Nova Scotia is moving ahead with legislation that would ban high-volume hydraulic fracturing for onshore oil and gas, but the proposed law also includes an exemption that would allow fracking for testing and research purposes.

Energy Minister Andrew Younger insists the exemption in the Petroleum Resources Act does not provide a loophole for the shale gas industry.

"Anybody could come to the door and ask for whatever they want," Younger said. "What this allows is for cabinet to consider a research project only."

Only three test wells have been hydraulically fracked in Nova Scotia since 2007, all of them in the Kennetcook area, where Denver-based Triangle Petroleum failed to make the natural gas there flow.

When asked if Triangle's test wells would qualify as research under the legislation, Younger said that wasn't the intent.

"That wouldn't be a research project," he said. "This only provides the authority for cabinet to consider (research and testing). That would have to come with a number of conditions."

Barbara Pike, CEO of the Maritimes Energy Association, said there is no loophole.

"It doesn't allow fracking through the back door," said Pike, whose organization represents companies that provide goods and services to the oil and gas industry.

"Research is not exploration drilling. High-volume hydraulic fracturing, however that's defined, this legislation prohibits that activity and that does not send a good message to anyone looking to invest in any energy project in the province."

'Closed for business'

Progressive Conservative Leader Jamie Baillie said the Liberal government has made a huge mistake by banning fracking.

"They're banning new ways of creating jobs in Nova Scotia," he said. "The government is setting out a big 'closed for business' sign to the whole country."

Baillie said the legislation is flawed because it makes no allowances for exploratory drilling and it says nothing about drafting new regulations that will ensure the industry is safe once it is allowed to set up shop in the province.

Younger announced the government's plans to implement a fracking moratorium Sept. 3, soon after a panel of experts submitted a report to the province saying Nova Scotia wasn't ready for hydraulic fracturing.

At that point, Nova Scotia had already had a moratorium in place for two years.

Younger said the legislation makes it clear that commercial fracking will not be allowed without a public debate in the legislature.

"There is always the opportunity for the minister … to lift the moratorium in whole or in part. Again, it would be through a legislative process. It would be a public process through the legislature and the members would get to debate that."

The government plans to draft regulations over the next three months to define what high-volume fracking is and describe the process the government will follow before reconsidering the moratorium.

Younger said the government won't consider lifting the ban until it is convinced fracking can be done safely under a set of stringent new rules and regulations.