Federal Newcastle MP Sharon Claydon says she's opposed to oil and gas exploration and drilling off the Newcastle to Sydney coast.
But Advent Energy says its plans to drill offshore could support the federal government's push for a "gas-led recovery" from the COVID-19 pandemic.
The comments come as two Sydney Liberal MPs prepare to raise a motion in federal Parliament on Monday.
Mackellar MP Jason Falinksi and Wentworth MP Dave Sharma will propose that the government "opposes oil or gas drilling off the coast of Sydney".
Ms Claydon, who will speak to the motion, said "let's be real".
"This motion won't even go to a vote, let alone force the hands of Liberal governments to act," she said.
"I do hope the Member for Mackellar has backed his words with action."
The two Liberal MPs also want the government to oppose Advent Energy's application to extend Petroleum Exploration Permit 11, which covers 4500 square kilometres of ocean from Port Stephens to Sydney.
Advent Energy is seeking to extend the permit for another five years. The company's managing director David Breeze said the plans to drill for gas were a "central potential solution to substantial gas shortage issues".
If the plans were successful, they would "give capacity to supply gas into the proposed gas-fired power station being put forward by the prime minister for the Hunter Valley area".
Mr Breeze said the project had the potential to find 5 trillion cubic feet of gas.
He added that a "key point that everyone is missing is that the offshore Sydney basin has been determined in independent government studies" to be a prospective area for carbon capture and storage.
The Morrison government said last month it would pilot carbon capture projects that "will dramatically help cut emissions".
Ms Claydon said the permit "should never have been granted in the first place".
"Australia has plentiful energy sources. We don't need this project. We don't need drilling rigs set up within spitting distance from major cities and towns. And if something goes wrong, we will more than regret it. "
Dr Natasha Deen, Save Our Coast founder, said 65,000 people had signed a petition to end the permit.
"They call it PEP11 - we call it home," she said.