North Dakota’s entry into large-scale data center development is driven by a constraint — but not the one most markets are facing.
The state expects three to three-and-a-half billion cubic feet of excess natural gas within the next five to seven years as Bakken production continues to grow while export pipelines near capacity, according to Richard Garman of North Dakota Department of Commerce. Moving more gas out of state would require new interstate pipelines, a process that is slow, expensive, and politically fraught. Restricting production would also restrict oil output and tax revenue.
“So the question becomes: what do you do with that gas?” Garman says.
North Dakota’s answer has been to treat surplus natural gas as an in-state economic development input — converting it into gigawatt-scale power generation rather than exporting the fuel itself. Few industries can absorb that kind of load, but AI and high-performance computing facilities can.
3.5B
At that scale, the strategy flips the usual site selection problem. Instead of asking whether power can be delivered to a project, developers start by anchoring generation close to demand.
That approach is already visible on the ground. Applied Digital operates the state’s two largest data center campuses. Its Ellendale facility evolved from crypto mining into a large-scale data center build that began construction in late 2023 and reached commercial operations in late 2025, Garman says. A second campus near the Fargo region is under construction now, with site work underway despite winter conditions.
The projects reflect a broader shift in how developers are evaluating markets. Loads that once measured ten or fifty megawatts are now planned in the hundreds, with long-term expansion targets approaching a gigawatt. In many traditional data center hubs, utilities are struggling to accommodate that growth on existing grids.
So the question becomes: what do you do with that gas?
North Dakota’s advantage is less about incentives than conversion speed — how quickly surplus fuel can become delivered power. Garman points to a regulatory environment shaped by decades of large energy projects, where air, water, and carbon permitting processes are well understood and sequenced early.
Carbon management has also entered some siting discussions. The state has suitable geology for CO2 storage, decades of handling experience, and the ability to permit injection wells in-state — giving operators another option when emissions strategies matter.
The bet is straightforward: as grid constraints intensify elsewhere, markets that can turn stranded fuel into reliable megawatts — rather than promises — will capture the next wave of AI infrastructure.
