Regulating Carbon Dioxide Storage Operations Near Oil and Gas Fields, Australia's Approach

Abstract

In 2008, the Australian Parliament passed legislation to establish a title system of access and property rights for geological storage of carbon dioxide in offshore waters. The new Act provides for petroleum titles and carbon dioxide storage titles to co-exist in the same area. A key concern for pre-existing title holders is the potential for adverse impacts on their resource investments. Where oil and gas, and greenhouse gas projects are proposed in the same area government policy encourages commercial agreements between the parties. In the absence of such agreements the Act allows for a significant risk of a significant adverse impact (SROSAI) test to be applied by the regulator to consider whether an activity in one title area could have a significant risk of a significant adverse impact on an activity carried out under the other title. The test is based on three core parameters: probability, economic impact and economic value of the operations. This paper discusses the objective basis for the SROSAI test, the regulations, the methodologies, the mathematical formulae, technical requirements, project scenarios and mitigation options.