At the April 2025 board meeting, the Environmental Quality Board (EQB) passed a resolution directing our staff to begin the rulemaking process to create mandatory categories' for gas resource development projects and use expedited rules to meet the timeline laid out in Minn. Stat. 93.514. It states that "the Environmental Quality Board may adopt or amend rules to establish mandatory categories for environmental review as they pertain to gas and oil production."
In recommending staff begin the rulemaking process, EQB recognizes that a gas resource development project may or will have the potential for significant environmental effects. Notably, the resolution directs staff to focus solely on gas production and not oil production.
Our role
Minn. Stat. 116D.04 Subd. 2a. (b) says that the EQB shall identify project types that are mandatory for EAWs and EISs and when projects should be exempt from environmental review. Both EAW and EIS mandatory categories are developed for projects based on their potential for significant environmental effects.
For more information on environmental review in Minnesota, see EQB's factsheet and website.
Mandatory environmental review considerations
In working to develop mandatory categories for a gas resource development project and when it requires environmental review, EQB staff are now tasked at identifying when these projects may have the potential for significant environmental effects (EAW threshold), and when these projects have the potential for significant environmental effects (EIS threshold). By defining an EAW and an EIS threshold in rule, it will then require the environmental review process whenever a gas resource development project is proposed at a level higher than those thresholds.
EQB staff have determined that gas resource development projects have potential environmental impacts at the land surface, the subsurface, and to the air. Staff are now working to define when these potential impacts represent a potential for significant environmental effects.
Regulatory framework
Because a gas resource development project is a new kind of project in Minnesota, there are some regulatory pieces that need to be developed through rulemaking. EQB only has the authority to write the rules indicating when these kinds of projects require environmental review. EQB staff cannot write rules that would permit or approve a gas resource development project. Other agencies that may have rules in place, or are working to develop new rules for this industry, would include:
- Department of Natural Resources (gas resource development permit)
- Department of Health (well construction)
- Pollution Control Agency (air, waste, surface water)
- Department of Revenue (taxes)
You can learn more about their roles by visiting their individual websites or you can visit the gas production website that was created to provide information on the temporary regulatory framework recommendations that were sent to legislators in January 2025. Note that the temporary recommendations were not enacted, more information below about the temporary framework.
Gas production in Minnesota
Legislation
In 2011, a mining exploration company accidentally discovered a helium deposit. In 2024, an additional exploratory boring by a helium exploration company showed they could start commercial production of helium within the next 12-18 months. In May of 2024, legislation was enacted that requires the creation of a regulatory framework for developing gas resources in Minnesota. This legislation gives expedited rulemaking authority to state agencies to amend and adopt certain rules pertaining to oil and gas production. Rulemaking must be completed by May 2026 under expedited procedures.
There is a moratorium on oil and gas production in the state without a permit. Permits can't be issued until rules are adopted, unless a temporary regulatory framework for permitting has been approved by the legislature.
The Minnesota Department of Natural Resources (DNR) was directed to create a multi-agency committee to make recommendations that would guide the creation of this temporary regulatory framework. Under the enacted legislation, the Gas Resources Technical Advisory Committee (GTAC) was charged with submitting its recommendations and draft statutory language to the DNR commissioner. The DNR submitted recommendations and draft statutory language for a temporary framework to the State Legislature in January of 2025.
GTAC committee membership was assigned by the DNR to the state agencies with rulemaking authority to create or amend rules for the creation of a regulatory framework. In parallel, these state agencies will work with the legislature to develop their own rules and policies under expedited rulemaking processes. Ultimately, in the 2025 legislative session, no bills with any of the GTAC recommendations were passed and therefore a temporary regulatory framework was not developed. This means that the moratorium for gas production will stay in place until rules are adopted by the DNR allowing for the issuance of a gas resource development permit.
Geology
Helium and hydrogen are the two types of gases that are the driving forces behind the potential for gas resource development projects in Minnesota.
To develop an underground reservoir of a gas resource, such as helium you need a few things geologically to align.
