Fisher

This newsletter is written as the legislature continues to work through the final hours of the session Saturday night and into Sunday morning. As I finish writing this in the chamber, it’s 11:30 AM Sunday, May 3, and we’ve been here working for nearly 27 hours.

Senate File 2490, which passed the House Saturday night with amendments, is a bill that deals with geologic hydrogen, oil, and gas production in Iowa. This legislation arises from the fact that Iowa has been identified as a potential site for geologic hydrogen production in recent years. This type of energy production is fairly new, hydrogen production has been largely manufactured thus far. Geologists tell me that only one other place in the world is currently producing geologic hydrogen in any usable quantity, and that well is used to power a small village in Africa.

This bill was necessary to update Iowa’s laws regarding all aspects of oil and hydrogen production, including rules on business filings for wells, confidentiality, exploration, pooling, landowner protections, surface damage negotiations, taxes on production, and distribution of revenue.

This idea of producing geologic hydrogen is new, and there is still much that needs to be understood and discovered about it. There are two main theories being discussed about how hydrogen could be produced in Iowa. The first theory is that pockets of naturally existing hydrogen can be found here in Iowa. If so, it simply needs to be found, wells drilled, and the hydrogen brought to the surface. The second theory, and in my understanding, after discussions with the Iowa Geological Survey, the most likely, is that Iowa’s known mineral geology in a large swath across Iowa at 2 to 5 miles depth implies that hydrogen production could be “stimulated”. That means that the hydrogen does not exist yet, but if water and other chemicals are injected into this specific mineral layer the water would stimulate the minerals to produce hydrogen gas which could then be drawn to the surface. At least one company pursuing hydrogen in Iowa has patents on this stimulation process. This stimulation process would require large amounts of water, and that water would likely be lost to the surface water cycle once it’s injected at those depths. I have deep reservations about this technology for that and other reasons.

One of the significant issues with hydrogen production revolves around the issue of “pooling” and “pooling orders.” If pools of naturally existing hydrogen gas do indeed exist under Iowa, these pools will extend across multiple landowners’ property. If one landowner drills and taps that pool, he would potentially draw hydrogen from beneath other landowners property. This bill defines how proceeds will be distributed between the landowners and the producer in order to ensure fairness and equity. An amendment that I sponsored to this bill ensures that a pooling order would not be issued unless a producer first identifies an actual pool of hydrogen. This amendment ensures that if a producer is using a hydrogen stimulation process instead, the pooling order would not be allowed because the producer has complete control of where they are stimulating the minerals.

The bill ensures that the owners of the mineral rights who wish to take advantage of these discoveries have the protections they need, as well as ensures that those who do not wish to participate are also protected. Time will tell if geologic hydrogen production in Iowa is a bold new revenue stream or a passing curiosity.

In the FY 2027 Budget, Iowa Republicans are doubling down on our promise to provide clean, safe water. The State of Iowa already invests nearly $100 million annually in water quality improvement and this year we’re increasing that investment even more with new funds for rural infrastructure, water quality monitoring, and a one-time investment in nutrient removal systems of Iowa’s largest water utility. We also receive nearly $500 million from the federal government for water quality, for an annual investment of nearly $600 million dollars state-wide. We aren’t just spending more; we’re spending smarter. We are realigning the Water Quality Financial Assistance Fund to ensure taxpayer dollars go to the most effective programs.

Among the key points of the new 2027 plan are these: We are allocating an additional $500,000 annually to water quality monitoring (totaling over $5 million state-wide); We are increasing annual funding for the Wastewater and Drinking Water Financial Assistance Program to over $12 million. Combined with a one-time boost of $8 million, we are making $20 million in grants available to Iowa communities for wastewater and drinking water infrastructure projects; We’ve created the new Rural Iowa Infrastructure Bank, providing $10 million in 1% low-interest loans specifically for small and medium-sized communities to modernize their water systems without breaking the local budget.

Also, we are providing a one-time, $25M investment to Central Iowa Water Works to double their nitrate removal capacity within three years. While the Des Moines Metro has grown, CIWW infrastructure hasn’t kept pace. The Iowa Legislature is picking up the slack to ensure the 1 in 5 Iowans served by CIWW have their access to clean water protected. Along with that investment, we are launching the Greater Des Moines Watershed Program ($3.72M annually) to fund scalable “edge-of-field” practices like cover crops and wetlands upstream. By treating water upstream, we reduce the burden on systems downstream. We continue to allocate roughly $2.79 annually to the Urban Infrastructure Program that provides grants for urban conservation projects in Iowa communities like stormwater wetlands.

The bottom line is this – clean drinking water is nonnegotiable for Iowans.

As always, I look forward to seeing you at the Capitol or in the district.

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Contact Dean Fisher at dean.fisher@legis.iowa.gov.