Dorgan ran for reelection. Schafer captured 35% of the vote to Dorgan's 65%. He entered the 1992 North Dakota gubernatorial campaign as the Republican nominee. He and Republican lieutenant governor nominee Rosemarie Myrdal defeated the Democratic nominee for governor, former North Dakota Attorney General Nicholas Spaeth, and the Democratic nominee for lieutenant governor, Julie Hill. Schafer and Myrdal captured nearly 58% of the vote, to 41% for Spaeth and Hill. When Schafer became governor, North Dakota was facing major budgetary and financial hurdles. This continued, on and off, throughout his two terms. "As governor, Schafer had to deal with budget crunches during his eight years as state budget maker in the Capitol," according to the Bismarck Tribune. While governor, Schafer oversaw annual state budgets that exceeded $4.5 billion and a state employee workforce of more than 12,000. Schafer prioritized the expansion and diversification of North Dakota's economy. For example, he worked with the private sector to expand the production and distribution of value-added agricultural products such as corn sweeteners and pasta. During his time in office, he helped to build a closer trading relationship with China in concert with other North Dakota government officials, federal government trade specialists and private sector business leaders. These efforts assisted in the development of China into a primary export market for North Dakota's products and services in the 1990s. As governor during the rise of the global internet and its introduction to broader society, Schafer realized the need for internet access across North Dakota. He worked with both government and business leaders, implementing various efforts "to upgrade North Dakota's communications infrastructure and make high-speed voice and data networks available to farmers, ranchers and rural businesses", and to individual households. In 1995 Schafer served as Chair of the Midwestern Governors Association. When Schafer ran for reelection in 1996, he and Myrdal defeated Lee Kaldor, the Democratic gubernatorial nominee, and Barbara Pyle, the Democratic nominee for lieutenant governor. Schafer and Myrdal received about two-thirds of the vote. Schafer's long-held interest in conservation led him to help arrange the U.S. Forest Service's May 2007 purchase of the 5,200-acre Elkhorn Ranch in North Dakota. The Elkhorn Ranch was established by former United States president Theodore Roosevelt as his main working ranch in the North Dakota Badlands, and is now protected as a unit of the Theodore Roosevelt National Park. In 1999-2000 Schafer served as chair of the Republican