Coal seam gas is seen by some as a "cleaner" energy source for the future but many people in the Illawarra are not aware of the active exploration project in the area.

Shoalhaven councillors expressed alarm last week when they discovered Planet Gas and Leichhardt Resources had an exploration which covered the area from Shellharbour to Nowra and west to Berrima.

Councillor Amanda Findley - who is running for the Greens in the NSW seat of South Coast - said the first many councillors knew of the project was when she told them last week.

"It's inexcusable the community doesn't know - but that's the modus operandi of many government departments," she said.

The Mercury reported on Leichhardt and Planet's exploration licence last month.

Meanwhile, Planet Gas wants to conduct exploratory drilling on properties outside Mittagong, with the Wingecarribee Shire Council opposed to it.

Planet Gas has not responded to questions from the Mercury.

Several Illawarra residents travelled to Sydney yesterday for a protest rally against coal seam gas at Martin Place, and the Country Women's Association hosted a community meeting on coal seam gas at Stanwell Park on Saturday.

Much of the concern over coal seam gas surrounds the controversial practice of hydraulic fracturing, or "fracking", where water, sand and chemicals are blasted into the seam to break up the coal and release the gas. The "BTEX" chemicals can include the carcinogen benzene.

The practice has been blamed for contaminating water supplies in Queensland and the United States, and the threat to water supplies is at the heart of most residents' concerns.

The issue has touched the NSW election campaign. Labor last week announced it would ban the use of BTEX chemicals if re-elected, set up exclusion zones in unspecified areas, and ban exploration activities near waterways which adjoin national parks.

The Greens have called for a special commission of inquiry into the coal seam gas industry and its approvals by the Government.

A new group called Stop CSG Illawarra was formed a week ago to campaign on the issue.