BISMARCK, N.D. — In a clear endorsement of energy development, President-elect Donald Trump has tasked his nominee for Interior Secretary, North Dakota Governor Doug Burgum, to champion a “Drill baby drill” agenda. During Burgum’s final budget presentation to lawmakers before assuming his new role, he showcased a promising financial outlook based largely on the state’s success in oil and gas extraction.
As he prepares to leave office next week, Burgum highlighted North Dakota’s prominent position as the country’s third-largest oil producer. His budget proposal reflects optimism for the state’s continued energy output and signifies his commitment to leading the newly established National Energy Council, aimed at bolstering U.S. energy supremacy.
“We anticipate a shift in focus from regulation to innovation in the coming four years, offering North Dakota and our resource owners enhanced access to expedited permitting processes for natural resource extraction,” Burgum stated in front of a full House chamber, expressing concerns over numerous federal energy regulations currently affecting his state.
With a robust background as a two-term governor and a successful software entrepreneur, Burgum is positioned as a fitting selection to fulfill Trump’s vision for both the new council and the Interior Department, where he will manage public lands and natural resources. However, environmental advocates remain apprehensive about the implications of Trump’s second term for climate policy, given his intentions to reverse many of President Joe Biden’s initiatives.
North Dakota’s economy heavily relies on oil and gas, with the state experiencing a significant boom in these sectors since the late 2000s, propelled by advanced drilling techniques like hydraulic fracturing and horizontal drilling. Recent figures indicate a record preliminary count of over 19,200 producing oil and gas wells as of September, with oil tax revenues exceeding forecasts by 13%, totaling an additional $475 million.
The state reached an impressive oil production level of approximately 1.2 million barrels per day in September. In 2019, under Burgum’s leadership, North Dakota achieved its peak annual oil production with 524 million barrels. Last year was recorded as the fourth best year for oil output in the state’s history.
Burgum’s budget proposal of $19.5 billion for the upcoming two years anticipates oil production rates of 1.1 million barrels per day during the 2025-27 cycle, with projected oil prices around $62 and $60 for each of the next two budget years. Oil tax revenues are a crucial component of the state’s budget, funding essential services such as education, property tax relief, human services, and infrastructure.
Longtime Republican Representative Mike Nathe emphasized the importance of oil revenue, stating, “Oil revenue impacts every community in the state.” Additionally, revenues from oil taxes contribute to the state’s sovereign wealth fund, which has surpassed $11 billion since its creation by voters in 2010, providing significant earnings for state use.
However, the volatility of oil prices severely impacted North Dakota in 2016, resulting in a budget shortfall that necessitated cuts and a depletion of reserves. Projections of oil revenue are pivotal to the budgeting process within the legislature.
Other states have reported their revenues are in excellent standing, with total general fund revenues exceeding forecasts by 12% at $392 million, and sales taxes showing a similar increase by 12%, equating to an additional $182 million.
His budget plan includes a general fund of $6.5 billion, establishing it as the primary operating account for state governance. The current legislature passed a remarkable budget totaling $19.6 billion for 2023-25, featuring a $6 billion general fund alongside substantial federal support, which was over $1 billion greater than Burgum’s initial recommendation.
In his final budget proposal, Burgum outlined various priorities, including salary increases for state employees, enhancements to K-12 education, and funding for critical areas such as workforce development, infrastructure, housing, and technology, along with allocations for childcare initiatives and addiction support programs.
As the budget writers prepare to evaluate Burgum’s proposal, they will also receive a budget plan from his successor, Republican Governor-elect Kelly Armstrong, who is due to take office on December 15. The Legislature is set to convene in early January, with Republicans maintaining a supermajority in both the House and Senate.