in-20251210-IR-312250702FNA: CARBON SEQUESTRATION PROJECTS

TITLE 312 NATURAL RESOURCES COMMISSION Notice of First Public Comment Period LSA Document #25-702 CARBON SEQUESTRATION PROJECTS PURPOSE OF NOTICE The Natural Resources Commission (commission) is soliciting public comment on adding rules at 312 IAC 30 concerning permanent underground carbon dioxide storage. The commission seeks comment on the affected citations listed and any other provisions of Title 312 that may be affected by this rulemaking. ADDITIONAL DOCUMENTS Regulatory Analysis: 20251210-IR-312250702RAA Notice of Public Hearing: 20251210-IR-312250702PHA CITATIONS AFFECTED: 312 IAC 30-5.5; 312 IAC 30-9 AUTHORITY: IC 14-10-2-4; IC 14-10-2-5; IC 14-39-0.5; IC 14-39-2 OVERVIEW Basic Purpose and Background The purpose of the proposed permanent rule is to provide clear regulations for persons interested in participating in carbon sequestration projects under IC 14-39. The passage of P.L. 163-2022 tasked the department of natural resources (department) with administering the carbon sequestration project program in Indiana by issuing carbon sequestration project permits. P.L. 158-2023 then gave the department rulemaking authority to adopt rules for carbon sequestration projects. The department is proposing permanent rules for the following topics based on that rulemaking authority: (1) Involuntary integration orders. (2) Certificates of project completion for a carbon sequestration project. For purposes of IC 4-22-2-28.1, small businesses affected by this rulemaking may contact the Small Business Regulatory Coordinator: For purposes of IC 4-22-2-28.1, the Small Business Ombudsman designated by IC 5-28-17-6 is: Resources available to regulated entities through the small business ombudsman include the ombudsman's duties stated in IC 5-28-17-6, specifically IC 5-28-17-6(9), investigating and attempting to resolve any matter regarding compliance by a small business with a law, rule, or policy administered by a state agency, either as a party to a proceeding or as a mediator. REQUEST FOR PUBLIC COMMENT The commission is soliciting public comment on the proposed rule. Comments may be submitted in one of the following ways: COMMENT PERIOD DEADLINE All comments must be postmarked or time stamped not later than January 14, 2026. The rule, Regulatory Analysis, appendices referenced in the Regulatory Analysis, and materials incorporated by reference (if applicable) are on file at the Department of Natural Resources, Indiana Government Center South, 402 West Washington Street, Room W261, Indianapolis, Indiana and are available for public inspection. Copies of the rule, Regulatory Analysis, and appendices referenced in the Regulatory Analysis are available at the Natural Resources Commission office. If the commission does not receive substantive comments during the public comment period or public hearing, the rule may be adopted with text that is the same as or does not substantially differ from the text of the proposed rule published in this notice. PROPOSED RULE Sec. 1. (a) If all the owners of pore space located within a proposed carbon dioxide storage area of a storage facility do not agree to voluntarily integrate their interests in the pore space under IC 14-39-2-4, a responsible officer who is an applicant for UIC Class VI permit with the United States Environmental Protection Agency (U.S. EPA) may petition the department for an involuntary integration order requiring the pore space owners to integrate their interests to develop the pore space as a proposed storage facility. A petition for involuntary integration must include the following: (b) A petitioner may not include in the petition pore space included in another involuntary integration order issued by the department.  Sec. 2. (a) Not later than fourteen (14) days after the department notifies the petitioner under section 3 of this rule that a petition for an involuntary integration order is deemed complete, the petitioner shall provide notice of the petition by first class mail to inform each pore space owner included in the proposed storage facility of the petition for an involuntary integration order.   (b) A notice under subsection (a) must include the following: (c) The petitioner shall provide proof that the notices required under this section were delivered before the department may establish the required deadline under subsection (d)(1) and evaluate the evidence submitted under subsection (d)(2). (d) The department shall: (e) At any time before the expiration of the deadline set by the department under subsection (d)(1), a pore space owner subject to the deadline may request one (1) extension of not more than sixty (60) days to present relevant evidence regarding the fair market value of the pore space to the department. The department shall grant a timely request made under this subsection. (f) The department shall not consider the information submitted by a nonconsenting pore space owner if the nonconsenting pore space owner does not submit the required information by the deadline under subsection (d)(1), or an extension under subsection (e).  Sec. 3. (a) Not later than ninety (90) days after receiving a petition for an involuntary integration order, the department shall notify the petitioner whether the petition for an involuntary integration order is complete or incomplete. (b) If the department notifies the petitioner that the petition is incomplete, the department shall provide the petitioner with a list of deficiencies in the petition.  (c) The department shall give the petitioner the opportunity to remedy the deficiencies.  (d) If a nonconsenting pore space owner does not submit relevant evidence before the deadline set by the department or an extension requested, or both, under section 2 of this rule, the department shall:  not later than forty (40) days after receiving a complete petition for an involuntary integration order.  (e) If a nonconsenting pore space owner submits relevant evidence or requests an extension, or both, under section 2 of this rule, the department shall: not later than seventy (70) days after receiving a complete petition for an involuntary integration order and relevant evidence submitted. (f) The department shall notify the pore space owners within the proposed storage facility in writing by first class mail that the involuntary integration order is: not later than thirty (30) days after the determination is made. (g) If a petitioner submitted an application for a UIC Class VI permit and the U.S. EPA determines the application contains all the information required to process the application, the involuntary integration order is effective fifteen (15) days after the UIC Class VI permit is issued by the U.S. EPA.  (h) The department shall review an issued involuntary integration order that is not effective under subsection (g) annually. If at least two (2) years have passed since the involuntary integration order was issued and: the department may order the petitioner to show good cause for failing to pursue, or be issued, the UIC Class VI permit. If good cause is not shown, the department may revoke the involuntary integration order. (i) An involuntary integration order must include the following findings: (j) If a pore space owner subject to an involuntary integration order: the pore space to another person after an involuntary integration order is issued, the other person becomes subject to the integration order unless the pore space rights are restored to the current pore space owner. (k) On the date an involuntary integration order becomes effective, the following occur: (l) The petitioner shall hold equitable compensation for a pore space owner that is unknown or unlocatable in trust, in an interest-bearing account, for three (3) calendar years after December 31 of the calendar year the petitioner was required to begin making payments under subsection (k).  (m) If the funds held under subsection (l) remain unclaimed after the period of three (3) calendar years under subsection (l), the storage operator shall transfer the funds as unclaimed property to the state under IC 32-34-1.5.  Sec. 4. (a) The division of reclamation shall make a determination of equitable compensation based on the weighted average of consideration paid to consenting pore space owners in the same project, weighted by each consenting pore space owner’s percent of pore space. A determination under this section excludes other compensation for grants of additional property or other associated rights for the same project for the consenting pore space owner’s proportionate share of the storage facility at the time the petition is filed and includes the determination in the notice to affected pore space owners under section 2 of this rule. (b) If a nonconsenting pore space owner disagrees with the determination of the division of reclamation under subsection (a), the division shall schedule an informal hearing on the petition for involuntary integration not later than sixty (60) days after receiving the information under sections 1 and 2 of this rule. (c) The division shall consider relevant evidence submitted timely under section 2 of this rule by a nonconsenting pore space owner regarding whether the equitable compensation determined under this section should be adjusted.  (d) An informal hearing scheduled by the division under this section must be held in a location a reasonable distance from the proposed storage facility. Department employees will hear the relevant evidence presented. (e) An involuntary integration order issued by the department must include the findings: (f) An involuntary integration order does not alter agreed compensation or contractual terms between the petitioner and a consenting pore space owner. (g) A determination under this section is subject to review and appeal under IC 4-21.5.  Sec. 5. (a) The department may not issue an involuntary integration order for the rights to pore space that have an existing, valid integration order. (b) If the department receives multiple petitions for an involuntary integration order requesting integrating the same or overlapping pore space, the department may defer making a determination on the petition until: (c) If: the department shall give priority to the first petition filed.  Sec. 6. (a) A petitioner issued an involuntary integration order may petition the department to amend the order.  (b) A petition to amend an involuntary integration order is subject to the same procedures and requirements as the original petition for an involuntary integration order. (c) The department may not issue an amended involuntary integration order unless the petitioner obtains consent from the pore space owners underlying at least seventy percent (70%) of the surface area above the proposed storage facility.  (d) If a petition to amend an involuntary integration order contains a request to reduce the boundaries of an involuntary integration order, the department shall grant the petition if the property to be removed is not within the current or projected carbon dioxide plume based on: Compensation paid to a pore space owner before the integration order is amended is not to be paid back to the petitioner. (e) An issued amended involuntary integration order does not waive or diminish rights or protections under IC 14-39-2-12. (f) An issued amended involuntary integration order does not obligate the petitioner to recalculate a payment previously made to a pore space owner based on the percent of the surface area overlying the storage facility owned by the pore space owner.  (g) An issued amended involuntary integration order does not alter contractual terms between the petitioner and a consenting pore space owner.  Sec. 7. (a) An involuntary integration order issued by the department expires five (5) years after issuance if the activity authorized by the order has not started. The department may grant an extension of one (1) year if good cause is shown by the petitioner for failing to start the activity authorized by the involuntary integration order.   (b) A pore space owner subject to an involuntary integration order, or another storage operator, may request that the department reduce the boundaries of an involuntary integration order after injection activity starts in the boundary of the order if: Before reducing the boundary of an involuntary integration order, the department shall notify the petitioner in writing by first class mail of the request to reduce the boundaries and give the petitioner an opportunity to contest the boundary reduction.  (c) If: the rights and interests vested in the petitioner by the involuntary integration order, which the expired order or boundary reduction is based on, revert to the pore space owner.  (d) If the vested rights and interests are reverted to the pore space owner under subsection (c), the petitioner shall pay any amount due under this rule not later than the date the property is no longer subject to the involuntary integration order. Compensation paid to a pore space owner before the order is amended may not be paid back to the petitioner. (e) If the vested rights and interests are reverted to the pore space owner, future payments by the petitioner, owed to the pore space owner no longer subject to the involuntary integration order, terminate. (f) An involuntary integration order that expires under subsection (a), or a reduction to the boundaries of an involuntary integration order under subsection (b), does not alter contractual terms between the petitioner and a consenting pore space owner.  (g) Not later than thirty (30) days after obtaining a determination from the department under this section, a petitioner may request review and appeal of the determination under IC 4-21.5. Sec. 8. (a) A petitioner that applies to transfer a carbon sequestration project permit shall apply to transfer an involuntary integration order for the project to the transferee of the carbon sequestration project permit. (b) At least one hundred twenty (120) days before the intended transfer date, a petitioner issued an involuntary integration order and the transferee for the carbon sequestration project permit shall notify the department of the intent to apply for a transfer of the integration order. (c) A petitioner and transferee applying to transfer an involuntary integration order shall submit the following with an application for a transfer: (d) If the department determines the application for a transfer is complete, the department shall notify the transferee, and the transferee shall do the following: (e) Not later than ninety (90) days after receiving proof that the notice under subsection (d) was published, the department shall notify the petitioner and transferee in writing by first class mail that the department either approves or denies the transfer. (f) If the department determines: the department shall deny the application. If a finding is made under subdivision (6), however, the transferee is not disqualified from receiving the transfer if the violation was, or is in the process of being, corrected to the satisfaction of the department or the transferee filed and is pursuing administrative review of the violation under IC 4-21.5. (g) If an application for a transfer is filed and there is a pending notice of violation: The department may waive a penalty for a notice of violation in writing not later than ninety (90) days after the transfer if the department determines the transferee is acting in good faith to abate the violation. (h) The department shall notify the petitioner and transferee in writing that the department approves or denies the transfer. (i) The transferee of an involuntary integration order shall assume the rights, duties, and obligations under the order without alteration.  (j) A transfer is effective on the date the written notice approving the transfer under subsection (h) is issued by the department. (k) A determination under this section is subject to review and appeal under IC 4-21.5.  Sec. 9. (a) A petitioner who obtains an involuntary integration order shall record the order: the involuntary integration order was obtained. (b) The petitioner shall pay the cost to record the involuntary integration order. Sec. 1. (a) A storage operator may apply for a certificate of project completion from the department after site closure is complete under a UIC Class VI permit. (b) An application for a certificate of project completion must include the following: (c) If the department determines the storage operator demonstrated the requirements under subsection (b), the department shall issue a certificate of project completion under IC 14-39-2-13. (d) If a storage operator applies for a certificate of project completion more than one (1) year after the date the UIC Class VI site closure report is submitted to the U.S. EPA, the department may request the following supplemental information from the storage operator: (e) A corrected application for a certificate of project completion is based on the same procedures and requirements as the initial application. Sec. 2. (a) After the department issues a certificate of project completion: (b) The state of Indiana is responsible for regulatory requirements associated with a storage facility, beginning on the date of the transfer, and shall maintain long term care and stewardship obligations for the storage facility under state or federal law using funds under IC 14-39-2. The storage operator and owner of the storage facility are released from responsibility for regulatory requirements under IC 14-39-2. (c) The state of Indiana is responsible for any potential liability associated with a storage facility that occurs not earlier than the date of the transfer.  Sec. 3. (a) If the department finds that a storage operator received a certificate of project completion based on: which the department relied on, the department may petition the commission to issue a violation. If the storage operator cannot remedy the violation within thirty (30) days after the violation is issued, the certificate of project completion is invalidated and void. (b) If a certificate of project completion is invalidated and voided under subsection (a), the rights and liabilities transferred to the state of Indiana immediately transfer back to the storage operator and owner of the storage facility. (c) A determination under this section is subject to review and appeal under IC 4-21.5.