- Geologic setting that can produce or generate a gas. These settings or parent rocks are typically found at great depths under the surface and are not accessible from the surface via drilling a well.
- For helium in Minnesota, the parent rock (or the space that is responsible for generating the helium) is deep crustal basement rocks. Helium gas can form as a byproduct of uranium and thorium decay in these parent rocks.
- An event that frees that gas from its generation location or parent rock. Because these parent rocks are often inaccessible an event must take place that allows the gas to be transported to an accessible depth.
- For helium in Minnesota, the Midcontinent Rift is responsible for releasing and providing a framework of vertical fractures for the helium to travel vertically away from the basement rocks.
- Geologic cap that captures the gas and allows gas to fill the space underground without having the gas escape to the surface. Once a reservoir has built up over time the gas resource can then be extracted via a well.
- For the helium find in Northeastern Minnesota, again the Midcontinent Rift is responsible for providing rocks with low permeability (stops or restricts flow) which is capable of stopping the vertical migration of the gas and allows for the building of an underground reservoir.
The development of a hydrogen underground reservoir is not quite the same as helium, but the Midcontinent Rift still plays a vital role.
- When water comes in contact with iron rich rocks, a process called serpentinization can take place to those iron rich minerals. The serpentinization process can also release hydrogen gas.
- In Minnesota, the Midcontinent Rift is made up of igneous rocks and has areas of "ultra mafic" rocks which contain high percentages of iron rich minerals (olivine). Groundwater aquifers exist within layers and formations of the rocks of the Midcontinent Rift, so the potential of prolonged exposure of these iron rich rocks to water exist to allow the serpentinization process to take place and potentially release hydrogen gas over time.
- Similar to helium, once a gas is created the gas needs to be capped or it will just continue to migrate out of the subsurface and out to the atmosphere.
- In Minnesota, again the rocks of the Midcontinent Rift (and potentially overlying the Midcontinent Rift) have areas of low permeability and then have the ability to capture the gas.
Projects
Minnesota does not have a history of gas extraction and this is a new project type to the State. The type of drilling that Minnesota is used to seeing is that of water wells. Drilling and producing gas is not done the same way as water wells. It may be helpful to review other sources to gain a basic understanding of oil and gas drilling.
One helium production company has drilled two exploration wells to date in Minnesota. This company is actively pursuing production of helium gas at these locations.
Hydrogen exploration in Minnesota is still mostly theoretical based on geologic conditions. There are no active exploratory borings that have been drilled searching for hydrogen and the science is actively evolving in identifying hydrogen deposits. Given the geology of Minnesota, it is certainly an area of interest for future exploration.
Why are projects looking to extract gas in Minnesota all of a sudden? Gases such as helium and hydrogen are often found as associated gasses in typical oil and gas type projects that most would associate with well known oil fields in other states (Texas, Colorado, North Dakota, etc.) Because these gases were already being found in those well-developed industry specific locations there really haven't been much of an effort to search for gases elsewhere. However, the landscape of the oil and gas industry has changed slightly and exploration companies have started to search for new sources. 
Rulemaking process
Due to the enacted legislation for gas production, the expedited rules process must be used to adopt rules regulating this type of project.
With the expedited rules process, EQB will be publishing a notice of intent to adopt rules by May of 2026.
Next steps
Be on the lookout for future engagement regarding rule development. Also, a public comment period will follow the notice of intent to adopt rules.
EQB staff have already begun to engage with Tribal staff. Meetings between Tribal environmental staff and EQB staff have taken place to discuss topics ranging from an overview of what a gas production project looks like, the geology of Minnesota, and draft rule language review. EQB will continue sharing information and meeting with Tribal staff throughout the process.
A memo was also shared with interested parties to inform about EQB staff's progress regarding the rulemaking process and to provide an opportunity to provide input prior to any draft rule language being proposed. See below for a copy of that memo.
Contact us
Be sure to sign up for email updates on gas resource development projects environmental review rulemaking. Or contact Jesse Krzenski with further questions.