in-20251001-IR-312250162FRA: Adds 312 IAC 30 concerning permanent underground carbon dioxide storage. Effective 30 days after filing with the publisher.

TITLE 312 NATURAL RESOURCES COMMISSION Final Rule LSA Document #25-162 DIGEST CARBON SEQUESTRATION PROJECTS HISTORY 60 Day Requirement: 20230906-IR-312230649ARA Notice of First Public Comment Period: 20250409-IR-312250162FNA Regulatory Analysis submitted with Notice of First Public Comment Period: 20250409-IR-312250162RAA Date of First Hearing: May 29, 2025 Notice of Second Public Comment Period: 20250611-IR-312250162SNA Regulatory Analysis submitted with Notice of Second Public Comment Period: 20250611-IR-312250162RAA Date of Second Hearing: July 11, 2025 CITATIONS AFFECTED: 312 IAC 30 SUMMARY/RESPONSE TO COMMENTS The Natural Resources Commission (commission), in coordination with the Indiana Department of Natural Resources (department), requested public comment from April 9, 2025, through May 29, 2025, from June 11, 2025, through July 11, 2025, and during the public hearings on May 29, 2025, and July 11, 2025. The comments received and the responses to the comments by the commission, in coordination with the department, are summarized as follows: Comments were received requesting that the department prohibit carbon sequestration projects in Indiana and expressing opposition to carbon sequestration projects in general putting more funding into Soil and Water Conservation Districts. Response: In 2011, the Indiana General Assembly passed P.L.150-2011, which permits carbon dioxide transmission pipelines in Indiana. In 2019, the Indiana General Assembly passed P.L.291-2019, which statutorily designated the pilot project. In 2022, the Indiana General Assembly passed P.L.163-2022, which permits carbon sequestration projects in Indiana. In 2023, under P.L.158-2023, the Indiana General Assembly created a duty for the department to adopt rules to administer IC 14-39, which includes rules for carbon dioxide transmission pipelines, as well as carbon sequestration projects. The proposed permanent rules are the result of that requirement. The Indiana General Assembly has explicitly allowed carbon dioxide transmission pipelines and carbon sequestration projects in Indiana. The department does not have discretion to decide whether to allow these projects or to adopt rules for carbon sequestration projects in Indiana. Because the Indiana General Assembly created a duty on the department to adopt rules for carbon sequestration in Indiana, the department must do so. The department may not prohibit carbon sequestration. This is a separation of powers issue. The legislative branch is responsible for making laws, the executive branch is responsible for implementing and enforcing those laws, and the judicial branch is responsible for interpreting the laws and ensuring they are constitutional and applied fairly. The commission and the department are part of the executive branch. We are tasked with implementing and enforcing carbon dioxide transmission pipeline and carbon sequestration laws as adopted by the legislature. The department does not have the authority to violate the laws passed by the Indiana General Assembly. The department also does not have the authority to fail to perform objectives specifically tasked by the Indiana General Assembly to the department. Comments were received regarding the safety of carbon sequestration projects in Indiana, the potential health and safety risks associated with carbon sequestration, specifically, the pipeline rupture in Mississippi and the protection of aquifers, emergency response in the event of a leak or disaster, and who is responsible for managing safety of carbon dioxide pipelines as well as Class VI wells. Response: Because Indiana does not currently have primary enforcement authority, or primacy, over Class VI permits for carbon, the U.S. Environmental Protection Agency (EPA) is responsible for handling safety of carbon sequestration projects and the Pipeline and Hazardous Materials Safety Administration (PHMSA) handles pipeline safety. Because Indiana does not currently have primary enforcement authority, or primacy, over Class VI wells, the regulations of the EPA and PHMSA preempt the state regarding safety, construction, materials, etc. Primacy refers to state, territory, or Tribal responsibilities associated with implementing EPA approved UIC programs. Any category of regulation covered by the EPA or PHMSA preempts the state's ability to enact regulations regarding those categories, unless Indiana obtains primacy over Class VI wells. A state, territory, or Tribe with UIC primacy, oversees the UIC program in that state, territory or Tribe. The Safe Drinking Water Act (SDWA) requires the EPA to develop UIC program requirements that protect underground sources of drinking water (USDWs) from endangerment. The EPA developed UIC program requirements to be adopted by states, territories, and Tribes to obtain primacy over wells regulated by the UIC program. Primacy programs are established under the SDWA sections 1422 and 1425. Section 1422 applies to all well classes and requires primacy applicants to meet the EPA’s minimum requirements for UIC programs. Section 1425 applies to Class II wells only and requires primacy applicants to demonstrate their standards are effective in preventing endangerment of USDWs. The State of Indiana does not currently have primacy over UIC Class VI wells. The only wells Indiana currently has primacy under the SDWA are Class II wells. Additionally, the U.S. Department of Transportation has regulated the safety of carbon dioxide pipelines since the Hazardous Liquid Pipeline Act of 1979. PHMSA was established in 2004 as the agency within the U.S. Department of Transportation and currently oversees carbon dioxide pipeline safety. Under current statutes, there are multiple steps that a carbon dioxide pipeline operator must take to ensure pipelines are operated safely. The proposed permanent rule does not address the safety aspect of carbon sequestration project, and may not do