USAupdated 1h ago2 min read
Donald Trump Invokes Cold War Defense Production Act To Fund U.S. Oil Production And Refining
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Trump declared oil production and refining essential to national defense under the Defense Production Act. Invoked Cold War Defense Production Act to provide financial incentives for oil production projects.
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Defense law for oil
President Donald Trump determined on Thursday that petroleum production, refining, and related activities are essential to national defense, and he invoked a Cold War-era Defense Production Act in a presidential memorandum. The memorandum said the Defense Production Act provision allows the administration to provide financial incentives for oil-related activities, pipelines, and liquid fuel storage. The memorandum tied the move to energy market pressure after crude oil and diesel prices spiked sharply since the joint attack on Iran by the United States and Israel at the end of February.
The memorandum also pointed to Ukrainian attacks targeting Russian oil refineries, which contributed to a worsening fuel shortage. The memorandum did not specify concrete projects that could benefit from the funding or incentives it makes available.
Prices, elections, approval
The presidential memorandum justified new actions by saying the United States could face difficulty delivering sufficient energy services in a timely manner if the steps were not taken. The memorandum cited obstacles including funding constraints, long wait times, permitting processes, bottlenecks in infrastructure and supply chain restrictions. A Reuters/Ipsos poll completed last Monday showed only 36% of Americans approve of Trump’s handling of the economy.
The move came as Republicans sought to maintain control of both chambers of Congress ahead of the November 3 elections. Vice President JD Vance said the administration would use the Defense Production Act to expand the capacity of a Texas refinery owned by Delek US Holdings.
Funding path, no projects
The presidential memorandum said the United States cannot provide adequate energy services in a timely manner due to funding constraints, long lead times, permitting processes, bottlenecks in infrastructure and supply chain restrictions. The memorandum noted that it could open the door to federal funding for fossil fuel-related projects, while also leaving the document without specified concrete projects. The memorandum described the Defense Production Act as a Cold War-era rule that allows offering financial incentives to oil-related activities, as well as to pipelines and liquid fuel storage.
Trump signed legislation last year that included $1 billion in funding under the Defense Production Act aimed at energy projects deemed critical to national security. The memorandum also framed the determination as a national defense requirement, stating that oil production, refining and related activities are essential to national defense.