Indiana Preparing Federal Takeover Application, Regulations For Controversial Carbon Storage Wells

A sign opposes Wabash Valley Resource’s proposed sequestration development. The site is the only one in Indiana that has a federal permit authorizing it to capture and inject carbon underground. (Photo courtesy of Bryce Gustafson/Citizens Action Coalition)

Indiana is drafting regulations to oversee companies injecting and storing carbon dioxide deep underground, as part of its bid to take over responsibility for the wells from the U.S. Environmental Protection Agency, the state’s Department of Natural Resources has confirmed.

“Should EPA grant primacy, we look forward to keeping Class VI permitting decisions here in Indiana and closer to the communities and businesses they affect, while maintaining the federal safeguards designed to protect Hoosiers,” department spokesman Marty Benson wrote.

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The EPA regulates six classes of wells under its Underground Injection Control program. Indiana and many states have secured primary enforcement authority over wells for oil and natural gas, but more are now pursuing primacy over Class VI wells for carbon dioxide sequestration.

Benson said the department has begun pre-application activities, the first step toward primacy.

“Indiana is actively working with the EPA in drafting our primary rules … and is currently in phase I of the primacy process,” he wrote. How long that step could take is unclear, according to Benson, as the EPA reviews the Hoosier proposal and answers department questions.

The regulatory push fulfills a mandate from state lawmakers.

House Enrolled Act 1368, approved in March, requires the Indiana Natural Resources Commission to seek primacy. It also outlines a state regulatory scheme and authorizes the commission to adopt more rules.

The regulations must align with an executive order Gov. Mike Braun issued last year, which prohibits new state environmental requirements from being stricter than Washington’s versions.

“Our goal is to establish a program that meets the federal Class VI requirements without adding requirements beyond the federal framework unless an authorized exception applies,” Benson wrote.

Timeline Troubles

The department expects to submit the regulatory package to the Indiana Legislative Services Agency late this year or early 2027, kicking off a public comment process.

But the timing could change, Benson said, as the department “completes the technical and legal work” required, plus waits on the EPA.

“Adoption of the state rules will not, by itself, transfer that authority,” he cautioned. “Indiana must submit a primacy application, and EPA must separately review and approve the state program. Only after EPA grants primacy would DNR assume primary responsibility for issuing and enforcing Class VI well permits under the federally approved state program.”

After pre-application activities, there are three more steps in the EPA’s primacy timeline. The federal agency must evaluate an application and decide that it is complete; publish its intent to approve or disapprove and take public comments; and finalize its decision.

Republican lawmakers and other primary proponents say state control will promote more stability compared to the federal government, where policies may swing back and forth with party power. Indiana, in contrast, has been under a GOP trifecta for more than 13 years.

Businesses seeking Class VI permits also testified that they prefer working with state regulators and support any policies to shorten application timelines, which have been lengthy under the EPA.

Opponents, however, think the state can be too lax — and fear shortened timelines could risk harm to Hoosier communities near proposed projects.

One Indiana project has already obtained a Class VI permit from the EPA: Wabash Valley Resources, which plans to produce ammonia fertilizer at a a former coal gasification plant — and pump the emissions underground. It is a pilot with its own state laws and rules.