A representative of the Department of Planning has conceded the Narrabri Gas Project is probably too small to drive down gas prices at Monday's public hearing into the Narrabri Gas Project.
On the first day of the Independent Planning Commission's (IPC) hearing into the project, Department of Planning, Industry and Environment (DPIE) Executive Director of Resource Assessments David Kitto said the $3.6 billion scheme is a relatively "small gas project".
"I think it would be fair to say that we are not saying in our assessment that the Narrabri Gas Project would reduce gas prices," he told the inquiry.
The IPC will hear seven days worth of speakers in favor and against the scheme, which would supply enough gas for about half of NSW's domestic use over 20 years.
Mr Kitto was the first speaker scheduled to address the three Commissioners. In total 35 speakers are slated to have their say on Monday.
In June DPIE recommended approving the gas project, which would sink 850 wells in an area around and within the Pilliga forest.
Mr Kitto, who represented the department to the IPC, was grilled by its counsel Steve O'Connor and spoke for well over his scheduled time of 60 minutes.
Asked by Mr O'Connor to substantiate his claim gas prices had made local business less competitive he said he didn't have any specific examples of bankrupted businesses "off the tip of my tongue".
Mr O'Connor later asked him to explain how the project would put downward pressure on gas prices
"The operation of the gas market is complex and I'm not going to try to be an expert on how it operates," he replied.
He said his understanding of the market dynamics was that a lack of competition, bad pipeline connectivity, and lack of supply had all contributed to the problem.
He said the scheme probably would not be big enough to put a dent in prices directly but would help stimulate upgrade of the pipeline network, among other benefits.
NSW Farmer's President James Jackson, who is scheduled to speak on the project on Thursday, has repeatedly said farmers have told him they're concerned the proposed 385-well mine's would be a threat to ground water.
Mr Kitto rejected those concerns, saying 95 per cent of the development will be between 800 and 1200m deep, far deeper than ordinary water aquifers. Even the remaining 5 per cent in shallower coal seams are at least 350m below registered bores, he said.
"We've thought long and hard about this. We don't think the precautionary principle is triggered in this instance," he said.
The public hearing continues.
On Monday, the IPC will also hear from Santos CEO Kevin Gallagher, Narrabri Mayor Cathy Redding and Gomeroi Traditional Custodians Dolly Talbott and Cathy Craigie among others.
