February 2025, Vol. 252, No. 2
Features
Burgum’s Backing at Interior a Boom for Bakken?
By Richard Nemec, Contributing Editor, North America
(P&GJ) – In North Dakota, the nation’s second-leading energy producing state and third-best for oil, a three-member Industrial Commission (IC) headed by the governor oversees the state’s economy that is dominated by energy and agriculture.
At his last meeting in December outgoing Gov. Doug Burgum, the Trump administration’s pick for U.S. Interior Secretary, made sure the IC approved some initial injection wells for a major carbon capture and storage (CCS) project in the state, which the eight-year governor championed as a key to North Dakota’s future energy development and environmental protection.
Meanwhile, state officials in the North Dakota Department of Mineral Resources (DMR), which is part of the IC, has reported a preliminary all-time high of 19,200 producing oil and gas wells in 2024. Oil taxes have come in 13% over forecast in the state’s 2023-25 budget cycle, or $475 million more than projected, according to a November report. Oil production hit nearly 1.2 MMbpd in September.
While Burgum supports Trump’s mantra to “drill baby, drill,” he is also an advocate for addressing climate change through various decarbonization measures. As a popular two-term governor – his first and only political office – Burgum managed to satisfy energy industry, environmental and Native American tribes’ agendas while leaving the state with the third highest GDP per-capita in the nation and one of the nation’s lowest unemployment rates.
His years of overseeing oil and natural gas operations in his state will come in handy for his role heading up the newly created National Energy Council that will bring together all federal agencies dealing with energy-related matters.
The council position will oversee the Trump administration’s campaign promises to rev up U.S. energy production after what the President-elect alleged was the Biden administration’s climate policies stifling domestic output and forcing U.S. allies to rely on rival sources for energy.
Ron Ness, president of the North Dakota Petroleum Council who has gotten to know and appreciate Burgum over the past eight years, thinks he will make a real impact as Trump’s Interior Secretary. Ness calls the former governor a “brilliant guy” who has become an energy champion that has led him to the cabinet spot.
“I am really excited to see what he does with the energy council, because I think that is really his wheelhouse, thinking big and doing big,” Ness said. “I suspect that between he and Chris Wright [CEO of Denver-based energy services company Liberty Energy who was tabbed as Trump’s Energy Secretary] they will take the [U.S.] message of energy to a whole new level, and the importance of the United States being the dominant energy provider in the world.”
In Interior, Ness said he is hopeful he will be able to instill the spirit of “America wanting to produce more energy and to do it right.” Also, helping small business provide the supplies and equipment needed to produce more energy. Drilling federal lands, taxation and permitting on federal lands are all issues near and dear to Ness and his North Dakota oil and gas compatriots.
“The demand for energy growth in this country is not going down; it is going up, we need it all,” Ness emphasized.
As an indicator of Burgum’s persuasiveness, Ness remembers when he was first running for governor in 2015 and met with the NDPC, which was supporting another candidate at the time.
“He sat down for several hours [with us] and was intrigued by the Bakken Shale play,” Ness said. “It was the beginning of his learning about energy, and he developed a real passion for it. He had virtually no knowledge of it before that.”
Ness sees the Bakken’s best days as one of the nation’s major shale plays still ahead, contrary to some predictions that it is slowing down.
North Dakota has been stable after Covid with Burgum as governor at 1.2 million barrels per day of oil per day.
“We are by no stretch in a decline,” Ness said. “The technology down the road is trying to supercharge this reservoir with CO2 and find ways to crack the code on how to super-charge enhanced oil recovery [EOR].
“Burgum is all about business and politics is farther down the road for him. We’ll see how that goes on a national level, but generally speaking he is about issues and what they are and moving forward.”
As governor, Burgum announced that North Dakota should be carbon neutral because he saw an opportunity available for EOR.
“He saw you could do it and still support oil and gas and coal production.” Ness thinks North Dakota, as a result, is out “ahead of the curve” on carbon sequestration, transportation and storage. He expects Burgum to keep championing this as part of the administration.
While some western elected officials have criticized Burgum’s selection for Interior because he is allegedly “too close” to the oil and gas industry, at least one Democrat, North Dakota state legislator Josh Boschee, said the former governor learned on the job since taking office in 2016 and adapted to not being able to run the state government like he would a private enterprise.
