The White House is weighing how to use the Defense Production Act to expand US oil refining capacity as the conflict with Iran exposes the country’s vulnerability to global crude supply disruptions and price spikes, according to two sources familiar with the administration’s plans.
Considering such an extraordinary step highlights how the Trump administration is under growing pressure to show it can contain the impact of surging fuel prices on consumers and businesses ahead of November’s midterm elections.
The proposal to use the act came up during a recent meeting between President Donald Trump and nearly a dozen US refiners, where White House officials sought to determine how federal support could best be used to add capacity, the sources said.
No final decisions were made, and participants left the meeting with the expectation that the conversations would continue, according to the sources.
Refining executives told officials that federal money would be better directed toward making refineries more efficient or expanding existing plants rather than financing an entirely new refinery, which would be considerably more costly and take years to complete, the sources said.
The Defense Production Act, considered a tool of last resort that has never been used to add refining capacity, gives Trump broad powers to direct industrial resources and provide financial incentives for companies to expand production of materials deemed important to national defense.
The latest discussions build on a presidential determination issued in April that authorised the use of the act to support and expand US petroleum production, refining and logistics capacity.
The United States is one of the world’s largest oil refining powers, with a vast network of plants capable of processing millions of barrels of crude a day, but the national average diesel price has climbed above $6 a gallon for the first time and gasoline prices remain elevated.
“America’s refining capacity is essential to ensuring the United States has continuous access to secure, affordable, and reliable energy.
Expanding that capacity is a top priority for the President and his energy team, who are evaluating concrete options to increase our refining capacity through regulatory reform, faster permitting, and additional investment,” Taylor Rogers, a White House spokeswoman, said when asked about the proposal.
