InterRegional for Strategic Analysis

In April 2026, US President Donald Trump invoked the Defense Production Act (DPA), a Cold War-era law that authorizes the president to intervene in domestic industry in order to expand supplies of critical materials in support of national defense efforts. The act was invoked to support US energy projects and strengthen related supply chains amid mounting pressure on the administration to contain rising oil, gasoline, and electricity prices following the disruption of global energy markets after the US launched its war against Iran on February 28, 2026.Using the powers granted under this law, Trump issued five Presidential Determinations targeting <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-coal-supply-chains-and-baseload-power-generation-capacity/" rel="noopener noreferrer" target="_blank">coal</a>-fired electricity generation, <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-natural-gas-transmission-processing-storage-and-liquefied-natural-gas-capacity/" rel="noopener noreferrer" target="_blank">liquefied natural gas</a>, domestic <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-natural-gas-transmission-processing-storage-and-liquefied-natural-gas-capacity/" rel="noopener noreferrer" target="_blank">oil production</a>, and <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-grid-infrastructure-equipment-and-supply-chain-capacity/" rel="noopener noreferrer" target="_blank">infrastructure and supply chains</a> associated with energy production and transmission. The administration argued that strengthening these sectors was essential to ensuring US defense readiness, preserving the country’s economic strength, and maintaining energy independence. The administration also warned that any insufficiencies in these sectors could threaten national security and US defense capabilities.Trump’s actions also built on a previous Executive Order declaring a "<a href="https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/" rel="noopener noreferrer" target="_blank">national energy emergency</a>," which was issued on his first day in office on January 20, 2025. This Executive Order indicated that weaknesses in US energy production, transmission, refining, and generation capacities constituted a threat to the economy, national security, and foreign policy.Multiple DriversA number of factors influenced the Trump administration’s decision to invoke the Defense Production Act and to issue five Presidential Determinations aimed at improving US energy supplies. These include the following considerations:1. Limiting the Impact of the Iranian War on Global and Domestic Energy Prices: The White House increasingly links US energy security with regard to oil, gas, coal, and power infrastructure to defense readiness and national security. This is due to several developments, including the sharp <a href="https://www.reuters.com/business/energy/oil-jumps-more-than-2-us-iran-peace-talks-stall-2026-04-26/" rel="noopener noreferrer" target="_blank">rise</a> in energy prices following the launch of the US-Israeli war against Iran in February, a continued deadlock in US-Iranian negotiations, and limited shipping activity through the Strait of Hormuz, which carries roughly one-fifth of global daily oil supplies, after Tehran closed the waterway. In addition to rising global oil prices, the domestic repercussions of the war have included higher gasoline and electricity prices and increased cost of living, thereby intensifying political and economic pressure on the Trump administration.In this context, the average U.S. gasoline price had <a href="https://www.reuters.com/business/us-pump-prices-near-4-year-high-iran-war-disruption-refinery-outages-2026-04-28/" rel="noopener noreferrer" target="_blank">reached</a> approximately $4.18 per gallon by late April 2026, approaching its highest level in nearly four years after having increased by more than 40 percent since late February. Invoking the Defense Production Act was an attempt to demonstrate a rapid executive response through expanding domestic production, supporting refining, transportation, and storage capacities, and strengthening energy infrastructure to reduce dependence on unstable external supplies and limit the political impact of rising energy prices on U.S. voters ahead of the congressional midterm elections in November.2. Boosting Republican Prospects Ahead of the Congressional Midterm Elections: The administration also activated the Defense Production Act to boost support for both the president and the Republican Party ahead of the congressional midterm elections. By supporting US energy supplies, the administration sought to demonstrate that it was moving quickly to curb rising fuel and electricity prices in the aftermath of the war against Iran.The war has affected Trump’s approval ratings, which had fallen to 34 percent by late April 2026 according to a Reuters/Ipsos <a href="https://www.reuters.com/world/us/trump-approval-sinks-record-low-war-with-iran-drives-cost-of-living-concerns-2026-04-28/" rel="noopener noreferrer" target="_blank">poll</a> showing that only 22 percent of Americans approved of his handling of the cost of living. These developments have fueled concerns among Republican lawmakers