Gas is sitting above $4 a gallon as the Iran war drags on. Now, President Donald Trump has reached for a 75-year-old law to take control of the American energy industry.
On April 20, he signed five orders under the Defense Production Act (DPA) to unlock federal funding for domestic coal power, liquefied natural gas, petroleum refining and power-grid infrastructure (1).
“I find that ensuring resilient domestic petroleum production, refining, and logistics capacity is central to United States defense readiness,” Trump said (2).
While the administration says shortfalls in those sectors “threaten national defense,” critics say it's a rescue package for fossil fuel companies — presented as a national emergency.
Many add that it is a political move as November midterms approach and voters are fed up with high gas prices.
Still, it isn't the first time a president has used the DPA to boost domestic energy production.
President Joe Biden did so in 2022, when gas prices were exploding after Russia invaded Ukraine (3). He invoked the law to speed up production of clean energy — like solar panels, heat pumps, electric grid transformers and clean hydrogen equipment (4).
Then-Energy Secretary Jennifer Granholm justified Biden's decision by saying “for too long, the nation's clean energy supply chain has been over-reliant on foreign sources and adversarial nations.”
The power and money that comes with the Defense Production Act
Dating back to the Korean War (5) in 1950, the DPA gives U.S. presidents power to direct private companies to speed up production of materials deemed critical to national security — supporting them with federal loan guarantees, purchase commitments and financial support.
Biden also invoked the DPA in 2021 during the COVID pandemic to speed up production of vaccines, masks and other supplies.
Trump's new directives allow the U.S. Department of Energy (DOE) to purchase energy, invest directly in energy production and eliminate market and regulatory hurdles to production and distribution, as reported by Bloomberg (6).
Such DOE funding could go toward coal-fired power plants, gas turbine manufacturing, petroleum refining facilities and transformer manufacturing.
Trump added that the country's “aging and constrained electric grid infrastructure” poses a “threat to national defense” (7).
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Testing the limits of a wartime law
Tyson Slocum, energy director at the consumer watchdog Public Citizen, called it a giveaway.
“President Trump is abusing emergency authorities and wasting taxpayer resources through unprecedented abuse of the Defense Production Act to promote his politically favored fossil fuel projects at the expense of energy affordability and common sense,” he said (8).
Public Citizen dubbed the move “a wish list for the oil, gas, and coal industries, who are already enjoying record profits under Trump's Energy Unaffordability Agenda.”
The broader critique, according to Newsweek (9), is that invoking national defense powers “blurs the line between emergency authority and routine energy policymaking.”
Using a wartime statute to support industries during a period of high prices (rather than a genuine supply emergency) tests the limits of what the law was designed to do.
However, the Council on Foreign Relations (1) notes this is consistent with how the law has evolved.
“Presidents Donald Trump and Joe Biden both invoked the DPA to encourage domestic production of critical materials, including those essential for national security and clean energy technologies.”
What this means for your wallet
Unfortunately, none of this lowers your gas bill. The DPA unlocks funding mechanisms, but it doesn't build a refinery overnight.
The U.S. Energy Information Administration (10) (EIA) expects oil to stay above $90 a barrel through mid-2026 with gas prices peaking around $4.30 a gallon in April. Those prices are being driven by the conflict in the Strait of Hormuz, not by what gets signed in Washington, D.C.
In the long run, these orders might lower barriers for new pipelines and energy projects. World Oil reports (11) on these consequences — particularly in shale and energy infrastructure — while giving the government more tools to intervene if private capital stays on the sidelines. That may see prices ease in 2027 and beyond.
The question is whether more domestic production, over time, can cushion Americans from future supply shocks like this one. That was Biden's argument for clean energy in 2022 and it's still Trump's argument for fossil fuels in 2026.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Council on Foreign Relations (1); The White House (2),(7); FactCheck.org (3); U.S. Department of Energy (4); U.S. Congress (5); Bloomberg (6); Public Citizen (8); Newsweek (9); U.S. Energy Information Administration (10); World Oil (11)
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Godwin Oluponmile is a content specialist, SEO strategist and copywriter with seven years of expertise in finance, Web 3.0, B2B SaaS and technology.