so due to federal preemption, unless Indiana obtains primacy of Class VI permitting. Potential operators are, however, required to obtain proper permitting from all federal, state, and local government agencies for a carbon dioxide transmission pipeline and for carbon sequestration projects. This is the responsibility of the potential operator to comply with EPA and PHMSA requirements. The EPA and PHMSA would then be the government agencies tasked with regulating safety, construction, materials, etc. Potential operators are required to take all necessary measures under the requirements of the EPA and PHMSA regarding safety and emergency response. Comments were received regarding the eminent domain process and taking private property. Response: The government’s power to take private property for public use may be delegated to private entities under certain circumstances. This delegation is not unlimited and requires the taking to serve a public purpose, with the private entity providing just compensation to the property owner. Eminent domain is only permitted under IC 14-39-1-7 for carbon dioxide transmission pipelines. The Indiana General Assembly declared under IC 14-39-1-3 the use of carbon dioxide transmission pipelines is a public use and service, in the public interest, and is a benefit to the welfare of the people in Indiana. The Indiana General Assembly also permitted the use of eminent domain by a carbon dioxide transmission pipeline company and the pilot project. The department does not have the authority to prohibit the use of eminent domain as long as an applicant uses the process properly under the Indiana Code. Comments were received regarding involuntary integration and the requirement that a storage operator obtain seventy percent (70%) of the pore space. Response: IC 14-39-2-4 allows pore space owners to integrate their interests to develop pore space. If the owners of the pore space do not agree to voluntarily integrate their interest, the storage operator may apply to the department for an involuntary integration order. If the department makes the required findings under IC 14-39-2-4(c), the department may issue an involuntary integration order. One (1) required finding under IC 14-39-2-4(c)(3) is that "…the storage operator has obtained the consent of the owners of the pore space underlying at least seventy percent (70%) of the surface area above the proposed storage facility or amended proposed storage facility". Involuntary integration is used in the oil and gas industry "…for the prevention of waste or to avoid the drilling of unnecessary wells…" (IC 14-37-9-1(b)). The department is in the process of developing rules regarding involuntary integration into a separate proposed permanent rule, which includes the process of obtaining an involuntary integration order from the department. Comments were received regarding an operator not needing a certificate of authority if the pipeline is on the same property and not being required to obtain a UIC Class VI permit to operate a Class VI well. Response: The exception to the requirement to obtain a certificate of authority specifically refers to operators who have "in the fence" wells. If the pipeline meets certain requirements provided under the Indiana Code under IC 14-39-1-4.5, and the proposed rules, a certificate of authority is not required. In these cases, the pipeline runs from the facility directly to the well at a relatively short distance, on the same property as where the carbon dioxide is injected. It is the position of the department that these are not actually pipelines because they begin and end on the surface property above the storage facility; and they do not cross public property, public rights-of-way, or parcels for which there are easements. Additionally, a pipeline company may contract for a private easement, use of a private easement, or a private right-of-way. If the pipeline company privately contracts in this manner, a certificate of authority is not needed due to the nature of private contracts. Nowhere in IC 14-39 does it state that a UIC Class VI permit is not required. A person who is looking to operate a UIC Class VI well is required to obtain a UIC Class VI permit. There are no exceptions to that provided by the Indiana Code or the proposed permanent rules. A comment was received by the Indiana Department of Transportation (INDOT) regarding clarification of their policies to accommodate the state and federal statutory requirements of INDOT and to ensure proper documentation of surface and subsurface facilities. Response: The department has made two (2) substantive changes to the permanent rule to accommodate this request. The first change appears under 312 IAC 30-5-7(a)(6). Subsurface facilities were added to surface facilities to ensure proper mapping of the area. Second, the addition of 312 IAC 30-6-2.5 was made to ensure an explicit explanation of INDOT's state and federal statutory requirements regarding disposition of property. Comments were received regarding the State of Indiana spending taxpayer money on carbon sequestration projects, and taxpayers being liable for long-term risks. Response: The Indiana General Assembly enacted IC 14-39-1 authorizing carbon dioxide transmission pipelines in 2011, and IC 14-39-2 authorizing carbon sequestration projects in 2022. Any other money appropriated to the department would be in the ordinary course of business for the department to administer the program as directed by the Indiana General Assembly. While taxpayer money does pay for the employment of staff to administer the program, the state does not pay for carbon dioxide transmission pipelines or carbon sequestration projects. Taxpayer money does not go to the projects specifically. IC 14-39-2-10 provides for a carbon dioxide storage facility trust fund. This fund was established for the purpose of defraying the costs incurred by the state for long term monitoring and management of, including monitoring and managing the safety of carbon sequestration projects. Storage operators contribute