Queensland's environment department is confident cancer-causing chemicals found in Arrow Energy bores weren't because of coal seam gas (CSG) extraction.
Traces of benzene, toluene and xylene (BTEX) have been found during routine tests of five bores used for monitoring around the company's CSG dams at the Tipton West and Daandine fields, 25 kilometres from Dalby.
The BTEX chemicals were outlawed last October in Queensland for use in fracking, a process used in the CSG industry to split rock seams and extract methane.
BTEX can be naturally occurring but can also be found in a range of oil-based products.
Arrow Energy said the shallow monitoring bores have no connection to gas production and the aquifer is not used for stock or domestic water.
The Department of Environment and Resource Management (DERM) on Monday said the chemicals found were "most likely" from a glue or petroleum-based product used in construction.
"The low detection levels, the variability of the results and the fact that other close monitoring sites and the CSG associated water storages themselves had no detectable levels of BTEX indicate that the source of the readings is most likely from remnants of a glue, grease or oil used in the on-site construction of the monitoring holes," a DERM spokesperson told AAP.
The department also said it does not believe the results indicate the contamination of groundwater or the land surface as a result of CSG extraction activities and, based on the data provided, do not pose a threat to the environment or human health.
It is the second time the company has had a BTEX scare.
In November last year, the chemicals were found in three of its wells at Moranbah in central Queensland.
Queensland Premier Anna Bligh heralded the latest detection of the chemicals as proof the screening process was working, adding that BTEX laws don't need to be expanded in the CSG industry.
"Any level of these chemicals is picked up and made public," Ms Bligh told reporters in the Torres Strait.
Meanwhile, the premier also criticised mining magnate Clive Palmer, who at the weekend said the Australian CSG workers were not as well trained as their overseas counterparts.
Mr Palmer also said the fledgling industry risked contaminating the water table if it wasn't operated correctly.
Ms Bligh said it was obvious a coalminer would be critical of another energy industry.
Mr Palmer on Monday issued a statement to clarify his comments, saying a properly regulated CSG industry was "one of the keys to securing Australia's energy future and thousands of jobs".
"I have no doubt the majority of CSG operators will be responsible in this space," he said.
"The government needs to ensure there are clear safety and environmental plans in place."
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