Victorian Consolidated Regulations Victorian Consolidated Regulations(1) This regulation—
(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.
Note
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
Note
See subregulation (7).
(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—
Note
See subregulation (7).
(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.
Note
See subregulation (7).
(6) A cost that relates to a year after the base year (a nominal cost ) is to be discounted using the formula—
Note
See subregulation (7).
(7) The calculations in this regulation rely on the assumptions in the following Table.
Table
|
Item |
Assumption |
|---|---|
|
1 |
The cost of an adverse impact is to be worked out on the basis of the cost that would accrue if the event which causes the adverse impact occurs |
|
2 |
An impact year is a financial year in which an impact occurs, or would occur |
|
3 |
The base year is the financial year in which the calculation is made |
|
4 |
The long-term bond rate is the average, expressed as a decimal fraction, of the assessed secondary market yields in respect of 10-year non-rebate Treasury bonds for the latest available 12 months at the time the calculation is made, as published by the Reserve Bank of Australia |
|
5 |
The total resource value for the purposes of sections 27 and 28 of the Act is the expected future revenue stream from greenhouse gas injection, taking into account matters including— |
| |
(a) the amount of greenhouse gas projected to be stored by the operation; and (b) the projected injection profile and projected carbon prices— |
| |
worked out as the present value of future greenhouse gas substances expected to be produced, and discounted if necessary using the formula in subregulation (6) |
|
6 |
The total resource value for the purposes of sections 29, 30 and 31 of the Act is the expected future revenue stream from a petroleum resource, taking into account— |
| |
(a) the amount of petroleum projected to be recoverable by the operation; and (b) the projected production profile and projected petroleum prices— |
| |
worked out as the present value of future petroleum expected to be produced, discounted if necessary using the formula in subregulation (6) |
|
7 |
Prescribed costs for the purposes of sections 27(5), 28(5), 29(5), 30(5) and 31(5) of the Act include any costs incurred by a party in analysing possible impacts or developing or providing information to inform the application of a test |