Doug Burgum is an entrepreneur and the 33rd governor of the state of North Dakota. Recently, Burgum announced a goal for North Dakota to be carbon neutral by 2030.
What role can growers play in achieving carbon neutrality?
We are incredibly blessed in North Dakota to have such rich natural resources, from our productive soil to our extensive lignite and oil and gas reserves, and some of the best geology in the world for permanent sequestration of CO2. This is a great opportunity to leverage one of the world’s challenges for the benefit of our entire state as well as the nation and world.
We already know that in North Dakota we enjoy some of the cleanest air and water in the nation, because no one cares more about our environment than the people who live here. We also know that, while carbon is a key building block of life, we are living in an increasingly carbon-constrained world. That’s why I issued the aspirational challenge earlier this year at the Williston Basin Petroleum Conference for North Dakota as a state to become carbon-neutral by the end of the decade. This isn’t another government initiative, and it isn’t like what the other states are doing. This challenge includes no mandates, no regulations, and no pressure for any individual company or producer to change to what we are already doing. Rather, it sends a clear message to the federal government and other states that North Dakota can reach the end goal faster with innovation and free markets and without the heavy hand of government mandates and regulation.
With practices already being used in North Dakota such as cover cropping, rotational grazing and no-till, we are already capturing more carbon and putting it to beneficial use. Aiming for carbon neutrality is an opportunity for growers who choose to benefit from these existing practices to develop another revenue stream based on the increasing demand for carbon offsets and the markets that will be created to serve this demand.
Why should growers skeptical of changing their practices in a market with already tight margins care about carbon neutrality?
Again, this aspirational challenge comes with no rules or regulations for any grower to change current practices, but rather an opportunity to capitalize on best management practices. The carbon offset market is willing to pay for credits for farmers and ranchers to do what they’ve been doing in North Dakota for a long time, and this could be an additional source of land-based revenue.
Together with the massive underground storage capacity that is part of our state’s geologic jackpot, we can continue to be a national leader in energy and agricultural production in an environmentally friendly and economically beneficial way – through innovation over regulation. Ultimately, these types of best management practices also improve margins. We heard from one producer in the central part of the state who farms on marginal land and was able to increase his yield from 20 bushels per acre to now being consistently above 50 bushels per acre. We also heard from a rancher in the western part of the state who through grazing practices was not only able to access a $20-per-acre carbon credit, but also increased his livestock yields without an increase in the size of his herd.
More generally, why is carbon neutrality important?
To grow and diversify North Dakota’s economy, we must be able to attract capital to our state. And currently, so-called ESG principles – short for Environmental, Social and Governance – are being used on Wall Street to both guide and restrict investment decisions.
Funds that use ESG principles captured over $51 billion of net new money from investors in 2020, setting a record for the fifth straight year, according to a recent CNBC report citing the Morningstar research firm. BlackRock’s head of iShares Americas predicts that by 2030, ESG investing could become a $1 trillion category. If we’re to continue growing our economy, we need to be able to tap into that capital. Fortunately, we are situated better than just about any state in the country when it comes to our capacity to capture, utilize and store carbon.
In addition to continuing our tradition of solid environmental stewardship, this presents huge economic opportunities, and increased economic activity benefits all North Dakotans through job creation, demand for goods and services, and tax revenue to support essential government services.
If a farmer wanted to take action towards the 2030 goal right now, what could they do?
Continue the great work they are already doing and don’t be afraid to tell that story. We are uniquely positioned to take advantage of the market demands shifting toward a carbonconstrained future. Take, for example, the huge opportunity for our corn and soybean growers who can sell their commodities to ethanol and biodiesel plants. By implementing best practices, they can receive a premium for their crop, which then is developed right here in North Dakota into an ethanol or renewable diesel product that can be sold into a lucrative, low-carbon market.
What role will Project Tundra play in all of this?
Our lignite industry has been providing us with reliable baseload power for decades. Through innovation, they have already virtually eliminated concerns with nitrogen oxide (NOx) and sulfur oxide (SOx) emissions, and the next logical step is Carbon Capture, Utilization and Storage (CCUS).
Thanks to the tremendous work by the Energy and Environmental Research Center (EERC) in Grand Forks, we now know that the geology in coal country is even more promising for storage potential than previously believed. Statewide, we have an estimated storage capacity for 252 billion tons of carbon. To put that in perspective, that’s enough room to store over 8,000 years’ worth of our annual carbon output related to energy production, or over 4,000 years of storage for what we produce statewide.
In addition to those impressive numbers, we also could use CO2 for enhanced oil recovery (EOR). Up to 8 billion additional barrels of oil can be produced in North Dakota while sequestering up to 4 tons of CO2 per barrel of oil produced. Given that we would need to import 10 times the amount of CO2 we currently produce to reach EOR’s full potential, it’s easy to see why we are so bullish on the carbon opportunity in North Dakota.
Is there anything coming from the state that growers should know about or be prepared for?
Opportunity is once again the main theme. Lt. Gov. Brent Sanford and I have been advocating a policy of innovation over regulation since the first days of our administration. We know that producers have had to overcome major uncertainty regarding regulation, especially as the political pendulum swings. In North Dakota, we strive to provide a stable tax and regulatory environment, and we regularly remind officials in Washington, D.C., that the states created the federal government, not the other way around.
Through opportunities such as CCUS, we hope to inherently improve the ESG scores for every company doing business in North Dakota, and to make our state a leader in attracting capital investment. We have opportunities to create markets for our CO2 right here in our state. Greenhouses are a great example: If we could capture and use our CO2 in greenhouses to grow crops year-round, we could grow crops not typically produced in North Dakota, such as blueberries and avocados. And we could help solve issues with food deserts and reduce costs for rural grocers.