to the fund annually throughout the course of the project and the money will be used for the intended purpose. Comments were received regarding lack of public input on carbon sequestration projects in the State of Indiana and criticizing the time of the public hearing. Response: In 2011, when IC 14-39-1 was adopted by the Indiana General Assembly, there were several opportunities for public comment during committee hearings throughout the legislative session. In 2019, when the Indiana General Assembly designated the pilot project, there were several opportunities for public comment during committee hearings throughout the legislative session. In 2022, when the Indiana General Assembly authorized carbon sequestration projects in Indiana, there were several opportunities for public comment during committee hearings throughout the legislative session. Additionally, there were several opportunities for public comment during committee hearings throughout the legislative session during the 2023, 2024, and 2025 legislative sessions when IC 14-39 was technically and substantively amended. Finally, the official rulemaking process under IC 4-22-2 requires at least one (1) public comment period and public hearing to provide opportunity for public comment on rulemaking measures of executive agencies. If agencies receive substantive comments during the first comment period or public hearing, a second public comment period and public hearing are required by statute (IC 4-22-2-24). IC 4-22-2-26(b) states "The agency shall convene the public hearing on the date and at the time and place stated in its notices and include an option for remote attendance." Additionally, the department provided opportunities for public comment at preliminary and final adoption. This means that the public has an opportunity to comment on the proposed permanent rules at preliminary adoption, during the first comment period and public hearing, during the second comment period and public hearing, and at final adoption. There is not a requirement of the time a state agency is required to hold a public hearing. Preliminary adoption occurred during a 10:00 a.m. commission meeting, the first public hearing occurred at 11:00 a.m., the second public hearing occurred at 1:30 p.m. and final adoption will occur at a 5:00 p.m. commission meeting. Even though there is no requirement regarding the time of day a hearing or meeting regarding a proposed rule must occur, the commission, in coordination with the department, covered several times of day and locations when the rules were subject to comments by the public. Comments were received regarding the location of the first public hearing for the proposed permanent rules. Response: According to the Environmental Protection Agency tracking website for UIC Class VI permits, there are five (5) possible projects in Indiana. These projects, as well as the pilot project, are located across Indiana. Knowing that the department would likely receive substantive comments regarding the proposed permanent rule, a second public hearing and public comment period would be triggered under IC 4-22-2-24 and IC 4-22-2-26. The commission and the department determined that having one (1) of the public hearings in the northern region of the state would be beneficial, due to there being at least two (2) proposed projects in that region of the state. The second public hearing will be held in a central location. There are multiple methods by which persons may submit comments regarding the proposed permanent rules. Every comment submitted, whether in person, electronically, via US Mail, or via telephone, is considered equally by the department during the rulemaking process as is required under IC 4-22-2-27. IC 4-22-2-27 states, "The individual or group of individuals who will finally adopt the rule under section 29 of this chapter shall fully consider comments received by the agency during each public comment period and comments received at the public hearings required by sections 23, 24, and 26 of this chapter and may consider any other information before adopting the rule. Attendance at the public hearing or review of a written record or summary of the public hearing is sufficient to constitute full consideration.". The methods by which a person may make a comment are set forth in the notice of public comment period, see below: Additionally, IC 4-22-2-17 requires public hearings to be remotely webcast. The public hearing notice states as follows: "The public may attend the commission meeting in person or join using the information posted at https://www.in.gov/nrc/rules/rulemaking-docket/." The information regarding attending the meeting remotely can be found at that link before the meeting is scheduled to start. These notices were published on April 9, 2025, more than thirty (30) days before the public hearing. The meeting location was not changed after the notice was published, or an updated notice would have been required. Finally, when more than one (1) community may be affected by the proposed permanent rules and the commission and the department do not choose the location of public hearings based on the location of one (1) potential project. The rulemaking process is statutory and can be found in its entirety at IC 4-22-2. The department does not have the authority to make changes to the rulemaking process. Comments were received regarding extending the public comment period for the proposed permanent rules. Response: Under IC 4-22-2-24 and IC 4-22-2-26, the department is required to have a second public comment period and second public hearing if substantive comments are received during the first public comment period or public hearing, or both. The department has received substantive comments regarding the proposed permanent rules during the first public comment period and public hearing; therefore, a second public comment period and public hearing are required under IC 4-22-2-24 and IC 4-22-2-26. The first public comment period ran for fifty (50) days, this is thirty (30) days longer than is required by the Indiana Code. Due to the nature of the rulemaking, the department accepted all comments received during the first and second public comment period. The second public comment period ran for an additional thirty (30) days, as is required by the Indiana Code. In total, there was an additional thirty-two (32) days where public comments were accepted beyond what is required by the Indiana Code. Comments were received that stated the department moved public hearings and failed to follow the proper rulemaking process, did not follow provisions under IC 10, and did not follow provisions under IC 13 regarding rulemaking.  