It’s a Gas: Minnesota and Iowa Race to Regulate Newly Discovered Reserves of Helium and Hydrogen

Iowa and Minnesota are not known for oil and gas production, and with good reason — there isn’t any. But, in 2023, the United States Geological Survey released a report disclosing the potential for significant deposits of geologic hydrogen across a large swath of land in Minnesota and Iowa. Further, in March 2024, the Minnesota Star Tribune reported that a Canadian company located a large concentration of helium near Babbitt, Minnesota.

Despite a history of no oil or gas production in either state, these recent discoveries prompted the 2024 sessions of the Iowa and Minnesota legislatures to revisit their oil and gas statutes for the purpose of redefining “gas” to no longer be limited to hydrocarbon gas (e.g., geologic natural gas), instead broadening the definition of “gas” to include naturally occurring, nonhydrocarbon gases — like hydrogen and helium. In Iowa, as part of S.F. 2421, the legislature amended the definition of “gas” in Section 458A.2(7) from “natural gas” to “naturally occurring gases.” In Minnesota, as part of H.F. 3911, the legislature amended the relevant sections of Chapter 93 to provide that use of the word “‘gas’ includes both hydrocarbon and nonhydrocarbon gases.” These changes allow regulators in both states to create frameworks for the operations of drilling for these types of gases.

While Iowa has long-standing (but mostly unused) regulations for Oil, Gas, and Metallic Minerals, this summer it promulgated changes to implement the statutory change. However, unlike Iowa, Minnesota does not have existing oil and gas regulations, and H.F. 3911 imposed a moratorium on permitting until temporary rules are adopted. H.F. 3911 mandated the appointment of a Minnesota Gas and Oil Resources Technical Advisory Committee to develop recommendations for a temporary regulatory framework to govern permitting of gas wells until rules can be adopted by the Pollution Control Agency, Commissioner of Health, Environmental Quality Board, Commissioner of Natural Resources, and/or the Commissioner of Labor and Industry. Further, the law requires the Commissioner of Natural Resources to submit to the appropriate legislative committees “recommendations for statutory and policy changes to facilitate gas and oil exploration and production in this state” no later than January 15, 2025.

Drilling for a gas or liquid (other than water) in Minnesota and Iowa was historically a fool’s errand — but it appears that may change soon as companies begin exploring for hydrogen and helium in both states. While much remains uncertain regarding the regulatory process for exploration and development of naturally occurring nonhydrocarbon gases in Iowa and Minnesota, all indications are that this activity is coming — and the regulators are scrambling to be ready.

Fredrikson is uniquely qualified to assist operators with all facets related to their hydrogen and helium operations in Minnesota and Iowa, from surveying, property rights, and environmental review, through construction, permitting, operational compliance and plugging and abandoning. We have decades of experience representing oil and gas companies in North Dakota with all facets of oil and gas operations, we have expertise practicing before the relevant regulatory bodies in both Iowa and Minnesota, and our Government Relations Group maintains strong relationships with key Minnesota legislators and state agencies to advance our clients’ policy objectives and regulatory goals. For assistance or to learn more, contact our Energy & Natural Resources Group.