9Manner of determining whether there is significant risk of significant adverse impact

9 Manner of determining whether there is significant risk of significant adverse impact

Manner—comparison of probability‑weighted impact cost to potential economic value (1) For the purposes of subsections 25(1), 26(1), 27(1), 27A(1), 28(1), 28A(1) and 29(1) of the Act, there is a significant risk of a main operation having a significant adverse impact on potentially affected operations that are being, or could be, carried on under a potentially affected title if the probability‑weighted impact cost of the main operation (determined in accordance with subsection (2)) is at least 00.15% of the potential economic value of the potentially affected operations (determined in accordance with subsection (5)).

Note: Each SROSAI section imposes limitations on:

(a) when an operation is considered to have an adverse impact on other operations; and
(b) when the risk of an adverse impact can be treated as significant; and
(c) when an adverse impact can be treated as significant.

Probability‑weighted impact cost of main operation (2) For the purposes of subsections 25(6), 26(6), 27(6), 27A(6), 28(6), 28A(6) and 29(6) of the Act, the probability‑weighted impact cost of a main operation is determined by applying statistical techniques that are appropriate to risk assessment to the probability‑weighted impact costs determined under subsection (3) of events that could occur as a result of the main operation. Probability‑weighted impact cost of events (3) The probability‑weighted impact cost of an event that could occur as the result of a main operation and that, if it occurred, could have an adverse impact on potentially affected operations that are being, or could be, carried on under a potentially affected title is to be determined by: (a) estimating the probability of the event occurring and having an adverse impact; and (b) estimating the loss in potential economic value in relation to the potentially affected operations if the event occurred and had an adverse impact; and (c) multiplying the estimated probability by the estimated loss in potential economic value. (4) For the purposes of paragraph (3)(a), an estimate of the probability of having an adverse impact on potentially affected operations that are not currently being carried on must take into account the probability of the operations being carried on in the future. Potential economic value of potentially affected operations (5) The potential economic value of potentially affected operations that are being, or could be, carried on under a potentially affected title is to be determined by estimating: (a) in relation to petroleum operations—the net present value of future cashflows from a petroleum resource, taking into account the amount of petroleum projected to be recoverable, the projected production profile, projected petroleum prices and projected costs of recovery and any other relevant matters; or (b) in relation to greenhouse gas operations—the net present value of future cashflows from greenhouse gas injection, taking into account the amount of greenhouse gas projected to be stored, the projected injection profile, projected carbon prices and projected costs of storage and any other relevant matters. Discounting rate for future values and losses in value (6) Estimates of the potential economic value of potentially affected operations under subsection (5), and of the loss in value under subsection (3), are to be adjusted to present values using a discount rate equal to the long‑term bond rate plus 5%.