about potentially losing control of both chambers of Congress.Accordingly, the invocation of the Defense Production Act was not merely as an attempt to address the energy crisis following the war against Iran, but also as a political move aimed at preventing potential Republican electoral losses. The administration has sought to transform the energy issue from a liability into an achievement through the use of exceptional executive powers to expand domestic supplies and reduce pressure on US consumers.3. Growing Concerns Over the National Security Risks of Energy Supply Disruptions: The five Presidential Determinations issued under the Defense Production Act reflect the administration’s belief that shortages or disruptions in energy supplies could become strategic vulnerabilities that foreign adversaries could exploit to pressure the United States domestically and internationally.&nbsp;The determinations reflected a broader strategic view that stable energy supplies are essential for sustaining the defense industrial base, command centers, military facilities, and the broader US economy.This approach is consistent with <a href="https://www.energy.gov/topics/electric-grids" rel="noopener noreferrer" target="_blank">assessments</a> by the US Department of Energy, which maintains that "a reliable, resilient, and secure electric grid is vital for national security, economic security . . ." and is "made up of millions of miles of transmission and distribution lines, transformers, sensors, software, [and] communications systems." This infrastructure could become a strategic vulnerability if tied to foreign supply chains or exposed to cyber or physical attacks.4. Energy Shortages as a Direct Threat to U.S. Economic Prosperity: The administration increasingly views energy shortages as a direct threat to US economic prosperity rather than merely a technical imbalance in oil or electricity markets.In its <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-development-manufacturing-and-deployment-of-large-scale-energy-and-energy-related-inf/" rel="noopener noreferrer" target="_blank">Presidential Determination</a> concerning large-scale energy infrastructure, the White House stated that "inadequate energy production, transportation, refining, and generation constitutes an unusual and extraordinary threat to the Nation’s economy, national security, and foreign policy." It further argued that current "insufficient and intermittent energy supply" posed a growing threat to US economic prosperity and national security.These five Presidential Determinations were intended to expand domestic capacities in sectors the administration considers essential for sustaining economic growth, reducing energy costs, and limiting the exposure of US industry to energy-market shocks.Energy shortages could threaten US economic prosperity because they impose constraints on sectors the administration views as central to future growth, particularly artificial intelligence, data centers, advanced manufacturing, and the defense industrial base.A previous US Department of Energy blog post <a href="https://www.energy.gov/oe/clean-energy-resources-meet-data-center-electricity-demand" rel="noopener noreferrer" target="_blank">stated</a> that the United States was entering a new phase of rising electricity demand driven by the expansion of AI applications, the growth of data centers, the return of domestic manufacturing, and increased electrification across multiple sectors. The blog indicated that total energy demand was expected to rise by approximately 15 to 20 percent over the next decade.The blog also cited estimates that data centers could consume up to 9 percent of total US electricity generation annually by 2030, but emphasized that such facilities have become essential to supporting US economic growth and preserving US technological and innovation leadership.5. Energy Generation is Essential to US Defense Readiness: The administration increasingly views uninterrupted energy generation as essential to US military readiness. The White House Presidential Determination concerning <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-coal-supply-chains-and-baseload-power-generation-capacity/" rel="noopener noreferrer" target="_blank">coal supply chains and baseline electricity generation capacity</a> stated that maintaining stable coal supplies and uninterrupted electricity generation is necessary for national defense because power plants, fuel reserves, and transmission networks provide indispensable resilience during wars, disasters, and market disruptions.According to the determination, declining baseline generation capacity could deprive the United States of the stable electricity needed to support defense facilities, industrial expansion, and growing demand associated with emerging AI technologies.The US Department of Energy has also <a href="https://www.energy.gov/sites/default/files/2025-06/doe-fy-2026-vol-3-ceser.pdf" rel="noopener noreferrer" target="_blank">stressed</a> that the energy sector underpins critical infrastructure sectors including the defense industrial base and that energy-system security has become a vital component of economic security, military readiness, and US competitiveness in advanced