Radioactive material is being used at some coal seam gas drilling sites in NSW and Queensland, raising concerns about potential health and environmental impacts.

A radiation management licence issued to US-based drilling company Halliburton shows it is permitted to use caesium-137, a radioactive isotope, for drilling by AGL at Gloucester, in the northern Hunter Valley and for Santos in the Pilliga forests near Narrabri.

Drillers deploy devices containing CS-137 to measure the composition of gas and water deep underground, with the isotope emitting gamma rays to operate like a miniature X-ray. Produced in nuclear reactors, the material is potentially deadly and among the main radiation concerns at failed power stations at Chernobyl and Fukushima.

Only small amounts are used in coal seam gas drilling, and the NSW Environment Protection said the isotope was also sometimes used in mining and construction, and strict rules were in place about its use.

"The EPA is not aware of any incidents or accidents involving caesium-137 and CSG in NSW," said the EPA's chief environmental regulator, Mark Gifford.

Concerns about CS-137 surfaced earlier this year when a container of the material was found unattended on a site in the Pilliga.

A spokesman for Santos said the storage and handling of CS-137 was done in accordance with the appropriate regulations.

"CS-137 is securely kept onsite inside a lead and concrete-lined container," he said. "The use of CS-137 is registered individually, as are the engineers who are responsible for handling it.

"Safe and sustainable practices are Santos' paramount concern and we have full confidence in our contractor managing this process to the highest possible standard."

A spokeswoman for AGL said: "The density measuring device [using CS-137] is fully licensed for use in NSW. It is important to note that at no time does the CS-137 source come in contact with the fracturing fluid or any parts of the ground in the vicinity of a natural gas well," she said.

Environmental groups say the use of the radioactive material is not disclosed in the CSG projects' Review of Environment Factors (REF) and Environmental Impact Statements, nor does it appear by name in Materials Safety Data Sheets.

An anti-coal seam gas campaigner at Gloucester, Jennifer Schoelpple, said AGL had played up the use of much more benign chemicals used for hydraulic fracturing – fracking – but had downplayed the role of caesium.

"No matter how thoroughly you search 'under your kitchen sink' or how scrupulously you check the ingredients of your condiments and 'household products', you are highly unlikely to lay your hands on any CS-137 in your family home," Ms Schoelpple said.

"If they are so transparent, why don't they document the most dangerous thing they use?"

Vicki Perrin, from Lock the Gate in Queensland, said farmers allowing CSG drilling on their land and the neighbouring communities should be made aware of the risks:  "Farmers need to know there is a radioactive source on their site."

Ms Perrin, who worked for three years as an occupational health technician at Olympic Dam in South Australia, said communities should be told where the radioactive material is being stored, what the arrangements are to ensure devices aren't lost and for long-term monitoring.

"It particularly worries me that there are exposure standards for workers but no exposure standards for the community," she said.