Trump Invokes Cold War Law In Push To Expand American Oil Production
President Donald Trump is turning to a powerful Cold War-era law to expand America’s domestic refining capacity, authorizing up to $150 million in federal funding as soaring fuel prices continue to squeeze American families and businesses.
The move, announced Thursday, invokes the Defense Production Act of 1950, a law originally designed to strengthen American industry during national emergencies. The administration plans to use the authority to support domestic petroleum production, expand refinery operations, and increase supplies of gasoline, diesel, and jet fuel.
The decision comes as the ongoing conflict with Iran has disrupted global energy markets, sending crude oil and diesel prices sharply higher. With Americans facing mounting costs at the pump, the White House is moving to increase domestic fuel supplies and reduce the nation’s vulnerability to overseas disruptions.
Speaking at a campaign rally in Sioux City, Iowa, Thursday night, Trump announced the initiative as part of his administration’s broader effort to strengthen American energy independence.
“Tonight, in more breaking news, my administration is using the Defense Production Act to release $150 million to increase American refining capacity to produce more diesel and more gasoline at record levels, actually,” Trump told supporters.
The Department of Energy confirmed that the funding will support petroleum production, storage, and logistics projects at refineries across the country. Officials project that the investments could eventually increase American refining output by millions of gallons per day, although those increases have not yet materialized.
Energy Secretary Chris Wright praised the decision, arguing that previous federal policies had discouraged investment in domestic refining infrastructure.
“These Defense Production Act funds will be used strategically and in partnership with private industry to rapidly bolster America’s existing energy infrastructure,” Wright said.
The proposed $150 million will come from a larger $1 billion federal allocation designated for energy projects considered critical to national security. Specific recipients have not yet been announced, and the Department of Energy’s selection process remains underway.
Under the presidential memorandum, Trump designated domestic petroleum production, refining, pipelines, storage facilities, and marine terminals as essential components of national defense.
The administration argued that financing difficulties, lengthy construction timelines, permitting obstacles, and supply chain limitations have prevented American energy companies from expanding production quickly enough to meet national security needs.
The Defense Production Act gives the federal government authority to provide financial incentives and other assistance to industries considered vital to the country’s security.
The announcement comes as diesel prices have climbed to particularly painful levels.
According to the Energy Information Administration, the national average price of highway diesel reached approximately $6.28 per gallon Monday, an increase of roughly $2.66 compared with the same period last year.
Those costs have placed additional pressure on trucking companies, farmers, manufacturers, and other industries that rely heavily on diesel fuel. Higher transportation expenses can also translate into increased prices for groceries and other consumer goods.
However, expanding refining capacity presents significant challenges. American refineries are already operating at high utilization rates, while restarting shuttered facilities or building additional infrastructure could take considerable time, potentially delaying meaningful relief for consumers.
The United States remains the world’s largest crude oil producer, averaging approximately 13.6 million barrels per day in 2025. Still, global supply disruptions continue to influence domestic fuel prices despite America’s substantial production capabilities.
The administration has not provided a firm timeline for when the proposed investments will translate into additional fuel supplies or lower gasoline prices.