Drilling companies want to explore for hydrogen in Minnesota’s Iron Range

Minnesota could soon find itself at the center of a burgeoning clean energy industry — and it’s not solar, wind or hydropower.

Hydrogen gas burns without producing carbon dioxide, unlike fossil fuels. Minnesota could be sitting on large reserves of hydrogen that formed over hundreds of millions of years, according to a federal report released earlier this year.

That report has drawn the attention of three hydrogen prospecting companies, which in recent months have purchased mineral rights and applied for permits to explore for the gas. If they discover major hydrogen deposits, they say it could make Minnesota a player in an emerging industry aimed at reducing the carbon emissions of heavy industries.

“We’re talking about directly powering data centers … also sustainable aviation fuel. We’re talking long-haul shipping and trucking. So, it’s really like this Swiss-Army-knife resource that can clean up multiple large sectors that are hard to clean up,” said Kristen Delano, an executive for Koloma, a hydrogen exploration company based out of Colorado.

Delano said her company hopes to begin initial surveys by the end of the year.

“We’re raring and ready to go,” she said.

Canada-based Pulsar Helium, as well as Orvian Natural Resources, which is jointly owned by two international companies based in Canada and Switzerland, are also in talks with Minnesota officials.

In recent years, Democrats have hoped to spur innovations in domestic hydrogen production. The Biden administration earmarked billions of dollars to fund hydrogen production hubs, including one that would span much of the Midwest. The Inflation Reduction Act established a hydrogen production tax credit, though that credit will phase out early in 2028 instead of 2033 thanks to a law signed this year by President Donald Trump.

In Minnesota, CenterPoint Energy launched a pilot project in 2022 to study the feasibility of producing hydrogen gas with renewable energy. Currently, CenterPoint is mixing the hydrogen produced by that project into their natural gas, which they say has helped reduce its annual carbon emissions by up to 1,200 tons.

Some environmentalists have expressed concerns over hydrogen drilling, worried it could have environmental risks similar to fracking. State officials and hydrogen companies, however, say the process is different from fracking and should have a smaller environmental footprint.

So far, hydrogen companies have obtained mineral rights for areas in Minnesota’s Iron Range, saying the geological makeup there looks promising. The federal report found a high probability that hydrogen formed along the midcontinent rift, which travels diagonally across the Midwest from Kansas to Duluth.

Mike Liljegren, assistant director of the Minnesota Department of Natural Resources’ lands and minerals division, said companies can start exploring for hydrogen but will have to wait to extract it until after new rules are written for the industry.

One of the biggest questions state regulators must answer is how to determine the mineral rights on adjacent properties. Unlike solid minerals, like iron or quartz, gas moves underground, so understanding exactly where the gas is coming from can be tricky, Liljegren said.

“If you own 40 acres of mineral rights, that goes straight down. It’s like you own those mineral rights down to the core of the earth,” Liljegren said. “For gas … it’s coming from all over. It’s not staying within that little 40-acre piece of land.”