A methane gas fire burning in a grazing paddock in Southern Queensland has added further fuel to rural concerns about the safety of the rapidly expanding Coal Seam Gas industry.

The Basin Sustainability Alliance, a group that represents landholders and rural communities, says a grass fire sparked by gas leaking from a hole in the ground at Daandine near Dalby has reinforced fears that coal seam gas depressurisation is causing unexpected and dangerous impacts.

The leak, discovered on the weekend, follows the recent sighting of gas bubbling from a leak in the Condamine River in the same region.

Arrow Energy, which operates a nearby gas field, told Beef Central it is assisting the State Government to secure the site, 25km west of Dalby, as a safety precaution.

The company has also moved to distance itself from the leak and resulting fire.

"There is no threat to personal safety. The site is not an Arrow well," a spokesperson said.

"It’s unclear as to how the fire started. It is understood the site may be a 32-year-old coal mining exploration bore.

"There is no evidence Arrow has contributed to this incident."

The Basin Sustainability Alliance, said it was eagerly awaiting the results of a Government investigation into the latest gas leak.

BSA Committee Member Wayne Newton, who was one of the first landholders on the scene of the Daandine incident, said he’d never seen anything like it.

“Someone had heard a hissing noise, seen the ground bubbling and emitting a blue light, by the time I got there, it was alight and the grass had caught on fire,” he said.

“We are seriously concerned that the CSG companies and the Government are not looking closely enough at what is causing the gas to find pathways and escape to the surface.”

“Initial comments are that this may have been an old coal mine test hole that was not properly rehabilitated, so it raises the question as to how many other parts of Queensland countryside has this kind of crack or holes in it for gas to escape.”

Mr Newton said that if these incidents are occurring when there are around 4000 wells operational in Queensland, what kind of environmental and safety impact will we be facing when there are more than 40,000 wells built.

“The scary fact is that there are way too many unknowns when it comes to the CSG industry.”

In a press released issued on Monday Lock the Gate alliance president Drew Hutton said he believed there was 'no doubt' the burning methane had occurred as a result of CSG operations.

He said attempts by Arrow Energy to attribute the methane leak and fire to the nearby, 30 year-old Wilkie Creek coal mine were "pathetic and defied common sense”.

“The coal seam gas industry can always come up with reasons why they are not to blame for these incidents but none of this was happening before the companies began de-watering and de-pressurising the coal seams on the Weastern Darling Downs," Mr Hutton said.

“In the last few weeks we have seen the Condamine River bubbling like a spa bath along a 15 kilometre stretch of the river with a coal seam gas field nearby.

"Then, we have people on the Tara residential estate, in the middle of a gas field, complaining of chronic headaches, nose bleeds, ear bleeds and skin rashes while, at the same time, smelling 'rotten egg gas'.

"Methane and other gases will be liberated from the coal seam aquifer when that aquifer is de-watered as it has been at Tara-Chinchila and at Daandine. It will then find whatever pathways it can. If some of these pathways are cracks and fissures in the ground, it will find its way to the surface and this is undoubtedly what is happening."

"I have seen similar incidents in my recent visits to the United States and there, local communities were permanently evacuated because methane was coming up through cracks in the ground."

Mr Hutton called on communities where CSG developments are planned to look closely at what is happening on Queensland’s Western Downs and to “think carefully about whether or not they want this industry in their areas”.

* Members of the public have been invited to the BSA Annual General Meeting tonight, August 21, at the BMO Business Centre in Dalby from 5.30pm, where CSG issues will be discussed and where Queensland Gasfields Commission Chair John Cotter will be the guest speaker.