Santos CEO Kevin Gallagher has hit back at criticism that east coast gas producers are not doing enough to meet demand in the domestic market and called for a clear policy that will allow for the development of new fields to head off shortages.

Mr Gallagher said Santos had spent about $1.5 billion over the past 10 years on its proposed Narrabri coal seam gas project in NSW, with still no certainty it can proceed amid a legal challenge to the development approval in the NSW Land & Environment Court this week.