South Australia’s Liberal opposition is putting investment at risk by calling an inquiry into fracking, oil and gas producer Santos says.
The Liberals are set to establish a parliamentary select committee to examine the effects of fracking in the state's south east, saying it will ease concerns about the practice.
In response, the state Labor government and industry groups have rubbished the proposed inquiry, saying it would put billions of dollars of investment at risk.
Santos' vice-president of Eastern Australia, James Baulderstone, added to the criticism, saying the Liberals were ignoring the company's long track record of safe operations in SA.
"The South Australian gas industry has been built on strong bipartisan political support, which in turn has given investors confidence to invest in this state," he said in a statement. "If this inquiry is captured by political opportunists, it could seriously erode that confidence."
While Santos has no direct operations in the south east, the company was concerned at the "wider implications" of the proposed inquiry, Baulderstone said.
The SA Chamber of Mines and Energy said the business community should be alarmed that the Liberals were playing into the hands of "hardcore Green activists."
The Liberals rejected an earlier fracking inquiry proposed by the Greens, saying it was too broad.
Opposition resources spokesman Dan van Holst Pellekaan told AAP the Liberals' inquiry would clear up scaremongering by the environmental lobby.
The Liberals, however, look unlikely to secure crossbench support in the lower house, with independent minister Geoff Brock saying an inquiry would send the wrong message to the resources sector.
The Liberals have claimed Martin Hamilton-Smith, who defected from the Liberals to become an independent cabinet minister in the Labor government, was the original architect of their fracking policy. Hamilton-Smith declined comment.
Fracking involves injecting large quantities of water and chemicals into gas reservoirs, while materials like sand are pumped in to keep the fractures open and allow the gas to flow.
More than 700 wells have been safely fracked since 1969, according to the government.