Cougar Energy report rejected

QUEENSLAND'S environment department has rejected Cougar Energy's report on water contamination from a coal gas project, saying it failed to prove the operations were safe.

The Department of Environment and Resource Management says Cougar Energy's report on the underground coal gasification plant near Kingaroy, northwest of Brisbane, was inadequate.

Environment Minister Kate Jones said the report failed to provide all of the information requested by the department.

"Cougar Energy's operations will remain suspended until the government is satisfied that the company can meet all regulatory requirements," Ms Jones said in a statement.

"If they cannot prove their activities can be undertaken safely, they will not be allowed to recommence operations."

Director-General John Bradley said the report Cougar Energy submitted last week did not provide all the information set out in the notice requiring an environmental evaluation.

"The company will now have to undertake an additional environmental evaluation and submit a report to the department providing further detailed information," he said.

Ms Jones said separate investigations to determine whether the company has breached environmental protection legislation were continuing.

She said the company was required to ensure there was no contamination of groundwater.

"If there is any evidence that this company has failed to meet its legislative requirements, we will not hesitate to take action against them," she said.

Breaching the environmental protection legislation can attract fines of up to $2 million.

Comment from Cougar Energy is being sought.