Responding to the inquiry’s recommendation that fraccing be banned until an official review of the chemicals used was completed, the government said it would stick with its decision to allow fraccing to proceed “with careful management and strict regulatory oversight”

The government noted it had banned evaporation ponds, but said “temporary large storage areas” were necessary for produced water and that it was developing best-practice policies through an inter-departmental coal seam gas working group.

The government agreed with a recommendation that CSG operators reimburse landholders for “reasonable” costs from access agreement reviews and said it would be amending the Petroleum Act.

It rejected the inquiry’s call for a state domestic gas reservation policy, saying such a policy was unnecessary as there were no plans to export NSW gas.

“Additionally, implementing a reservation policy as the industry is trying to develop will be a disincentive to investment and add to project development costs,” the response said.

The inquiry’s final recommendation was that NSW stop issuing production licenses “until a comprehensive framework for the regulation of the coal seam gas industry is implemented.”

The government responded that a comprehensive framework already existed in the form of its strategic regional land use policy.

NSW Greens MP Jeremy Buckingham, who was deputy chairman of the Legislative Council standing committee that held the inquiry, told the ABC the government had ignored the recommendations.

"It's a rehash of what the government announced with its strategic regional land-use plans and it goes no way to addressing in full the very strong recommendations of the inquiry," he reportedly said.

"Many of the elements of the inquiry remain unaddressed and it's just another indication that this government is green-lighting coal seam gas in the Northern Rivers and across NSW."

The government’s full response is available online here .