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Feb. 19, 2026 11:15-11:37 - CSPAN
21:40
Politico Holds 2026 Governors Summit
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Oil vs. Data Centers 00:14:22
You know, last year, I ended up, you know, the budget that we passed, again, balanced budget, had more cuts than any Maryland budget in the past 16 years.
These are hard decisions.
But as governors, the reason that it's great being a governor is we actually want the ball in our hands on the fourth quarter.
Right?
And the people trust us to have the ball in our hands in the fourth quarter.
And I do think it is a different type of philosophy, Lair, where like politics is not a game to us because these are real lives that are being impacted by this.
And so the who's up and the who's down and the pungentry about what this decision means, like that does not factor into our decision making.
We're going to leave this to take you back live to the Politico Governor Summit with Kelly Armstrong of North Dakota.
Welcome to North Dakota, Governor Kelly Armstrong.
I'm so thrilled that you're here to have this conversation.
Yeah, it's great to be back in D.C.
Yeah, I was going to say it's a return to being chased by reporters again.
Correct.
So we're going to cover a lot of issues today, some of which have already been talked about on the stage, but we're going to dig in in particular on data centers, on tariffs, on oil and gas development, all things that really matter to your state.
So, and also, I'm going to save a few political questions at the end because we are still politico and can't resist form party chair here.
But let me start with the question on data centers.
So North Dakota, like a lot of states, is starting to see these data centers pop up.
And that's spurred in part, obviously, by great demand for AI and crypto capacity.
But North Dakota also has a lot of energy and a lot of resources in which makes that state, your state, particularly attractive.
At the same time, political opinion on data centers has become a lot more complicated.
We're starting to see a real backlash to them, particularly around affordability, higher costs, and an effect on people's day-to-day living.
So let me just start with where do you stand on data centers and do you want to see more of them in North Dakota?
Yes, but from the perspective of I view how we do economic development is building the infrastructure.
We need power, we need water, but also we like to help close deals, but it's the local community that's going to sell it.
First of all, they have to because they have to have buy-in.
But I said this earlier, there's not a lot of places where cold and windy is an attribute, but North Dakota has the right actual climate for data centers.
They're cheaper to operate there.
But I also think we've handled it pretty appropriate.
We're moving fast, but not so fast that it puts so much pressure on local communities that you get as much of that backlash.
But the other answer for us, which is really huge, for as valuable as natural gas is to everybody, to the North Dakota budget, it's actually almost like a detriment because it's all associated gas, which means if we can't move our gas and we don't have places to utilize our gas, it decreases our oil production.
And so we have the natural resources.
I will tell you, I tell everybody who's looking at any of these, the one thing I have, and from a policy standpoint, is you will not increase end users' utility rates.
Well, so to that point, that is a big concern for people, right?
Is that these data centers are going to come in?
It's going to affect people's affordability, particularly on their energy bills.
Do you think that politicians have sort of messaged this port?
Or the data center industry has messaged this effort poorly?
Like, is that the breakdown?
Or is there something specific you're doing in North Dakota to make sure those prices stay down?
I think a lot of it depends on where your stranded power is.
North Dakota has some really huge advantages in that we can sell a lot of the power behind the meter, which means you can deal with how data centers deal with it.
But also, fundamentally, I mean, the company that is the farthest along, we have seen actually utility rates go down or at least not go up as much as they would have because of that.
And then you also have like coincidental things where a utility will raise their utility rates, which has been in the works for seven years, and then the social media mob comes in and blames the data center that's not even built yet.
And so you have to always be able to combat that.
But I do think, I think whenever you're doing large-scale economic development, my advice to anybody doing it is go have meetings with the community you're coming in.
When you're doing something large, particularly in rural, it doesn't matter if it's a value-added, I mean, it doesn't matter if it's a soybean crushing facility, a potato processing plant, a gas.
I mean, you have to go meet with the local communities and make sure that you are honest with them and you open that dialogue.
Because if you do it poorly right away, it's almost impossible to get it back.
Yeah.
Well, so, you know, your colleague, Democratic Governor J.B. Pritzker, town of Illinois, announced just this week that he's actually going to pause, do a two-year pause on tax incentives around data centers in order to study it.
Do you have the opposite message?
Are you saying to data centers at this point, like, we're going to roll out the welcome app for you in North Dakota?
Yeah, I'm not, yeah, I mean, we want to build the infrastructure in place, but again, I think it comes down to getting the buy-in from the community in which they're going in first.
I'm not, so we, again, the ones that are farthest along haven't asked for a tax incentive.
We have the natural resources, we have the business environment, we have the regulatory environment where it makes it available to do those things.
I think as you get there, there's some different sales tax issues that really actually matter in this space.
