Trump Invokes Wartime Powers to Fund New Energy Projects

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(Bloomberg) — President Donald Trump invoked the Defense Production Act to provide federal funds for a wide range of energy projects, as his administration faces pressure to help curb rising oil and gas costs.

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Trump on Monday signed five presidential determinations under the law, according to a White House official on condition of anonymity to detail the measures ahead of a public announcement. Those measures broadly cover a number of sectors, including coal power, liquefied natural gas, domestic petroleum and power-grid infrastructure. 

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The move allows the Energy Department to deploy funding that was secured last year in Trump’s flagship tax-and-spending package. The directives authorize the use of tools including energy purchases and financial support, the official said, in a bid to overcome delays, financing shortfalls, regulatory hold-ups and market barriers impacting the industries. 

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With Trump’s signature, the determinations set the stage for the federal government to release funds targeting purchases under those categories later. Projects eligible for awards could include coal-fired power plants, gas-turbine and transformer manufacturing facilities and critical electrical production sites — all of which have been subject to shortages.

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Consumer worries about high energy costs have weighed heavily on the White House as the Iran war drags on. Voter worries about high costs of living — including for electricity and gasoline — threaten to cost Republicans control of Congress in November’s midterm election. Surging power demand — in part to help supply the artificial intelligence industry — also threatens to keep driving up electricity bills Trump promised to slash in office.

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Trump has pushed to expand domestic oil production, saying that will help ease energy bills and match the growing demand for power by rapidly developing industries such as artificial intelligence.

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The Defense Production Act allows presidents to take unilateral actions to bolster US national defense capabilities, including by directing private-sector companies to expand production of critical industrial materials. Trump has already invoked the Cold War-era statute to advance some of his energy priorities, including a bid to clear the way for renewed oil production off the southern California coast.

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Former President Joe Biden also invoked the DPA to bolster energy technology, with the aim of boosting domestic production of solar panels, transformers, heat pumps and fuel cells.

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Trump set the stage for aggressively using the law on his first day back in office, when he formally declared a national emergency tied to US energy supply and infrastructure. The directive said the country faced an “extraordinary threat” from insufficient energy production, transportation and refining capacity.

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