BABBITT — When something has never been done before, there typically aren’t rules about how to do it.

Oil and gas have never been produced in Minnesota. With the discovery near Babbitt of what is believed to be the richest helium deposit in the world and rising interest in the state’s potential for geologic hydrogen, the Legislature created the Gas Resources Technical Advisory Committee to develop temporary regulations.

Officials from GTAC recently shared their recommendations for temporary gas development rules with lawmakers.

Pulsar Helium, the company exploring the Babbitt deposit, welcomes the committee’s work. The company reported the successful drilling of a second well in January underscores the project’s potential, with helium concentration of the deposit upwards of 15%. Most economically viable helium projects have concentrations of around 0.3%.

During a visit to Pulsar’s drill site last month, CEO Thomas Abraham-James said the company is grateful for the attention and speed at which the temporary rules were moving.

“Very satisfied. Very constructive,” he said. “And you know for us, we let the process run its course. At the end of the day, everyone has to benefit from our presence here, and I think, yeah, there’s no concerns.”

Abraham-James said the company is aware of demand for helium in Minnesota from semiconductor manufacturers and distributors of helium gas, which provide smaller cylinders to places like hospitals.

Across the country, there’s demand for helium for space launches, MRI machines, fiber optic cables and data centers. Abraham-James said all the helium would be sold in the U.S.

Company representatives did not point out any issues with GTAC’s recommendation when they were recently presented to the legislative committees overseeing environmental issues.

But some DFL legislators and tribal officials expressed concerns about the lack of public input — and coordination with tribal governments — in the process.

The process in question was convened by five state agencies with representatives on GTAC: the Department of Natural Resources, the Environmental Quality Board, Department of Health, Pollution Control Agency and Department of Revenue.

Their recommendations cover permitting, taxes and environmental review, as required by the Legislature, plus rules for gas well construction, environmental permits and policies addressing the pooling and spacing of gas. The Legislature also required draft legislative language.

‘Meaningful consultation’

Aaron Klemz, chief strategy officer for Minnesota Center for Environmental Advocacy, was the only testifier before either the House or Senate committees to contend GTAC largely did not implement recommendations from the five tribal governments that submitted comments.

Fond du Lac, Grand Portage, Leech Lake and the 1854 Treaty Authority criticized the short period that tribes had to provide feedback. The draft recommendations were shared with tribal governments Nov. 15, with the request that comments be returned by Nov. 25. The public comment period began Dec. 2.

“This draft document was developed without consultation with Tribes and was provided after 4pm on a Friday for a 10-day review period, which functionally yielded 6 working days for review and comment,” wrote Craig Tangren, Leech Lake Band of Ojibwe deputy environmental director.

Grand Portage Chairman Robert Deschampe wrote the short timeframe “appears to be purposeful and does not allow adequate time to respond before the draft rules are provided to the public for comment.”

In the “Tribal Engagement” section of its report, GTAC noted tribes were invited to continue providing feedback during the public comment period.

Sen. Jen McEwen, DFL-Duluth, said nation-to-nation dialogue should be a step above seeking public input.

“It’s not just an open comment period and, ‘Hey, submit a letter and let us know what you think and we’re going to take it or leave it,’” she said. “It actually has to be a meaningful consultation.”

Mille Lacs Commissioner of Natural Resources Kelly Applegate wrote the agencies did “a good job” sharing technical information with the band, but that is not the same as meaningful consultation.

“Meaningful consultation is a political act between sovereigns, and a dialogue regarding possible impacts to each Party’s sovereignty,” she wrote. “This conversation is separate, but not isolated, from the technical merits of the regulatory issues at hand.”

Multiple tribes noted MPCA was the only agency to acknowledge the need for tribal consultation. The Environmental Quality Board updated its recommendations to include tribal contacts in the environmental review process.

All five tribes that submitted comment recommended the PCA — not the DNR as the draft said — be considered the primary agency responsible for gas production regulation. The DNR was the suggested responsible agency in the final recommendation.

Rep. Peter Fischer, DFL-Maplewood, said he was concerned with advancing quickly with the temporary rules, given dissatisfaction with tribal engagement efforts, asking what would be done to improve them during the regular rulemaking process.

Mike Liljegren — DNR assistant director of lands and minerals who led the recommendation presentations before the House Environment and Natural Resources Finance and Policy Committee on Tuesday, Feb. 11, and the Senate counterpart on Feb. 6 — said he was working with the DNR’s tribal liaison.

“We did have a lot of coordination, collaboration with the tribes at our state tribal meetings from the time that legislation was being enacted all the way through the GTAC process, plus we did have meetings with all of the tribal leadership,” he said in response.

In its report, GTAC groups the input it received by theme and subtheme and details how it considered it. Under tribal relations, need for consultation, the report details the DNR’s updates to tribal government environmental staff at mining meetings.

“Prior to the input period, tribal leaders did not call for Consultation regarding gas legislation or the GTAC recommendations in the State,” it concludes.

GTAC emphasizes urgency

Klemz, from the Minnesota Center for Environmental Advocacy, also reiterated comments asking for clarification on the length of permits and ensuring permits issued under the temporary framework would need to be reevaluated once the permanent rules are in place.

The DNR recommended permits issued under the temporary framework not be considered temporary, “to make clear that a permit issued during rulemaking will not be limited to a term less than what is proposed by the applicant, nor revoked” once rules are established. If a project requires a permit amendment or “substantively changes” its operations, then its permit would be updated to align with the permanent rules.

The agency argued forcing permittees to reapply for a new permit may lead to them delaying their investment in gas resource development until the permanent rules are established.

Liljegren emphasized that if the Legislature does not pass a temporary regulatory framework, the moratorium it also passed last year prohibiting gas production without a permit will stay in place.

In that case, no permit applications could be accepted until permanent rules are adopted. Agencies must publish their notice of intent to adopt permanent rules by May 2026.

A rising industry

A lawyer for Pulsar Helium also testified before the House committee. The company expects to make its final investment decision late next year, deciding whether it’s worth producing gas from the Northern Minnesota deposit. The lawyer said that’s when Pulsar would begin the DNR permitting process in development — likely after the deadline for permanent gas production rules.

CEO Abraham-James estimated it would take another 18 months after the final investment decision to begin production.

In November, the company announced a partnership with Chart Industries, a leading manufacturer of industrial gas processing facilities with a large fabrication plant in New Prague. Chart would design and fabricate the equipment Pulsar would use to produce the gas on site: essentially, a series of shipping container-sized trailers that filter out the different types of gas, including carbon dioxide and nitrogen.

The carbon dioxide, which makes up the bulk of the gas deposit, would be sold in Minnesota.

He said he’s extremely pleased with the company’s progress, and there’s been nothing concerning.

“This is the industry that I’ve chosen to work in. It’s an industry I’m proud to work in,” he said. “I personally care very much for the environment and for the people here, and I wouldn’t ever do it any other way.”

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