Boschee and other elected officials in the state credit Burgum with developing good working relationships with North Dakota Native American tribes, and they expect he will carry on the legacy of Biden administration Interior Secretary Debra Haaland, the first Native American to hold the post, and continue to focus on improving cooperation between the federal government and the tribes.
Burgum is credited in North Dakota for working hard to build a respectful relationship with the tribal nations that share borders within North Dakota. The state is home to five federally recognized tribes, including Standing Rock and Fort Berthold reservations.
There are about 30,000 Native Americans living in the state, making up about 5% of the state’s population. During his administration, Burgum held a tribal summit in 2023 and has been recognized for work to incorporate the Indian Child Welfare Act into state law when the federal statute was being challenged in the U.S. Supreme Court.
Political opponents still raise concerns about Burgum’s potential Interior leadership, noting that he will be implementing the Trump administration’s agenda on public lands, which could conflict with conservation of land, sacred sites, national parks and other protected areas, all issues of concern for the tribes.
In November, Mark Fox, chairman of the Mandan, Hidatsa and Arikara (MHA) Nation, called Burgum’s recent nomination for Interior and the National Energy Council a “match made in heaven” for North Dakota tribes. In the combined role outlined by Trump, Burgum would not only lead the Department of the Interior — which includes the Bureau of Indian Affairs – but also wield power over all federal agencies that regulate energy.
Fox and other North Dakota and South Dakota tribal leaders welcomed the news. North Dakota news media reported that Burgum was credited with improving the state’s one-time strained relationship with local tribes. During his two terms as governor, Burgum advocated for tax-sharing agreements with tribes, added a permanent display of all five tribal flags outside the governor’s office and pushed for law enforcement partnerships to improve emergency response times on reservations.
“Governor Burgum understands Indian country and the challenges we face, such as the need for public safety, better tribal education, and economic development in Indian country, among other needs,” David Flute, former chair of the Sisseton Wahpeton Sioux Tribe, wrote in a statement to the North Dakota Monitor. Flute is now secretary of the South Dakota Department of Tribal Relations.
Elected officials in the state have told local news media that they expect Burgum to continue to work collaboratively with the tribes. An example is MHA’s Fox, Burgum, and North Dakota Tax Commissioner Brian Kroshus signing an agreement between the tribe and the state of North Dakota that outlined a tax revenue sharing plan for alcohol sold on the reservation, allowing the MHA Nation to keep 80% of all tax revenue from alcohol sales on its reservation, while 20% goes to the state.
Previously, 100% of all alcohol tax revenue, generating millions of dollars, went solely to the state. Now the tribes will allocate all funds from alcohol tax revenue toward addiction treatment, law enforcement, community safety and wellness programs. The former governor and news media portrayed this as a win-win.
As captured by local news media, national and state elected officials in North Dakota have expressed support for Burgum’s nomination to Interior, calling out his record of dealing with issues important to the tribes in his state during the last eight years as governor. While criticizing the Biden administration’s dealings with the tribes, U.S. Sen. Kevin Cramer (R-ND) has said that Burgum “has done more for Indian relations in North Dakota than any governor in my lifetime, for sure, and maybe ever.”
Cramer thinks that Burgum’s experience working with North Dakota tribal leaders makes him a good fit for leading Interior. He characterized the current BIA as unresponsive and bureaucratic.
In the fall of 2024, North Dakota’s adversarial relationship with the federal government, particularly the Interior Department, erupted in full force. In September, the state won a preliminary injunction against Interior to block the Biden administration venting and flaring rule in North Dakota v. U.S. Department of the Interior.
The Bureau of Land Management (BLM) venting and flaring rule established a new royalty on flared gas, instituting monthly limits on allowable flaring, and added new application requirements for operators regarding their ability to capture natural gas before obtaining a drilling permit. North Dakota, Montana, Texas and Wyoming filed a lawsuit in North Dakota Federal District Court to challenge the rule and protect their interests. Cramer praised Burgum’s leadership in challenging what he called “the swamp’s anti-domestic energy agenda.”
On the positive side, at the end of 2024 Cramer was able to get $32.4 million in tribal infrastructure project funds for North Dakota reservation from Interior’s Bureau of Reclamation. The money will fund 11 tribal public works projects among the state’s five tribes.
One of the nation’s major pipeline projects, Dakota Access Pipeline (DAPL) came into service after Burgum took office in 2017. State energy officials say this marked a turning point in which North Dakota pivoted to pipelines as the dominant means of moving crude oil to market out of the region.
