SANTOS defended itself from a legal challenge this week, one that if successful could have had ramifications ripple across the entire NSW coal seam gas industry.
Narrabri-based group, People for the Plains, argued the company’s Leewood reverse osmosis (wastewater) plant was approved illegally.
The facility is classified as a petroleum exploration project, which under the State Environmental Planning Policy 2007 can be "carried out without development consent".
There is some oversight, but community and environmental groups say it is far less rigid.
For example, rather than preparing an Environmental Impact Statement, which is open to public examination for a month with all submissions assessed by the government before it makes a decision, a company is only required to do a self-assessment of environmental factors, which is then ticked off by the NSW Division of Resources and Energy.
If the court challenge had been successful, the Leewood facility would be viewed as a waste or resource management facility and need development consent from the NSW Department of Planning and Environment, viewed by many as a much more transparent and prescribed process.
A successful challenge could have set a precedent for other petroleum exploration projects – in fact it could have defined what could be classed as exploration.
The NSW government’s Petroleum (Onshore) Act 1991 has no clear definition of what “exploration” is.
It reads: “The holder of an exploration licence has the exclusive right to carry out such surveys and other operations, and to execute such works, as are necessary to explore the land comprised in the licence for petroleum.”
Without a definition of exploration, mining companies are free to apply their own interpretation until the day its challenged in court.
It’s an expensive venture, particularly against the well-funded legal teams of the resource industry.
Santos successfully argued its Leewood reverse osmosis plant was necessary for the coal seam gas exploration process.
The gas giant may be right, but how long until there is another challenge?
If the government does not categorically outline the rules, the resource industry will bend them until they’re caught offside.