A new report says gas exploration in Queensland's Channel Country is likely to be abandoned.

A report by Pegasus Economics, commissioned by environmental lobby group Lock The Gate, claims that gas found in the Lake Eyre and Cooper Basins would cost energy companies millions of dollars to extract and produce.

“Although significant gas resources do exist in the Lake Eyre and Cooper basins, it's just not economically viable to actually extract,” says the report's author, Alistair Davey.

Origin Energy recently announced plans to abandon its 11 exploration permits in the region to focus on the transition to clean energy.

The permits are to be sold on to another energy company or forfeited back to the Queensland government.

Dr Davey says Origin has seen the writing on the wall.

“Large multinational oil and gas companies don't pull out of prospecting projects unless they're fairly confident the resources [aren't] economically viable to extract,” he said.

“Unless there is a significant improvement in extraction technology, or there is another deposit of gas that is cheaper to extract, then it would be extremely difficult to get up and running,” he said.

But the Queensland Resources Council claims gas is still an important part of the transition to renewable energy.

“The demand for gas internationally has grown exponentially with the Ukraine crisis,” the council's chief executive Ian MacFarlane said.

“And the demand for gas in Australia is increasing daily.”

More details are accessible here.