A bill was introduced in the Indiana Senate that will provide companies that construct and operate pipelines the authority to use eminent domain to acquire pipeline right-of-ways for carbon dioxide (CO2) pipelines. This is not a new concept. Indiana has existing legislative statutes that provide eminent domain rights for pipelines that transport other products. Senate Bill 115 will amend the existing statute to include pipelines that transport carbon dioxide.

The bill was sent to Committee for review, corrections and reporting. The committee reported favorably back the Senate and recommended that the Senate vote to pass the bill.

The bill will have to be signed by the Governor of Indiana before it will become law. Governor Daniels has been supportive of legislation that promotes the development of coal gasification facilities in the past. Governor Daniels signed legislation that permitted the state to enter into long term off take agreements. For this reason, it’s expected that Governor Daniel will sign this legislation when it reaches his desk.

Indiana state legislators support coal gasification and provide legislation that will create jobs and secure energy for the state.Indiana Governor Mitch Daniels signed legislation into law that will enable the state of Indiana to negotiate long term contracts for SNG. This is an important step in removing hurdles for construction of a coal gasification plant that will produce SNG.

Indiana has first hand experience with the benefits that can be derived from a coal gasification plant. The state is the site of the Wabash Power Plant in Terre Haute, Indiana and Duke Energy is currently constructing the Edwardsport Plant. Both of these plants produce electricity.

Governor Daniel and the state legislators are familiar with the technology and benefits of coal gasification and have been working with state business leaders since 2006 to encourage the construction of a coal gasification plant to produce and distrbibute SNG, pipeline quality natural gas, to natural gas user’s in the state of Indiana.

Just as a homeowner must be able to demonstrate that he/she can make payments on a home purchase loan to be approved for the loan, a developer of a coal gasification plant must be able to demonstrate that it can make payments to be approved for a construction loan. A long-term offtake agreement of the end product is necessary to demonstrate ability to make the loan payments. This means that the developer must have long term offtake agreements for the SNG. However, the utility companies are not permitted to enter into long term contracts. This legislation was passed to provide a means to provide the long term offtake that any project developer will need to get financing.

The law permits the State to enter into 30 year contracts to purchase SNG. Utility companies will purchase the SNG from the state with contract terms that are less than 30 years. This was bipartisan legislation with broad support in the State of Indiana. It was approved overwhelming by the Senate (48-0) and House (90-8).

The State of Indiana is the 12th largest consumer of natural of natural gas. Indiana uses approximately 534 trillion BTU’s of natural gas annually. A single coal gasification plant producing SNG is capable of supplying the state with 15% to 20% of it’s natural gas requirements.