Geomechanical modelling of fault stability is an integral part of Australia's GEODISC research program to ensure the safe storage of carbon dioxide in subsurface reservoirs. Storage of CO2 in deep saline formations or depleted hydrocarbon reservoirs requires estimates of sustainable fluid pressures that will not induce fracturing or create fault permeability that could lead to CO2 escape. Analyses of fault stability require the determination of fault orientations, ambient pore fluid pressures and in situ stresses in a potential storage site. The calculation of effective stresses that act on faults and reservoir rocks lead then to estimates of fault slip tendency and fluid pressures sustainable during CO2 storage. These parameters can be visualized on 3D images of fault surfaces or in 2D projections. Faults that are unfavourably oriented for reactivation can be identified from failure plots. In depleted oil and gas fields, modelling of fault and rock stability needs to incorporate changes of the pre-production stresses that were induced by hydrocarbon production and associated pore pressure depletion. Such induced stress changes influence the maximum sustainable formation pressures and CO2 storage volumes. Hence, determination of in situ stresses and modelling of fault stability are essential prerequisites for the safe engineering of subsurface CO2 injection and the modelling of storage capacity. (C) 2004 Elsevier Ltd. All rights reserved.