Energy CEOs make case to North Dakota officials for $500M gas pipeline financial backstop – InForum

BISMARCK — Executives from a large North Dakota utility and another company backed by one of the state’s most prominent oilmen pitched separate natural gas pipeline projects on Wednesday, July 30, seeking to secure a huge financial guarantee from the state.

The North Dakota Industrial Commission is offering a decade-long line of credit in which it would commit to purchasing $500 million worth of space — $50 million per year — on a pipeline that would move natural gas from the Bakken oil fields in western North Dakota to the central and eastern parts of the state mostly to meet industrial demands.

Project proposals from both WBI Energy — a subsidiary of Bismarck-based MDU Resources Group — and Intensity Infrastructure Partners have been public since late 2024 and early 2025, respectively, but such a project is one that officials have hoped to see through for more than a decade.

Both oil and gas rise to the surface in the Bakken, but gas is seen as a byproduct and is wastefully flared if companies do not build the infrastructure to move and use it. Flaring has dipped in recent years, but the level of gas coming out of the reservoir relative to oil continues to grow, making gas capture a challenge. A pipeline could help alleviate the issue and also create more markets for the oil industry.

“We’ve been kicking the tires on this since as long as I’ve been in the state Legislature in 2013 and I’m absolutely more confident in this point in time that we are realizing something that we’ve known is going to be needed for a very, very long time,” Gov. Kelly Armstrong said Wednesday after he received both public and confidential details from the two companies.

Armstrong sits on the Industrial Commission with the attorney general and agriculture commissioner. The three will decide what happens with the financial backstop.

Pipeline shipping space remains a bottleneck to building large natural gas lines. To meet both financial and regulatory requirements, pipeline operators require long-term financial commitments from companies that would move the gas. These commitments are often a decade or longer.

The goal of the financial guarantee would be for the state to own the shipping space and then sell it to private companies for shorter intervals of time.

There is not enough interest from private companies that would allow either project to be as large as what the two developers are proposing without the state guarantee.

Officials from both companies expressed the belief that with pipe in place there would be enough private demand for the gas to avoid the whole state guarantee being used.

“We don’t view the state support as a subsidy, we view it as a bridge,” said MDU President Rob Johnson, representing the WBI subsidiary.

Intensity Infrastructure CEO Joe Griffin said the guarantee would jump-start a project.

“The very first mile built is going to be the most important mile built on the journey to Casselton and Mapleton (in eastern North Dakota),” he said.

The size of the state financial guarantee was not always $500 million.

North Dakota’s government has long had the capability to act as a shipper, though it did not have the funding allocated for it until 2023 when the state Legislature first approved $300 million for a 10-year period, said Pipeline Authority Executive Director Justin Kringstad.

The guarantee was expanded by $200 million after it was tacked on to the state Industrial Commission’s budget late during the recent legislative session. The provision ended up making the budget one of the more controversial measures as the session wrapped up. Before this program was in place, in 2021, the state offered a $150 million grant from COVID-19 federal rescue funds to incentivize a potential project, though no companies took up the offer.

Both projects would have two construction phases with the portion of the line ending in central North Dakota anticipated to be complete by 2029 and the portion of the line ending in the east anticipated to be complete in 2030.

MDU pitched its existing infrastructure network as an advantage.

Company officials said MDU transports about 60% of gas from the Bakken and transports about 68% of gas used in North Dakota.

The pipeline is anticipated to serve multiple types of demand, though data centers would play a big role. According to company documents, the pipeline could serve between 7,000 and 8,000 megawatts of data center demand. It could also include an 80-mile extension to Ellendale in southeastern North Dakota where Applied Digital — a data center served by MDU’s electric business — is seeking to significantly grow its footprint and energy demand.

“Without state support we will continue with this project, we will more likely right-size because at some point you do need return for your investment — and it is a significant investment,” Johnson said.

MDU’s project received letters of support from multiple electric and gas utilities, eastern and central North Dakota economic development associations and cities, the North Dakota Petroleum Council and North Dakota State University. Both projects received support from some state legislators.

Though Intensity Infrastructure does not have the monopoly presence that WBI does in North Dakota, it is no stranger to building pipelines in the state. The executive team at Intensity previously ran Hiland Partners, which laid 1,700 miles of pipeline in the state.

Intensity’s project is also backed by some big energy companies operating in the state including Continental Resources, the oil company whose leader Harold Hamm is credited with popularizing horizontal drilling technology that made the current level of oil production in the Bakken possible. He is also an investor in Intensity.

Rainbow Energy supports Intensity’s project, too. The company bought the huge Coal Creek power plant a few years ago with the help of the state, preventing it from an impending shut down. Rainbow is building a data center park near Coal Creek that would be powered by both coal and gas electricity.

Still, to build a pipeline as big as what Intensity is proposing for its first segment, Griffin said the full guarantee would be needed.

The potential use of eminent domain for building out the line was discussed, too.

Eminent domain is the taking of private property for public use with just compensation, decided by a jury. Companies or governments use eminent domain when they cannot secure a voluntary lease agreement with a landowner.

Griffin said his team has never relied on eminent domain. In some cases it was not a possibility because of the type of projects the company was developing, he added.

Though fairly common throughout history, the use of eminent domain can be controversial. In recent years, the prospect of its use for some pipelines and transmission lines across the Midwest has fueled a backlash.

Two of the three members of the Industrial Commission made comments at least somewhat sympathetic to the use of eminent domain for the gas line, if it is ultimately needed — the board does not have the power to decide if it is used.

“I don’t care if it’s a highway, bridge, transmission line or pipeline. We are the geographic center of North America and we produce a whole of things we cannot consume here. If we cannot get our products to market, we do not have an economy,” Armstrong said.

Agriculture Commissioner Doug Goehring was more blunt.

“This has been blown way out of proportion because of a (carbon dioxide) pipeline. We struggle now to even talk about putting infrastructure in place that supports the public … we have a history of all the companies in the state that do business here. They go out and secure easements. They do a good job with that,” he said.

A funding decision is expected in August.