Bill would give CO2 pipeline firms right to take private land

A bill filed in the Indiana General Assembly would give companies building pipelines to carry carbon dioxide the right
to take private land in their path.

A consumer group opposing Senate Bill 115 argues the measure is yet another
concession to the developer of a coal-to-methane plant proposed in Rockport, as well as to coal-fired electric utilities that
may opt to transport CO2 to underground storage sites.

The measure declares that the transportation of CO2 by pipeline
“is declared to be a public use and service, in the public interest, and a benefit to the welfare of Indiana,”
citing its potential to reduce carbon emissions and to promote economic development.

“Granting eminent domain
to a private entity is reason enough, we think, to oppose this bill,” said Kerwin Olson, program director for Indianapolis-based
Citizens Action Coalition.

The group said the measure is to benefit Indiana Gasification, which in 2006 proposed
building a $1.5 billion plant in Spencer County to convert high-sulfur coal to gas. Utilities could use the gas for heating
and to generate electricity.

Indiana Gasification, which planned to sell gas to Merrillville-based NIPSCO and Evansville-based
Vectren, shelved plans in late-2008 after failing to reach long-term gas supply contracts with utilities, which feared such
contracts could impair their long-term credit.

But last March, Gov. Mitch Daniels signed into a law a bill that
would allow the Indiana Finance Authority to act as contracting agent between the gasification plant developer and the utilities
buying its gas. Daniels has been a supporter of so-called clean-coal technology as an economic development tool and to protect
the state’s coal and electric utility industries in the face of punitive carbon-mission regulations contemplated by
Congress.

Olson said this marks the fourth year Indiana Gasification has sought various incentives from the state. 
The principal player in the venture, New York-based Leucadia National Corp., has sought more than $3.6 billion in federal
loan guarantees from the Department of Energy for potential gasification plants.

“You’ve got a multi-billion
dollar, multi-national corporation that is mandating their agenda through legislation because the business model just doesn’t
support it,” Olson said of the proposed plant.

The measure could potentially grant eminent domain powers
to numerous  firms that plan to ship carbon dioxide trough pipelines.

Duke Energy is studying whether to inject
underground the carbon dioxide to be produced at its $2.35 billion Edwardsport electric-generating plant, now under construction. 
Duke is looking at potential underground storage sites within 50 miles of the plant, but also has looked at piping CO2 to
oil wells in southern Illinois as a way to enhance oil extraction.

In addition, Indiana is among Midwest states
where Texas-based Denbury Resources is looking to run a 500-mile CO2 pipeline. It could receive carbon from power plants in
the state and move it to oil fields in the Gulf of Mexico.

The sponsor of Senate Bill 115, Beverly Gard, R-Greenfield,
could not be reached for comment.

Meanwhile, another measure co-sponsored by Gard is drawing fire from CAC. SB
211 would exclude the Indiana Utility Regulatory Commission from ratemaking jurisdiction over private firms that operate carbon-storage
facilities or pipelines. Public utilities that hired the private firms could file ask the commission for permission to recover
costs from ratepayers.

Moreover, SB 211 declares that carbon dioxide “is not considered a pollutant, a nuisance,
a hazardous waste or a deleterious substance.”

CAC argues that the release of CO2 from deep-underground storage
sites or from pipelines poses unknown health and environmental risks.

Please enable JavaScript to view this content.

Story Continues Below

Editor's note: IBJ is now using a new comment system. Your Disqus account will no longer work on the IBJ site. Instead, you can leave a comment on stories by signing in to your IBJ account. If you have not registered, please sign up for a free account now. Past comments are not currently showing up on stories, but they will be added in the coming weeks. Please note our updated comment policy that will govern how comments are moderated.