Iowa Senate Leader Mike Klimesh: Hydrogen Could Mean New Income and Landowner Protections

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Every now and then, something comes along that sounds like it belongs in a science fiction movie. It goes something like this: Hydrogen is trapped 8,000 feet beneath Iowa farmland. Private developers extract it. Landowners have a new source of income. Their neighbors have new protections. Eventually – maybe, just maybe – residents across the state could see lower income taxes. They might not pay income taxes at all.

But according to Iowa Senate Majority Leader Mike Klimesh, this isn't a futuristic concept. Companies are already spending millions of dollars trying to find naturally occurring hydrogen beneath Iowa, and lawmakers have spent the last three years trying to make sure landowners are protected if those discoveries turn into something bigger.

"We want to make sure the landowners had the keys to those conversations, and they were in the driver's seat," Klimesh, a Republican from the Southwest Iowa town of Spillville, told American Farmland Owner from his office at the Iowa Statehouse in Des Moines.

Mike Klemish bio:

• Iowa Legislature -- State Senator since 2021

• Iowa Senate Majority Leader -- Elected in 2025

• Spillville -- Former mayor

• Graphics, Inc. -- Former manager

• Winneshiek County Economic Development Board -- Former member

• South Winneshiek High School/Northeast Iowa Community College – Shooting team instructor

New hydrogen exploration plan

Earlier this year, Klemish led legislation in Iowa that updates underground resource pooling. Previous state statutes existed, but they were leftovers from another era.

"Iowa is not a state that has had access to underground natural resources," Klimesh said. "Those code sections were antiquated. They were not keeping pace."

Lawmakers studied other states that have dealt with oil, gas, and mineral development for decades.

"We looked at states like Oklahoma and Wyoming, North and South Dakota, Pennsylvania, even Texas," he said. "Iowa needs to bring this up to speed."

One reason was simple: the old law offered very little protection to landowners.

Protection for landowners

"Prior to the bill we passed this last year, if a landowner was encompassed in a pooling order, the cost recovery method from the driller was a lien on their property," Klimesh explained. "There were no landowner protections. There were no surface restorations in our code sections."

The new law changes that.

Under the legislation, at least 25 percent of a hydrogen pool must be made up of voluntary participants before a pooling order can move forward. Landowners also have more authority to negotiate what happens to their property after drilling activity ends.

"We've crafted a very good section in that bill that dealt with surface owner restoration, so the landowner can dictate exactly the terms they want once the drilling company has sunk the well and moved on to someplace else," Klimesh said.

So, what does this look like for a farmer?

How farmers can benefit from hydrogen exploration

Klimesh used a neighbor-to-neighbor example.

Imagine a company approaching you because geological surveys suggest a hydrogen-bearing dome may lie beneath your farm. They drill an exploratory well and discover hydrogen. The deposit, however, doesn't stop at your fence line.

"They're going to go to me and say, 'Hey, we found hydrogen, but the pool also exists under your property, Mike,'" Klimesh said. "We want to make a pooling order to encapsulate all the landowners that are in the pool geographically."

Without a pooling mechanism, only the owner of the drilling site would benefit financially, even though neighboring landowners sit atop the same underground resource.

"To make sure that everybody gets compensated for the hydrogen," Klimesh said, "it's important to establish that pool."

The Iowa Department of Natural Resources oversees the process, and the new law ensures that participation cannot be entirely forced.

Hydrogen could offer revenue for landowners

For many landowners, though, the bigger question may be why companies think Iowa has hydrogen in the first place.

Klimesh admits he was fascinated by the science long before many of his colleagues had heard the term “geologic hydrogen.”

"The first time I heard about this was about four years ago," he said. "I happened to stumble across a small United States Senate subcommittee hearing that was talking about hydrogen development."

Scientists now believe Iowa's geology may be especially promising, Klimesh said.

Klimesh explained how the process worked. About 8,000 feet below the surface lies iron-rich rock. When water interacts with that rock, oxygen bonds with the iron, leaving hydrogen behind. Over millions of years, shale formations can trap the gas in underground domes.

"Mother Nature's been making this underneath the earth, just kind of cooking along with the process," Klimesh said.

Companies search for those domes using ground-penetrating surveys along Iowa roads before drilling test wells.

Hydrogen could lower fertilizer costs

And while royalty payments from hydrogen production could someday provide new revenue streams for landowners, Klimesh believes the biggest economic impact may show up somewhere farmers already spend a lot of money: fertilizer.

Hydrogen can be converted into ammonia, a key ingredient in nitrogen fertilizer.

Today, the United States imports roughly half of its ammonia supply, and Iowa farmers pay transportation costs to bring much of it north from the Gulf Coast.

"We did some math, and basically right now Iowa farmers pay about $200 to $250 more a ton for fertilizer for ammonia than Texas farmers do," Klimesh said.

If Iowa can produce hydrogen and ammonia closer to home, he believes farmers could see meaningful savings.

"When you boil the math down, if we can control that means of production here in Iowa, we can drive 25 to 30 cents more per bushel on the backside for farmers upon harvest," he said.

Hydrogen exploration is still new

That's still a big "if." Companies are in the exploration phase, drilling holes, and looking for evidence that commercial-scale deposits exist.

But lawmakers decided waiting until after discoveries were made would be too late.

"We worked on this bill for three years," Klimesh said. "There were three years of conversations here at the Capitol."

For landowners, that may be the most important takeaway. Whether hydrogen becomes Iowa's next energy boom or simply an interesting chapter in the state's history, the framework is now in place to ensure that property owners have both an opportunity to benefit and protection if developers come knocking.