Environmental Quality Board authorizes staff to begin rulemaking on mandatory environmental review for gas production projects

The Environmental Quality Board voted on April 16 to authorize staff to begin rulemaking to identify mandatory environmental-review categories for gas production projects, with the board limiting the request to gas (not oil). The motion passed with a roll-call showing 12 yes, 0 no and 5 members not voting; the board's resolution directs staff to start the process that could lead to formal rules and further public engagement.

The vote matters because state law enacted in May 2024 placed a moratorium on production until rules are adopted or an interim legislative temporary-permit framework is approved, and it also directs agencies to use expedited rulemaking procedures if they choose to adopt rules. Executive staff said agencies must publish a notice of intent to adopt rules by May 2026 under that expedited schedule.

Jesse Krasinski, environmental review program administrator for the EQB, told the board, "Staff is recommending that the board approve the resolution allowing staff to begin the rulemaking process to identify mandatory environmental review categories for gas production projects." He said staff is recommending rulemaking now only for gas and not oil because Minnesota geology is not conducive to oil production and participating agencies did not want oil included at this time.

Krasinski summarized the technical and policy background that led to the legislation. He said an accidental pressurized gas discovery in 2011 led to renewed interest by industry in helium and other subsurface gases. Industry interest, plus the lack of a regulatory framework for gas extraction of this type, prompted the Legislature to act in 2024. The statute referenced by staff (93.514) and the enacted law require that agencies follow expedited rulemaking if they adopt rules and set the deadline to publish a notice of intent within two years of enactment.

Staff described the types of gas of current interest in Minnesota—helium and naturally produced hydrogen—explaining differences in how each forms and the state’s geologic potential. Krasinski said helium projects are the most concrete near-term prospect: companies have identified helium-bearing reservoirs in northeastern Minnesota and have drilled wells more than 5,000 feet deep near Babbitt. He said hydrogen potential is more theoretical at present and largely at the research stage.

Potential environmental effects staff flagged that the board would need to weigh during rule development include surface impacts (land clearing for well pads and access roads, often about an acre per well), noise (drilling and production equipment can run 24 hours), groundwater and water-quality concerns from subsurface disturbance, air emissions from production (including whether associated gases such as carbon dioxide, methane or nitrogen are vented, flared or captured), and cumulative impacts. Krasinski noted that officials will need to decide which thresholds trigger an Environmental Assessment Worksheet (EAW) or Environmental Impact Statement (EIS), such as volumes produced, size of facility, or type of gas.

Board members asked technical and policy questions. Board member Bauerkemper asked whether rules could cover all gases at once; Krasinski replied that a single rule set might work, but the rulemaking could also define different categories for different gases if the impacts differ. Board member Martin and others asked about hydrogen economics and how subsurface hydrogen production might compare to electrolytic “green” hydrogen; Krasinski said there’s not yet enough real-world production data to know which pathways might prevail.

Public comment on the proposed rulemaking was opened and closed with no in-room commenters on that agenda item; staff said virtual commenters could have raised hands but none did for this decision item.

The board’s vote authorizes staff to begin public engagement and drafting work toward required rule language; Krasinski said the board will see draft rule language and additional analyses before any notice of intent is published. The record also notes the law’s expedited timeline: if EQB or other agencies proceed, they must publish intent to adopt rules by May 2026 under the statute staff cited.

Next steps: staff will design an engagement plan, gather technical information and draft rule language for future board review. The board’s resolution does not itself adopt rules; it authorizes staff to proceed with the rulemaking process and associated public engagement, after which the board will have further opportunities to review draft language prior to formal publication.

Sources: presentation and discussion at the Environmental Quality Board meeting, April 16, 2025; staff slide presentation and oral remarks by Jesse Krasinski (Environmental Review Program Administrator).