The council unanimously passed a motion last week opposing the controversial method of extracting methane gas from coal seams using processes such as "fracking", which can involve using toxic chemicals to extract the gas.

Councillor Larry Whipper's motion outlined seven points opposing coal-seam gas exploration.

It re-affirmed the council's opposition to longwall mining, which is being proposed for Sutton Forest, and supported the NSW Farmers Federation's calls for a moratorium on all coal-seam gas exploration.

Planet Gas has signed a deal to explore a coal-seam gas lease, owned by Leichhardt Resources, which covers the Shoalhaven and Highlands.

Cr Whipper said coal-seam gas exploration was the "new environmental cancer" and fracking was "incredibly dangerous" and put water catchments at risk.

Large projects such as mining are determined by the State Government under Part 3a of the Planning Act and not local councils, but Cr Whipper said the motion wasn't symbolic.

"We need to engage the State Government through the Local Government Association and put pressure on Keneally," he said.

"It should be taken to the federal level.

"It's becoming a national crisis."

Mining companies were "running rampant" with greed and Cr Whipper said it was time to stand together.

"It's bloody serious and not just symbolic. We need to make noise to the Federal Government if the State Government won't listen," he said.

The motion comes as NSW Auditor General Peter Achterstraat said NSW taxpayers had been ripped off $8 million in mining royalties over the past five years.

Collection is based on "self-assessment", a process the Greens have heavily criticised.

Coal accounted for 95 per cent of the state's royalty payments.