And it's not just data centers, it's hospitals, it's different, how you treat some of the things that they exist there.
But I mean, we're not particularly interested in like giving away the farm, so to speak, to bring you here.
What we will offer you is the right business climate.
We'll offer you the right regulatory climate.
We'll offer you the natural resources you need and a state and local governments that are willing to work with you.
Well, speaking of farms, I want to move to tariffs.
So North Dakota exports a lot of soybeans.
A lot of those soybeans go to China.
And as we all know, there's been an enormous amount of turmoil in that relationship between America and China in terms of trade relationship.
Back in November, President Trump and President Xi Jinping agreed to some tariff reductions and a resumption of Chinese purchasing soybeans, but not at the same levels that they had previously.
So at this point, what are you telling farmers who are very concerned about their ability to sell their crop and more broadly about this sort of environment of volatility?
Well, so I think there's the China question on tariffs and then there's the other egg question on tariffs.
And the reason I say that is China is our biggest strategic adversary in the 21st century.
And we've seen it from patent trolling.
We've seen it.
I mean, they utilize our freedoms to have these court cases and all of that.
I'm very certain that we wouldn't have access to the Chinese criminal justice system if we were going into some of those things.
So how we deal with China will define where we're at for the next hundred years.
And I think that's really important.
Now, we're one of the only states, us, a little bit of eastern Montana and Vermont, that actually farms to the Canadian border.
So we have, I mean, we have very unique geographical issues.
We have friends and family on both sides of the border.
We have farmers who farm on both sides of the border.
So the Canadian relationship has been, I mean, we are very close with our neighbors in Canada.
So that has put us right on it.
I do the best thing I think you can do.
I talk to my colleagues on the other side of the border, make sure we're maintaining relationships.
You know, the Premier of Manitoba and the governor of North Dakota don't set trade policy.
But what we can do is create the, make sure we're talking to each other, make sure we're communicating, make sure we are dealing with those issues as we can.
So when this kind of the dust settles, we're ready to go completely back open.
But you are saying that these tariffs have put a strain on that relationship.
I mean, yeah, I mean, the tariff relationship between the U.S. and Canada is unique in North Dakota, and it hasn't, I mean, we want to get those things settled so we can resume.
You know, like I said, we have people that have family on both sides of the border.
Like, we're not getting that.
Do you get frustrated then with the way that the president has handled this?
No, I mean, I think the one thing about the president and tariffs is it's something that anybody who is surprised by any of this has never listened to President Trump talk about it, right?
Like ever.
I mean, this is something he very seriously believes in.
And I think resetting trade deals with a lot of our, a lot of other countries is a good thing.
And I think it is one of those things where if you just, there was no way to kind of casually ease into some of these things.
I think the disruption is good, but we want to make sure we have our relationships in place so when we come back.
But the farm economy is not great right now.
Inputs are higher, commodities are lower, and we're, I mean, and soybeans aren't being purchased.
So what are you trying to do then on the state level to help North Dakota farmers find new export markets, reopen those with China?
I mean, look, there's obviously these bridge payments coming from the USDA to sort of try to paper over or help farmers in a, as they said, in a bridge moment.
But what are you trying to do to help?
So little known fact, North Dakota is the only state in the country with a state bank.
So we're running two different farm relief programs right now.
The big difference, I think, from the farm crisis in the 80s to now when you're watching all these strains is land values haven't plummeted.
So we have a state bank.
It is a fantastic thing that I don't think you could ever get a conservative state or even, I mean, a Democratic state to create one now.
But when you had a bunch of Norwegian immigrants that came to North Dakota and had fights with actually the bankers in Minneapolis, they had this structure in place.
So we're running two programs allowing farms to refinance on that.
And that's just a unique advantage for North Dakota.
But I will tell you, farmers don't want the payments.
They want access to markets.
So, and we also have unique, we have bilateral meetings with other countries about looking for different ways to do markets.
Now is the most trade activity.
When I got to Congress in 2018, USMCA had just passed.
And since then, under four years of President Biden after President Trump, there was no trade deals done.
Like the trade deal, I mean, both parties never really got to modernizing any of that.
So I think you'll see governors do more and more bilateral agreements with other countries.
Are there any that you could talk about in this moment?
No.
And mostly because I think we're still in the exploratory stages, and we're lucky too, because we have an ag commissioner who has been, I mean, been in North Dakota office since 2008 and has really done a great job of building these relationships over time.
Got it.
So Republicans, both in Congress and in the White House, know that affordability is going to be central to the midterms.
I'm guessing you probably are, you're not going to be on the ballot, but I'm sure you're hearing similar things from people in North Dakota.
And Trump has talked a lot about gas prices being low, and that being a point of real pride.
