A High Court ruling in New South Wales has Western Australia's energy industry "deeply concerned" about future investment in the resource-rich state.
The ruling stymied the planned expansion of MACH Energy's coal mine after it had already been approved by NSW planning authorities in 2022, after three out of five judges ruled in favour of a community group, Denman Aberdeen Muswellbrook Scone Healthy Environment Group (DAMSHEG).
The ruling found the planning authorities were required to take into account the emissions caused by using the coal MACH would export, otherwise known as the project's scope 3 emissions.
While the ruling is an interpretation of NSW planning laws, the energy industry is concerned effects could be felt on the other side of the country.
In WA, Woodside's $30 billion Browse gas proposal, which would produce more than 11 million tonnes of gas per year, is still being considered by state and federal environmental bodies.
Industry concerned
Independent oil and gas consultant Jeanette Roberts said the decision affirmed industry fears of "lawfare".
"One of the issues that concerns the industry in general is this lawfare of an approval being given and then an opportunity for it to be challenged, and the approval rescinded," she said.
"International investors will come because they believe that there's certainty and a rule of law and understanding what the rules and ground rules are.
"That certainly swings the pendulum away from that."
Chamber of Minerals and Energy WA chief executive Aaron Morey said it was "deeply concerning".
"If we shoot ourselves in the foot and we don't allow the development of these sorts of projects, then what you'll find is that new projects will spring up in other countries with lower environmental controls and standards," Mr Morey said.
Mr Morey said it was important that everyone took the implications of the decision as seriously as possible.
"Those are the sorts of issues that we need to more deeply understand," he said.
The Conservation Council of WA executive director Matt Roberts said it was common sense for all the environmental and climate impacts of a project to be considered in the approvals process.
"Australia can't wash its hands of the emissions caused when coal, oil or gas that is extracted here ends up being burnt overseas," he said.
"Gas export projects like Woodside's Browse proposal at Scott Reef risk massive climate damage because of their scope 3 emissions.
"We've always said that state and federal governments need to consider these scope 3 emissions when assessing these projects."
Interstate impact possible
Johnson Legal director Elaine Johnson said while it was an interpretation of NSW laws, the decision would be relevant to courts in other jurisdictions.
"The High Court of Australia has issued its first climate ruling, so obviously the content of that decision is going to be relevant to other courts in different jurisdictions around the country, including, I would assume, Western Australia," Ms Johnson said.
Johnson Legal represented DAMSHEG, the NSW environmental group that won in the High Court.
While Ms Johnson said the decision would cause ripples for WA, University of Melbourne lecturer Liz Hicks told the ABC the decision would primarily affect NSW.
"The decision turns on NSW law, so its direct effect on other states is limited, but courts and decision-makers across the country will take note."
Last September, Environment Minister Murray Watt granted Woodside an extension of its Burrup Peninsula facilities until 2070 and said the project's impact on climate change did not have to be considered, as most of the resource would be exported overseas.
Australia is one of the world's largest exporters of LNG, accounting for about a fifth of global LNG trade.
Premier confident not the end of Browse
WA Premier Roger Cook said the decision would not spell the end of the WA Browse gas project.
"No, Browse is undergoing the environmental approval process both under the state regime but also under the national regime as well," he said.
"There are very stringent regulations they have to pass through.
"Ultimately this was a decision the High Court made about a state jurisdiction in New South Wales and so we need to understand if there are any implications for WA and what they may be."
A Woodside spokesperson said the company was aware of the High Court decision and would review it.
Mr Cook said he needed to look more closely at the implication of the decision.
Federal Labor cabinet minister Anne Aly said while the Commonwealth did not have any involvement in the case, the court had made the right decision.
"We've always said that new projects need to stack up environmentally, they need to stack up economically," she said.
"In this case, the court has made a decision that this project does not stack up environmentally."
