Cr Moore wants to take the city off the state's coal-fired electricity grid by 2030 by establishing a network of gas-fired engines in a system known as trigeneration. The plan to extract ''indigenous'' gas from under Australia's most populated area of land is being kept a closely guarded secret, with inner-west residents completely unaware of the prospect of a gas mine in their neighbourhood. Not even the Greens-led Marrickville Council, covering parts of St Peters, was aware of the scheme. Test drilling, due to begin within months, will take place on privately owned land - the site of a former landfill and brick pit owned by a company called Dial A Dump. Macquarie Energy, owned by Apollo Gas, confirmed it had engaged in discussions with the City of Sydney. Drilling is expected to last 60 days. Evidence of the deal to explore underneath Sydney arose in a call for papers by the Greens in the NSW upper house last week.

Greens MLC Cate Faehrmann said the project should be halted until the public had a chance to assess and comment on its impact. ''This approval demonstrates a serious lack of transparency around the approvals process,'' she said. ''Inner-west residents will be horrified to learn that their suburb could be the subject of a full-scale gas extraction operation. ''Gas companies don't undertake exploration just for the sake of it. This could very well be the first step in Sydneysiders having to live with gas wells and drilling operations for some time.'' Coal-seam methane gas mining has been controversial in NSW and internationally for environmental damage caused by the so-called fracking technique used to extract the gas. In fracking, water injected with sand, salt and chemicals is used to fracture rock to force gas to the surface. Thania Kearns, a resident of nearby Campbell Street in St Peters said she was against the digging: ''If it is going to have a nasty effect on our bodies, we should be notified, and we have not heard anything.''

Neighbour Noel Bowden was keeping an open mind. ''I don't have a problem with people looking for alternative energy sources as long as the byproducts aren't too bad,'' Mr Bowden said. Apollo Gas managing director Andrew Mayo said there was no intention to use fracking in Sydney. ''Based on all of our geological knowledge to date, we would definitely not be using the fracking technique,'' he said. ''It is very early days but, should we move into production, we would be using tried and tested surface-to-in-seam drilling technology, which does not require any fracking.'' Mr Mayo said discussions with the City of Sydney were at an early stage.

Cr Moore's spokesman said there was no formal relationship between the City of Sydney and Macquarie Energy. ''That company has made inquiries to the City of Sydney about gas supplies.'' Total Environment Centre director Jeff Angel has joined calls to stop any drilling at St Peters. Loading ''Given the increased sensitivity and concern about the coal-seam methane gas industry, it would be sensible for the council and government to pause and take a good hard look at at the potential pollution problems,'' he said. Follow Environment on Twitter @smhenvironment