Burgum will be at the helm of a newly created National Energy Council, which Trump said "will consist of all Departments and Agencies involved in the permitting, production, generation, distribution, regulation, transportation, of ALL forms of American Energy."
Trump added in a statement that the council is expected to oversee a path to US energy dominance "by cutting red tape, enhancing private sector investments" and focusing on innovation over regulation.
The position will give Burgum a seat on the National Security Council, Trump added, although it remains uncertain if the National Energy Council will be based in the White House as well.
The aim is to expand all forms of energy production and restore the United States' "fabulous Oil and Gas advantage," Trump said.
Trump, who is set to return to the White House in January, has pledged to reverse the green policies of his Democratic predecessor President Joe Biden.
He could also pull the United States out of international efforts to limit global warming to 1.5 degrees Celsius above preindustrial times.
On the campaign trail, Trump repeatedly said he would "unleash" the US oil sector by boosting production and curbing the move towards renewable energy pushed by Biden.
Experts have warned that a second Trump presidency would slam the brakes on the transition to green energy, crushing hopes of hitting crucial long-term climate targets.
Burgum's appointment at the Interior Department was criticized by climate group Evergreen Action.
In a statement Friday, Evergreen Action executive director Lena Moffitt called his nomination "nothing more than a reward for a career of putting fossil fuel corporations and special interests ahead of the American people."
Moffitt raised concerns that Burgum could turn the agency into "a tool for fossil fuel corporations to exploit public resources."
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