The demise of a gas-fed precinct in northern NSW is a step in the right direction for the region, local clean industry advocates say.
The so-called special activation precinct in Narrabri was intended to be a source of local demand for gas from coal seam wells in the Pilliga Forest.
But the NSW government decided not to proceed with the precinct after a strategic infrastructure review, officials have confirmed.
"Now that gas is officially off the list in Narrabri, this can be replaced immediately with a new vision for our shire," said shire councillor Rohan Boehm.
That vision is for new industry and high-value jobs driven by advances in technology, he told AAP on Thursday.
Mr Boehm said he welcomed plans for a large and integrated clean industrial precinct in Narrabri, powered by "many forms of renewable energy with battery storage and new grid connections".
The Department of Planning and Environment and Narrabri Council are working on rezoning for improvements to the town centre, land for more housing and light industrial activity.
Oil and gas giant Santos plans to drill more than 850 coal seam gas wells for the Narrabri development, which has approval from the NSW and federal governments.
But the Hunter pipeline to carry the output, which could supply half the gas used in NSW homes and businesses, continues to face fierce community opposition.
Critics say the plan to extract gas and run a pipeline through the Liverpool Plains foodbowl will compromise farmland, water supplies and Indigenous heritage sites.
Lock the Gate Alliance NSW co-ordinator Nic Clyde said Narrabri's future lies in sustainable farming and renewable energy.
"The Narrabri precinct was designed to create an artificial demand for Santos gas. It's no surprise that this review has found it is not needed," he said.
"Santos ought to cut its losses and abandon the Narrabri gas project before it wastes any more money."
Santos has been contacted for comment.
