Queensland's independent regulator is best placed to weigh the risks of drilling 55 gas wells near a site contaminated with cyanide and benzene, the state's environment minister says.
Coal seam gas producer Arrow Energy wants to drill "areas in proximity to" the contaminated site of the failed Linc Energy underground coal gasification project on the Darling Downs, west of Brisbane.
Environment Minister Meaghan Scanlon says its application will be decided the same way other proposals are.
"They're decisions by the independent regulator, not by politicians, and I think that's there for a very good reason," she told reporters on Tuesday.
The minister also rejected opposition claims the government tried to cover up contamination of from the Linc site.
"They have put incorrect information on the public record, claiming there's been some sort of alleged cover up. That is incorrect," she said.
"As soon as I was made aware that ... landholders were only advised of the water sampling of the bores on their property, I asked the department to provide the information around the road reserve contamination levels to those landholders."
The Department of Environment said on Sunday it had taken more than 180 groundwater samples from the Linc Energy site, which have tested positive for contaminants including benzene, naphthalene and cyanide.
The department said a further 130 samples from nearby landholder bores taken since 2015 showed they had not been contaminated and landholders were notified as recently as late 2021.
Tests from monitoring bores on the nearby Kummerows Road reserve found benzene and cyanide in 2021.
"The concentration of contaminants is trending down and the likelihood of environmental harm arising is considered very low to negligible," the department said in a statement.
"The department will continue to sample groundwater at the former Linc Energy site and offsite to monitor groundwater quality trends, assess risks and provide those results to relevant landholders."
The department rejected suggestions it had failed its legal obligation to notify landholders about the contamination.
Ms Scanlon said she's asked the department to make water testing data from state properties near the Linc site publicly available.
Brisbane District Court found the company guilty in 2018 of allowing toxic gas to leak from its four underground coal gasification sites near Chinchilla between 2007 and 2013.
The company was slapped with a $4.5 million fine but had already gone into liquidation, meaning it is unlikely to be paid.
Arrow applied for an environmental authority to increase the number of gas wells by 55 and surface area of its nearby Hopeland project in October 2021.
The application has gone through the public notification process and is now at the decision stage.
A "full and robust assessment" of the application and Arrow has been advised of the results of the groundwater monitoring, the DES said.
Arrow has been contacted for comment.