But when gas prices are low, that can hurt oil-producing states like yours and North Dakota.
And, you know, in local coverage, it says that North Dakota legislature is now projecting somewhere in a billion-dollar shortfall over the next couple of years, and part of that's because of the oil prices.
So I wonder if you can just talk a little bit about the Trump administration's approach to both energy and foreign policy around oil and gas.
I mean, even Venezuela being a new place where oil could be produced.
I mean, is that concerning to you?
No, it's actually not.
And for a lot of reasons, we won't have a billion-dollar surplus.
What we won't have is a $1.5 billion or we won't have a billion-dollar deficit.
What we won't have is a $1.5 billion surplus.
Got it.
Yeah.
So I mean that North Dakota has grown by 20% over the last 20 years and grown very rapidly.
So with that, the growth in government at the state level has also grown very rapidly.
So we look at it as an opportunity.
We're going to be able to level reset some of our growth in government spending.
But I think the overall, I mean, for us in energy production, we've all dealt with high prices, low prices, how all of that works out.
I think you're seeing, I mean, the market on oil is soft right now, but it's not devastating.
I think we're getting, I think it was $63 WTI this morning.
Our biggest issue in North Dakota is two things.
One, our shale play is pretty mature.
So as we talked to Secretary Bergham, Secretary Wright, trying to figure out how we do enhance oil recovery, for as great as the oil industry has been for North Dakota, we're still leaving 85% of the oil in the ground.
But we're also farther along than the Permian or the Eagle Ford or the Powder River.
So when we figure out how to get another 15% of that oil out of the ground, that's like an entire another oil boom for my state without any of the challenges of the infrastructure and all of that because all of the locations still exist.
But more importantly, when you're talking about affordability, that is how we figure out how to do that in North Dakota will be used in the Permian and it will be used in the Powder River and it will be used in the Eagle Ford.
And the single best way you want to control affordability and energy prices is have the United States producing more of the energy, be a net exporter of oil or LNG because then we don't rely on some of our adversaries in the world stage to control oil prices.
But is it challenging then when Trump is encouraging more investment in oil to come out of a place like Venezuela when, as you're saying, there's still opportunities in North Dakota?
Sure, but I also think the Western Hemisphere matters.
I think that that resource is going to be developed.
I mean, you've got Guyana right next to it, which my wife is from Oslo, Norway, but with all due respect, within probably a decade, Guyana will be the richest country per capita in the world.
800,000 people, large-scale oil discovery.
So they're right, obviously, right next door to Venezuela.
Somebody's going to develop the oil in Venezuela.
It's too valuable.
I mean, my version is, do I want Chevron and Exxon and U.S. companies that even if there's no EPA that have a responsibility to their shareholders?
Or do I want Iran and China developing that resource?
And I think anybody who cares about responsible energy policy and cares about the United States' place in the world would rather it be us and our allies than our adversaries.
Rural Health Transformation Funding 00:02:23
Got it.
So you just completed a special session in North Dakota where you addressed rural health care, its implementation, distribution of funds.
I know that you've talked about this a decent amount, that you were really proud about the way that your administration worked with the legislature to get $200 million out of the federal government to then disperse and to offset the cuts from Medicaid that came out of Trump's one big beautiful bill.
But there's also a bill that really sort of struck me, which was this, and you mentioned earlier, having a state-owned bank that was able to loan $5 million to a rural hospital in Elgin, North Dakota.
And North Dakota state rep Karen Rohr, a Republican, who co-sponsored this effort, she said, quote, once a rural hospital closes, reopening it is extraordinarily difficult to do.
So it seems like you're able to save it in your state.
But in thinking about other states and other rural hospitals, are you concerned about a state's ability or a governor's ability to sort of try and prop some of those up?
Well, so I think those are two different questions, right?
I think one of the cool things in how we're treating the rural health transformation money is we don't want to prop up failing systems.
And we don't want to use federal money to create programs that will become state obligations when that federal money goes away.
What we want to invest in is recruitment, training, retention, telehealth labs, mobile clinics, things that you can deliver healthcare into communities that aren't going to have a hospital.
But I think, I mean, if you would talk about the economy, the economics of the healthcare ecosystem, those days of having like those small clinics in really small rural towns, they just don't exist anymore.
There's so much vertical integration.
There is so much different spaces.
So I think how we look at that is different.
Now, the Elgin one is a very unique circumstance, and I'm sure other states have these unique circumstances.
That's where your ambulance comes out of.
It's without a doubt the largest employer in that area.
And we had the unique ability, and they had some, their infrastructure isn't terrible.
They had some really bad leadership decisions and some spending decisions, which they're getting under control.
