The gas industry says the process is long established in Australia and completely safe. Leaked confidential company documents written for a Sydney gas drilling company, Apex Energy NL, detail plans to extract coal seam gas from old coalmines along the edge of Lake Burragorang, the reservoir at Warragamba Dam. Some gas can be extracted without fracking to stimulate the release of gas but ''Apex expects that commercial levels of production will not be met without such seam stimulation,'' the documents say. Environment groups say fracking should be banned from around water sources. ''No one else would be allowed to enter the area with hundreds of chemicals and pump them into the ground. The catchment manager would throw the book at them,'' said Jeff Angel, the executive director of the Total Environment Centre.

He is calling for a moratorium on new coal seam gas mining in NSW until a transparent, state-wide strategy is developed. ''The miners deserve no special privileges, especially since no mining operation is fail-safe … Sydney's drinking water supply must have absolute protection.'' US studies have shown that chemicals used during fracking can contaminate groundwater, and the US Environmental Protection Agency is investigating links between drinking water impurities in heavily mined districts and health problems. A full report is to be produced in 2012. The gas mining industry says there are no cases in the US of human health being affected by fracking. Apex told the Herald its ''preferred strategy is to avoid hydraulic fracturing for operational reasons and utilise alternative methods of exploiting the coal seam methane''.

It has already received approval to drill 15 test wells along the Illawarra escarpment. The company's description of hydraulic fracturing in its Illawarra document says the process ''involves the injection of more than a million gallons of water, sand and chemicals at high pressure down and across into horizontally drilled wells as far as 10,000 feet below the surface''. But this week the company said: ''Apex's strategy is to utilise the existing fracturing caused by strata relaxation resulting from coalmining operations rather than hydraulic fracturing. This will be beneficial to the environment.'' According to a timeline developed by the company, a part 3A planning application process for the Warragamba Dam drilling process will start at the end of March and be completed 33 weeks and four days later. The drilling of gas production wells is to start in January 2012.

The NSW Planning Department said it was not aware of Apex Energy's intention to mine alongside Lake Burragorang, and it had granted approval for the Illawarra drilling sites on the basis that the drilling would take place only to test the viability of commercial-scale gas mining. ''Nonetheless, the department recognises the need to carefully consider all potential impacts that may arise from a particular project, including from the specific techniques to be employed,'' a spokesman said. ''As such, the department rigorously assesses all applications it receives on a case-by-case basis on their merits.'' Fracking techniques are already being used at another coal seam gas operation, at Camden, south of Sydney. It is run jointly by AGL and Sydney Gas, which holds many other petroleum exploration licences around the edges of the city.

Loading During its most recent reporting period, 2008-09, the plant operated safely though a few minor spills of hydrocarbons were recorded. ''All spills and leaks were of minor, non-reportable quantity and cleaned up immediately to prevent off-site impact,'' the project's annual environmental update said.