Central Coast based company CEEMAC have applied for the licence with the NSW Trade and Investment's Resources and Energy Division but Mr Grant said there are no guarantees the application will be granted and it will be thoroughly investigated before a ruling is made.

"The minister for Resources and Energy has the power to approve or refuse PEL applications and community consultation is a huge part of those deliberations," Mr Grant said.

"I will ensure no decisions are made until the community is consulted and that any applications are in the interests of our economic, environmental and social interests. The NSW government has introduced and delivered the strictest regulations around CSG activity in the country."

Mr Grant hit back at Greens MP Jeremy Buckingham, who has been critical of the National Party's response to coal seam gas, accusing him of "scaremongering" on the issue.

"I'm not sure if there is anyone in Parliament more irrelevant or with less credibility than him - one only needs to look at his Parliamentary Hansard record to see he makes no valid points on regional or agricultural issues, among his ill-informed rants about the coal seam gas industry," Mr Grant said.

"As the NSW Greens' self-proclaimed spokesperson on mining and agriculture, he should be accurately speaking about and focusing on these important issues."

The chief operating officer of the Australian Petroleum Production & Exploration Association, Paul Fennelly, also took aim at Mr Buckingham's suggestion that farmers should lock their gates to gas companies.

"It's instructive The Greens and the Lock the Gate Alliance have already embarked on a campaign of fear and misinformation in the central west about natural gas from coal seams," he said.

"This despite the fact there is no indication the central west represents a high-value gas resource in NSW. Only exploration could determine that potential.

"We are urging farmers in particular to be very wary of organisations that are hell bent on stopping resource development, jobs and another wave of economic investment."

NSW Farmers Association president Fiona Simson said her organisation aren't jumping to condemn coal seam gas but they want to see it done properly. She questioned the actions of the state government signing a memorandum of understanding with Santos for a multi-billion dollar coal seam gas project at Narrabri, despite the project not yet receiving approval.

"NSW Farmers is not opposed to coal seam gas (CSG) activity in NSW. Rather, we insist that CSG is produced with caution; strategically, and never at the expense of our agricultural land and water," Ms Simson said.

"We advocate for the application of world class science throughout the entire process; from exploration to production, and the rigorous monitoring of the environment both during and well after the actual CSG extraction."