Regulatory Framework for Developing Gas Resources in Minnesota

Enacted Legislation

The enacted legislation for creating a regulatory framework for gas production in Minnesota includes the following elements:

Allows the Minnesota Department of Natural Resources (DNR) to lease state-managed lands to prospect for gas resources. Leases must be approved by the Executive Council. This will allow both royalty disbursements and rental payments to state and local governments under MS 93.22.

Requires the DNR to amend and adopt certain rules pertaining to oil and gas production and allows other state agencies to adopt or amend rules for oil and gas production. Rulemaking must be completed within 24 months (by May 2026) of enactment under expedited procedures.

Prohibits oil and gas production in the state without a permit from the DNR. Prohibits issuance of these permits until rules are adopted, unless the permitting process has been approved by the legislature. (Note that with the exception of recommendations from the Minnesota Department of Revenue related to tax structure, GTAC recommendations focus on gas development only and no rules are being prepared for oil production.)

Directs the DNR to create the multi-agency Gas Resources Technical Advisory Committee (GTAC) to make recommendations to the DNR commissioner that would guide the creation of a temporary regulatory framework that would govern, after legislative approval, permitting of gas production projects during the rulemaking process.

Requires GTAC to hold one public meeting on this topic and consider testimony from stakeholders and Tribes.

Directs the DNR commissioner to submit recommendations to the State Legislature that reflect GTAC recommendations by January 2025.

Provides appropriations to support the identified work per Law of Minnesota 2024, Ch. 116, Art. 3, Secs. 21-25. Upon enactment, a one-time appropriation of $768,000 was issued to fund GTAC. A second appropriation of $2,406,000 was made available on July 1, 2024, for the development of a regulatory framework for gas production and for rulemaking over the ensuing twenty-four months.