Indiana Gov. Mitch Daniels and state Rep. Ed Soliday are excited about the first legislation the governor signed into law this year. There is reason for both nervousness and hope with Senate Bill 423.

The bill, authored by state Sen. Brandt Hershman, R-Wheatfield, and co-sponsored by Soliday, R-Valparaiso, clears the way for a project to turn coal into synthetic natural gas.

The legislation allows the Indiana Finance Authority to negotiate 30-year synthetic natural gas supply contracts with a company planning to build a coal gasification plan in Rockport, near Evansville. The power plant is expected to create both electricity and the liquid fuel.

"To finance it, (the developers) need 30-year commitments, and most utilities don't want to carry a 30-year commitment on their books," Soliday said. "The state is not putting money in. It's just acting as a vehicle for the contracts."

Daniels gushed about the new law. "It means that each participating utility will have locked in, with the help of the state, a meaningful percentage of its consumption for the next several decades at a price that is derived from the price of coal, which is the most affordable source of energy we have," he said.

U.S. Sen. Dick Lugar also was supporting this project for the coal gasification plant. That shouldn't be a surprise; Lugar is a strong proponent of weaning the United States off foreign energy sources. That would help reduce the foreign trade deficit and increase national security at the same time.

The coal gasification plant is expected to create more than 200 permanent jobs and will require $2 billion in private investment.

The carbon dioxide that is a byproduct of this process would be sequestered and trapped underground to reduce greenhouse gas emissions.

"This will be one of the cleanest power plants of any kind ever," Daniels said. "It's 99 percent cleaner than the plants of today."

Clean coal technology carries a cost, however.

NIPSCO has not committed to the project, preferring to wait and see what the cost of the power produced from this new fuel will be and whether the synthetic natural gas will be defined as a renewable energy source.

The price of electricity from this new fuel must be at least close to, if not equal to or less than, the price of power from existing coal-burning power plants in order to make utilities like NIPSCO more likely to purchase it.

Consumers need to watch this carefully and weigh both the possible impact on their monthly bills and the long-term effects on the environment from this new fuel.

It says a lot about Indiana's leadership on energy technology that the first legislation Daniels received -- and signed -- this year is supportive of innovation in the way coal is used. The state needs to become known as a leader in cutting-edge energy research and development.

Now the pressure is on to make sure this process is viable.