Response: First, IC 4-22-2 and IC 14 apply to the department and commission regarding rulemaking. IC 10 applies to several state agencies tasked with public safety, i.e. the state police, veterans’ affairs, the department of homeland security, and other similar agencies, the department and commission are not included. IC 13 applies to the Indiana department of environmental management (IDEM). The statutes that fall under IC 13 apply to IDEM and their rulemaking process, they do not apply to the department. The meetings of the commission, which occur several times throughout the calendar year, are often held at Fort Harrison State Park at the Garrison. One (1) meeting is often held at a different location, which is chosen during that calendar year. These meetings are separate and completely unrelated to public hearings required for rulemaking under IC 4-22-2. The commission heard the proposed permanent rule for preliminary adoption on March 18, 2025. The Notice of First Public Comment Period and Notice of First Public Hearing were published on April 9, 2025. The first public comment period ended on May 29, 2025, and the first public hearing was also held on that date. Each public comment period is required to run for at least thirty (30) days (IC 4-22-2-23). The first public comment period for the proposed permanent rules lasted for fifty (50) days. This is twenty (20) days longer than is statutorily required. The Notice of Section Public Comment Period was published on June 11, 2025, and the second public comment period lasted for the statutorily required thirty (30) days. Additionally, the department and commission accepted comments that were received between the close of the first public comment period and the opening of the second public comment period. Therefore, the total days of public comment where comments were accepted by the department and commission was ninety-two (92) days. This is thirty-two (32) days more than the statutory requirement. Public hearings are required to be scheduled at least thirty (30) days in advance of the public hearing (IC 4-22-2-26). Again, the Notice of First Public Hearing was published fifty (50) days in advance of the public hearing. The notice included the location of the public hearing, as well as how individuals wishing to participate remotely could do so, as is required by the Indiana Code. This notice was not changed or updated after it was published with both the Indiana Register and on the commission’s rulemaking docket. Had the meeting location been changed, the department would have had to push the meeting back to accommodate the thirty (30) day notice requirement. The Notice of Second Public Hearing was published thirty (30) days in advance of the meeting as required by the Indiana Code, and contained the exact location, including the room where the public hearing would be held. Additionally, the notice included how individuals could participate remotely. Again, the meeting location was not changed after the notice was published with the Indiana Register and was added to the commission’s rulemaking docket. Finally, under IC 4-22-2-27.5, the department and commission are required to submit “a summary of the comments received by the agency during each public comment period and public hearing under sections 23, 24, and 26 of this chapter of IC 13-14-9 and a summary of the response of the agency to the summers. The publisher shall publish the summaries with the final adopted and approved rule.” The department and commission are not required to respond to each comment received individually. As is required by the Indiana Code, the department and commission submitted the summary of comments and summarized responses. Comments were received demanding both a third public hearing and demanding that the public hearing occur in Vigo or Vermillion County. Response: The commission, in coordination with the department, held two (2) public hearings for the proposed permanent rules, as is required by the Indiana Code (IC 4-22-2-23, IC 4-22-2-24, and IC 4-22-2-26). One (1) meeting was held in Randolph County and one (1) meeting was held in Marion County. The commission, in coordination with the department, will not have additional public hearings regarding the proposed permanent rules included in this rulemaking package. Comments were received regarding final adoption before the commission on July 15, 2025. Response: The commission, in coordination with the department, completed the statutory requirements to submit the proposed permanent rules to the commission for final adoption. As was stated during the second public hearing, the rules were eligible for final adoption at the next meeting of the commission. Comments were received regarding local ordinances, local control, and the responsibilities of the department and federal governments for carbon sequestration projects. Response: The issue here is one (1) of preemption. The Supremacy Clause of the United States Constitution (Article IV, Clause 2) establishes that the U.S. Constitution, federal laws, and treaties are the supreme law of the land, taking precedence over any conflicting state laws. There is express preemption, which occurs when a federal law explicitly states that it supersedes state law; and implied preemption, which occurs when federal law doesn’t explicitly state that it preempts state law, but can be implied due to a comprehensive federal scheme, conflict with