The Environment Protection Authority is investigating a 500-litre waste-water spill from a coal seam gas operation at the Pilliga forest in north-western NSW.
The waste water was spilled during a transfer from an assessment well to a holding pond at the Santos gas field near Narrabri on Tuesday, the EPA NSW said in a statement.
"Immediately following the release, the diversion drain was blocked to prevent the produced water leaving the site," it said.
"The produced water was captured and returned to the pond."
An EPA spokeswoman said the spill involved Bibblewindi 2 pond, not the No. 3 pond that is leaking wastewater into the aquifer layer beneath.
The Greens described the waste water as "toxic" and said it contained high levels of salt, as well as dangerous heavy metals such as arsenic, lead and uranium.
Greens MP Jeremy Buckingham called for Santos's operations to be halted.
“Santos promised that their 'new’ management would ensure that the pollution incidents stopped," he said in a statement.
"This latest spill of toxic coal seam gas water is proof that this industry is unsafe no matter who runs it,” Greens MP Jeremy Buckingham said.
“We’ve had multiple spills and contamination incidents with only a dozen pilot wells.
"The risk will be multiplied with 850 gas wells planned for their Narrabri operations."
“Santos’s coal seam gas operations continue to threaten our water resources with yet another spill in its trouble-plagued operations in the Pilliga forest in north-west NSW,” said Wilderness Society Newcastle Campaign Centre Manager Naomi Hogan.
“It’s also difficult to believe that the contaminated waste water has been contained when the Pilliga has been drenched with rain this week, with 60 millimetres falling on Tuesday, the reported day of the spill, and 80 millimetres on Wednesday."
“Santos has a long tragic history of failure in the Pilliga forest, with at least 20 toxic coal seam gas waste water spills including uranium contamination and continuing leaks from evaporation ponds," she said.
“These spills were from just 56 exploration wells, and Santos has plans to drill 850 wells throughout the Pilliga and productive Narrabri farmlands," Ms Hogan said.
Santos described the amount of wastewater spilled as ''very small''.
''There was no impact to any nearby water source and no risk to the environment,'' the energy company said.
NSW Premier Barry O'Farrell this week announced a six-month freeze on processing new coal seam gas exploration licences.