technologies, particularly artificial intelligence.These Presidential Determinations appeared to be based on an assessment that any large-scale disruption or chronic shortage in generation, transmission, or distribution capacity would directly affect the ability of the armed forces and defense facilities to perform their missions.The determination concerning <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-grid-infrastructure-equipment-and-supply-chain-capacity/" rel="noopener noreferrer" target="_blank">electricity-grid infrastructure</a> warned that aging infrastructure and limited domestic production of transformers and high-voltage transmission components constituted growing threats to national defense because the United States could remain vulnerable during wars, disasters, or economic disruptions.Similarly, the determination concerning <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-domestic-petroleum-production-refining-and-logistics-capacity/" rel="noopener noreferrer" target="_blank">domestic oil</a> production stated that petroleum fuels the armed forces, the industrial base, and critical infrastructure, and warned that the absence of immediate federal intervention would leave defense capabilities vulnerable to disruption. The determination on <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-natural-gas-transmission-processing-storage-and-liquefied-natural-gas-capacity/" rel="noopener noreferrer" target="_blank">natural gas and liquefied natural gas</a> further emphasized that adequate transmission, processing, storage, and export capacity was essential for sustaining US defense operations and securing allied energy supplies during crises.&nbsp;The U.S. Department of Defense has also <a href="https://www.dla.mil/About-DLA/News/News-Article-View/Article/4347210/incorporating-tactical-energy-storage-into-war-reserves-dlas-vital-role-in-sust/" rel="noopener noreferrer" target="_blank">emphasized</a> that energy remains a core component of military capability. In March 2026, the U.S. Army <a href="https://www.army.mil/article/290881/army_advances_installation_resilience_through_partnerships_and_innovation" rel="noopener noreferrer" target="_blank">stated</a> that energy resilience at military installations relies on the ability to operate independently of the commercial grid during outages or disruptions. Protecting critical defense infrastructure from cyber and physical threats has also become a central element of military planning.6. Accelerating the Provision of Energy Supplies: The five determinations issued under the Defense Production Act also reflected the administration’s desire to bypass slow market mechanisms and traditional regulatory procedures in meeting urgent energy needs.In its determination concerning electricity-grid infrastructure, the White House <a href="https://www.whitehouse.gov/presidential-actions/2026/04/presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended-on-grid-infrastructure-equipment-and-supply-chain-capacity/" rel="noopener noreferrer" target="_blank">argued</a> that U.S. industry would be unable to supply transformers, transmission lines, conductors, high-voltage equipment, and other grid components at the required speed without presidential intervention because of limited domestic production capacity, lengthy delivery timelines, dependence on foreign suppliers, and insufficient capital investment in the sector.The administration framed government procurement, advance purchase commitments, and targeted financial-support mechanisms for expanding production capacity as the most efficient, rapid, and practical means of meeting these needs.Accordingly, the objective was to shorten the timeframe required to expand production, transmission, storage, and generation capacity by granting the Secretary of Energy the authority to undertake direct procurement, secure financial commitments, and support arrangements for these projects.A Deepening CrisisThe five Presidential Determinations issued by President Donald Trump under the Defense Production Act reflect the administration’s growing view that the energy crisis is no longer merely a pricing problem or a sectoral imbalance within the U.S. energy market. Instead, the administration increasingly regards the energy crisis as a direct threat to national security, defense readiness, and US economic prosperity, particularly amid the repercussions of the U.S. war against Iran, rising gasoline and electricity prices, and mounting political pressure ahead of the congressional midterm elections in November.&nbsp;At the same time, the directives also exposed deeper structural problems within the United States, including aging infrastructure, supply-chain bottlenecks, rapidly growing demand driven by artificial intelligence, and continued dependence on vulnerable maritime routes and global markets susceptible to international crises.Accordingly, the success of this policy will not be measured merely by the invocation of the Defense Production Act, but rather by the administration’s ability to translate these directives into rapidly implemented and adequately funded projects that reduce prices without triggering new legal, environmental, or fiscal disputes.

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