EDO challenge to Scarborough LNG withdrawn

The Australian Conservation Foundation (ACF) has withdrawn its legal challenge against Woodside’s Scarborough LNG Development (Scarborough Project). This demonstrates that environmental groups are becoming wary of pursuing litigation against fossil fuel producers due to the potential for adverse costs orders, as a result of recent applications by Santos in the aftermath of the failed Barossa challenge.

Background

The Scarborough Project is located in the Carnarvon Basin, approximately 375 km off the coast of Western Australia. The $16 billion development is a key part of Woodside Energy’s portfolio and will involve the construction of a floating production platform and 430 km of pipeline to connect it with the onshore refining facility. The gas will be exported to overseas markets, such as Taiwan, Korea and China, with Woodside stating that the use of natural gas will allow foreign markets to transition to green energy.

Despite Woodside already receiving environmental approvals from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), the ACF sought an injunction over the project, seeking to delay the construction of the project and preventing gas extraction. Supported by the Environmental Defence Office (EDO), the legal challenge’s central argument was that the carbon emissions generated by the Scarborough Project would contribute to global warming, and as such harm the heritage listed Great Barrier Reef. The EDO further argued that, given the harm to the Great Barrier Reef, the Scarborough Project required assessment under the Environment Protection and Biodiversity Conservation Act 1999.

Dismissal of the Scarborough challenge

Both parties have agreed to seek court orders for the challenge to be dismissed. The exact details of the agreement have not been released; however, industry speculation has focused heavily on the threat of damages or adverse costs orders had Woodside been successful in this matter.

This is not the first negative outcome that the EDO has suffered recently. EDO was the legal representative for the applicant in the recent decisions in relation to Santos’ Barossa project, which saw Santos successfully defend an application for an injunction, and has left the EDO potentially exposed to serious cost liabilities. The threat of costs appears to be an effective disincentive to ongoing environmental litigation.

Despite the recent losses, ACF has stated that litigation ‘…remains a key plank of ACF’s strategy to stop the impacts of major polluters’. In a statement released to its supporters, the ACF lamented that the law was not adequately designed to handle climate change. This sentiment was echoed by Woodside’s CEO, Meg O’Neil, who celebrated the dismissal, stating that: ‘Litigation against energy projects like Scarborough is an ineffective way to pursue solutions to global climate and energy challenges.’

The EDO is in the process of an external review, examining the organisation’s involvement in recent controversies. In particular, the organisation is looking to strengthen its board and internal governance procedures in the wake of judicial comments about the EDO’s conduct within the Barossa case.

Despite the legal challenge, the Scarborough project has remained on track for completion and has not revised its schedule to begin exports of its LNG cargo in 2026. The Scarborough project will produce an estimated 8 million tonnes per annum of LNG to overseas markets over the next thirty years.

For more information about the Barossa decisions, please see our series of alerts below that detail the progress of the Barossa Project.