President Donald Trump declared petroleum production and refining essential to national defense and invoked part of the Defense Production Act. The move could open US funding for fossil fuel projects. Prices for crude oil and diesel have surged since the end of February.
US President Donald Trump determined on Thursday that petroleum production, refining and related activities are essential to national defense, a step that could open up US funding for fossil fuel projects.
In a presidential memo, Trump also invoked part of the Cold War-era Defense Production Act. The law lets him provide financial incentives for oil-related activities, pipelines and storage of liquid fuels.
Prices for crude oil and diesel have surged since the US and Israel attacked Iran at the end of February, and the conflict has limited energy shipments globally. Ukrainian attacks on Russian refineries have exacerbated the fuel shortages.
The surge in costs poses a risk for Trump in the November 3 elections, and a Reuters/Ipsos poll shows just 36% of Americans approve of his handling of the economy.
The memo says the US cannot otherwise provide enough of those energy services in a timely manner because of constrained financing, long lead times, permitting and infrastructure bottlenecks, and supply chain limitations. It does not mention specific projects that could receive funding.
Last week, Vice President JD Vance said the administration would use the Act to expand capacity at a Texas refinery owned by Delek US Holdings. Trump also signed legislation last year that included $1 billion in Defense Production Act funding for energy-related projects deemed critical to national security.
Source: Reuters via Investing.com
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