federal law, or if the state interferes with a federal objective. Preemption occurs when a higher level of government supersedes the authority of the lower level of government. When state laws conflict with federal laws, federal laws take precedence, and the state laws are deemed invalid. Preemption essentially prevents states from interfering with the federal government's constitutional powers and ensures a unified legal system across the nation. Because Indiana does not currently have primary enforcement authority, or primacy, over Class VI wells, the regulations of the EPA and PHMSA preempt the state regarding safety, construction, materials, etc. Primacy refers to state, territory, or Tribal responsibilities associated with implementing EPA approved UIC programs. Any category of regulation covered by the EPA or PHMSA preempts the state's ability to enact regulations regarding those categories, unless Indiana obtains primacy over Class VI wells. A state, territory, or Tribe with UIC primacy, oversees the UIC program in that state, territory or Tribe. The Safe Drinking Water Act (SDWA) requires the EPA to develop UIC program requirements that protect underground sources of drinking water (USDWs) from endangerment. The EPA developed UIC program requirements to be adopted by states, territories, and Tribes to obtain primacy over wells regulated by the UIC program. Primacy programs are established under the SDWA sections 1422 and 1425. Section 1422 applies to all well classes and requires primacy applicants to meet EPA’s minimum requirements for UIC programs. Section 1425 applies to Class II wells only and requires primacy applicants to demonstrate their standards are effective in preventing endangerment of USDWs. The State of Indiana does not currently have primacy over UIC Class VI wells. The only wells Indiana currently has primacy under the SDWA are Class II wells. Additionally, the U.S. Department of Transportation has regulated the safety of carbon dioxide pipelines since the Hazardous Liquid Pipeline Act of 1979. PHMSA was established in 2004 as the agency within the U.S. Department of Transportation and currently oversees carbon dioxide pipeline safety. Under current statutes, there are multiple steps that a carbon dioxide pipeline operator must take to ensure pipelines are operated safely. Additionally, the Indiana General Assembly created a duty for the department to adopt rules to supplement IC 14-39. State law preempts local control under IC 36-1-3-8(a)(7), which explicitly states “…a unit does not have the following: (7) The power to regulate conduct that is regulated by a state agency, except as expressly granted by statute.”. Local governments may adopt ordinances under the authority provided to local governments under the Indiana Code. However, if a local ordinance conflicts with state or federal laws or regulations, the ordinance is invalid and unenforceable on its face due to state and federal preemption. Comments were received regarding delaying adopting the proposed permanent rules. Response: The Indiana General Assembly established a duty for the department to adopt rules regarding carbon dioxide transmission pipelines under IC 14-39-1, and carbon sequestration projects under IC 14-39-2. The proposed permanent rules supplement what appears in the Indiana Code regarding the authority provided by the Indiana General Assembly regarding carbon dioxide transmission pipelines and carbon sequestration. Delaying the adoption of the rules does not change the duty of the department or the authority provided to the department by the Indiana General Assembly. Comments were received requesting language regarding public access to certain documents for specific projects and demanding that the department publish all project information on the department’s website. Response: Indiana's public access law can be found at IC 5-14-3. There is not a need to add additional public access requirements to the rules which would be duplicative of IC 5-14-3. The department is required to weigh the interests of the public with the interest of applicants and permittees. Individuals may submit public information requests to the department, and the department will provide the documentation required to be disclosed under IC 5-14-3. Comments were received regarding the department denying permits. Response: The department may deny a carbon dioxide transmission pipeline certificate of authority under IC 14-39-1, a carbon sequestration project permit under IC 14-39-2, or any subsequent permit under the proposed permanent rules if the applicant does not submit a completed application or any other reason set out in the Indiana Code or the proposed permanent rule. The department does not have the authority to deny a permit simply because certain residents in a location are opposed to the permit. The Indiana Code does not grant the department that authority. If there are safety concerns, the EPA, PHMSA, or both would be responsible for denying any required permit. Comments were received regarding who is responsible for damages if there is a problem with a carbon dioxide transmission pipeline, or a carbon sequestration project and increasing insurance requirements. Response: While carbon dioxide transmission pipeline companies and storage operators are required to obtain and maintain financial responsibility, a court of law would be required to determine liability if an issue arose. The insurance requirements in the proposed permanent rules are the same as those required of state vendors for state projects. Comments were received regarding spelling out in the rules what state and federal permits are required, as well as the specific state and federal requirements outside of permitting in the rules, and the specific provisions that apply to Wabash Valley Resources (a specific project). Response: The Indiana Administrative Code is meant to be a supplement to the Indiana Code. The Indiana Code controls when looking to interpretation and meaning. Additionally, IC 4-22-2-19.5(a)(3) requires that administrative