COAL seam gas may no longer be a problem for the south-west.
At press time, Premier Barry O'Farrell was due to make a major announcement about the future of CSG mining in the state.
It is believed a two kilometre buffer between mining wells and residential areas will be imposed.
The decision was made during a cabinet meeting on Monday night.
CSG mining was also a topic discussed at last week's Liverpool Chamber of Commerce meeting.
The Premier told the Champion that his government was looking at alternative solutions to the state's gas shortage.
"I have to be mindful that we don't open the state up to millions, if not billions of dollars of compensation because a government removes a right from a company that got those right legitimately under the former regime," he said.
"Am I frustrated that exploration licences and leases were granted over residential areas and proposed residential areas in Sydney's growth area? Absolutely.
"Are we looking at ways to see if whether or not that can be dealt with? Yes."
During Mr O'Farrell's Liverpool visit, about 150 people gathered outside the Bella Fonte Function Centre to voice mining concerns.