Egdon Resources’ application for an oil well in Biscathorpe was refused last year.
The company’s appeal was heard by Planning Inspector Paul Thompson at Kenwick Park Hotel in Louth, with fierce interest from the local community.
The county council and members of the public argued with Egdon representatives over the impact on the site, which falls within an Area of Outstanding Natural Beauty.
SOS Biscathorpe stood outside the meeting singing eco-themed songs.
Group member Amanda Suddaby said: “We’re in the middle of a climate crisis and this development is pursuing further fossil fuels to put on the climate bonfire.
“There is no justification for it, and there is particularly no justification in this location, in an AONB next to a protected chalk stream.
“They are planning to extract enough barrels of oil to keep the UK going for just one and a half days, but it will take 15 years of industrialisation in a very precious landscape. There’s no justification for that.”
One campaigner told the meeting that he was “staggered” that anyone would drill at the site, and urged that fossil fuel exploration halted.
Egdon said that the well would help the UK towards energy independence, and would have minimal impact on the area.
The site is a former sand quarry. The company says it is well-hidden and its farmland is low value.
If approved, there would be eight weeks of drilling and 12 weeks of testing followed by 15 years of extraction.
Egdon representatives told the meeting up to 6.5 million barrels of oil could be recoverable.
However, campaigners said the numbers “don’t add up” given the company would be restricted to three HGVs per day. They believe less than half that amount would be extracted.
The meeting heard that plans for a 50m tall oil rig during the early stages have been revised to 26m.
Members of the public also claimed the industrial development would pollute the landscape with light, which Egdon disputes.
The planning inspector was to visit the site in person on this morning (Wednesday).
A decision is expected in the next few weeks.