NSW Opposition Leader Luke Foley has vowed to permanently ban coal seam gas production in the Pilliga Forest in the state's north-west.
Mr Foley said the risks of water contamination were too big to ignore.
"There's some parts of the state that must be off limits to coal seam gas permanently, and the recharge zone for the Great Artesian Basin has to be one of them," he said.
Energy giant Santos is exploring for coal seam gas in the Pilliga, which it anticipates could one day supply 50 per cent of the state's gas needs.
Mr Foley said he would not cancel the company's exploration licence but would never grant it a production licence for its Narrabri project.
"I'm making it very clear if there's a change of government on March 28 that there won't be a future for that project," he said.
Labor said it did not believe it would need to pay Santos compensation.
"There's never guarantees when exploration licences are issued," Mr Foley said.
The ban would include the Pilliga East Conservation Area and State Forest, as well as the Bibblewindi and Jacks Creek state forests.
Labor's policy was welcomed by Anne Kennedy, whose family has farmed in Coonamble since 1968.
"Total jubilation, it's wonderful," she said.