rules be written to "avoid duplicating standards found in state or federal laws." Based on the requirement of the Indiana Code, and the purpose of the Indiana Administrative Code, it would be improper to duplicate the state and federal laws and permit requirements into the proposed permanent rules. These laws, regulations, and requirements appear in state or federal law or regulations and may not be duplicated into the proposed permanent rule. The Indiana Administrative Code is meant to be a supplement to the Indiana Code. The Indiana Code under IC 14-39 explicitly states what provisions apply to Wabash Valley Resources, the dedicated pilot project. This information will not be included under the proposed permanent rules because the Indiana Code requires that the rules avoid duplicating standards found in state or federal laws. Since these provisions are found in the Indiana Code, they may not be duplicated to the proposed permanent rules. Comments were received regarding removing imposed deadlines and amending the proposed permanent rules regarding the application process. Response: The deadlines placed in the rules were thoroughly vetted by the department and were found to be reasonable. Additionally, the application process established by the proposed permanent rules is common to the department and in line with how the department processes applications across the divisions. Comments were received regarding the working group that developed the proposed permanent rules and posting information about the working group on the department's website. Additionally, there were comments about how the working group was chosen. Response: The department worked to draft rules with an external working group consisting of members of the industry, landowners’ organizations, and other state agencies that may be involved in permitting carbon sequestration projects and carbon dioxide transmission pipelines. The department also established an internal working group made up of department employees to manage drafting the rules, discussing the different suggestions of the external working group, and compiling the proposed permanent rules. The proposed permanent rules are the product of both the external and internal working groups. The persons included in the working group were those who would be directly affected by the proposed permanent rules, which encompass the duties of the department under the Indiana Code. No official action was taken regarding the working group meetings. The department then received suggestions from the working group, discussed them internally, and made decisions regarding the language to be included in the proposed permanent rules. The department often seeks input from special interest groups and potential interested parties when developing proposed rules. The rules then go through the public rulemaking process under IC 4-22-2. Additionally, under IC 4-22-2-23.1, an “agency may solicit comments from all or any segments of the public on the need for the rule, the drafting of a rule, or any other subject related to a rulemaking action. The procedures that the agency may use include the holding of conferences and the inviting of written suggestions, facts, arguments, or views.”. The working group simply provided this feedback due to the nature and scope of the rules the department was permitted to adopt under the framework set out in the Indiana Code. Comments were received regarding clarification of certain points within the proposed permanent rule to ensure ease of compliance by applicants. Response: The definition of "transporting carbon dioxide" and the corresponding applicability provision 312 IAC 30-5-1 were modified to clarify that a carbon dioxide transmission pipeline certificate of authority is not needed if the injection well is considered "in the fence", or inside the boundaries of contiguous property owned by the applicant. 312 IAC 30-5-4(c) was amended to state that the applicant is responsible for requirements applicable to the applicant, not requirements of designated individuals, contractors, subcontractors, or affiliates. 312 IAC 30-6-3(a)(8) was reworded to state the purpose of the provision, which is that if a permit holder knows of the issue and does not immediately notify the department, suspension or revocation is possible. Additionally, 312 IAC 30-6-3(e) was amended to say, "immediately stop injecting carbon dioxide.". This will allow storage operators to continue operating the storage facility in compliance with the Class VI permit. Comments were received regarding the definitions included in the proposed permanent rules and the Indiana Code, as well as the format of the rules generally. Response: Under IC 4-22-2, the department is required to draft all rules in compliance with the requirements established by the Indiana Register. The Indiana Register has published the Administrative Rules Drafting Manual, which includes the requirements for the format of rulemaking in Indiana. Specifically, comments were received regarding proposed changes to definitions, as well as the use of “may” and “shall”. According to the drafting manual: The changes to the definitions suggested by the comments would be considered substantive provisions. This is improper per the drafting manual. Additionally, there were comments regarding use of “may” and “shall”, which gives the department discretion under certain circumstances to choose whether to deny, suspend, or revoke a permit. The drafting manual states as follows: There are instances when there are violations that are harmful, and violations that are clerical in nature. It is important for the department to have some discretion in denying, suspending, or revoking a permit when the violation does not create a harm and is easily rectified. Finally, definitions that appear in the Indiana Code, do not appear in the Indiana Administrative Code.  