Late in 2014 the company performed test fracking operations on four pilot wells at Waukivory, just outside Gloucester.
The company said the chemical BTEX (benzene, toluene, ethylbenzene and three forms of xylene) was found in a sample of flowback water, taken from two of the wells and an above-ground tank. Flowback water is water returned to the surface after it has been pumped into the ground mixed with chemicals to open up coal seams.
"BTEX chemicals in the water are an absolute nightmare and the Greens want a permanent ban on coal seam gas and fracking in NSW," he said.
"Coal seam gas is unsafe, unnecessary and unwanted.
"AGL should pack up and leave the Gloucester Valley for good following this latest pollution incident before they do any more damage to either their battered corporate reputation or our precious water.
"How many more spills, leaks and accidents will it take before the government acts to ban coal seam gas?"