gas in Victoria.

The former Napthine government established a moratorium on exploration and drilling in Victoria, which the Andrews government says it will maintain while the inquiry is under way.

A TINY INDUSTRY IN VICTORIA, BUT MUCH RURAL ANGST

A human sign is formed by protesters at Seaspray, Victoria against coal seam gas in 2013. Photo: Cameron Cope.

The unconventional gas industry – which includes shale, tight and coal seam gas – is substantial in NSW and Queensland, but there has been no commercial extraction in Victoria and only limited exploration.

The government's submission says there are few reliable estimates of the Victorian resource.

But there is still significant angst in rural Victoria about the potential impact of any industry on farming and water. Sixty-two communities have declared themselves coal- and gas-free – a symbolic gesture indicating residents do not support new drilling.

A broader government community consultation this year reported 29 per cent of people supported the industry, whereas 27 per cent opposed and 44 per cent were undecided.

THE IMPACT ON WATER IN GIPPSLAND AND OTWAY REGION

The studies modelled the potential groundwater water impacts of developing coal seam, shale and tight gas across two likely regions – Gippsland and the Otway region.

The highest impact on water users and the environment was found in Gippsland from coal seam gas development, with more than a 15-metre decline in the water table modelled. Over time, water pumping to extract gas would decrease the pressure in aquifers, which could lead to lower flows and reduced water quality.

"Given the close proximity of the coal seam gas resources to major regional aquifers, coal seam gas has the most potential to impact on water users and ecosystems," the Gippsland synthesis report says.

In the most affected areas south-west of Sale, the work found 202 licences for groundwater use and 243 for surface water, which would include farmers, irrigators and water authorities supplying towns.

But the report adds that the impact on these water users could be mitigated by measures such as limiting the scale and timing of gas extraction.

For tight and shale gas in Gippsland, and for for all three types of unconventional gas in the Otway region, the reviews find that the likely impacts on water users and the environment would be low, with the water table expected to fall by less than two metres.

It was also found  the potential for chemical contamination of groundwater from "fracking" to be low in both regions.

Executive director of water resources at the state environment department, Dr Sharon Davis, described the studies as a "first pass" regional assessment. She said the work was not in response to any specific project proposal.

STATE GOVERNMENT SAYS MUCH IS STILL UNKNOWN

The government's broader submission makes no statement about whether an industry should be allowed to restart exploration in the state or not.

It points to a large number of Victoria data gaps, in particular the size of the potential resource, what role it could play in the state's energy mix and what impacts it may have on human health. It also points to significant greenhouse gas emissions that may escape from extracting gas, but says this is poorly understood.

In response, Cam Walker from Friends of the Earth said the evidence of water contamination from unconventional gas extraction was growing throughout the world.

"The government needs to get off the fence on the issues of new coal and gas and place an outright ban on all new fossil fuel developments in Victoria," he said.

The gas industry lobby group, the Australian Petroleum Production and Exploration Association, said in its submission that the risks of unconventional gas could be managed with robust rules and monitoring, and there were other regimes in place in Australia that Victoria could draw on.