As was stated previously, IC 4-22-2-19.5(a)(3) requires that administrative rules be written to "avoid duplicating standards found in state or federal laws." Based on the requirement of the Indiana Code, and the purpose of the Indiana Administrative Code, it would be improper to duplicate the definitions that appear under the Indiana Code into the proposed permanent rules. Comments were received regarding the department not using independent studies in the rule draft. Response: This language was not found in the draft of the proposed permanent rules. The language was taken from the regulatory analysis document for the proposed permanent rule, misconstrued, and restated during the second public hearing in a manner that was grossly inaccurate. What this statement means is that the department did not come up with the numbers provided in the regulatory analysis document by looking at independent studies. The comment made incorrectly misconstrued the language provided in the regulatory analysis document and applied that language to the proposed permanent rules in a manner that grossly misrepresented the purpose of the statement. Comments were received outside the scope of the proposed permanent rule, namely the validity of carbon sequestration projects, the 45Q federal tax credit, specifics regarding possible projects, primacy, transporting carbon dioxide on the highways by truck, accusations made regarding the Indiana General Assembly and the reasoning behind legislation authorizing carbon sequestration projects, accusations made regarding the Department and the Director of the Department, unflattering comments about Governor Braun and other specific past or current public or elected officials who may support carbon sequestration, specific scientific commentary regarding carbon sequestration projects, what is published in the media, when commenters learned about carbon capture and sequestration, the actions of other states regarding carbon sequestration projects and carbon dioxide pipelines, questions or comments regarding reasoning of the department on various issues, issues regarding carbon dioxide pipelines or Class VI wells in other states, and hyperbole and emotional or inflammatory statements made. Response: The proposed permanent rule does not deal with the following topics: (1) whether there is a need for carbon sequestration; (2) the 45Q federal tax credit; (3) specifics regarding possible projects; (4) primacy; (5) transporting carbon dioxide on the highways by truck; (6) accusations regarding the Indiana General Assembly and the reasoning behind legislation authorizing carbon sequestration projects; (7) accusations made regarding the department and the director of the department; (8) unflattering comments about Governor Braun and other specific past or current public or elected officials who may support carbon sequestration; (9) what is published in the media; (10) when commenters learned about carbon sequestration; (11) the actions of other states regarding carbon sequestration projects and carbon dioxide pipelines; (12) questions or comments regarding reasoning of the department on various issues; (13) issues regarding carbon dioxide pipelines or Class VI wells in other states; and (14) hyperbole and emotional or inflammatory statements made. Currently, the department is moving forward only with the proposed permanent rule in the rule package. There may be changes if circumstances change in the future, but at this time, the proposed permanent rule contains the entirety of the provisions the department is statutorily required to regulate under IC 14-39-1 and IC 14-39-2. Because the Indiana General Assembly passed P.L.150-2011, P.L.163-2022, and P.L.158-2023, the department is required to adopt rules for carbon sequestration in Indiana. The scope of the proposed permanent rule does not include these topics. Most of the comments received by the department were outside of the scope of the proposed permanent rules. Despite this, the department responded to those comments in the summary of comments and responses following the first public comment period and first public hearing. Additionally, after the second public comment period and second public hearing, the department provided additional explanation on certain points that were reiterated during the second public comment period and second public hearing, despite the fact that the department already provided responses to those comments; i.e. the rulemaking process which may be reviewed under IC 4-22-2; preemption, supremacy, and home rule which may be found under the U.S. Constitution and the Indiana Code; and public access requirements which may be found under the Indiana Code. EXPLANATION OF DIFFERENCES IN FINAL RULE No substantive changes were made to the final rule following the second public comment period. FINAL RULE Sec. 1. (a) This article provides definitions that apply to this article and are in addition to those definitions set forth in IC 14. (b) Except as otherwise provided in this article or under IC 14-39, this article applies to the permanent underground storage of carbon dioxide. Sec. 2. "Class VI well" means a well regulated by the United States Environmental Protection Agency under a UIC Class VI permit. Sec. 3. "Confining zone" means: capable of limiting the movement of the carbon dioxide stream above an injection zone. Sec. 4. "Department" means the department of natural resources. Sec. 5. "Mechanical integrity test" means a test performed on a Class VI well: Sec. 6. "Responsible officer", for purposes of IC 14-39-1-4, includes the following: Sec. 7. (a) "Transporting carbon dioxide" means the movement of carbon dioxide to a carbon dioxide injection well located outside the storage facility for which a certificate of authority for a carbon dioxide transmission pipeline is required. (b) The term under subsection (a) includes a carbon dioxide transmission pipeline that crosses a parcel above pore space that is: (c) The term under subsection (a) does not include movement of carbon dioxide to a carbon dioxide injection well inside the boundaries of contiguous property owned by an applicant or under IC 14-39-1-4.5. Sec. 8. "Underground Injection Control program" or "UIC program" refers to the