Narrabri community group People for the Plains took the NSW government to the court believing that Santos' holding pond facility at Leewood should have been approved via planning legislation instead of mining legislation because it is a CSG water treatment facility.

The Land and Environment Court decided that the NSW Department of Industry's approval of the project in August 2015 without an environmental impact statement was valid.

The facility can now start operation, and is is expected to treat up to 1.5 million litres of CSG wastewater a day.

Santos argued that the water treatment facility would not be needed without the "mining" operation, so that was why it was approved under the mining legislation.

Regardless of what the court decided, the relevant government departments have already approved the safety and sustainability of the project.

"The Leewood project in part, is properly characterised as being for the purpose of the activity of petroleum exploration and is, thus, permitted by the provisions of clause 6(c) of the Mining SEPP without the need for development consent," Justice Timothy Moore concluded.

"This conclusion applies to those elements of the proposed Leewood facility up to but excluding the transportation of water from it for the purposes of commercial lucerne cropping."

Santos welcomed the decision handed down by the Court, pointing out that the reverse osmosis plant was similar to those used across the world.

A Santos spokesman told Energy News that the RO plant will be used to treat saline water produced by the company's exploration and appraisal operations to a "very high standard" so it can be used for irrigation and operational activities.

The company said just ahead of the case being heard in May that the Leewood facility posed a "low environmental risk".

Equally predictably, People for the Plains were "gutted" by the decision, as they vented on their greatest platform that often substitutes for real news and facts these days, Twitter.

Sue Higginson, CEO and principal solicitor for the NSW Environmental Defenders Office, said her client was "very disappointed" by the decision.

"People for the Plains was fighting for the community's right to have a say about the facility and to ensure a comprehensive assessment of its environmental impacts was conducted," Higginson said.

"Our client and others in the local community are worried about the impacts the facility will have on the ecosystems of the Pilliga."

She said such a large industrial waste treatment facility did not fit within the ordinary understanding of CSG exploration; and that developments of that scale normally require a rigorous assessment process, where the community is given the chance to have their voice heard.

EDO argued that this had not been the case at Leewood.

"This development is a significant addition to CSG activities in the area, and is one of a number of incremental CSG projects that represent not only a growing presence of the industry in this biodiverse region, but also a new threat to one of Australia's important natural environments," Higginson said.

"The public exhibition of major developments is a key foundation of a well-functioning planning system. It's a right that has been imbedded in Australia's environmental law since the ‘70s, for good reason: public participation brings about better planning decisions and ensures transparency and accountability.

"Without this fundamental right, we'd be a much poorer nation

"This is a complex area of the law, and we'll be looking very closely at the judgment to explore our client's options for appeal."

"Bully" tactics

The court case over bureaucratic semantics is the latest in activists' battle to not only stop oil and gas activity but pressure the world's larger investors to pull out of fossil fuels to save the planet.

The Wilderness Society's Naomi Hodgson said just before the court heard the case that Santos had taken a "huge risk" continuing construction of the facility in the face of a significant legal challenge.

In doing so she indicated activists' hopes that the Adelaide-based oiler would simply run away with its tail between its legs.

However, Santos chairman Peter Coates said at its last AGM that the company would not be "bullied" out of the Pilliga.