This is tagged as Environment: UNDERWATER and that doesn't seem correct... 

>Use Conjure Minor Elemental
>Summon 8 Steam Mephits
>Find a way to contain them, such as in a jar 
>Command them to constantly use Steam Breath
>Channel it into an engine
>Boom! 1 hour's worth of steam power.
>Now make a train.
>Introduce the steam engine to your Dnd world.
>Start a business around this new technology
>Make your train empire

Underwater magma fissures are a thing. I was under the impression they lived near those (because it’s a mix of fire and water). Plus, where else would they live? There’s no other environment on the environment list that suits them. 

Quote from SubblyXatu >>

>Use Conjure Minor Elemental
>Summon 8 Steam Mephits
>Find a way to contain them, such as in a jar 
>Command them to constantly use Steam Breath
>Channel it into an engine
>Boom! 1 hour's worth of steam power.
>Now make a train.
>Introduce the steam engine to your Dnd world.
>Start a business around this new technology
>Make your train empire

 I actually did this.

it worked.

I love my DM.

That will be the type of elementals they speak about caging in Ebberon!

Yeah it seems strange that an Underwater creature doesn't explicitly have the ability to breath underwater. 

Since it's an elemental, it probably doesn't need to breathe at all, but that was left out of the statblock for some reason. Same with the water elemental.

I'm going to use these by a geyser. I think that's one of the few places you might find them on land.

I once used these via Conjure Minor Elementals to swiftly destroy a couple of fire elementals which were hanging around. The damage isn't much, but they're completely immune to fire damage and the DM spent a couple of rounds trying to kill them instead of us.

The CR for this monster is definitely too low

So my friend is making this OP. They summon them, use steam breath, and make them kill themselves doing 16d8 dmg with using minor elemental 

They cannot damage themselves, as they are immune to fire damage :)

I summoned 8 of these and they removed a hydra’s head.

Hot dang.

Claws. Melee Weapon Attack: +2 to hit, reach 5 ft., one creature. Hit: 2 (1d4) slashing damage plus 2 (1d4) fire damage.

 Turns out they can damage themselves, just not with Steam Breath, their own Death Burst, or with the second d4 on the Claws attack. What you meant to say HeliumSquid is that there isn't any possible way that the tactic being employed by goyo225's friend can actually work (with RAW), because the only method a steam mephit has to kill another steam mephit would take an average of nine Claw attacks. Not practical to say the least. That being said, there is an easy way to make this "mephit bomb" strategy possible in a more plausible way. It would require a small tweak by the DM to decide that the lore for mephits is that the means by which they blow themselves up is something they can control.

 It's implied by goyo225 that the spell Conjure Minor Elementals is being used. In the spell description it says that they have initiative as a group and obey your verbal commands. The goal is to trigger the death burst for all of them at the same time, which requires the mephits to 'die'. However, if mephit lore is now modified to say that they choose to blow up upon death (or somehow ensure that they will) out of spite to harm their enemies in a last hurrah, but could blow up before they die if they were... convinced to do so, it means that the player in control of the mephits can command them to blow up and they have to do it, with neither damage nor death as a prerequisite. Since they are a group in the initiative, they would basically be going off at the same time and unlike some other spells (such as Command for example) there is no stipulation in Conjure Minor Elementals that states you can't ask the conjured creatures to harm themselves.

 In the end, as always, it's up to the DM to decide what level of shenanigans they want to allow. I would allow this at my table, but I would make the 'kamikaze' action take a full round to 'charge up' before it goes off and explodes immediately if they take damage while charging but the damage is halved. This gives the target a last chance opportunity to escape or mitigate the damage which I think is fair, since the game has several things in it specifically for controlling movement and restraining (Hold Person, Hold Monster, Sentinel, etc.).

Same here. I was thinking of an active geothermal area. Geysers, mud, hot springs, that sort of environment (think Yellowstone National Park here in the US; Termas Geometricas in Chile; the Puga Valley in Ladakh, India; or Russia's Kamchatka Peninsula). 

This is genius 

sizzle sizzle bb

My dm actually used these guys trapped in canisters as “portable steam power” that we had to move around in a temple to activate switches/doors/traps.  I pulled one out of the wall, burned my hand, and dropped it on the ground.  Shattering the canister and releasing the mephit. 

if you upcast conjure minor elementals,  you can create 24 steam mephits. As a conjurer, the durable summons feature allows them to have 30 temporary hit points. Each. This means that you can create a small platoon of steam mephits with tons of HP that you can use to take over the world.

*Queue maniacal laugh.*