The NSW environment regulator has revealed water for livestock is being extracted from an aquifer at a point less than five kilometres from where it was contaminated by a controversial coal seam gas project in the Pilliga Forest.

The Environment Protection Authority has not told the user, as it says taking water from the aquifer so far from the point of contamination poses "almost no risk".

Setback for industry: The coal seam gas project in the Pilliga Forest has contaminated water for nearby livestock. Credit:Dean Sewell

But the disclosure undermines claims by the company operating the gas field, Santos, that the affected ground water is not an aquifer but a "shallow perch layer" beneath the pond.

Santos was fined $1500 by the EPA on February 11 after an investigation revealed the holding pond for waste water from coal seam gas wells had leaked, affecting an aquifer with elevated levels of uranium, arsenic and other metals.