Crude Oil, Chemicals

November 15, 2024

Trump taps North Dakota Governor Doug Burgum to lead US Interior

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HIGHLIGHTS

Appointment signals major shift for US federal lands

Industry seeking new lease programs and rules

Burgum supported some environmental efforts as Governor

US President-elect Donald Trump said on Nov. 14 night that he will nominate North Dakota Governor Doug Burgum to be the next secretary of the US Department of the Interior, reinforcing Trump's plan to boost oil and gas production on US public lands.

"He's going to head the Department of Interior, and it's going to be fantastic," Trump said during an event at the Mar-a-Lago resort Nov. 14. "We're going to do things with energy and with land, interior, that is going to be incredible." Trump said a formal announcement would be made Nov. 15.

If his nomination is confirmed by the incoming Republican majority in the US Senate, Burgum will oversee a federal agency with around 70,000 employees responsible for managing roughly 500 million acres of federal land and more than a billion acres offshore.

"Governor Burgum knows what it takes to unleash American energy," Senate Energy and Natural Resources ranking member and majority whip for the 119th Congress John Barrasso, Republican-Wyoming, said in a statement. "He recognizes how important our federal lands are for energy and mineral production, grazing, and recreation. As North Dakota's governor, he's shown he can balance environmental stewardship with record energy development."

Federal lands policy

Burgum ran in the Republican presidential primary before suspending his campaign and endorsing Trump. He has been a vocal proponent of increased US oil and gas production and, according to a recording of remarks obtained by the Washington Post, told donors at a fundraiser in May that US President Joe Biden's policies constituted "an attack on liquid fuels."

The US is the world's top producer of crude oil and natural gas, with production hitting new highs each year of Biden's tenure. Analysts are skeptical that US government policy -- rather than global market forces like slowing Chinese demand growth -- would meaningfully increase US production in the near term.

"We continue to regard global supply-demand balances (and, concomitantly, prices) and investor appetites as primary drivers of upstream development decisions," ClearView Energy Partners wrote in a Nov. 7 research note. "As we have noted, the global liquids supply appears poised to exceed demand by ~0.9 million b/d during H1 2025. That could dampen operator enthusiasm for upstream investment in any regulatory environment."

Still, Republicans and large industry groups like the American Petroleum Institute have been critical of the Biden administration's Interior Department. Under current Interior Secretary Deb Haaland, the government prioritized wind and solar development on federal lands, protected large tracts of Alaskan land from drilling and mining, minimized offshore drilling leases and reworked, for the first time in decades, onshore lease terms and costs.

"The incoming administration should tackle the weakest offshore programs in history," API CEO Mike Sommers said on a call with reporters Nov. 12. "Issuing a new five-year offshore leasing program and holding regular lease sales should be a key priority to encourage long-term investments. It's also critical that the new administration repeals restrictive onshore leasing rules."

On Nov. 15, US Representatives Raul Grivalja, Democrat-Arizona and Frank Pallone, Democrat-New Jersey, as well as 11 other House Democrats, sent a letter to Biden urging him to permanently protect coastal waters from offshore drilling by using his authority under Section 12(a) of the Outer Continental Shelf Lands Act.

"Protecting our waters from offshore drilling is widely popular, with nearly two-thirds of registered voters expressing support," the lawmakers wrote. "More than 390 municipalities across the Atlantic, Pacific, and Gulf coasts have formally opposed the expansion of offshore drilling."

Climate record

While Trump has referred to climate change as a "hoax," governor of North Dakota -- which ranks third among US states in both crude oil reserves and production, according to the US Energy Information Administration -- Burgum created the state's first Department of Environmental Quality. "Preserving our natural resources for current and future generations is a top priority," he said in a statement at the time.

In 2021, at the start of his second term, Burgum announced a goal for North Dakota to be carbon-neutral by 2030. Burgum has also supported Summit Carbon's $8 billion plan to capture carbon dioxide at Midwestern ethanol plants and sequester it in North Dakota via pipeline. The pipeline would take advantage of Inflation Reduction Act tax credits which subsidize $85 per ton of carbon dioxide captured and stored underground.

"Coming from North Dakota, Doug has the right background to lead the Department of the Interior and oversee our public lands and natural resources in the right way," US Senator John Hoeven, Republican-North Dakota, said in a statement. "He has been a great partner as we've worked to build North Dakota's energy leadership and in this role can help to not only restore American energy security, but make America energy dominant."

Environmental groups criticized the appointment and pledged to fight Trump's agenda.

"Doug Burgum's ties to the fossil fuel industry run deep and, if confirmed to this position, he will surely continue Donald Trump's efforts to sell out our public lands to his polluter pals," Sierra Club executive director Ben Jealous said in a statement. "Our lands are our nation's greatest treasure, and the Interior Department is charged with their protection. The Sierra Club and its millions of members and supporters across the country will do everything in our power to stop Donald Trump and Doug Burgum's fossil fuel agenda and preserve our wild and special places."


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