Growth of natural gas production and Burgum’s leadership in addressing that challenge through gas capture as well as working with value-added industry in attracting those companies to the state for power generation and data centers was another plus attributed to the former governor.
Engineers in the state DMR who worked with Burgum, such as Justin Kringstad, director of the North Dakota Pipeline Authority, say the governor worked hard at educating himself about energy at the same time he forced the state’s brain trust to become more innovative. Kringstad thinks advances in technological implementation were made during Burgum’s eight years heading the state.
“Certainly [Burgum’s] innovative approach to decision-making at all levels in the state was one of the most encouraging things I have seen for energy development,” Kringstad said. “Under Burgum, energy development in the state was never at the expense of the citizens or the environment. It was a challenge to us and other energy leaders and sectors working with energy to think outside the box and not being beholden to old ways of doing things.”
Kringstad said one of the first projects he worked with Burgum’s office on was an initiative to increase pipeline safety, taking a very aggressive approach to reducing the frequency and intensity of pipeline incidents occurring in the state.
“Out of that there are different programs that have been developed like the iPIPE, or Intelligent Pipeline Integrity program,” he said.
The iPIPE program is a collaboration between pipeline operators from several key oil-producing states with matching funds from the North Dakota IC and management by experts at the state’s university-based Energy & Environmental Research Center. It recognizes that the pipeline industry faces new challenges in moving toward an era of zero tolerance for leaks. This program resulted from a call to action by Burgum. iPIPE members are working together to develop emerging technologies that hold promise to improve pipeline leak detection and prevention.
Under iPIPE, technology providers are continuously scouted, and the most promising participants are invited to present proposals to a technology selection panel that chooses development projects, offers funding, and hosts development and demonstration activities. This process creates custom solutions for members and allows technology providers access to practical feedback.
Nothing in Douglas Burgum’s background growing up on a farm near a small village of 350 people indicated that he was destined for a presidential appointment inside the Beltway in our nation’s capital. He obtained a bachelor’s degree 30 miles from home at North Dakota State University, and the allure of warmer climes eventually pointed him West to Stanford University’s business school where his life was unalterably changed.
With a 1980 MBA from Stanford, Burgum returned to his home state and founded a successful software company that eventually was sold to Microsoft for $1.1 billion in 2001 and he stayed on as an executive with Microsoft running its business solutions unit. Before taking on the governorship in 2017, he had served as board chairman for an Australian software company, Atlassian Corp., and U.S.-based SAP SuccessFactors, later founding another company, the Kilbourne Group, a Fargo-based real estate development firm, and he also was the co-founder of Arthur Ventures, a software venture capital group.
His classmates from the class of 1980 at Stanford’s graduate school include Silicon Valley luminary Scott McNealy, venture capitalist and former NBA player John Hummer, and former Walt Disney Co. executive Stan Kinsey.
“Silicon Valley was becoming a term and a concept” when he arrived, according to Burgum’s remarks to a Stanford alumni event. Stanford’s entrepreneurial spirit is woven in his career, including software, real estate investment, philanthropy and politics. “The people, the experiences [and] the foundational learning have been essential,” Burgum told fellow alumni.
Politically, Burgum’s selection was viewed favorably on Capitol Hill, particularly among Republicans on the energy committee in the House and Senate. The governor rode a crescendo of praise inside the Beltway. Current ranking energy member Sen. John Barrasso (R-Wyo.) said Burgum “recognizes how important our federal lands are for energy and mineral production, grazing and recreation, and as governor, he’s shown he can balance environmental stewardship with record energy development.”
North Dakota Sen. John Hoeven called him “a great partner as we’ve worked to build North Dakota’s energy leadership,” and his colleague from Alaska Sen. Dan Sullivan, who hoped Trump would pick a westerner, noted westerners “know the issues.”
Both of Trump’s Interior secretaries in his first term heaped praise on Burgum. One of them, Rep. Ryan Zinke (R-Mont.), who now serves in the House, called Burgum an ally. “When I was secretary, he was a trusted partner advancing the president’s priorities on energy dominance, rolling back the regulatory overreach of the Obama Administration, and ensuring we strike the right balance.”
In 2023 as a presidential candidate and Trump surrogate who was once considered for vice president, Burgum called for expanded energy and mineral production on public lands, and he has been a leading opponent of Democratic energy and public lands policies.
Richard Nemec is a long-time contributing editor at Pipeline & Gas Journal, based in Los Angeles. He can be reached at rnemec@ca.rr.com.
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