In an eagerly awaited report made public on Tuesday night following 19 months of investigations, NSW Chief Scientist Mary O'Kane said the technical challenges and risks posed by the coal seam gas industry could be addressed by limiting extraction to areas where the geology and land use were appropriate.

Data from industry operations should be collated in a central repository to allow better interrogation, and laws should be supported by a transparent and effective compliance and reporting regime, the report said.

The state government commissioned the landmark report in February last year, amid fierce opposition to the coal seam gas industry from farmers and communities concerned about the effect on water and land.

Last week Premier Mike Baird said the report would be "the line in the sand" on how the industry operates in NSW. The government will finalise regulations for coal seam gas activity once it has considered the report.

The review was intended to diffuse public fears by identifying gaps in the management of coal seam gas activities, particularly the risk to human health, the environment and water catchments.

Professor O'Kane conceded that as technologies were applied in new regions "there could be unexpected events … or even accidents".

"It is inevitable that the CSG industry will have some unintended consequences, including as the result of accidents, human error and natural disasters," she wrote.

"Industry, government and the community need to work together to plan adequately to mitigate such risks."

The review found that consultation and the provision of information to the community could be "significantly improved" but many people would remain opposed to the industry "under any conditions".

It recommended that the government "establish a world-class regime" for coal seam gas extraction and ensure good communication about the industry's activities.

Communities should have strengthened protections and benefits, including compensation for landholders and others badly affected by extraction activity.

The government should also establish a standing body of experts to advise on the industry and consider a robust policy of insurance and environmental risk coverage of the industry, it said.

Opponents of coal seam gas say fracking, a drilling technique that forces gas to the surface by pumping water, sand and chemicals underground, can cause gas leaks, damage aquifers and pollute water with toxic chemicals.

In November last year, the government put an immediate hold on coal seam gas exploration and mining in the Sydney drinking water catchment areas, pending the review's findings.

It is unclear whether that and other bans, such as in buffer zones around residential areas and in horse breeding and wine producing regions, will be revised after the government has digested the report.

Gas company Metgasco has also suspended the operation of its Clarence Moreton exploration in northern NSW, but has previously indicated it will resume operations once the regulatory environment is clarified.

Before the report's release on Tuesday, Metgasco chief executive Peter Henderson said the firm was "keen to restart its exploration and development activities" in the Northern Rivers.

Lock the Gate Alliance spokeswoman Carmel Flint, whose organisation is opposed to the coal seam gas development, said experience in Queensland showed serious risks were not addressed before the industry was allowed to expand.

She called on the NSW government to "apply caution and ensure major projects aren't approved without several years of baseline data" which would measure original environmental conditions before mining starts.