A legal report on coal-seam gas activity shows local councils may have more rights than was first thought.

The advice was commissioned by the seven member councils of the Northern Rivers Regional Organisation of Councils (NOROC).

It followed a decision by one of the member councils, Lismore City, to refuse a coal-seam-gas company permission to conduct seismic testing on council-owned roads within its boundaries.

The advice was also sought to clarify the legal position after the Lismore City and Kyogle councils imposed a moratorium on CSG developments on lands they control.

The report, prepared by Sydney-based law firm Marylou Potts Pty Ltd, was released to NOROC more than two months ago, but only made public last week.

Lismore mayor Jenny Dowell, speaking in the Australian Local Government Association’s newsletter, said the report showed that councils may have the right to deny coal-seam gas companies permission from using council-owned roads.

"And the grounds for that refusal… is the definition of ‘improvement’," she said.

"It could be argued that the road-side reserves and the public roads are an improvement of the land and therefore council has the right to refuse access and drilling and other work on that improvement."

A spokesperson for the Australian Petroleum Production and Exploration Association, quoted by the Northern Star newspaper in Lismore, said people living in NSW received a direct benefit from the industry in the form of royalties.

"It is disappointing some councils are spending thousands of ratepayer dollars on legal advice to stymie investment in jobs and their own communities," the unnamed spokesman told the newspaper.

The seven member councils of NOROC are Ballina, Byron, Clarence Valley, Kyogle, Lismore City, Richmond Valley and Tweed Shire.