And so we had the ability to walk in, but I don't, I mean, with all due respect to my friend Senator Scheibley and Representative Rohr, this is a short-term version of you guys have to get the ecosystem right.
You have to get the economics right.
So we're not just going to do $5 million or $7 million to this hospital every two years.
Getting Economics Right 00:03:00
Gotcha.
So there shouldn't be an expectation that this money continues to flow together.
No, because otherwise we'd have to do it.
I mean, we'd have to do it, I mean, and not now, but we have other rural hospitals that are in, I mean, that are in various stages of trying to figure out what the next 20 years looks like.
Got it.
So we don't have too much time left, so I wanted to end with a couple of politics questions.
Sure.
So you had some interesting interactions, let's just say, with your state Republican Party, which I'll note you used to be the chair of.
So you're very familiar about how an organization like this works.
Last summer, your state Republican Party censured you over not, it seemed like going far enough in their minds on a tax relief package, which my understanding is it was one of the biggest in North Dakota's history.
And they also censored you on, or attacked you for vetoing a book ban legislation.
So can you just explain what's going on here?
Yeah, they censored me twice, and I don't care.
The book ban legislation created more due process for somebody who didn't like a book in a local library than it does for a criminal defendant in a court system.
Like it literally created this due process mechanism that I, quite frankly, a rural librarian is not going to implement.
Like I like you could talk about whether or not, I mean, first of all, I used to get in a lot of trouble in D.C. because I'm a First Amendment absolutist.
I believe the best cure to bad speech is more speech.
But more importantly, nobody's ever showed me who will police the policers.
I don't care if it's a Democrat president.
I don't care if it's a Republican president.
I don't care if it's Chairman Jordan or Chairman Nadler in a House Judiciary Committee.
Nobody's ever told me who polices the policers.
And so when you are going to restrict speech or you're going to restrict content, you better be very, very careful about how you are doing that.
And I had a lot of opportunities to look at some of my Republican colleagues when I was here and I'm like, congratulations, you're a little skeptical of federal law enforcement.
I've been there since 2004.
So it's great to have you in the deep end of the pool.
So I mean, I just have no problem with that.
The property tax ones just, quite frankly, they don't, I mean, this is the most responsible and most durable property tax plan that could be introduced in a way in which we can increase primary residential credits, but also continue to afford it.
I mean, there's governors all over the country talking about how they're going to deal with property tax.
And we found a way that we think is going to be, you know, in tax policy, it's either regressive or progressive.
Either give it, I mean, sales tax is regressive, income tax is progressive.
This is a unique space where we got to give the most relief to the people who needed it the most the fastest.
Well, so on this book banning legislation, I mean, this is something we've seen a surge of in Republican-led legislatures across the country.
Pet America said that 10,000 books were banned under Republican-led censorship laws in 2023 to 24.
Do you think the parts of the Republican Party have just lost the plot?
Have they lost their limited government?
No, I don't.
I mean, I watched this too, right?
Three Years Is a Lifetime 00:01:52
I can tell you I've watched it from both sides.
I watched lots and lots of people think you should be censoring Facebook during COVID.
Those weren't Republicans.
I think we get into this.
I think the biggest thing, particularly out here, is when the pendulum shifts from one side to the other, we think our censorship is better than their censorship.
And it doesn't matter if you have a D behind your name or an R behind your name.
I will just tell you, for as long as I'm involved in public life, I don't care if it's a D or an R behind your thing.
I'm not into censorship.
I just am not.
Got it.
So your predecessor, Doug Bergum, now Secretary of the Interior, ran for president.
Do you think he should run again in 2028?
I think Governor Bergham should do whatever he wants to do.
I think the one thing you will get from everybody right now is they're very cognizant.
Everybody who works in this administration knows there's no second term.
I mean, they've got three years to implement their stuff, whether it's Secretary Bergum, Vice President Bent, Secretary Rubio, Lee Zeldon has been to North Dakota.
We've had the EPA in North Dakota three times already since they've been there.
They're all focused on what they can do in the next three years, and I think that is the best way.
I always tell high school seniors the best way to prepare for whatever's next is to do whatever you're doing now really well.
And I think this administration is doing that, and I think that's the right approach.
Do you think that it should be a your party should nominate a governor in 2028?
I think we are three years away.
And if I've learned one thing in politics, three years is an absolute lifetime right now.
So we are a long ways away from that.
I think we should concentrate on holding the House in the midterms and electing more governors to state capitals in the next election cycle.
Got it.
So Governor Armstrong's not ready to play the prediction market.
All right.
Well, look, Governor, thank you so much for taking the time.
I really appreciate this thoughtful conversation and appreciate you coming out here to talk more about this.
So thanks.
Governor Armstrong.
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