158Significant risk of a significant adverse impact—manner of determining risk

158 Significant risk of a significant adverse impact—manner of determining risk

(a) is made for the purposes of sections 27(1), 28(1), 29(1), 30(1) and 31(1) of the Act; and

(b) sets out the manner of determining the question (the risk question) described in any of those sections.

Sections 27(1), 28(1), 29(1), 30(1) and 31(1) of the Act describe different risk questions. Broadly, a risk question is whether there is a significant risk that an operation that could be carried on under a licence described in the section will have a significant adverse impact on other operations described in the section.

(2) The Minister must determine the risk question by—

(a) determining the probability of the occurrence of a particular event that causes an adverse impact; and

(b) estimating the cost that would accrue if the event occurred, including (but not limited to) estimating the following—

(i) any increase in the capital costs of the relevant petroleum operations or the relevant greenhouse gas operations;

(ii) any increase in the operating costs of the relevant petroleum operations or the relevant greenhouse gas operations;

(iii) the cost of any reduction in the rate of recovery of the petroleum or the rate of injection of the greenhouse gas substance;

(iv) the cost of any reduction in the quantity of the petroleum that will be able to be recovered or the greenhouse gas substance that will be able to be stored; and

(c) multiplying the probability by the cost; and

(d) if it is necessary to determine the probabilities of more than one event occurring—applying the appropriate statistical techniques to the results obtained under paragraph (c).

(3) The economic consequences of an adverse impact (a probability weighted absolute impact) are to be worked out using the formula—

event probability × event absolute value

(4) The economic consequences of an adverse impact relative to the potential economic value of operations that are being, or could be, carried on (a probability weighted relative impact) are to be worked out using the formula—

(5) All costs for a base year that are used, or worked out, under this regulation are to be expressed in real dollars for the base year.

(6) A cost that relates to a year after the base year (a nominal cost) is to be discounted using the formula—

(7) The calculations in this regulation rely on the assumptions in the following Table.