program carried out by: under the Safe Drinking Water Act to regulate underground injection. may engage the department in preapplication coordination with the division of reclamation before submitting an application under this article. so that the applicant is only transporting carbon dioxide continuously on property owned by the applicant or under IC 14-39-1-4.5. to obtain a carbon dioxide transmission pipeline certificate of authority. whichever is earlier. for the applicant under the Indiana Code or this article. The department shall schedule the public information meeting under subdivision (2) not later than one hundred twenty (120) days after determining whether the application is complete and accurate. The department shall expedite reviewing changes to an application for a certificate of authority under this subsection. Sec. 9. (a) Before a person may obtain a certificate of authority under IC 14-39-1 to use, occupy, and construct pipeline facilities in a designated right-of-way, the person shall obtain the proper authorizations and permits from a state agency or another unit of government that has jurisdiction over the right-of-way under IC 8-23-4. (b) The authority to use and occupy a designated public right-of-way under this rule is subject to compliance with applicable state and federal requirements for facilities, as defined by IC 8-1-26-7, which occupy rights-of-way, including IC 8-23-6-6, IC 8-23-26, or IC 36-9-42. Sec. 10. (a) On the carbon dioxide transmission pipeline company's request, the department may modify a carbon dioxide transmission pipeline certificate of authority to make a minor modification under subsection (b) without requiring the storage operator to file an application to amend the carbon sequestration project permit. (b) A minor modification includes the following: (c) Except as provided in subsection (d), a modification to a certificate of authority not processed as a minor modification under subsection (a) must be filed as an application to amend an existing certificate of authority. A pipeline company may file an application to amend a certificate of authority regarding the following: (d) A pipeline company is not required to file an application to amend an existing certificate of authority if the pipeline company is required by a state agency or another unit of government to relocate the carbon dioxide transmission pipeline under IC 8-23-26, IC 36-9-42, or another applicable state or federal law. Sec. 11. (a) A carbon dioxide transmission pipeline company issued a carbon dioxide transmission pipeline certificate of authority by the department, with the transferee, may apply to the department for a transfer of a certificate of authority if the transferee meets the same underlying qualifications of the pipeline company. (b) A pipeline company and transferee under subsection (a) shall notify the department of the intent to apply for a transfer at least one hundred twenty (120) days before the intended transfer date. An application for a transfer must be completed as prescribed by the department, including the information required under subsection (c). (c) A pipeline company and transferee applying for a certificate of authority 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 the notice under subsection (b) was published, the department shall notify the applicant in writing that the department either approves or denies the transfer. (f) If the department determines: the department shall deny the application. (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 transferor and transferee in writing that the department approves or denies the transfer. (i) A transfer is effective on the date the written notice approving the transfer under subsection (h) is issued by the department. (j) A determination under this section is subject to review and appeal under IC 4-21.5. Sec. 12. (a) The department may initiate a proceeding to suspend or revoke a carbon dioxide transmission pipeline certificate of authority for the following reasons: (b) The pipeline company may request one (1) extension of the certificate of authority under subsection (a)(2) for two (2) years. (c) If the pipeline company does not remedy a violation not later than (30) days after the violation is issued, the department may suspend or revoke the certificate of authority. (d) A determination under this section is subject to review and appeal under IC 4-21.5. After the department gives the applicant an opportunity to remedy the deficiencies under subdivision (2), the department shall return the application to the applicant. If the applicant fails to remedy the deficiencies not later than fifteen (15) business days after receiving the notice under this subsection, the department may deny the application. fails to immediately notify the department and submit the omitted or correct information to the department. The department may waive the penalty for a violation notice in writing not later than ninety (90) days after the permit transfer if the department determines that the transferee is acting in good faith to abate the violation. not later than thirty (30) days after an instance under subdivision (1) or (2). as required by the department in carrying out the department's duties regarding a carbon sequestration project. not later than one hundred eighty (180) days after receiving the certificate of project completion from the department under IC 14-39-2-13. under the requirements of a carbon sequestration project permit. LSA Document #25-162 Notice of First Public Comment Period: April 9, 2025 Last Hearing Held: July 11, 2025 Approved by Attorney General: September 3, 2025 Approved by Governor: September 4, 2025 Filed with Publisher: September 5, 2025, 11:44 a.m. Documents Incorporated by Reference: 49 CFR 192; 49 CFR 195 Small Business Regulatory Coordinator: Danae Schneck, Carbon Program Coordinator, Division of Reclamation, Department of Natural Resources, Indiana Government Center South, 402 West Washington Street, Room W293, Indianapolis, IN 46204, (463) 207-5093, DSchneck@dnr.in.gov